Targeting the Japanese Market

Presence in Japan provides almost automatic entry to the markets of Southeast Asia

Sándor Laczkó
February 18, 2020

The Hungarian Export Promotion Agency (HEPA) opened a regional partner office in Tokyo in May last year, assisting Hungarian firms to enter the Japanese market and establish a firm presence there.

“Last year was very important in Hungarian-Japanese relations as we celebrated the 150th anniversary of the two countries establishing diplomatic relations. We thought it was also quite a nice landmark to consider when we decided to open our regional office in Tokyo,” HEPA CEO Balázs Hendrich highlights to Diplomacy&Trade. Japan is a market HEPA considers important and strategic, and thus, being there physically, having a local presence with dedicated staff is crucial. The EU-Japan partnership agreement that came into force in February 2019 also gives a special relevance to the opening of the HEPA Japanese regional office. The agreement opens new business opportunities for Hungarian companies through synchronisation of quality standards and certification systems and the continuous reduction of customs tariffs. The CEO points out that Japan was one of the countries from the late 1980s that really supported Hungary when it opened its markets during and after the change of its political system. “They were one of the first significant, serious investors that came to the help of the new Hungarian economy, which was a great base for further cooperation. We are very happy that the Japanese market also appreciates the quality of the Hungarian products and considers them a kind of taste of Europe.” Since its opening, the regional office has helped to find Japanese business partners for Hungarian companies in different business sectors such as food and ICT. The partner office organized successful B2B meetings during the Foodex 2019 exhibition for the exhibiting Hungarian companies. It has also played a key role in catalysing the cooperation between companies of the Hungarian space industry sector and Japanese high-tech companies.

Japan as a benchmark
Key Hungarian exporters to Japan mainly include those from the fields of electrical parts, machinery, chemical products and food products. “Our target is to increase the export of high value products and services. As Japan imports most of its food product needs, it represents a high potential market for quality Hungarian food products. Obviously, the best-known goods are wines, food products and meat products like mangalitsa – there are quite a number of special products of Hungarian origin (Hungaricums) on the Japanese market. We are very happy in that the average Japanese household likes these. Custom made ICT solutions have also had considerable successes in recent years, for example, in the field of process control and facility management,” Balázs Hendrich stresses. He adds that the knowledge and preparedness of Hungarian companies fit well with the very prestigious and very high-quality cautious Japanese market. “We know that the bar is very high, and it is a big challenge for foreign companies in general to jump over this bar and be successful on the Japanese market but once they are there – and that is one of the pieces of strategic advice that we give to Hungarian companies once they are capable of providing the goods and services to the Japanese market – it creates almost an automatic access to the countries of Southeast Asia where Japan is considered a benchmark: if a company is successful in Japan it is also accepted in these countries.”

Busy office
Hungarian presence in Japan is on the rise but things can always be improved and HEPA’s Tokyo-based regional office plays a significant role in it. According to the CEO, the office has a busy agenda. “We assign tasks to this office that we receive from Hungarian exporters. With some market analyses and market research, they dig deep to identify potential on the Japanese market. On the other hand, they also pick up opportunities based on taste and need. They figure this out from the local market and send the information back to us. Based on this, we start searching among our exporters. We also work to raise the overall awareness about the Japanese market within the Hungarian business community. We provide firms with knowledge about the market that allows them prepare themselves in a faster and cheaper way.”

Regarding local organizations, partners in Japan who promote Hungarian exports, HEPA from Budapest and the Tokyo-based office are working with many people and organizations. “These include the local commercial attaché, based at the Hungarian Embassy, who – similarly to HEPA – also belongs to the Hungarian Ministry of Foreign Affairs and Trade. On the other hand, the regional office – that covers seven other Southeast Asian countries: South Korea, Vietnam, Thailand, Laos, Cambodia, Myanmar and the Philippines – also works with similar missions from the Visegrád Four countries and other states from the east central European region. They also work with some EU backed organizations. It is a Japanese specialty that they have large trading houses, trading conglomerates, so to get in touch with them and establish operations with these big Japanese conglomerates that are very important to reach all over Japan,” the CEO says.

Education and openness
In addition to the distance, the difference in business cultures between the two countries is also considerable. According to Balázs Hendrich, foreigners can only be successful when they adjust to the local specialties and local culture, therefore, HEPA is providing training and education to the companies on how they should prepare for meetings with Japanese businesspeople. “We also train them how their packaging and exhibitions should look. So, I think education and openness are important when delivering services and goods to that market,” he concludes.

Sándor Laczkó

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