IMS Research Establishes Japan Office, Anticipates Japan Revenue to Double Over Next Three Years

October 2011 -- IMS Research is a business-to-business market research firm focusing on the electronics sector across a wide range of industries, including consumer, automotive and industrial--all of which are strongly represented in Japan. Upon seeing a significant growth in customers from Japan, IMS Research realized that establishing a physical presence in Japan would help the company grow even further. We spoke with Ian Weightman, President of IMS Research, about the opportunities the company saw in Japan, setting up the local office, and working with JETRO in the process.

Opportunities in Japan
Over its 22-year history, IMS Research has seen its product portfolio increasingly cover virtually all aspects of electronics, especially in the industrial, consumer and automotive industries, areas which closely match strengths of the Japanese economy. "I think [Japanese companies] need very detailed information on global markets and on the local Japanese market, in a broader cross-section of industries, and that isn't really the same for any other countries," said Mr. Weightman. "Where some countries are strong in industrial, such as Germany, others may be strong in consumer, such as Korea. But Japan has a balance industries across multiple sectors."

A few years after gaining its first customers in Japan, IMS Research engaged with the Japanese company Global Information, Inc. (GII) to be its agent in Japan. Upon seeing sales in Japan increase over the past few years, IMS Research saw it could further grow its business by having both a direct sales presence and analysts located in Japan, complimented by continuing support from its local agent. "When doing primary research on markets, we realized that we would get much better, more accurate and detailed information if we were able to hold our conversations with Japanese companies in Japanese language, [as well as] if people were able to visit to those companies in person more frequently, as opposed to trying to do everything by telephone or by email."

"[We] realized that we would get much better, more accurate and detailed information if we were able to hold our conversations with Japanese companies in Japanese language... ."

JETRO's Free Office Setup Services Used
IMS Research made use of the following JETRO services:

• Initial consultation on office setup procedures and comparisons between setting up a subsidiary (kabushiki kaisha, or KK), a branch and a rep office
   
• Further consultations with the Invest Japan Business Support Center (IBSC) legal staff and accountants in Tokyo
   
• Free office space - IMS Research's Japan country manager used the JETRO IBSC offices in Tokyo for several weeks until the company was able to find its own offices, and also used the meeting rooms to hold appointments

"The initial discussions helped me be more confident about the processes of doing business directly in Japan" said Mr. Weightman. "Also, the documentation they provided me with on the basics of setting up an office, the comparisons from the different entities, and what sort of taxes we'd have to pay gave me a strong starting point. I've set up of offices in different countries but never in Japan, so I needed help to understand what I needed to do, needed to know, and equally, what I didn't need to do."

Mr. Weightman described JETRO's role in the office setup process as "the glue around which we were able to do things". "We went off and did all the parts that we needed to do ourselves," he said, "but we were always able to refer to JETRO's documentation or staff to make sure we were going about things the right way."

Mr. Weightman noted additional, perhaps less tangible, benefits of JETRO's services to IMS Research's Japan country manager. "As the first person [in another country], it can be kind of lonely; it can be a very difficult experience for them. But by having the JETRO staff around, and being in the JETRO building, I think in his first few weeks in the company, [the country manager] was able to talk to other people and ask questions in a way that he probably couldn't do with others at IMS Research, be it because we didn't know the answers, or be it because of the time difference. He had people to interact with in local language, so I think that helped him really get started....That to me was one of the most important aspects of it. It was that bridge between ourselves and our new office [in Japan] that JETRO was able to offer."

"[We] were always able to refer to JETRO's documentation or staff to make sure we were going about things the right way."

Benefits of Having a Local Office
The greatest benefit IMS Research has seen from having a local office in Japan is the ability to personally visit companies, both those with whom it already has relationships as well as new potential customers. "We've now been able to create a local presence and somebody that they can call," said Mr. Weightman. "We feel that in the next six to 12 months and beyond, we'll be able to start capitalizing on some of those relationships. This will include new clients and those companies that had already been buying research from us, as we now have local language support. It will give them more confidence in buying more from us. That was always our plan, and it seems to be working." IMS Research is also planning to run conferences and "analyst days" in Japan. "We haven't done them yet, but now we've got a presence there, we're going to be able to do it," he said.

"We've now been able to create a local presence and somebody that they can call."

Outlook
Established in July, IMS Research Japan is already off to a solid start and has a very positive outlook for Japan. The company has recruited its first analyst, is in the process of recruiting another, and plans to eventually grow the team to around 10 analysts to cover areas key to Japan, including consumer, automotive and industrial, among others. The company also intends to write reports specifically for Japanese companies on the Japanese market, which is something the company has not been able to do yet without a local staff.

When asked whether the earthquake, tsunami and nuclear disaster affected the company's plan to set up a Japan office, Mr. Weightman said, "The tsunami occurred right in the middle of when we were going through the initial evaluation of where to put the office and when to start it?.We always felt very close to Japan through our agents and contacts that we already have there. And I think we felt it quite personally when the disaster happened....It was quite a major thing for us. Actually, that encouraged us all the more to go ahead right at that time....It very quickly became apparent that any help that people could give through charity was great, and we did that, but also what Japan really needed was the help in rebuilding economically and the rebuilding of confidence. We were already down that road. We just felt that we could do a good thing to actually keep going ahead, start to create some jobs and do something positive. It seemed like the right thing to do, and I'm glad we did it."

In light of these events, IMS Research's outlook for its business in Japan is "very encouraging," Mr. Weightman said. The company as a whole grew 42 percent last year and about 25 percent the previous two years, and it expects similarly strong growth from Japan as well. Revenue from Japan currently represents approximately 7.5 percent of global revenue, and the company hopes to double this figure over the next three years.

Some of IMS Research's customers in Japan include:

• Toshiba 
• Mitsubishi 
• Omron 
• Asahi Kasei 
• Panasonic 
• Fujitsu

"We see lots of opportunities in Japan. The more we look, the more we see," Mr. Weightman said. "Japan will probably be our fastest growing country or region proportionally in the company."

Japan Company Profile

*Note: The opinions contained in this article are based on the experiences of the interviewee. They are not representative of all experiences in Japan or working with Japanese companies, and do not reflect the opinions of JETRO.