Selling to a frugal Japan

Kioicho Fukudaya Bldg., 6-12 Kioicho, Chiyoda-ku, Tokyo 102-0094
Tel: 03-5211-2101 • Fax: 03-5211-2102
E-mail: office@sccj.org

Board Members
Chairman: Carl-Gustav Eklund
Vice Chairman: Ulf Nilsson and Yukio Yogo
Treasurer: Kanichiro Hirata
Directors: Carl-Gustav Eklund, Höganäs Japan
Ulf Nilsson, Nobel Biocare Japan
Fredrik Alatalo, Nippon Ericsson
Anders Pentelius, Alfa Laval
Magnus Wetter, Embassy of Sweden
Mats Bruzæus, Garuda Japan
Kanichiro Hirata, Swedbank
Koh Tokuda
Yukio Yogo, IKEA Japan

The SCCJ promotes Sweden-related business in Japan by supporting the Swedish business community and by creating a more favourable market environment for its Swedish, Japanese, and other member companies.

“Sweden is a small country if you just look at the nine million population, yet we have very strong and diversified industry,” says Carl-Gustav Eklund. He points to world-leading Swedish companies in sectors that range from heavy industry to dental implants. “But we have three or four times the export dependency of Japan,” he adds. “We are a humble people who know that we have to export to survive.”
Eklund is chairman of the Swedish Chamber of Commerce and Industry in Japan (SCCJ). Founded in 1992, the chamber has 140 members, including internationally known companies such as IKEA (home products), Electrolux (electrical appliances), Sandvik (engineering) and Ericsson (telecommunications).
The chamber works closely with the Swedish embassy and trade organisations to promote investment. Last year they organised 24 events in which 1,400 people participated (see page 31 of this issue for a report on one event).
The economic relationship between Sweden and Japan began a century ago with steel, wood and paper pulp exports. Later it shifted to technical engineering, pharmaceuticals, design, software and retail. Most recently, Swedish retailers such as IKEA and H&M have become household names in Japan. “The timing is very good now,” explains Eklund. “Over the last decade Japan has turned into a frugal society. It’s popular to buy high-quality products at low cost.”
Sweden’s positive image in Japan is thanks not only to such companies, but also to Sweden’s natural environment, sophisticated product design, and social system. “Since I first came here 30 years ago, Japanese people have been telling me how they envy the Swedish system,” says Eklund.

Swedish ergonomics
Some Japanese look to the way Sweden is dealing with its ageing society. Already, Sweden has managed to raise its birth rate through policies such as childcare and sexual equality in the workplace. Sweden has also turned its design expertise to products for the elderly, a potential business opportunity in Japan. “Japan has a lot to learn about ergonomics in hospitals and elderly care,” says Eklund.
But to succeed in Japan, Swedish companies need more than just image, namely, “a good product and patience,” says Eklund. A presence in Japan is also essential, i.e., a local subsidiary, not just a representative or distributor, he says. Without that, it is difficult to get the “true story” about the Japanese market.
While it is easier for Swedish companies to enter the Japanese market than it was before, Eklund is disappointed at the “very slow” rate of change – something he views as more inertia than active attempts to obstruct foreign business. “There is much more that European companies can do in Japan,” says Eklund. “We hope that the EBC can be a strong force for deregulation. If we can reduce non-tariff barriers, there should be a win-win situation.”
Like their Japanese counterparts, Swedish companies traditionally place a strong emphasis on long-term relationships, notes Eklund. “Both partners and customers in Japan look very carefully to see if a foreign company has a long-term commitment,” he says. “We are doing very well because we have many similarities with Japan.”