Japanese SMEs to Explore Market in China

On August 20， the Bank of Japan released a monthly economic assessment report， in which judgement of the current domestic economic situation is summarized as “weak”. This is the first time in a decade that they have reached this conclusion. Due to the depression of Japan’s domestic market， Japanese SMEs are seeking the opportunities outside in order to expand sale channels. Recently， sponsored by the Japan External Trade Organization (JETRO)，“2012 Good Goods Japan (China)”kicked off in Beijing on August 14， 2012. One hundred and Fifty Japanese SMEs with more than 2，000 daily necessity products came to China seeking buyers.

Increased scale of the exhibition year by year with significant effects

According to Mr. Yasuhiro Ishida， director in charge of Creative Industries Promotion Department of JETRO， as the long-term showcase of Japan daily necessities， JETRO has held the exhibition of “Good Goods Japan (China)”for three years in a row.

The exhibition introduced nearly 200 high-end enterprises in the fields including household supplies， beauty health care and sports leisure. The number has increased from 12 companies in 2010 to 150 companies this year with over 2000 kinds of products， four times the amount of last year. Most of them are debuting in China. This year， the exhibition is held from June 2012 to the end of February 2013 in six cities — Shanghai， Shenyang， Beijing， Jinan， Hong Kong and Chongqing. These enterprises could communicate with the local Chinese buyers through different kinds of activities.

Mr. Yasuhiro Ishida told China’s Foreign Trade that last year 80% of the enterprises reached cooperation with the agents. They not only found Chinese agents， but also entered Chinese market. Considering the significant effect， many SMEs are encouraged to participate in this event. This year， the enterprises participating in the tour for the first time accounted for 40% of the total enterprises.

Concept of delicate creativity， good quality and environmental protection

The 150 Japanese companies showed classic techniques， innovative technology， fashionable designs and environmental protection concepts. The exhibits are very popular in Japan and many are bestsellers.

When visiting the exhibition， I found many products appear ordinary， but in fact they focus on quality guarantee and the innovation of traditional technique.

At the section of kitchenware tableware， Japanese traditional manual products such as Shimizu ceramics， persimmon glaze pottery， bowls and teapots， not only showed their respect to conventional methods， but also dis- played the characteristics of the natural materials.

I found one new product like fridge， but the staff from this company told me that it is a fresh-keeping rice chest that has gained eight patents in Japan. He explained that during the rapid development of China’s economy the standard of eating among Chinese people has continuously improved， while the consumption of high-quality rice in wealthy families has also increased. They further thought that although Chinese market currently sell rice cabinets， they do not offer such combination of rice cabinet and air-conditioning， which can stop the surface of the rice becoming oxidized， prevent the emergence pests， and maintain the quality record. Meanwhile， its cooling system has the effect of energysaving. They believe that this product will be popular in China.

At the section of interior decoration commodity， whether it is air conditioning vent devices with the function of air purification， household slippers with fragrance， environmental-friendly cooling pads， household hygrometers， security lights， infant bedding， or purified drinking fountains for pets， all products have one thing in common —they all display creativity and environmental protection functions.

I witnessed in one of the booths， a row of soft organic cotton slippers placed neatly and orderly， seemingly no different with ordinary slippers. However， according to the staff these slippers have a certain speciality: the organic cotton for the slippers is cultivated on healthy soil without using pesticides and fertilizers for more than three years， but natural fertilizer in accordance with the certification standards of organic cultivation. Afterwards they place the ladybug to rid of any worms. The materials are completely environmentally friendly natural without any harmful chemicals; therefore consumers can dress at ease.

Another booth was covered with different kinds of stickers. According to Miss Liu， gilt stickers are high-tech products that can not be imitated with high value-added. Nowadays， only two companies are capable of producing it in Japan. Gilt processing is applied with Japan traditional gilt manufacturing， which adds gold dust to decorate the surface of the ink powder and make it glossier. It has vivid three dimensions with the latest printing technology; its powerful bond doesn’t use any tools and attaches on the object surface simply and securely. The price of a sticker is very cheap， costing only RMB 60.

