Shinsaibashi is one of Osaka's busiest commercial districts. On Christmas eve, a street that stretches shop-lined for nearly a kilometer is packed with holiday shoppers. In the surrounding neighborhood, which is full of companies and financial institutions, in a new office building not far from the headquarters of Matsushita (the top dog among Japanese electronic companies), 18 Chinese firms last October 22 moved into the Taiwan Trade Center of Osaka.

　Picking Osaka for Its Special Character: In Japan, where Tokyo is the unquestioned leading city, why pick Osaka?

　Osaka was picked "as a result of a number of considerations including climate, geographical advantages and harmony with the people," explains Chiang Peng-ta, director of the Osaka office of the Far East Trade Service Center, who also serves as director of the Taiwan Trade Center there. Thirty Taiwanese companies have already established offices in Tokyo, he explains. But in Osaka, besides nationally owned concerns such as China Steel and the China International Commercial Bank, only Tahsin has an office. "Most Taiwan businesses have a firm impression of Tokyo and often overlook Osaka, which is more suitable for Taiwan businessmen."

　The atmosphere of Osaka does indeed differ greatly from that of Tokyo. "It's really a lot like Taipei here," says Y.K. Tsai of the computer company Acer when asked to describe the city in which he is posted. The architecture is disorderly, the not-so-wide streets are always packed with cars, and there are easy and harmonious relations between people. For those ill-suited to the distant and indifferent, workaholic fast track of Tokyo, where the doors are strictly guarded and the hierarchy clearly established, Osaka gives one a feeling of "being able to breath once again."

　Furthermore, Osaka was one of the original major industrial cities of Japan. A number of traditional Japanese industries, such as pharmaceuticals, food products, textiles and miscellaneous items, all made their rise in Osaka. While the city has been in decline during the last 20 years, it is still a center for wholesale goods and still has active mid- and small-scale firms. The structure of its industry does not differ vastly from Taiwan's.

　"Generally speaking, in Tokyo firms of any country will be dealing with government and large financial institutions and companies whereas in Osaka mid- and small-sized firms are most important," Chiang Peng-ta points out. Hence, in consideration of the relative difficulties, "first try Osaka, then Tokyo" is the policy CETRA has decided upon.

　The Asia and Pacific Trade Center's First Client: CETRA was anxiously searching for the new home of the Taiwan Trade Center of Osaka when the Osaka city government came up with the concept of an Asia and Pacific Trade Center to restore the city's commercial strength. Given an offer that it couldn't refuse, the Taiwan Trade Center became the Asia and Pacific Trade Center's first client. As the first client, the Taiwan center's success or failure and what people say about it are naturally quite significant to Osaka. As a result, the Taiwan Trade Center is enjoying more than a few special privileges. For example, the contract stipulates that a sum of 1.7 billion yen will be paid up front as rent and then returned in six years when the contract expires. "In Japan, where deposits are not usually used, something like this is unheard of," said CETRA's Liu Ta-chun. What's more, with the help of the Asia and Pacific Trade Center, the representatives of the 18 Taiwanese companies dispatched to Osaka were all able to obtain one-year business visas, unlike many Taiwanese businessmen who have been in Japan for years, still hampered by the regulation that they must go back to Taiwan every three months to get a new visa.

　With the advantages of climate, geography and harmony with the people, the temporary offices have been completely readied. There are 20 offices, from 24 to 36 sq. ft. in size. Each office is fully equipped with chairs, tables, closets, cabinets, telephones and fax machines, designed to save the companies time and money in getting their operations off the ground. The problem was, who would want to become the center's first occupants?

