Many westerners know Japan primarily as a producer of high-end consumer electronics and cars. Indeed, the economy of this island nation of nearly 130 million people relies heavily on these exports.

Japan has run a trade surplus for many years, with exports significantly outweighing imports. Recently, though, the situation has begun to balance out.
“A strong currency has brought Japanese consumers purchasing power,” says Finnair Cargo’s VP, Global Sales Pertti Mero. “Because of the strength of the yen, European products have been selling well in Japan. For instance when H&M opened three stores in Tokyo last year, there were long lines outside them for several weeks.”

Finnair Cargo now flies fully-loaded between Finland and Japan, with roughly a million kilos of freight going in each direction every month.
“The rise in the yen translated directly into lower consumer prices in Japan. For instance, the price of European watches dropped significantly in Japan, so this has not only benefited importers and retailers,” Mero notes.
 
Japanese consumers appreciate Nordic design and know-how. Along with design and other items, Norwegian salmon is flown to the homeland of sushi and sashimi.

Sales agents expand network

The global recession has rattled Japan’s economy, with GDP declining by about six percent last year.
“In November 2008, Japan suffered a sharp drop. Air cargo volumes between Japan and Europe dropped by half, a bigger plunge than anywhere in the world,” Mero says.

Now Japan’s economy is recovering, and the air freight market is also perking up. This year Japan’s GDP expected to rise by about two per cent.

Mero has first-hand experience of Japan’s economic decline and recovery. Until the end of last year, he was based in Tokyo as head of Finnair Cargo sales in Japan and Korea. Now Finnair Cargo sales in Japan are handled by general sales agents (GSA’s) rather than in-house.
“Through these agents, our sales network has expanded and we’ve gained more sales power,” says Mero. “Along with our traditional bases of Tokyo, Osaka and Nagoya, we’ve gained representation in Sapporo and Fukuoka through GSA’s.”

Finnair Cargo has 19 flights a week to Japan’s three largest cities – Tokyo, Osaka and Nagoya. The country’s industry is concentrated in and around these cities. For instance, Nagoya is home to an automotive cluster built around the world’s biggest car manufacturer, Toyota.
Finnair Cargo aims to ensure that Japanese companies can get their products to European markets.
“The success of Japan’s export industries is vitally important to us. Finnair Cargo offers support to Japan’s export industries, customers and forwarding companies, with whom we carry on a continual dialogue,” Mero says.
Japan sends many of its world-famous consumer products to Europe by air. Automotive spare parts and car factory components are also often sent by air freight.

New growth through state funding

While Japanese consumers have been enjoying their growing purchasing power, the nation’s export industries have suffered because of the strong currency, which has given a competitive advantage to Korean manufacturers, for instance.
And the economic downturn is only the tip of the iceberg when it comes to Japan’s economic problems. For years now, the country has become accustomed to slow economic growth.
Since a new government took office, though, Japan has now begun to systematically build new growth in order to meet both the turmoil in the world economy and the nation’s own structural challenges – such as population ageing.
“Japan has decided to invest in green technology among other areas,” says Mero. “They have a huge number of patents, and are concentrating heavily on product development and innovations.”
The Japanese government has announced that it will spend more than 100 billion euros on reforms aimed at bolstering employment and corporate financing. 

During the summer season, Finnair has 20 direct flights every week to Japan. There are daily flights to Tokyo and Osaka, with six flights a week to Nagoya. You can access all of Finnair Cargo’s Japanese timetables at http://www.finnaircargo.fi/en/cargo/routemap.html.

Markets for Finnish products

In Japan, there seem to be products and services to meet every need. For European companies, finding a business niche in the Japanese market can be challenging, partly because of high labour costs and tough competition. In order to break into the market, western firms must thoroughly study Japanese standards and the local business culture.

According to the Tokyo Export Centre run by Finpro (formerly the Finnish Foreign Trade Association), Finnish companies have potential to succeed in Japan in fields such as IT, biotechnology, value-added products of the forest industry, functional foods, products for the health care and ecological building sectors.
However, success in Japan, where consumers are highly quality-conscious, requires the right attitude.
“In Japan, the saying that ‘the customer is God’ is true. This can be seen on a daily basis in the over-the-top service culture. Quality consciousness means that everything must work properly,” says Mero. 
 

Tourist information regarding Tokyo, Nagoya and Osaka is available on Finnair web site (Plan & Book -> Destinations -> Intercontinental)