Small and medium-sized companies looking to penetrate the Japanese market, especially the food industry, should take a hard look at the country's rules and regulations and use trading firms to make their initial foray, regional exporters say. Although the world is coming to like Thai food, manufacturers must do more in order to market it to foreign countries, say the panelists at the seminar. Asean is poised to become a major hub of production, says Mr Kissinger. Japan, one of Asia's most prized export markets, is also one of the toughest nuts to crack. Stringent rules and regulations take time and resources that some smaller firms simply cannot afford. "It is tough to get through in the initial stage, but once there the returns are worth all the effort," said Imelda Madarang, vice-president and general manager for RFM Corp, a Philippines-based company that exports heavily to the Japanese market. Speaking at a recent seminar on exporting Asian foods to global markets, most participants said that although the world was coming to like Thai food, manufacturers must do more in order to market it to foreign countries. Japan, for example, is a prosperous country that must import a large amount of food to feed its 128-million population. It is estimated that the average Japanese household has more than $100,000 in savings and a disposable income of about $3,800 per month. This provides a huge opportunity as long as a supplier can gain the trust of Japanese consumers. Exporters need to keep abreast of the changes in rules and regulations in Japan, says Mr Takai. "It is necessary to go through trading firms if you are to enter the Japanese market; even companies such as ours have to use these trading firms to penetrate the market," said Charoen Kaowsuksai, assistant vice-president of C.P. Retailing and Marketing, a unit of agribusiness giant Charoen Pokphand Group. CP continues to encounter obstacles when exporting to Japan, including heavy restrictions on the ways the food is cooked and processed imposed due to fears of contamination. "If we export to Japan, they cannot have any kind of foreign body in any of the consignment, as even a single foreign body - be it flies, bees, additives or any other thing - would mean that the entire consignment would be rejected," he said. "Therefore my best advice is to read through the regulations and then make the move." Another way to penetrate the market is to get locals spreading news of the product through word of mouth. This strategy was used by the Philippines-based RFM, which targeted expatriate Filipinos in Japan to get the ball rolling for its products. "We were very successful in using the Filipino ethnic groups as a springboard to launch our products, apart from displaying our products at various exhibitions, such as Food Expo Japan and Asean Food & Beverage, which helped us," said Ms Madarang, whose company experienced difficulties when it first started to export to Japan. Apart from this, Thai SMEs can also act like an OEM, whereby the customer's branding is used on products made by the Thai company. "We are a one-product brand and did not have a brand strong enough to penetrate the market overseas, so we co-branded and entered the market," said Pravit Santiwattana, executive director of Thai Edible Oil, a small rice-bran oil producer located in Ayutthaya. Such moves would help Thailand achieve its goal of becoming the "Kitchen of the World" and also help the country's SMEs to expand their markets. "Asean's importance is self-evident; it has a population of 570 million, is rich in resources and is conveniently located near Japan, China, India and many other important markets," said E.E. Kissinger, director of the general development office at the USAID Regional Development Mission in Asia. "Asean is poised to become a major hub of production, feeding Asian and global markets." Michiaki Takai, general manager for food and safety administration at Itochu Corp, one of Japan's leading trading firms, said that rules and regulations changed very often in Japan and therefore food exporters to the country needed to keep themselves abreast of the changes. "The recent changes that have been implemented are things such as hazards either from new agricultural chemicals, new additives or from global supply sources," he said. Apart from this, he says that product labelling is another key aspect, where exporters must disclose all relevant information on the packaging. These include any health risks, such as allergies the product may cause. The lack of such details in the past has led the Japanese to reject 97 consignments from Thailand. Microorganism specifications comprised the bulk of violations. This is part of a series of articles to help food-related Thai SMEs expand their markets to more profitable countries. Next week will feature a breakdown of the Japanese market, tastes, preferences and ways to win over Japanese consumers.
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