 Think Tech Hawaii. Civil engagement lives here. Good afternoon. This is Ray Tuchiyama for another exciting segment on business in Hawaii. Actually, we're talking about business in Hawaii, business companies led by visionary CEOs who wish to export products, especially to Japan and other Asia Pacific markets. And this is a huge new area for businesses in Hawaii and throughout the world, exporting. And today we have a guest who is really involved in assisting business in Hawaii to export to Japan and other Asian Pacific countries. His name is Lyle Fujikawa from the Department of Business and Economic Development and Tourism. And we're looking at Japan as a great market for goods from all over the world. But we think, and Lyle thinks, and the Department and Hawaii State thinks that there's a receptive market for quality products from Hawaii. And Japan is quite unique to Hawaii. There's nearly two million tourists a year from Japan. They spend time on the beaches, at restaurants, shopping. And there's back in Japan about 600,000 to 700,000 people involved in hula and Hawaiian music practicing the ukulele and really interacting with the Hawaiian language and anything that really sparks their interest in things about Hawaiian history and culture. Welcome to the show, Lyle. Thank you, Ray. We appreciate it. We appreciate the invitation to speak, and it's always a pleasure to see you. Well, let's define what the state of Hawaii does to really help Hawaii business export to Japan. Where can we start? Well, we have an annual program. We're actually leading up to, we're waiting for the decision. It's actually a grant from the SBA. It's called High Step Hawaii State Trade Expansion Program. And it's something that we've been doing for about, oh, I want to say seven, eight years. And we really have systematized things. We work with great partners like the SBA, SBDC. That's a small business administration. Small business administration, who gives us the grant, but we have partners who do consulting the Hawaii Pacific Export Council, HPEC. SBDC also helps us with counseling. What we do is we prepare Hawaii companies who are selling well, and they think they can get to the next level and actually export product to Japan or to other markets. So what you're saying is that they've already developed a product for the Hawaii market first, right? Right. And they've already enjoyed some success. Let's see. They're looking for the future. So let's say they're in Waikiki, or they have some product in Don Quixote, perhaps. You have all these Japanese tourists buying it, and they see, oh, we have something. And so what is the next step? They understand that they need to sort of localize their product to make it acceptable or even readable of the brand name and what it's about. In the Japanese language. Into Japanese language. And they say, oh, what should we do? So we do get a lot of inquiries like what do I need to do to get my product into Japan? And that also includes the packaging, right? Packaging. And how to present them. And quality. Quality. Yes. The whole bit. So there's a big gap in terms of what the Hawaii companies understand. They may have gotten success to a certain level, but then they need to really jump to another level. So through our program we work with a lot of other partners to give them that kind of advice. It's concrete, systematized, and to get them literally into the market where they can meet with potential distributors and customers as well. So you prepared a way for companies that have had some success, early success, and you're correct. The Don Keori's or the shops or Waikiki stores where they may have their product on the shelves. They've already tested it out with Japanese because they're Japanese tourists. Right, exactly. Hawaii. And when they buy it and they bring it back and they enjoy this word of mouth, and then more people come to really seek out that product. And suddenly the people behind that product, the CEO, the owner, and the marketing folks said, wow, there must be a market in Japan. Yes. The business owner or people may have traveled to Japan and seen this opportunity, well, you know, a product that is similar, or maybe they see there's a gap and say, oh, our product should be here in the gap. And we could fill this. This is an opportunity. So we have all kinds of companies that we help large and small startups to establish companies. And we've been finding great success through our business to business introductions. We have this one particular show, Tokyo International Gift Show. We're going to lead up to that. We'll lead up to that. And that's a B2B activity. But more recently, we've been doing actually B2C, sort of a pop-up show in Osaka. And that's been hugely successful. Now, B2B means that you're marketing or selling or kind of showing your products to other businesses, right? Correct. Become your partners, your distributors, or channels within Japan. Exactly. That's one thing. And B2C means people off the street who may look at the products as, wow, it's great. But somehow, if you modify it, it will be even better for the Japanese consumer. Exactly. Right. Correct. As you said, the B2B is really about the distribution, right? As we, you and I know very well, since we're working in Japan, distribution is key. You need to have an importer. Someone who's going to take that product to another wholesaler who will go to a specialty