EP #279] [ESP] - Strategies to launch and dominate Amazon Japan - Shinjin Kahler

EP #279] [ESP] - Strategies to launch and dominate Amazon Japan - Shinjin Kahler Unknown Speaker: Welcome to The Ecommerce Lab By Ecomcy. This is the place for everything related to Amazon private label and e-commerce. Learn exactly what you need to start or scale your business. Get insights from the top industry experts who will discuss the latest trends and best practices in the world of Amazon. From choosing products and sourcing from a supplier to setting up your Amazon account and marketing your business, you will hear it here. Let's get started. Here is your host, Vincenzo Toscano. Speaker 2: Hello guys, welcome to another episode of the E-Commerce Lab by E-Commerce, the place where everything related to Amazon FBA, pro level and E-Commerce. My name is Vincenzo Toscano, founder and CEO of E-Commerce, and today we bring another special guest. His name is Xing Yin, and he's the director of global selling and partnership at Picaro. Which is one of the top agencies when it comes to scaling brands in Amazon Japan. Amazon Japan has been one of those things that has been a hot topic lately because the growth of this market has been very fast, very significant, and there's a huge amount of opportunities in there. And that's why I wanted to bring Shinjin today to talk about all the strategies, what is happening, things that you have to consider, is actually Japan the right market for you, and so much more. So Shinjin, it's a pleasure to have you on the show. How are you doing, my friend? Doing great. Speaker 1: Thanks for having me, Vincenzo. Looking forward to it. Speaker 2: Thank you for being here. I'm super excited for today's episode. Japan is definitely, you know, one of those regions that has been having such a rapid growth. I was actually very close. I was in Asia. I was in Thailand, Vietnam and Singapore. I was very close to go to Japan. I couldn't make it, but hopefully next year. I need to. I need to. Everybody tells me that Japan is a dream. It's like you go inside a video game. So I really want to go. But everybody that, you know, been in Japan, when I spoke to them in Asia, they told me, you know, the amazing opportunities they're seeing with Amazon Japan. And that's what I want to highlight today with you and what you guys do at Picaro. I guess before we dive into that, tell us a little bit about you. For those who might not know you. Speaker 1: No, thank you. So my name is Shinjin. I've been in the Amazon advertising space for about eight years now. I'm just jumping into my eighth year. So I've been using Amazon ads, running ads for our brands clients for about, for quite a while now. The space has very much changed and originally I was working at a company called Channelbakers in the US. I was there for seven years and I joined Picaro, the company that I currently represent, three months ago. So I lived in Japan until I was 18 and then I moved to Anaheim, California. And I lived there for several years. And then I moved back to Japan about two years ago. And so, you know, being local definitely helps in understanding, you know, what the Amazon space is like in Japan. At Channelbakers, I was initially hired to run campaigns in Japan. So I've been managing both US, European, Japanese clients. And so it's really interesting to see the differences and, you know, the very different nuances of each region on Amazon. Speaker 2: That's good. Speaker 1: That's good. Speaker 2: Actually, you know, I always say like the best way to really sometimes master a market is you have to be in it, not only from the perspective of the language, But it's also the fact that I'm sure you're going to have some insights that nobody else is going to have from the perspective of the culture, how you interact with people, things that happen on a daily basis that go beyond data. And I think I'm sure that adds a ton of value to your customers. Now, I'm sure for a fact, you know, pick out your specialties that are like healthy brands and scale, and Amazon Japan. I get a lot of questions which I'm sure resemble with the ones that you get at Picaro, which is, you know, what are some of the things you have to conceal when it comes to expanding to Amazon Japan? Because it's a new country altogether, the language is completely different, so people get very nervous about, you know, some of the things that they have to have in hand to get ready. So I guess I just want to touch some of them high level, not go too much into detail. But some of the first questions I get is like, do I actually do I need a company in Japan to sell in Amazon Japan? Or can I use my US entity, for example? Speaker 1: Yeah, so that's that's a little complicated, right? So in order to sell products in Japan, you either need to have your own entity or you need to go through an importer record. And so Picaro, we don't offer services like that, but we do have partners that will take care of everything like that. So I'd say that importing products into Japan is a pretty strenuous process. There's a lot of processes for approval that you need to go through, legal counsel that you probably have to go through until you can actually get your product into the country. And once you do, then you have to deal with the logistics, you know, if you're going to go FDA or if you're not. What a lot of people do is that they work with distributors. They would rely on them to upload their listings onto Amazon or to Rakuten because that's a pretty big marketplace as well in