With the recent visit by Wen Jiabao to Japan, the press is in a frenzy about Sino-Japanese relations. After all, it’s been seven years since any top-level Chinese officials set foot in the land of the rising sun, and anti-Japanese sentiment looms large as China has historically considered Japan a rival. It was only two years ago that young Chinese in Shanghai and Shenzhen protested all things Japanese, violently smashing up Japanese cars and restaurants without impunity.
Yet in the world of retail and business, it’s another tale.
Japan’s Shiseido gets prime real estate on the cosmetics floor of nearly every single department store. Popular clothing retailers such as Baleno now offer a line of Japan-inspired women’s fashions. In the basement of Raffles City in the heart of Shanghai, a blindingly pink, flowery photo-shoot shop blaring Ayumi Hamasaki music videos sits right next to the Japanese Ajisen Ramen shop, where long lines are the norm. Did I mention that Japan is China’s number one trading partner?
This odd juxtaposition of politics in the face of retail outposts and business realities begs the question: what is the place of Japanese brands and styles in China?
Understandably, it’s a rocky marriage to say the least.
Take for example an anecdote in this Business Week article titled China Real Estate: The Japanese Touch:
Japan’s difficult history with its giant neighbor has haunted the WFC. What caused the most fuss was a circular hole at the top of the building that was supposed to represent “heaven” and serve as a way to reduce wind load on the building. But China linked it to Japan’s imperial symbol of a rising sun. In mid-October 2005, Mori caved, and “heaven” was changed to a rectangular opening.
Japan seems to be on the losing end of the car market — or so says this article titled Investing in China’s Booming Automotive Sector: Japanese Cars a No Go:
When we interviewed drivers in Shanghai, they overwhelmingly told us not to buy a Japanese car because the â€œJapanese are evil.â€ Investors should not underestimate the level of hatred most people in Asia have for Japanese. I used to live in the Philippines and Korea and the hatred is as palpable there as in China because Japan does not acknowledge its horrendous actions. Regardless of what political regime runs an Asian country, Japan is uniformly hated in Asia.
But while tensions explode over cars and real estate, softer goods such as cosmetics get a completely different reception. This article titled Japanese cosmetics players creep up on global rivals notes that China has driven the success of two cosmetics brands, Shiseido and Kao:
Japanese cosmetics player Kao became a top ten ranked company for the first time last year, knocking German based Henkel out of tenth place, after driving up its global market share to nearly three per cent.
Despite Kao being only one of two Japanese company in the global top ten ranking – the other being Shiseido – both firms are thought to have strong growth prospects and are pushing into overseas markets to capitalise on booming markets, particularly China, to continue to consolidate their leads at the top of the industry.
When it comes to brands, China and Japan make for odd bedfellows. Being associated with Japan may be more of a liability than an asset for your brand in China. In this case, your parents had it right: do your homework (i.e. research) first!