　A Squad of 18 All-Stars: "At first we were worried that no one would come," says Li Fu-shan, the deputy director of the Osaka center who is actually in charge of operations there. It was known from previous investigation that Taiwanese firms had deep-rooted fears of Japan and no interest in attacking the Japanese market. Currently, Taiwan exports more than US$9 billion worth of goods every year to Japan, but the vast majority of this is bought by Japanese who come to Taiwan to buy themselves. And it's easy to come to and go from Japan, which is only a three hour flight away. It would seem of little sense to spend a lot of money in Osaka, where the costs are even a bit higher than in Tokyo. Thus, there was a logic to Li Fu-shan's concern. Fortunately, more than 20 companies came to apply for 20 offices. CETRA's loose conditions were that each company have exports of at least US$1 million and that a representative must be posted in Osaka. From these applications, "18 allstars" were selected.

　The 18 companies selected make different products, are of different size, and have different backgrounds and attitudes approaching the struggle of gaining a foothold in Osaka. Together they make quite an odd group.

　Those who have experience "in the Japanese way" are of course more assured. Take, for example, one of the stars of Taiwan manufacturing, Acer computers. Using its own brand name of Acer, the company established an office in Tokyo three years ago. Now yearly operations total 1 billion yen, the equivalent to selling more than 1,000 computers a year.

　"Admittedly, the Tokyo operation is the ugly duckling of Acer's ten foreign branches, but Mr. Shih [Shih Chen-jung] has taken Japan as a test: if we can do it in Japan, we can do it around the world," says Manager Y.K. Tsai. And with this attitude, Acer decided to join the group at the Taiwan Trade Center in Osaka--for profit or loss.

　The Homer Printing Company of the Hsinchu Science-based Industrial Park, which does high quality printing, on the other hand, expects that it can turn a good profit. "Right now Homer can do NT$60 million worth of business a year in Japan. Shiseido, for example, found us to print their cosmetic packaging. But our boss feels that waiting in Taiwan for people to come and see us is too passive. With the company's strength, we should be able to get a bigger market in Japan and so we have decided to come ourselves," said Lin Ho-shih, a retired plant head at Homer who has come to lend a hand.

　Taiwan's largest domestic manufacturer of integrated circuits, Advanced Semiconductor Engineering is "starting from scratch" in Japan. "ASE has more than 60 customers in America and Europe, including such major names as the American firm Texas Instruments. But Japan's own integrated circuit industry is extremely strong. If it wasn't for a soon-to-be-finished plant in Malaysia, for which we will need consumers, and the weak economies of America and Europe, we wouldn't be going to Osaka," states frankly the manager of their Japanese operation, Hsu Ching-ju.

　Different from America? Of course each firm's plans differ. Some are already actively visiting customers whereas the representatives of other companies have already closed up shop and gone home after a month of frustration. But generally speaking, "the companies have been making inroads faster than expected," says Li Fu-shan with delighted relief.

　In coming to Japan with guns a blazing to open up the market, each firm, of course, has met different difficulties. Nonetheless, all have had the experience that "the Japanese market is a hard target to hit." "Most importantly, the Japanese market and the American market with which so many Taiwanese manufacturers are familiar are completely different," says Chiang Peng-ta, getting to the heart of the matter.

　For the past 30 years, Taiwan has been directed toward the United States as its biggest market. American companies make their orders quickly -- in one shot for the whole year--and the types they want are fixed and the quantities large. And while the price may be low, the demands on quality are not great. Used to making this kind of "easy money," when Taiwanese manufacturers encountered Japanese, who take forever to place an order, ask for small quantities in a great variety of types and make mercilessly strict demands on quality, they were unaccustomed to this kind of anxiety and felt that the Japanese were taking them for a ride.

　But after understanding the special characteristics of the Japanese trading system and the consumer habits that have influenced it, the Taiwanese businesses discovered that their complaints were not really fair.

