Tailoring to Japan pays off

COMPANIES doing business in Japan need to specifically tailor their products and business

practices to match the market, says Formation Design Systems managing director Philip Christensen.

The Fremantle-based company creates 3D software for design and construction industries.

Around 80 per cent of the company’s sales are to the export market. Half of this business is from Japan.

Mr Christensen said companies doing business in Japan should adapt products to the peculiarities of that market.

“We deliver completely Japan-ised products to that market, Mr Christensen said.

“We translate software into Japanese and include a database of Japanese materials.

“Our engineering products do earthquake analysis. A database of the Kobe and other Japanese earthquakes allows for simulations.

“There’s even a module that complies with Japanese building codes.”

Mr Christensen said doing business in Japan was infinitely easier and more rewarding than doing business in Australia.

“You must be very patient. It took us a year to establish relationships and make sales but now we have sold substantial installations to more than 600 Japanese companies,” he said.

“You also need to adapt to the Japanese way of doing business – people are interested in forming long-term partnerships.

“It’s not just a case of saying ‘Here’s our product and see you later’. You also can’t use a ‘go it alone’ strategy and just open up an office.

“They want to know the background and size of your company and how strong your commitment is to the market.”

Mr Christensen said US and European companies viewed Japan as a difficult market to enter.

“They mostly don’t attempt it, so there’s less competition for Australian companies,” he said.

“Price is not the driving factor in Japan – they are quite happy to pay a reasonable price but because of the exchange rate issue, prices there are much higher than in other places, which means your margin and profitability is a lot higher.

“Another critical issue is getting the OK from government departments – you need at least implicit support.

“The software development in Japan is surprisingly quite weak so there are lots of opportunities there.

“It’s a protectionist country in some ways but only if you’re competing in an entrenched industry.

“Being such a large market, even a niche product or service can be extremely lucrative.”

FDS is about to launch a web site tailored for a Japanese audience which will provide a business to business e-commerce site for the architecture, engineering and construction industries.

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