Canton Fair

Wrong place, wrong time, false sales hopes

Japanese supplier struggles to attract interest as it seeks to expand beyond its home market

PUBLISHED : Saturday, 20 April, 2013, 12:00am
UPDATED : Saturday, 20 April, 2013, 5:35am

They came to Canton Fair for the first time in the hope of expanding into the Chinese market.

But they found themselves in the wrong place at the wrong time.

Kawamura Electric and Nitto Kogyo, two of Japan's largest electrical appliance makers focusing on the Japanese market, were the only Japanese presence among the 24,840 exhibitors at the fair.

That compared to the 17 Japanese exhibitors that attended the fair's autumn session last year.

Japanese goods and car sales have plummeted since a territorial dispute between Japan and China over the Diaoyu Islands - known as the Senkaku Islands in Japan - in August sparked nationwide boycotts of Japanese products. Despite the tension, Kawamura came in search for new customers at Guangzhou's oldest trade fair. The depreciation of the yen has heightened the company's need to look for markets outside its home country.

"We manufacture the products in China and ship them back to Japan for sale, so the appreciation of the yuan and the recent downfall of the yen dealt a double blow to our business," Kawamura's president, Arima Ryoichi, said.

The company's sales in China fell by 5 per cent last year, although they improved by between 10 to 15 per cent in the first quarter of this year. That meant little to the company's total turnover as more than 80 per cent of the company's sales were made in Japan.

"We are working with our sister company, Nitto Kogyo, to expand our markets into the Middle East and Southeast Asia," Ryoichi said.

"But most important of all we need to expand our market in China. We hope to reduce our reliance on the Japanese market to 60 per cent in about three to five years."

However, their first day in the fair didn't go well, with very few inquiries and no orders placed. Ryoichi blamed the poor showing on the booth's location. The company was in the fair's imports sector and not among other home appliances suppliers in the exports section.

South Korean company Geeben was also in the imports area, but its first morning at the fair was a bit different from that of its neighbour, Kawamura.

Geeben manager Kang Myung-gu said the company had at least a dozen inquiries about their new oil press in the few hours after the fair opened on Monday.

"With US$500 what would you do to improve your health? Join a gym? Visit a herbal doctor? Perhaps you could try out our product which produces the purest form of vegetable oil you can make at home," Kang said.

It wasn't cooking oil, by the way, it was meant for drinking - two spoons a day, Kang said.

The Korean company is eyeing the vast Chinese market, where a healthy diet and lifestyle have become more important issues amid growing wages and education of China's consumers.

The machine extracts oils from various seeds, from sesame to flaxseed, each said to contain different vitamins and nutrients like omega 3 beneficial to the skin or digestive system.

But was the company worried about being copied before even selling one in China? Kang said he was "a little bit" concerned but insisted the technology - which contained a built-in temperature sensor designed to best suit each kind of seed - was not so easy to copy.