　Take, for example, the slowness at which the Japanese make orders. "The Japanese are by nature collective creatures. European and American bosses say something and it's done, whereas in Japan no one has that kind of authority," says Chiang Peng-ta. As a result, Japanese companies not only want to come to Taiwan and visit the factory before placing an order, but the president and then the staff will come in turns, and regardless of who comes no one can take unauthorized action--they all just take back piles of data for further research together. With this long, hard process, three to five months will go by and the Taiwanese manufacturer, only eager when seeing immediate advantages, will simply give up hope and no longer pursue the deal. Yet once a Japanese company internally comes to a decision, because there was first collective under-standing, it will be fast in administration and there will be few snags.

　Consumer-Orientation and Strict QC: The strict Japanese requirements about quality are also one of the major reasons for the "Nippophobia" among Taiwanese companies. Kao Shun-cheng, the manager of the Osaka liaison for Sampo, which is focusing on selling air conditioners to the Japanese, describes one of his main duties as listening to costumer complaints. He has even had the bitter taste of being scolded by Japanese customers for three hours at a time. "For major shortcomings it is certain that you'll get scolded, but even a slightly dirty box has been brought up as an area for improvement," he says, sounding a bit helpless. What one sees even more often are the expressions of dissatisfaction when a shop's maintenance man opens a box to find that the cord has not been wound up well. Especially since Sampo is currently only in Japan as a contracted manufacturer making machines for other companies' brands, it is of course even more important that they have to be very careful.

　"One reason the companies are so strict about quality is because Japan is a completely consumeroriented market. Under such high competition, with any hitch or flaw you can lose the client," said Chiang Peng-ta, giving the following example: A Japanese customer buys a piece of clothing in a department store and goes home to find that a button is lose. If this was Taiwan, he might consider himself unlucky and sew it up himself. But in Japan, regardless of distance, he takes it back to the department store, where the sales ladies offer 101 apo logies, present him with a new piece of clothing and ask the manufacturer to take the whole lot back and inspect every piece, all the while keeping records and making a report.

　"The Japanese are indeed very strict," says C.Y. Lin, a representative of the Columbus Mfg. Corp, which began doing business in Japan as early as seven or eight years ago and now does a yearly total of more than US$10 million. Recently the company paid for several of the heads of the companies with which it cooperates to come to Japan. This was done with the purpose of "letting them see how the Japanese check their goods." C.Y. Lin points out that even by talking himself blue in the face, he could never get these Taiwanese factory heads to understand the severity of Japanese checks for such frequently occurring problems as being short a piece (a screw or a small spare part).

　Not only must the product itself be complete and perfect, pre-sale product catalogues and after-sale service are equally important. "Information is so well disseminated in Japan that even the consumer is quite knowledgeable. The consumers are used to looking at product brochures to get a handle on products' special characteristics, functions and prices -- so there's no need for a heavy oral sales pitch," says Acer's Y.K. Tsai. There's not just one manual for a computer in Japan but three thick volumes--one each for beginning, intermediate and advanced users.

　It's easy to spout off the logic behind it, but the costs for three thick volumes is startlingly high. If you employ a Japanese designer to get that "Japanese feeling," you're talking about another big lump of money. "Only a couple of machines will sell in a year, but everything costs money," says Y.K. Tsai, laughing at himself.

　Because it is making its own brand, it has also got to handle after-sales service itself. "The Acer Japanese sales office has complained, saying how can one expect customers to bring in a 700-800,000 yen computer for repairs in Japan when servicemen there will go to your home to repair a 50,000 yen washing machine." In order to meet consumer expectations, Acer has established its own servicenet work in Tokyo and Osaka and commissions others to do the job in other areas. This is of course yet another big outlay of cash.

　When Will the Brands of Taiwan Raise Their Heads?! Stressing quality and service, Japanese consumers have cultivated a special consumer habit--going straight for highly reliable brand names--that makes expanding sales in Japan very difficult for Taiwanese brands. In Japan, where there is an attitude of worshipping the West and putting down Asia, "it can be said that there are not only no Taiwanese brands but no Asian brands--other than Japanese--that are famous there," frankly states the vice president of Lucky Sun Corporation, Kiyoshi Nishimoto, who is familiar with Taiwan businesses.