retailer, very complex. And we discussed this even before the show. Right. It's even complex for Japanese companies who speak Japanese, write Japanese, but are befuddled by the complexity of distribution. And sometimes they say that this is a barrier to business in Japan, even within Japan itself. It really is. We have partners on the ground, our friends at the U.S. Commercial Service, at the embassy, export.gov. And what they do, they do have specialists understanding each market, category, geographic. They provide information and relationships, and they will make introductions. And so using their support, we will put on a show like the Tokyo National Gift Show and match up businesses with potential importers, potential distributors and all that. Well, why don't we go and show what a show looks like? Sure. Can we have the first slide up? All right. What is the showing there? These are the... Where is the show? This is in Umeda, Osaka. This is actually the Hankyu, Hawaii Fair. And I just went there in July, the beginning, first week in July. This is a B2C show. Right. Hawaii companies are able to bring their product and sell directly to Japanese consumers. And what is this product we're seeing? This is Chocoléa. Oh, yeah. Erin is an up-and-coming star. She's got a great product. Her mission is to bring about world peace, one piece of chocolate at a time. Well, and again, we were talking about before the show, her Chocoléa chocolates really reflect an obsession of quality. Yes. It's an authentic Hawaii story. Yes. It's from a white-washed cottage in Manoa. Yes. And when you take a bite of that chocolate, you're experiencing the breezes from Manoa Valley and you're part of Hawaii. Exactly. It's definitely aspirational. I always show this pyramid at the very top. It's emotional benefit. And it's something that all consumers will aspire to, but especially Japanese. They want to be in Hawaii. They want to be like you and I locals. And they want to understand what it's like to. And now, when I see that, what was that company trying to do? Showcase a product to Japanese consumers or distributors? Yes. Or trying to attract more people to buy things in Hawaii? So specifically, she's selling to consumers in Osaka to show that her product has a viability. Right? She would sell continued. I'm not sure if a lot of people know this, but in Valentine's Day of February is huge for chocolate in Japan. Right. And so what she was trying to do was to show the viability of her product and that would be popular. And so for Hunkyu to actually bring her product in for Valentine's Day, Valentine's Day is millions of dollars in revenue. I think it's billions. It could be. It really could be. Because as you and I remember. It's the White Day afterwards. That's right. But the Gini chocolate is another whole sub-genre. It's not just people you like. It's like people you're obligated to. Right. You're controlled and so forth. So there's this economic activity that if she can just get a piece of that. Wow. She got it just in the consign reason. That's like $500 million. That's huge. But fantastic. So she was showcasing this product to gain visibility. To gain visibility brand. To gain feedback as well. It says well what flavors were working. How did you think of my packaging? Wow. And talking to the consumers as much as possible. Okay. Next slide. This is also part of the Hawaii Fair. So all the photos are from the most recent. Right. Very, very new. Very successful fair. It happens every year in early July for seven days. We have 250,000 consumers of all demographics and what have you come through. But the sponsor, Hankyu Umeda Department Store, is the Arbiter style in Osaka. It's upscale. Very luxury. It's upscale. It's like you're in North Shum named Marcus. The people who come in are, you know, they have money. Right. They're looking for authentic products. Right. Right. Quality. Right. And the kind of thing that is really, again, the emotional ties, you know, to whatever Hawaii experience that they have. And I see it's dresses here. I know I can. There's apparel. There's gift, you know, items. Right. Cosmetics, skincare. It's like a, I mean, it's a Hawaii Fair. So it has everything. It's like a mini ball. It's a mini ball for seven days. Okay. Next slide, please. That they do. Nina Tai, she's been very successful. She has two stores in Waikiki. Apparel that is for young women. Very successful in her business as well, because what she's done is understand what the Japanese consumer wants, making sure that she continues that, but she pushes the edge and, you know, in terms of design and all that. And what is her market niche? I would say it's young Japanese women. 