High quality requirements on the Japanese market – how to cope with the challenge?

Author: Zoltán Bassa

Why quality is so much important in Japan?

Despite its shrinking share and changing product profile due to Chinese, South Korean and emerging countries’ competition, Japanese products still retain a global fame of high quality, reliability and durability.

A historical reason for such a phenomenon is that in medieval Japan artisans and farmers that those producing goods had a higher position in society’s hierarchy than merchants. Even today we can notice that inside a Japanese company those with the knowledge of how to produce goods have higher prestige and more influence on the decisions as opposed to those who are involved solely in sales or marketing. Before purchasing products, compared to their counterparts in most countries, Japanese buyers need more detailed product information concerning its production process, raw materials and quality. Even after successful sales, buyers are coming up with additional demands for information and product improvement.

There are also geographical and social factors for high quality requirements. Because of frequent natural disasters and a humid climate, products should be safe, resisting physical influences, humidity. A country with a very high population density, hygienic requirements are strict in order to avoid epidemic and contamination. In the case of food and beverages, veterinary and phytosanitary standards and requirements can be surprisingly demanding. The packaging of any kind of product must be perfect, especially when it comes to being undamaged, with very sound sealing and labelling. ‘Anzen – anshin’ as the Japanese term goes: ‘If it is safe, I am relieved’.

Although they are the importers that come up with strict requirements, in most cases expectations and special requests originate from the final consumers who are accustomed to the almost perfect domestic products. In Japan ‘Customer is the God’ and their requirements are mirrored by retailers’ stringency and that is passed on wholesalers, distributors and finally through the importer falls right back on the producer.

The perception in Japan is that Europe is a region possessing deep cultural and industrial traditions, innovation and high technology. European products thus can have a higher prestige and price level, but expectations are also higher.  This becomes a more complex problem when you realize that the Japanese see their own concept of total quality management as a guarantee for high quality: products must be thoroughly checked at as many points of the production process as possible, using detailed and exact standards. Contrary to this, there still many SMS in Europe focusing more on the final stage(s) of production when it comes to quality control and there might be less parameters checked.

What should you be aware in terms of quality when entering Japan’s market?

              Checking the regulations

Higher requirements have a footprint on the Japanese food safety and sanitation, imports and quarantine rules that are very detailed, in particular when it comes to the use of additives and pesticide residuals. Some rules are not clearly defined, therefore when there is uncertainty it is advised that the importer check or double-check the content of the regulation by directly contacting the authorities. It is also important to note that there can be company-level special requirements, e.g. for microbiological limit values. For certain products like pharmaceuticals and cosmetics, there is a license procedure that can be time-consuming and costly. One should avoid complaining that Japanese rules are stricter than European. In many cases they simply have a different logic and structure.

              Agreeing on product specifications

Apparently the most important business document is sometimes not the sales agreement or purchase of order, but the product specification sheet. During discussing and agreeing on specifications, it is strongly advised to negotiate about, check and confirm every letter and number on the document. The Japanese side might come out with their own format of product specification where some additional information might be required. The most important is that versions of the European and Japanese side must have the same content, so it is highly advised that any additional details must be included in the business partner’s specification sheet, even if the format is different. When there is any change of specifications during business, this should be noted for the Japanese side and specification sheets must be amended and mutually accepted by the partners.

              Drawing up and agreeing on the production process flowchart

For fear of losing technology secrets some European producers are getting suspicious when the Japanese buyer demands a detailed production process chart. While for sample sending or less complex goods a relatively simple chart works, in many cases a very detailed production process flowchart is necessary right from the start. There are several reasons for this. To judge which customs nomenclature (HS code) is to be used, it is sometimes the process detail that decides. Also, when it comes to factory audits or claim processes, the Japanese side is referring to the chart rather than to any detailed sales agreement. The chart should include all the details of the packaging process as well, right until the loading place of the production plant. If there is a significant change in the production process, the flowchart should be amended and mutually accepted.

              Japanese are very loyal buyers, but quality claims are almost unavoidable

Roughly speaking, once the second commercial delivery has arrived safely, we can expect further orders and, in many cases, a long-lasting business. However, it is dangerous to lean back and become lenient in quality. Nice words and growing order volumes do not mean that there is a less strict quality expectation. In case of minor problems, there is only a ‘comment’ or ‘note’ coming from Japan, asking why the small defect happened and asking to avoid it next time. If there is information required, it should be answered to the best knowledge. When a claim is coming in, it should be taken much more seriously, because this is the most important point when trust can be saved. Claims should be answered quickly and thoroughly, in written form with formal signature. Improvements to avoid further problems should be made and explained in detail. Although we can receive new and new questions from Japan during a claim Q&A process, it usually does not mean that the problem is escalated. It is simply a hunger for all aspects of the problem that is reflected. Believe or not, the Japanese side in fact wants to help by being so strict to contribute to the improvement of production quality and to avoid further claims later. Claims, if properly answered, usually do not hinder further business. In fact, they can strengthen trust, something that was so hard to achieve in earlier stages of the business.

Be proactive when you need information

There are times you feel like the most obvious quality aspect for you is not reported or discussed. Feel free if you need information about consumer satisfaction, how they found your product, be it taste, functionality or any other aspect that is not part of specifications. In Japan there is a strong tradition and propensity of collecting data so you can expect quantitative results as well.

Extra efforts and their fruits

The above said, it is not surprising that some companies have special internal rules for production standards, quality checks when they produce for Japan’s market. If it is so, it can be reported to your buyer in Japan showing your commitment. Also, if you plan to improve quality in any respect, inform the Japanese party beforehand. It will be appreciated, but deviation from your earlier agreed standards needs to be discussed beforehand. Entering Japan and being able to deliver on an orderly basis is an excellent reference for you globally. It is your strongest competitors that might be most aware how difficult a challenge you have achieved. Also, you can count on your Japanese buyer to fulfil paying terms exactly the way that you have agreed – a stabilizing force in your finances.

Conclusion

Besides a competitive price, quality is probably the most important factor when entering Japan’s market. It is important to prepare for extra requirements, devote extra time and patience to do that successfully. Whenever you feel the conditions are too strict, try to take it as a learning process in which your products’ quality can surely become more competitive on global markets. Behind harsh requirements there is always a large portion of the need for long-term cooperation and harmony in the heart and mind of your Japanese business partner.

Ready for the challenge to export to Japan?

At Sudy & Co., Ltd., we can help you to start out and keep on track towards a successful business in terms of quality related aspects of business, too. Whether it is the initial mapping of business chances; product and process related discussions on quality; reaching the effective way of communication and presentation; handling claims for the satisfaction of both parties, we are here to help you.

Feel free to contact us today to explore how we can help you succeed in the Japanese market.