　In 1986 Japanese academics performed an interesting study, taking identical casual clothes of a Japanese brand name and dividing them into four groups: one group was left in its original form; the second group had the additional words "Made in Taiwan" added to the other side of the label in the collar; the third group had "Made in Taiwan" added to a less conspicuous place inside the clothing; and the fourth group had the Japanese brand name removed, which was replaced with an unknown brand and again the words "Made in Taiwan." The four groups were given to 500 consumers for appraisal, who as expected gave the first group the highest scores, the second and third group roughly equal scores, and the fourth group the lowest scores.

　"It's of no use occasionally to give physical proof of the deep-rooted prejudice against Asian products," says a book that discusses the situation of selling Asian products to the Japanese. Buying Asian products will bring an onslaught of deprecatory remarks such as "like to use cheap goods" or "not very impressive," which result in the internal barriers Japanese have against buying Asian products.

　Thus, even if Taiwan industries keep shouting for "creating one's own brand name," and a lot of Japanese businessmen such as Kiyoshi Nishimoto think that there is no other way when trying to open up the Japanese market, Taiwan businesses can't avoid the fate of making goods under a Japanese brand name.

　The Root Issue Is Raising the Level of Production: The company deserving of being called the most successful in Osaka, Tahsin, markets some products under its own Tahsin and Nanya brand names. But in light of the sales climate, President Lin Ching-chih says, "It is extremely difficult to have one's own brand--it's not as good as cooperating with a Japanese brand or a European or American brand already famous there."

　The problem is that Taiwanese companies have already learned a lot about the hardships of working with Japanese brands. Take, for example Sampo, which is owned in part by the Japanese firm Sharp. Sharp naturally does not allow Sampo to move into Japan and compete with Sharp with its own brand. The markets and product areas in which Sampo is restricted are all spelled out.

　"In the Japanese market we still only do work on contract for other companies, but we can't get jobs with the better names and so are forced to work as an OEM (original equipment manufacturer) for second-tier Japanese companies (such as Noritsu and Morita)," Kao Shun-cheng painfully explains. "Some of the techniques in these second-tier companies are inferior to our own. Who knows whether or not they'll dispense with us once they get our know-how?"

　Even more tragic is that over the past two year, with a strategy of doing low-cost contracting, Sampo has attained substantial sales for air conditioners there. Unfortunately, in so doing it evoked the envy of the Japanese industry. Matsushita and Mitsubishi, major manufacturers of the compressor, an essential part, cut the supply in half. "We had thought we could sell 5,000 this year, but because we can't get compressors we'll only be able to sell upwards of 3,600." Kao shun-cheng points out that if Taiwan can't raise the level of its production and supply the key parts itself and tries only to make progress in such skin-deep areas as marketing, it will never be able to break the yoke of Japanese control.

　Fickle Hearts Are the Biggest Worry: In opening up the Japanese market, all around are difficulties rarely encountered elsewhere, and a major problem of developing markets in America and Europe--finding personnel who are willing to be posted there for a long time--is just as much of a problem in Japan.

　"I deeply respect Tashin President Lin Ching-chih's statement that his 'grave will be dug in Japan,'" says Charlie Hsu of ASE. "But that was 13 years ago. Now Taiwanese have money, and they're soft and like the easy life. No one's willing to sell their life to the company anymore." Hsu, who speaks no Japanese, toughened his hide on the Japanese battlefield when no one else was qualified to go. He says frankly, "I certainly couldn't say what he did." Among those posted from the 18 Taiwanese companies, no small number requested a raise and a limit to their tour of duty before they were willing to come.