20s, 30s. Are they like, you know, fashionable? Definitely fashionable, but they have disposable income. Okay. So they will spend money. Her price point isn't super high, but definitely the quality is there. But she had brought up the idea. So she's been in Hankyu for at least three years. Right. From the very beginning, she says, we need to do a fashion show. Wow. And so she brought up that idea, and it took two years to do it. You do it. Yeah. Everything good takes time, right? In Japan. So she brought up the idea, successful, you know, filling up the time, getting people to buy stuff. And, you know, again, promotion, you know, showing, you know, her product and other people's, you know, apparel. But she's a great partner because what she does is shares her information. Each time she always learns something new. And so she's the kind of entrepreneur that we want to, you know, help. I mean, she's not waiting for, tell me what to do. She's doing it. And then she says, I'm trying to do this. Help me with this. And so we keep, you know, adding together. And so it becomes very synergistic. Terrific. And we're going to come back to more exciting stuff for the Hawaii Intrometer in a few moments. Well, I'm Dave Stevens, host of the Cyber Underground. This is where we discuss everything that relates to computers that just kind of scare you out of your mind. So come join us every week here on thinktecawaii.com, 1 p.m. on Friday afternoons. And then you can go see all our episodes on YouTube. Just look up the Cyber Underground on YouTube. All our shows will show up. And please follow us. We're always giving you current, relevant information to protect you. Keepin' you safe. Aloha. Are you tired of sleepwalking through life? Are you dreaming of a healthier, wealthier, happier you? You're not alone. And that's why thousands of people tune in each week to watch RB Kelly on Out of the Comfort Zone Tuesdays at 1 p.m. Make a change. Get the help you need. And stop sucking at life. Hey, Armi, we're going to go live. Hello. It's 1 p.m. on a Tuesday afternoon. And I'm your host, RB Kelly. Welcome to Out of the Comfort Zone. Welcome back to a scintillating discussion at the Hankyu Department Store in Umeda, Osaka, where the top Hawaii companies and entrepreneurs want to really find success in the Japan market through the assistance of the Hawaii State Agency in economic business development. So we have Laya Fujikawa. And could we have the next slide up, please? And here we go. It's a lot of pink there. It's a Hawaiian hotel. It was their anniversary. And so they had a booth of their anniversary items, merchandise, and they allowed Hankyu to borrow the design elements. So that's the center of this huge amphitheater floor that they put all the stores around. SmackDev in the middle is Banan. And this doesn't show, this doesn't do justice, but you see those stanchions there. They didn't have them in true Japanese style. They waited for the line to really develop. And then they said, OK, we've got to put control on here. And the line didn't go, hundreds of people. And what were they lining up for? Banan. Banan is a frozen dessert. Again, entrepreneurs, a bunch of kids who decided they're going to make a business. I know the one in the university. Right. And I heard that, well, this is the first time that they actually sold in Japan. So that had a huge cache and huge effect on the sales. What was the reaction? It was tremendous. Everybody was lining up and they were paying, I think it was like $10 at least. So they were making money. I heard they had a licensing deal that started. So very happy to be helping companies get to the next level. Our job is to, we really take a lot of startups and guide them with other people's help. They're partners to get to be a viable business, continue to help them with branding. And then we're in the more mature part with the exports. But you're correct with the branding and so forth. But there's a lot of preparation that goes into it. You just can't hop on a plane tomorrow and go to Osaka and expect to know how to, say, exchange cars, Japanese meshi, business cars, or have the right packaging, or have Japanese and English on your brochures, or to have pricing or your channels of distribution all figured out before you go. These are very complex areas that really deserve a show by themselves, all these topics and websites also. But what would you recommend people to do before investing in a booth? Would you recommend people just going to one of these shows? Most definitely. Actually, Erin, earlier at Chocolier, she had realized that she wasn't at the stage to actually have a booth when she did the Tokyo International Gift Show. So that was a couple of years ago. And she said, I'm just going to go, I'm going to see how things are, I'm going to check out the market. And so that's the very first thing you can do. It's very inexpensive now to travel to Japan. And you can just go for a few days, check out the market. But in terms of strategy, definitely want to talk to us at DBED because we have our high step program which has training seminars, consulting, we're helping you by subsidizing and putting together this Hawaii Pavilion. So they should really contact us right away, get into our email newsletters. We have a lot of things that are online and you can start learning from there. We have other people who have been successful, but they've had to really figure things out. There is like food items. They have to be very careful because as you know, Japan restricts beef imports from the U.S. to Japan. Even still, beef jerky is kind of off the table. But there may be other food products that can be sold in Japan, but they have to really talk to the right people including the Department of Health state people here to get really insights and guidelines on what is the best types of food products to sell in Japan. As you know, pharmaceuticals and food are two areas where Japan is very strict on ingredients and so forth. I'm glad you touched on that because we do have in terms of the Hawaii brand, we have a lot of opportunity for great food products that can