First, welcome to Osaka. When Tahsin came here 13 years ago, in 1979, the place was completely unfamiliar to us. Fortunately, we got a lot of help and suggestions from Tatung Co., which had come here before us. We've always remembered their kindness with gratitude and are pleased to be able to return the favor in some small way by helping recently arrived companies from Taiwan today.

Tahsin Co. started doing business in Japan as far back as 18 years ago. Thirteen years ago, it formed Tahsin Shoji Co., which is a joint venture with Nan Ya Plastics. Losses were heavy at first, and the company was on the verge of bankruptcy when I was ordered to come here. It was really pathetic. We hadn't done a market survey or got our quality and technology in shape, and we met with setbacks left and right.

New Products to the Rescue: I went from technician to plant manager to production manager at Tahsin, and raincoats were my specialty. But in Japan, the companies we worked with thought I was trying to elbow in on their territory, and they wouldn't let me sell any I was stuck, and I decided to develop some new products, starting out with motorcycle raingear and fashion rainwear in bright designs (fashion rainwear was my idea.) Besides being new, they were sold through motorcycle shops and mass merchandise stores, which avoided overlap with our existing distributors. Next I came up with a dual-function motorcycle poncho that's resistant to the cold as well as the rain, and now it's one of our main products. When I think back on it now, if I'd insisted on trying to snatch that little piece of pie from the others, we might have been eliminated long ago.

There were a lot of setbacks when I first came here too, like our Tahsin brand knockdown plastic closets--they sell well in Taiwan but in Japan we couldn't sell a one. Later it dawned on me that no matter how we tried to sell it, it would always be too "Chinese" and it wouldn't suit Japanese tastes. So I spent some money and hired a Japanese to redesign it, and that's when sales picked up.

Later, we developed golf club head covers to diversify operations more. Since we'd never made them before, he had a lot of returns at first. I still remember spending 140,000 yen around New Year's one year for a steamroller to roll over the rejects. As much as it hurts, you've got to do it. Your brand name is on it, so you can't let it get out and ruin your reputation.

Raising Quality the Key: I finally found a Japanese consultant to help improve the quality of production at our Taiwan factory, but it wasn't easy. Japanese industry was still very conservative back then, and that kind of person was considered a traitor by people in his field. Practically no one was willing to go to Taiwan for three years and give us technical guidance. Management in Taiwan thought that was too long and the pay was too high, and they finally decided we should pay half the cost. Well, the consultant drove them so hard in the factory they screamed and hollered, but he really did raise their technology and management.

I bought some Japanese equipment for the factory, too. My boss didn't approve at first, because the same brand and model of equipment cost a million NT in Taiwan and buying it in Japan cost twice as much. But I said if the price is different, it's different. The stuff they use in Japan is better. I wound up paying for half of that, too.

Looking back on it today, I think the greatest contribution I've made to Tahsin isn't our annual sales here of US$30 million but the new products I've developed and the new concepts and new technology I've brought in. People sent over here by Taiwanese companies usually try to boost performance and earn a quick buck, but the only way for overseas sales people to build a real foundation for success is to help the factory back in Taiwan build up its strength.

Fortunately, that's also the way our CEO, Mr. Hu, looks at it. Before I came to Japan he told me, "I'll give you five years." When I heard that, it gave me quite a start: How can it take five years, I thought. Well, that's how it turned out. Tahsin Shoji lost money the first three years, broke even the fourth, and only started making money the fifth. If it weren't for Mr. Hu's total support, Tahsin Shoji probably would have beat a hasty retreat long ago.

Stick to Your Guns: I was prepared for a long, hard fight, and I swore I wouldn't go back to Taiwan unless I succeeded. To avoid distractions, I came here by myself the first year. when I brought my wife and children over, I forced them to "go native" and made the children go to a Japanese school. It was pitiful at first. The kids didn't understand the word "recess," and they just sat there like dummies when everybody else was heading out to the playground. My wife couldn't adjust either and cried every day the first three months she was here. Since I was so busy trying to open the market, it was ten years before I took them on a trip. I was so busy sometimes I couldn't make it home at nights. But when my Japanese friends heard how determined I was to bust my back here, they were really moved and they'd say, "Ah, Lin san, then I'll help you!" A lot of companies sending people here talk about four or five years or something--if they don't change their approach, I don't think they should consider doing business here.