　On the other hand, Taiwanese manufacturers are famous for being able to adapt quickly. Once they get to the front line, they'll charge ahead by themselves. In Japan for just half a month, Charlie Hsu of ASE declared to his boss that if he didn't receive three orders before Chinese New Year, then he wouldn't come home for the holiday. Acer's Y.K. Tsai, on the other hand, already has three to five sales outlets in the works and is urgently trying to replenish his stock. Homer Printing has an NT$10 million deal in the works. Companies dealing in apparel, sporting goods, umbrellas, miscellaneous items and other areas in which Taiwan is strong have had an even easier time getting orders.

　Open for just three months, the Taiwan Trade Center in Osaka has already been making waves. Without even looking ahead to two and half years from now when the center moves into the Asia and Pacific Trade Center, the current situation is already quite O.K.

　Everyone Has the Chance for Their Own Office: "This is simply too important a base!" declares Y.K. Tsai. "Having spoken no Japanese for eight years, without the support of CETRA I wouldn't have had the courage to come." Low costs, extra legal consulting and such services as renting housing and taking phone messages are all advantages the center offers. But the biggest advantage is "the feeling of a home, that there's someone to talk to, a place to get rid of the frustration and loneliness."

　From clipping newspaper articles about the opening of the Taiwan Trade Center to his current negotiations with such companies at the center as Anchas Garments and Columbus Mfg., Kiyoshi Nishimoto sees the center through Japanese eyes. "Japan is a collective society," he says. "One firm coming won't attract anyone's attention, but 18 coming makes people sit up and take notice." He also jokes that the traffic in Osaka, which is as bad as in Taipei, also provides an incentive: when one considers the time involved in going for one appointment, one may decide that it's just not worth it; at the trade center, one can see 18 firms at one stop.

　The Taiwan Trade Center in Osaka seems to have had a good start. Temporarily putting aside the question of whether it can reduce the nearly US$10 billion trade deficit with Japan, Li Fu-shan's greatest hope is "that every company can be as successful as Tahsin and after growing strong go out and establish its own office, allowing more companies to participate in the opening of the Japanese market!"

　This wish ought not be difficult to attain. Let's wait and see.

[Picture Caption]

A Tienren tea shop makes Taiwanese travellers feel right at home.

(Left) Osaka feels a lot like Taipei, lessening the problem of adjustment. The photo shows a street scene in Osaka.

Japanese businessman Kiyoshi Nishimoto (right), who came to the center after clipping out newspaper articles about it, enthusiastically makes relevant suggestions to Taiwanese businesses. On the left is C. Y. Lin, assistant manager of the Columbus Mfg. Corp.

A collection of advertisements and a simple layout: This is the Taiwan Trade Center of Osaka.

Off and about on their own business, getting these Taiwanese businessmen together for a photo like this is no small feat. On the third from the right is Assistant Director Li Fu-shan, who is responsible for the center.

The director of the Osaka center, Chiang Peng-ta, who has been posted in Japan for many years, has his own outlook about how to break into the Japanese market.

The Japanese information industry leads the world, but Acer, using its own brand, has taken up the Japanese challenge. The picture shows Acer Marketing Director Y.K. Tsai.

Anchas Garments, which has the largest Taiwanese factory in the mainland city of Wuhan, has joined the group at the Osaka center. Shown is CEO Kao Sheng-hsiong.

Can the Taiwan trade center make a place for itself amid the busy streets of Osaka?

A Tienren tea shop makes Taiwanese travellers feel right at home.

Japanese businessman Kiyoshi Nishimoto （right）, who came to the center after clipping out newspaper articles about it, enthusiastically makes relevant suggestions to Taiwanese businesses. On the left is C. Y. Lin, assistant manager of the Columbus Mfg. Corp.

A collection of advertisements and a simple layout: This is the Taiwan Trade Center of Osaka.

Off and about on their own business, getting these Taiwanese businessmen together for a photo like this is no small feat. On the third from the right is Assistant Director Li Fu-shan, who is responsible for the center.

The director of the Osaka center, Chiang Peng-ta, who has been posted in Japan for many years, has his own outlook about how to break into the Japanese market.