Doing Business The Japanese Way

Japanese consumers and business culture offer lucrative trade, but can also present a minefield to the unwary Westerner. Even global giants Nokia and IKEA stumbled after getting their homework wrong.

Zurich-based trading services company DKSH is more aware than most about the do's and don'ts of doing business in the land of the rising sun. The firm's predecessors established roots in Japan nearly 150 years ago.

"Contrary to popular belief, the Japanese market is very open and receptive, but you have to know the rules," DKSH Japan president Wolfgang Schanzenbach told swissinfo.ch. But he believes Swiss firms have an in-built advantage over competitors.

"The 'Made in Switzerland' values of reliability, trustworthiness and good service are also ingrained into the Japanese. So certain basics translate very easily between the two countries," he said.

"Nominication"

Companies attending a Japan business seminar in Zurich last month were warned about some potential hazards. These included ignoring local etiquette, trying to bypass local staff, and skimping on presentation or after sales service.

Business Network Switzerland (Osec), which hosted the event, also advised firms to do proper research into a market that is unlike any other in the world. Schanzenbach particularly agreed with this point.

"Whatever you want to supply in Japan, there are always a couple of local producers. Japan is highly sophisticated so you have to be sure that you know what else you can add to the product to make it fly," he said. "Many companies still under-estimate this."

Another catchword in Japan is "patience", which translates into a series of personal face-to-face meetings with clients.

The local jargon throws up the word "nominication" – a combination of "communication" and the Japanese word for drinking (tea rather than alcohol): "Nominasu". Nominacation is the art of social business networking to develop trust before deals are discussed in detail.

FTA benefits

Presenting your unique product to the public must also be handled with care, according to Schanzenbach. The Japanese public loves a novelty, but they also need to feel personally connected to the product they are buying.

"Once Japanese customers find a brand they like, they are very loyal. But that loyalty must be earned through sound research, promotion and marketing," he told swissinfo.ch.

The fact that Swiss exports to Japan have been booming in recent years shows that firms are doing something right. The Swiss-Japanese free trade agreement (FTA), signed in February and which came into force on September 1 this year, brings a further boost through tariff reductions and more friendly regulations.

Schanzenbach believes the treaty has greater symbolic than short-term financial benefits as many tariffs were low in any case.

And he believes that Japanese consumers, ravaged by years of economic hardship, are starting to follow new trends.

"There is a tendency to eat out cheaper and spend less on clothes. Consumers are turning their yen over twice before spending," he said. "Producers will have to be smarter at finding ways to sell their unique, add-on value brands."

Swiss Economics Minister Doris Leuthard arrives in Japan on Monday for a four-day visit to promote Swiss business interests following the implementation of the FTA.

Matthew Allen in Tokyo, swissinfo.ch