Case Study: VenusRoses Labsolutions / SME / wants to open a branch office in Japan

VenusRoses Labsolutions – from BG

VenusRose Labsolutions was founded in 2009 in Sofia, Bulgaria. It is a privately owned biotechnical research, development and production company specialised in all-natural herbal remedies designed to improve people’s life.

WHY JAPAN?

When asked why she chose to do business in Japan, Ms. Hristova from VenusRoses Labsolutions explained that the premium segment of Bulgarian rose oil is really popular in Japan. She mentioned that when talked to about Bulgaria, Japanese people often think of rose oil and yoghurt. From their market study it appeared that a large part of the population would be interested in rose oil that is used in various sweet and healthy products. The company then decided to try to enter the Japanese market because it is a strong competitive advantage when the product and the ingredients are well known. Already since 2007, the company has been participating in trainings related to Japan and it has since made valuable contacts that gave them advise and feedback on their product. They made some first sales through direct mail delivery which gave them the confidence to continue with their focus on the Japanese market.

STEPS TAKEN – 2014 SME/EU-Japan Cluster Support Mission

VenusRoses Labsolutions attended the EU-Japan Centre’s biotech mission to Japan in 2014. Their participation was their first time to exhibit at a trade fair in Japan. By meeting various Japanese companies Ms. Hristova came to understand that her company’s product is adequate for the Japanese market and that the company would need to be ready to enter through different distribution channels than just direct sales. Through conversations at the BioJapan fair during the

mission, she found out that several retailers such as convenience stores or pharmacies were interested in her products. However, it became clear that the company first had to find an importer in order to sell to them. At the same time, in order to enter the Japanese market the rose oil products needed to be registered as safe to use in Japan. The company has had registration approval since 2007 but they found that the regulation has changed.

Since the BioJapan fair and the Centre’s mission then, VenusRoses Labsolutions worked to adjust their products to market requirements as well as the latest trends. For this they worked with several Japanese advisors to be clear on what is the right way to do the procedures.
Moreover, Ms. Hristova and her company worked on finding an importer. They have attended a different trade fair by themselves and managed to find a suitable partner: a big company dealing with food supplements and healthy food. They will manage the import procedure and so that the products can be delivered to retailers.

CHALLENGES

Their progress on the Japanese market did not come easy however. Ms. Hristova explained that they faced many difficulties in trying to enter the market. For example, they found out that Japanese packages are typically different from European ones. In Japan, they prefer flexible packaging like the ones for candies. Furthermore all labelling information is only in Japanese.
On subject of the Japanese language, Ms. Hristova discovered that it can be a real barrier.
She describes her experience when exhibiting at trade fairs in Japan. As a European it can occur that some Japanese don’t stop at your booth because of the psychological factor of there only being European people. The moment the Japanese representative of Ms. Hristova’s company came at the booth people seemed relieved and came to talk. In practice this means that is very difficult to present your company without any translation.
Finally, the process of importing goods is also a challenge. Doing direct delivery to resellers is not possible and instead you either need an importer that has storage space or you need to open up your own branch so you have the opportunity to hold some stock.

CURRENT STATUS – NEXT STEPS

As for their next steps in the Japanese market, Ms. Hristova mentioned that the company will of course continue to work with the importer that they found and reach the interested retailers and convenience stores through them. In the future, VenusRoses Labsolutions would also aim to open a branch of the company in Japan so as establish a presence with the Japanese people, which is something that they currently lack.  Moreover, the company wants to have a continuous presence every year at a range of trade fairs in Japan. They find that this is important to present new products and finding new customers in the market.
With regards to their products, VenusRoses Labsolutions is looking to develop a range of products specifically for the Japanese market. One of their products that sells very well in Europe is not well adapted to the market in Japan, because the type of symptoms it helps to relieve are not very common in Japan.
Finally, Ms. Hristova mentioned that by doing business in Japan you are always working and learning at the same time, the market is different from the rest. It is a challenge but when Japanese trust your company and the product, there is a continuous stable development and growth.

Based on an interview with Ms. Hristina Hristova from VenusRoses Labsolutions.