The reason is simple. When Japanese do business, what they focus on is personal relation-ships and establishing long-term trust. Upper-, mid-and downstream are linked closely together, and it's hard to change the companies you word with. I gave out free samples to a lot of firms when I first got here, and even though they thought were pretty good and the price was right, they were afraid to take them. They didn't know me, for one thing, and for another, they already had solid sources of supply and they didn't want to offend old clients for the sake of a new one. My only hope was to develop new products using new materials.

Sometimes the Japanese stress personal relation-ships even more than the product itself. Even though we've had experience in Osaka, for instance, the branch we opened in Tokyo has been losing money for three years now. Tokyo is more conservative than Osaka, and the customers there come to Osaka and buy from me instead of buying through our branch in Tokyo simply because they know me better. Not only that, but banks loans and dealings with companies in the same line of business also depend on the reputation of the person in charge. If you switch people every four or five years and break up those relationships, how can you expect to do long-term business?

Approval of Your Peers: People often say that doing business with the Japanese is like marrying: It's hard finding the right person, but once you have, you're not likely to split. Also, there's no such thing as the "low end" in Japan, so as long as your products are up to snuff, they'll usually earn you a pretty good profit. Buyers don't try to slash prices like they do in Europe and North America.

It's hard to get business in the beginning, of course, but what's even tougher is that even if you get it, you have to think twice. Once a company in Wakayama wanted to buy 8,000 raincoats, and I was tickled pink. I went all the way over there to meet them and even helped them put together a catalogue. The deal was nearly closed when somebody told me that they only paid attention to the price and didn't care about quality and that if I did business with them it would damage our reputation, hurt our bank credit and so forth. When I heard that, I had to call the whole thing off, no matter how painful it was.

To put it in a nutshell, there are traps for the unwary everywhere in overseas sales. A company coming in from outside can't figure them all out, so you've got to ask around and join the local in dusty association to build up your contacts and protection. Tahsin is a member of the Kansai Rainwear Association and the Packaging Industry Association, and we had 20 members from the packaging association visit Taiwan this June. To make it in the local market, you've got become one of them first and win the approval of your peers.

Learn to Be a Japanese Boss: The last thing I want to talk about is how to get along with Japanese workers. Maybe a lot of people have the same feeling: The Japanese don't trust small foreign businesses, and so it's particularly hard to hire workers. Our first two workers were women in their fifties that we were introduced by other companies in the same line because we couldn't hire anybody younger. That's a problem that wasn't solved until the firm found itself on a firm footing. Our most recent employees are all under 30.

If you hire Japanese workers, you've got to use Japanese management, of course, which means giving a summer bonus of 2-1/2 months' pay and a winter bonus of 2.8 months' pay, for instance. That's seen as a part of their salary and can't be eliminated, whether you're making money or not. I treated all our workers to a trip to Hawaii in June. That's another part of the benefits.

Japanese companies place a lot of stress on employee benefits, and worker loyalty is correspondingly high and job hopping low. We've got people here who've worked for us for eight, 10 or 12 years, and they work very hard. Our business grew by 15 percent this year. I feel like it's been too fast. I been so busy I've barely managed to keep up--maybe you've noticed already that the only people with long hair here are me and chief Chiu, who's also from Taiwan--we haven't even had enough time to get our hair cut. That's why I'd like us to make a profit next year, but a growth rate of five percent would be enough. But the goal that the Japanese workers set for themselves at the end of this year is 13 percent growth next year. They think now's the time to go for it and a little effort is worth it. It's really sweet. Selecting a quality workforce is important, of course, but the corporate culture helps to create one, too. It's up to you. There is no royal road to running a business in Japan. The Japanese work hard, so you have work harder than they do. The benefits are more than worth it.

[Picture Caption]

Large in scale and installed with the latest equipment, Tahsin's warehouse is admired no end by the businessmen from Taiwan.

Lin Ching-chih's 13 years of experience in sales are most instructive, and his earnestness and sincerity left his guests with a deep impression.

Your chances of success are higher if you set up in Osaka first instead of Tokyo--those interested, please take note.

Lin Ching-chih's 13 years of experience in sales are most instructive, and his earnestness and sincerity left his guests with a deep impression.

Your chances of success are higher if you set up in Osaka first instead of Tokyo--those interested, please take note.