Thomas Seiler, what makes the Japanese market interesting for your company?
As an ICT company, we are always interested in markets in which there is a strong industry on the one hand and where electronics plays an important role on the other. Of course, with its huge high-tech and electronics industry, Japan is a prime example of such a market.
How has u-blox Japanese business developed since it entered the market 15 years ago?
In the beginning, it took a relatively long time for us to be accepted and the Japanese customers to feel confident in our solution. In the first five years, we did almost no business. At some point, however, we managed an initial breakthrough, which changed our position in Japan abruptly. Today, Japan is our second most important market in Asia after China.
What finally helped you to make a breakthrough?
What applies in many markets, applies to Japan as well: especially at the beginning you need local partners – be they certain people, institutions or companies – who already have a foothold in the market and are able to open the doors for you. In our case, this was a renowned Japanese university professor who dealt with positioning technology. Of course we were lucky too: our launch in Japan coincided with a time when the country was considering placing satellites in space and building its own subsystem for positioning technology. We were able to take advantage of this sentiment and position ourselves as a competent partner.
ICT is one of the leading industries in Japan. Is there even room for foreign suppliers in the market?
As a foreign ICT company, you do have to compete against strong local competition in Japan. At the same time, the ICT market is a very dynamic one in which many things happen and there are always opportunities for entry. The decisive factor is that, as a foreign company, you have to bring along a product that, on the one hand, matches the environment and, on the other hand, clearly differentiates itself from existing products in the market. This requires a good understanding of the market and an eye for the niches in which you can position yourself.
How did you manage to establish yourself in Japan over all these years?
From my point of view, the decisive factor was that over the years we have been able to develop a heightened awareness of Japan’s high standards. Japanese customers demand high quality, always want precise answers and will not give up easily if a problem arises. To meet those demands, we have hired local staff who are familiar with the country’s business culture. But our entire organization also had to be sensitized to the country’s high quality standards. Otherwise it would not be possible for our people on site to meet local demands.
Quality and precision are attributes that are also associated with Switzerland. To what extent does u-blox benefit from the good image of Switzerland in Japan?
As a company with a Swiss background, you are naturally used to high standards of quality and precision, which must be helpful in Japan. Conversely, the umbrella brand Switzerland alone is not enough to meet the high expectations. In general, there is a certain mistrust of foreign offers in Japan. You have to work hard to earn trust and acceptance here.
Apart from the high quality standards, are there other hurdles to be considered when entering the market?
We have never encountered hurdles of a technical or regulatory nature in our entire time here. On the other hand, it is very important to learn to understand and respect the cultural aspects of the business. In Japan, the customer is always right. If he or she makes certain demands, you do everything to fulfill them. You have to be aware that things can get difficult in such a context. Your own organization must be able to learn how to manage such situations and how the different cultures can work together best. This process takes time.
What advice would you give a Swiss ICT SME wanting to gain a foothold in the Japanese market?
In my view, three basic requirements must be met: First, an SME must bring along a product that truly differentiates it from what the local market already offers. Second, you have to be patient, efficient and ready to engage with the local business culture. And third, you absolutely have to find a way to acquire partnerships that will help you get the business into the market. This is certainly an aspect that requires more time in Japan than anywhere else.
About Thomas Seiler
Thomas Seiler has been CEO of u‑blox Holding AG since 2002 and a member of the Advisory Board since 2006. In 1987, he became a member of the Executive Committee of Melcher Holding AG, Switzerland, and its CEO from 1991 to 1998. After that he led Kistler Holding AG, Switzerland as its CEO from 1999 to 2001. In addition, Thomas Seiler is a member of the Advisory Board of Artum AG, Switzerland. He holds a degree in mechanical engineering from the Swiss Federal Institute of Technology (ETH) Zurich and is an MBA graduate of INSEAD, France.
The listed Swiss company headquartered in Thalwil, in the canton of Zurich, manufactures small modules and chips for positioning and wireless communication for industry, automotive and consumer goods. The company was founded in 1997 as an ETH spin-off and currently employs around 1,100 people – spread over locations in Europe, the Americas and Asia. In Japan, the company has been active for about 15 years, and with its own subsidiary since 2007.