Japan. Yahoo Shopping, believe it or not. I don't know when the last time you heard of Yahoo was. You know, a big marketplace in Japan, but then they would rely on those distributors to manage their account, campaigns. And, you know, my honest opinion is that these distributors, they don't have that much knowledge when it comes to selling on Amazon. It's just kind of they upload their listing, just throw in a couple images in there, and then it's just leave it up to the algorithm, which, you know, tends to be a quite a difficult process. Speaker 2: Yes, I think at the same time, I'm sure when people hear this, they might get afraid, but this is an opportunity because the fact that it's not that easy to get into Japan, that means if you put the homework and you put the time to really figure that out, that's where you could fall into what I have seen with some customers, like Blue Oceans, because there's not as much competition in these categories because not many people are actually selling into those because they haven't gone through all these obstacles. When it comes to that category, that's another question I get a lot. I'm sure in Japan, given that the culture is sometimes so different compared to the West, there are certain things that are going to work compared to others. My question to you is, do you see certain trends in certain categories that are moving faster than others? What are some of those? Is it sports? Is it the kitchen? Is it toys? What are some of those categories that are becoming very trendy when it comes to shopping on Amazon Japan? Speaker 1: I don't have specific data to prove this. This is just my own anecdote. I would say that a lot of household home goods is a category that's expanding. That's just generally because A lot of people use Amazon as a means of not having to carry home their goods because buying toilet paper, they have to hold it. Not many people will be holding it on the train, but they have to walk home with it. Instead of carrying two shopping bags, they'd rather carry one. Buy in bulk on Amazon. So that's definitely a category that's growing. House goods. I'd say beauty products are also a big area that's starting to expand, especially with Korean beauty products becoming very popular. They look towards imported products. But those are the products that are actually hard to get into Japan, right? Because of the strenuous processes that you have to go through to get the product approved in order to sell in Japan. Speaker 2: Cool, cool. Yeah, I think I was talking... With a friend I swear that in Japan, especially for women, beauty is such a big thing, like makeup, creams and all of that. So I was actually in South Korea and I met a manufacturer that he was very big and one of his biggest markets was Japan. He was saying how Japan loves, you know, things that are made in South Korea. So yeah, maybe for those listening and watching, if you're willing to go through the, you know, to the obstacles of getting your post approved, that could be a very good category for you. Yeah. Speaker 1: There's a lot of like, you know, those categories are important to consider as well. But, you know, the real main thing that needs to be considered is making sure that your product is suited for Japanese customers, right? People don't really think about this, but one major point of consideration when it comes to a shopper purchasing a product is definitely considering how big the product is. That tends to be an issue. Japanese houses are quite small. So you got to make sure that your products, you know, if they're being sold in the US, maybe a chair, it's okay to be bigger. But in Japan, there's not that much space to be rolling around a big chair. So that has to be smaller, A, for housing or like the household, but also, you know, people are just smaller in general too in Japan. Speaker 2: That's actually such a good insight. It's true. Like everything in Japan is very small. So yeah, if you bring an oversized item, you might struggle there. Yeah, that's right. When it comes to the whole strategy, because of course there is the obstacles of You know, the company, the importing, the paperwork and all of that. But beyond that, there's also the complexity of the language, right? Like the fact that everything is in Japanese. So how and what are some of the main, I guess, difference compared to doing Amazon in Japan compared to OS? Like what are some of, for example, the tools that you use? Because I know not all the tools works in Amazon Japan. What are some of the differences in terms of how you deal with dialects when it comes to copying in Japan? Tell us a little bit about that. Speaker 1: Yeah, for sure. Let me start off with localization, right, for your content. I've done some presentations regarding this and did a little bit of research myself, but Japanese content, like if you hop onto Amazon Japan and even if you look at some of Amazon's listings, like for example, Alexa products or like Ring cameras, you can very much tell that the content is very different compared to what you see on amazon.com. A lot of the content that you see in the US, it's very much lifestyle oriented, lifestyle image just being used. They want to show the product actually being used by people within their content and maybe highlight some key points of the product. But in Japan, I would say there's less uses of lifestyle images and it is full of text. Content, image gallery images, A plus content is just full of text and Japanese that shows, you know, the Japanese society's tendency to