Not far， another booth was decorated with iron teapots and earthen brazier， Mr. Iekura told China’s Foreign Trade that Kutani brazier is the traditional craft of Ishikawa Prefecture with a history of more than 350 years. This type of pots in cast iron production in China is very popular. When you use it to boil water， the iron component is dissolved， which could add to the full-bodied taste of the water and supplement the hematopoietic iron element to the body. Now， a set of products from low-end to highend is sold at RMB 4，000 to RMB 9，000. He said though rising cost is inevitable， the enterprise explores new products to balance the rising of cost and is strict with quality control.

When passing along the area of beauty and healthcare， one product in particular attracted my attention. The staff told me that was a ‘nostril hood’. This product is different with the traditional face mask and has been immensely successful. It was released on the market in October 2008 and so far has sold 150 million pairs.

The area of bathroom and cleaning supplies all appeared green and healthy. According to Mr. Yasuhiro Ishida， these products are completely made by natural raw materials and its green environmental features developed through rigorous scientific process.

Mr. Yoshinori Kishimoto showed a toothbrush in his hand to the reporter，“Do not look down upon it， this anion toothbrush of ‘KISS YOU’ gained the No.1 position on Japan’s largest cosmetics website，” he told China’s Foreign Trade that the built-in battery generates anion that could not only remove the tooth decay effectively， combat gum disease and bad breath， but also make gum active through micro-current. This toothbrush without toothpaste also can clean the tooth surface effectively and prevent the pigmentation on surface of the teeth. Also it is fitted with substitutional brush heads and when the battery runs out， the handle will prompt the user.

“This facial tissue has a variety of flavors， such as chocolate taste. If you don’t believe， come to smell it.” Mr. Fumihiro Hayashi passed a tissue box with cartoon pattern to the reporter. It exactly gave off the chocolate flavor. Products including elements like the Japanese cartoon and the style of fashion in Japan are popular among young people. He also expressed that with improvement of standard of living， Chinese consumer demand higher requirement for household products， and this kind of products will be popular in the market.

Optimistic about the great potential of the Chinese market

During the interview， many Japanese exhibitors told the reporter from China’s Foreign Trade that they are very optimistic about the development of China.

Only one percent of 150 participating enterprises have set up factories in China which produce products to supply not only the Chinese market but also overseas. However， this is partly explainable due to the small scale and little understanding of Chinese markets and related policies. Most of SMEs have not set up the factories in China but have plans to open the factories when the amount of volume is increased year by year. Now， considering the factors such as technology， raw materials， as well as tariff， the majority of companies have chosen to directly export products to China for now. The products are mostly sold around Shanghai. Besides attending this type of exhibitions to look for suitable regional agents， many companies also take advantage of online channels to promote their products.

Mr. Jiang Dali told China’s Foreign Trade that the company he worked for came to the Chinese market in March this year. It not only sold products in outlets in Shanghai but also sold on Taobao. Its flagship store is located in Jingdong Mall. While， Mr. Yoshikawa Taizo， president of Shanghai Excellent Co.， Ltd.， said the handmade cloth toys are sold in large shopping malls in Shanghai. Last year’s sales volume reached approximately RMB 400，000. At the beginning of this year， his products were sold on Taobao and recently his company has discussed about the cooperation with Jingdong Mall. He believes that the Chinese market has great potential and wishes in the future products could be sold not just in Shanghai， but also in other cities. He expected that this year the volume could reach around RMB 1 million.

At the end of the interview， Mr. Yasuhiro Ishida stressed that this tour not just helps Japanese SMEs to develop new market in China， but also brings more beautiful life concepts to Chinese consumers through the introduction of high-quality products from Japan. He expected that both Chinese enterprises and Japanese companies would seize the opportunities to further strengthen trade relations and cooperation.