Q&A with Meishi Sonobe of the Japan Beachhead

He joined Mobil Sekiyu in 1972 and was appointed Director in 1995. Upon its merger with Exxon Mobil, he was promoted in 2000 to Representative Director and Vice President.

Mr Sonobe graduated from Keio University with a BA in Economics, has undertaken exchange studies at Stanford University and holds an MBA from the Harvard Business School.  He and has a particular interest in fostering venture companies.

What are the opportunities for New Zealand businesses in Japan?

Japan has lifted its imports in recent years and there are many opportunities for New Zealand companies to expand their range of products to Japan. Until now, New Zealand has largely concentrated on the agricultural, dairy, forestry and fisheries sectors. There is plenty of scope in other areas such as electronics, ICT, IT-related systems and biotechnology.

How is New Zealand perceived in Japan?

Japanese consumers don’t know a lot about New Zealand products. Many primary products from New Zealand – such as potatoes and pumpkin – are usually imported as raw materials. New Zealand companies don’t sell direct to Japanese end-users. So Kiwi brands aren’t well known.

Fonterra, for example, is very active in Japan but it does not have a brand presence there. Japanese consumers know New Zealand mainly for the All Blacks, the fact that the country has a lot of sheep and it’s a good place for tramping. There is a good side to this: it means there’s plenty of room for growth for New Zealand business in Japan.

What are some of the challenges of doing business in Japan?

It’s important to understand how Japanese culture and business practices differ from those in many western countries. The Japanese approach is more relational rather than contractual. It’s also more situational rather than literal.

So, for example, if you have a meeting with senior people attending, you tend to be quieter so that senior people can feel comfortable talking. We very rarely speak out against comments by senior people because we don’t want them to lose face in public. Japanese people pay a lot of attention to relational and situational issues.

Things are not simply right or wrong. They are more dependent on each situation. It’s easy for New Zealand companies to misinterpret this. In practical terms, this can mean that it takes much longer to do business in Japan than it does in a western country.

New Zealand’s exports to Japan have leveled off in recent years. Do New Zealanders think it is too tough to do business there?

I think New Zealanders may think the Japanese market is difficult to enter due to differences in business practices and culture. For example, Japanese consumers’ stringent demands for quality products and services, or our unique business practices of life-time employment, consensus building, and system of grouping companies (Keiretsu). 

In recent years, however, Japan has been adopting more global practices and standards. So while it is important to understand the differences, New Zealanders should not overreact and think it is too difficult to do business in Japan.

How should businesses prepare to enter the Japanese market?

Ideally, companies considering entering the market should get themselves a good Japanese business partner. You don’t necessarily need to set up a joint venture. But do make sure you have a Japanese advisor or partner. The Beachheads Japan Advisory Board can provide guidance in this area.

Are Japanese businesses interested in partnering with New Zealand businesses?

Yes, they are. I think this is because of New Zealand companies’ emphasis on quality, safety and clean operations. The forestry industry is a good example of where joint ventures have been established. Traditionally, automotive companies have successfully established good business relations with New Zealand distributors and dealers.  And recently, Suntory and Kirin have made significant equity investments in New Zealand companies.

How important are personal relationships in Japan?

Personal relationships are very important in Japan: especially if you are new to the market. It’s all about trusting and being trusted. You need to have a high-quality product as well, of course. And make sure it’s competitively priced.