want to get as much information as possible from the things that they're seeing. What's interesting is that this is like Every day you get pieces of paper thrown into your mailbox, and we called them chirashi, and that's essentially a piece of paper for, you know, whether it be a brand or business that just showcases everything that they do into a one-pager. And that's just a lot of information to dissect and break down, but people still manage to break it down. Speaker 2: It's like an anime style. It's like anime. You have all the user... Speaker 1: Everything bunched into the... You know, together. So I think that being a culture over here really, you know, allows people to dissect information, even though it's just a jumble. And so might as well use the space as much as you can. And so when people look at image galleries that tend to lack information, that also impacts the trustworthiness of your product. Speaker 2: Interesting, interesting. And talking about trust, like, Is there anything in Japan that people look for when shopping beyond reviews? Because, for example, to give an example, I think in Germany, there's big things to do with, for example, a budget of awards, like this big thing in Germany that if pros have certain quality in terms of the test that was done by a lab or the awards that they have. or the recognition they have a specific fair people really look forward for that in Germany as an example. In Japan is the same like people really look forward to reviews and awards and certificates and things like that or they go more with the if the product looks good if the infographics really respond my answer I go and give it a try like how emotional are there when it comes to them. Speaker 1: I think, you know, listing the awards that your products have won or even just your business, like, for example, a lot of crowdfunding is a very big thing in Japan, especially when launching a new product. And so, you know, a lot of companies would list things such as We hit our 5 million yen goal, raising 5 million yen goal in just one week. That's a flex to show that a lot of people actually were interested in our product in order to invest in it so that we can get things launched. I see a lot of things like that. Many, many images would showcase badges that may show things like, hey, we were the top seller in our category for three years in a row. We've had some reviews from people that showcase very high indication of the product being good. Speaker 2: Yeah. Awesome. And now when it comes to The optimization of the branding in Japan, does it mean usually most brands on your experience and what you guys are doing, you to some extent have to do a little bit of rebranding because if you don't have all these kind of, you know, infographics and way of communicating your message and everything, Like, it seems like you really need to spend a lot of time in advance to reverse engineer how Japanese will perceive your product. And maybe you even need to change the packaging, which is something we haven't touched on. Like, is packaging also a little bit different the way people perceive packaging in Japan compared to the West? Like, what is your experience with that? Speaker 1: Yeah, it's, you know, it's not the end of the world if your packaging is, you know, still in English and stuff like that. But definitely, you know, again, kind of going back into the import side. Things like beauty products or food. Those categories you need to actually list everything so your packaging has to change. And then you could use that as an opportunity to potentially rebrand or localize. But I don't think it's exactly a necessity, right? Maybe you're going to want to change the sizes of your text. Maybe in the U.S. have your brand name just huge, slap it on your box. But maybe in Japan you might want to make that smaller. That's up to the consumer to actually see what Works the best or what that gets their attention, but see that's why there are tools available, right? Like one thing that we do that we're gonna really gonna start to use is We met them a couple months ago is PickFu, right? PickFu is a great tool to use in order to get information from the actual consumer on what types of packaging they would prefer, what types of call-to-actions they would prefer within ads, what types of image gallery would actually get more engagement and So, you know, testing and learning is definitely something that's very important here as well. Like, there's no correct answer for things regarding branding and content. Speaker 2: It's trial and error. I know that. Speaker 1: Yeah, exactly. And that's probably the same for every marketplace, right? Speaker 2: Yes. And now, PPC, because this is a big thing as well. A lot of times when people look into new markets, because the PPC for example, markets such as the US is just so expensive. It's difficult to keep scaling brands in Launching Pro. So people look to markets where the cost per click is much lower, the competition is lower. So tell me, what is the panorama looking like in Japan? Do you feel it's still early stages when it comes to PPC or people's getting very savvy already? What do you say? Speaker 1: I'd say maybe like early to mid. What I like to say is that PPC, selling on Amazon, just the general knowledge around selling online typically is like five years behind what is currently being spoken about in the US. Because the US is obviously front lines, but Japan is very slow at implementing new things. It's cultural. People are more conservative. Speaker 2: I was