be exported, but you just have to do it in the right way. Meaning that you need to have the right agent to help you localize your ingredients in this and make sure that you're not on some list that's going to get rejected. You're passing customs. Exactly, getting through customs. Making sure that your products are packaged in the right size. The quantity is not a huge thing. It's not like everybody goes to Costco every day. They buy things every day to put in a small refrigerator. Which retailer are you going to be a gift item with surprising? There's all these basic things that you could start with your basic business plan and as an extension of that say you're going to create your export plan and refine it towards that. But again, because Japan is such a different market it's almost like a whole new business plan because are you going to create it manufacturing in Hawaii and then ship it or at some point will I manufacture it? I thought these are great questions because some entrepreneurs will say well I sold in Arizona and sell the same shape or packaging or same ingredients in Japan. That's the case of death right there. So that would be very careful and get the best advice. But again, market entry, oh can we go to another slide before we go into anything else? Here's another one. This is a tremendous opportunity. This is actually Michelle Zane. Zane is her brother. Michelle has a company called Hanaho which is in Hilo creating Laohala products and I didn't realize this but she says her a pouch or a wallet can last for 50 years 5-0. It can define a Laohala part. Laohala, the tree the mangrove tree they have specific types of tree species that they harvest the leaves and store it for some time. It becomes really a treasure because things are handmade they're very high quality so it's perfect for the Japanese. Authentic based on culture it's definitely related to Hula it's all related to all those things very aspiration and emotional you would invest in something like this because it's going to last for a long time. They would pay a lot of money if it becomes almost like an heirloom or something you could really show your friends that this links you again to Hawaii a big part of this is also too that they had this demonstration so we had more space this year because Dibe is investing in this partnership with Hankyu we have more space for more companies and we had a table as you saw people doing demonstrations and so when they are doing something hands-on there's going to be an even closer affinity towards a brand that was a great experience and we hope to keep replicating I think the hands-on experience for local people to go and they'll go back and tell their friends next slide please just to show Hankyu is actually part of a huge group of department stores they acquired Hanshin department stores they own a railway company this is in the station it's a digital sign Umeda station so it's leading towards the tracks department stores behind and it shows this is Hawaii this is what you aspire to be like or in or around and come to the Hawaii fair and you can be a part of it so they have huge presence on the web they have a video and all the trains will have these signs in there and so they bring the people and I think Hankyu would not do it for just about anybody I think there's a very good emotional, cultural, historical ties with Hawaii Japan has the cultural ties the values, the history backing up a little bit though Hankyu definitely is an expert at what they do to partner with them we as the state are basically validating yes, we're bringing authentic products the cultural part is sort of certifying if you will we fit very well as a partner because we definitely want to promote Maine and Hawaii Maine and Hawaii products as best as we can and so that's what we're doing to push towards them and by partnering with this partner people in Japan then have the approval quality that they know it's been vetted and they know it's an authentic product and it's coming from a state of Hawaii where they really like and love and also in the end though you're creating a pathway for local Hawaii entrepreneurs creating jobs locally so that it will be again, export driven small business and I think it's easier to start a business now in Hawaii than when I left for Japan 20 years ago but to continue that to keep it sustained is hard so what we're trying to do is to find these other opportunities for companies to sell and why we do the big B2C is that validation like you said, building the brand and giving them a lot of feedback which they normally would not be able to do well again, Japan is a huge market it's the third largest economy in the world over 11.5 trillion dollars and like we said it has a population that loves Hawaii 600 to 700,000 people who practice the hula and do music but we're unfortunately at the end of our show and we could go on forever different topics on quality and business development and distribution which we think are very important to people who are coming to Japan and finding success and I want to point out that my column on export in Japan will be featured in the September issue of Hawaii business, it's a plug shamelessly by myself and working with Hawaii companies and other companies for market entry I want to thank all our viewers and especially Laia Fujikawa for another great segment for Hawaii business in Hawaii, thank you very much