gonna ask you that. I feel the perception they give me is that they don't try new things very fast and they're not very risky. Speaker 1: Yeah, they're very risk-averse, very conservative. It takes a whole bunch of time, even at companies, to try to implement new processes. They aren't that nimble. So as an agency, it's kind of tough to pitch to new clients in Japan because They have a five-year relationship with their existing agency and they're like, why do we have to switch? Like you guys can use AMC, but like nah, we like our current sales, you know, whatever, right? In that sense, it's about five, six years behind. So PPC advertising is, it's not in its infancy, right? Like, but there are a lot of companies, brands leveraging sponsored ads without a certain strategy in mind. And I would say that a lot of the campaigns are still very much audience and auto targeted. So that means that your, it depends on category, don't get me wrong, but CPCs are relatively lower compared to, you know, what you see in the US at the moment. So, You combine that with the fact that, okay, let's talk about that again, risk averse people. That means that they don't use tech. I think I was speaking with Amazon the other day and they were saying that Japan is like behind compared to every single region that Amazon is in. Don't quote me on that every single, but in like a lot of the first world regions that Amazon has, the tech adoption is the lowest. Speaker 2: I guess in terms of APIs, softwares and all of that. Speaker 1: Yeah, so like Packview, Helium 10, they do have a presence here, Perpetua, but they're not as big and people aren't as engaged with using tech as they are in other regions. So the fact that that's the case gives you an opportunity if you're being savvy and using tech, then you're using AI to optimize campaigns, you're using AMC reporting to actually create strategies that are very intentional, then you're on a track towards success. You're reaching the right people at a low CPC, bam, grow your sales. Speaker 2: Yeah. Wow. That's actually such interesting insight. I would actually expect the opposite, like that Japanese would be very into tech and innovation, but I guess it has to do more with the fact that it's something new. It takes time for them to trust them and really diving into that, which now I'm assuming if that's the case, It could mean that also in Amazon Japan there isn't a lot of black hat because if you're saying that they're not very risk friendly and all of that, it's not like in the US where everybody has so much to do giveaways, to do things in the back end, to attack the competition. It seems like Japan is a more chill market. Could you say yes or you already see also black hat and dodgy things in Japan as well? Speaker 1: For sure. Not everybody, but yeah, I see that all the time. I don't know if rules have changed, but back a couple of years ago, you weren't really able to use emojis. I see that all the time. It doesn't seem like Amazon is very, if they're enforcing that over here in this region. I do see a lot of hero images being edited so that it's not following guidelines, but that seems to have kind of become I see a lot of PDPs that don't follow the hero. They gave up. Speaker 2: Amazon gave up. Right? Speaker 1: It seems like it. As an agency, I kind of struggle. The competition is doing it, but I can't recommend that to my clients and then have the listing taken down. And then guess what? Black Friday, your listing is not up. That's the last thing that we want. On your own risk, I would say You know, do that in Japan as well. It seems like they're not as strict in enforcing that. But I definitely do see a lot of brands still putting in pieces of paper. I think I just bought something for Black Friday. And then they said, if you leave us a review, we'll give you a discount on our free warranty. Leave a review, take a screenshot of it, send it to their QR code, and then they'll give you a free warranty. Speaker 2: So yeah, it is against terms and conditions, but you know. Speaker 1: Yeah, definitely a lot of gray hat, black hat tactics. Speaker 2: Cool. Now, when it comes to conclude on the PPC South things and listing creation, which tools do you recommend for keyword research in Japan that are working very well? Speaker 1: Keyword research, I mean, Helium 10 works just like in any other region. Internally at Picaro, we use Datadive. Made by Brandon Young. That seems to be a lot of insight that you could get in order to make a difference in the region. It's a lot of data that people aren't tracking over here. So that can put you ahead pretty far. When we optimize campaigns, personally, I'm a huge fan of Exmars. So we've struck up a deal with them to start using them from this year. So a lot of the like all the tech works in Japan. It's just I would say a matter of what you're used to using and make sure that there's a support team in Japan that can actually help you out. Speaker 2: Awesome. Speaker 1: Cool. Speaker 2: Now, let me also bring to the conversation secondary markets, because as any markets, Amazon is the leader, for example, but then you have secondary like in Walmart, TikTok shop in the US. Tell me a little bit what is the panorama looking like in Japan? Beyond Amazon you have Rakuten, but how is the dynamic of Rakuten? It's also very strong in Japan. Do you have any third marketplaces? Tell me a little bit about how people shop beyond Amazon in Japan. Speaker 1: For sure. Yeah, I'd say a lot of it is still, you know, ecommerce penetration has definitely increased, but people definitely like to shop in person still in Japan. I think they really, I think they really value going into a store. Speaker 2: Human interaction. Speaker 1: Actually touching the product, holding it so that then they get an idea of, okay, like, how sturdy is it? I think Temu is a great example, right? You see a PDP on Temu and then you're like, oh, this looks awesome. But then the product is like $15 and then you get it and then it's like a toy, right? Like very, very weak hinges that you feel like you could break it really easily. But that's something that people value. So it's definitely, you could get over that with your content. And I think Amazon does a very good job of it. But then behind that is Rakuten. When I first started working in Japan, I was still somewhat complicated around the differences between Rakuten and Amazon. But, you know, as I got to know the two different platforms, they're actually very different. They're not just ecommerce platforms, kind of like you would imagine, maybe like Walmart and Amazon, right? They're not stores that exist online. Rakuten is kind of like, you know, if I were to compare it to actual brick and mortar stores, Rakuten is like you're shopping in a mall. You're walking in a building and then there's a lot of different storefronts that are actually there and you can explore between them. But Amazon is like a catalog, right? It's like you're ordering from a magazine. It's, you know, just pages of a lot of products, right? And then you have your brand store, which then creates that experience of, you know, being in a mall. But Rakuten is a little different in that sense. Companies would have their own storefront. It's actually hard to start selling on Rakuten. The background that you have to provide to them is much more rigorous than Amazon. You just have to create an account. And the distribution is not as robust as... Speaker 2: Do they also offer something like FBA? Like can you send inventory to them and they deal with everything? Speaker 1: I believe you have to be like a very big client to be able to do that, but like a lot majority is like... Speaker 2: They ship themselves, yeah. Okay, so I would say the Amazon, Rakuten. So beyond those two, there isn't really a third player that is big enough to look at, right? Speaker 1: Third is Yahoo Shopping. I've never shopped on Yahoo before. I don't even know if I ever will. Maybe I should. Speaker 2: Is there any eBay in there? There's no eBay in Japan, or there is? Speaker 1: They used to, but they don't have a presence here that big anymore. But a lot of the A lot of e-commerce retailers are popping up based on categories. For example, there might be e-commerce websites just for clothing. There might be e-commerce sites just for sporting goods. Imagine a Best Buy. Best Buy is pretty much electronics. Those are starting to pop up. Speaker 2: Okay, okay. Yeah, it makes sense. I think that also explains now and I start to understand why Amazon is doing so well because they brought something that it didn't exist, like next day delivery, the ease of shopping online and everything. So they definitely are disrupting the market compared to what the competition was already doing. Awesome. So now to conclude the episode, is there any other insights or tips you want to provide to people when it comes to explaining too much in Japan? What else do you think is important to know? Speaker 1: Yeah, I definitely say, you know, it's, it's a market that's hard to expand into just from, you know, legal perspective for distribution. Definitely, the language barrier is huge. So do not underestimate that, right? If your content is not localized and you just list your product on Amazon, even advertising it is not going to get you the convergence that you need. So don't underestimate the language barrier. If you're actually serious, hire an agency that's localized in Japan that is bilingual. I kind of want to raise my hand to say that that's who we are. Or actually hire someone internally that speaks Japanese and is somewhat local or has lived in Japan in the past, understands the culture, because it's not an easy marketplace to be successful in. However, if you can be successful, there's a very high chance because I believe Japan is one of those regions where our GDP is third. It used to be third. Now it's fourth behind Germany. But then the number of sellers that are actually on Amazon is very, very low relative to the UK. So there's a lot of opportunity. So as long as you get those pieces right, I think there's a lot of area for success. Speaker 2: Love it. So for those that might want to reach out to you, Shinjin, and work with you and Picaro, tell us a little bit about where they can find you and how does it work? Speaker 1: Yeah, for sure. I think the best way to get to reach us is to look me up on LinkedIn and then add me there. I pretty much add anybody that gives me a request. So that would probably be the best. Vincenzo, I'll hook you up with my work email so people can reach out. Speaker 2: Put it down in the description. Speaker 1: Yeah, perfect. Cool. Speaker 2: So other than that, it's been a pleasure. Thank you so much for, you know, teaching us a little bit about Amazon Japan. I think it's such an interesting market that, you know, if you have the time and you have the resources, you definitely should give it a try. I have seen so much success with some of our brands as well. So I'm sure it can be something very meaningful for your business moving forward in 2025. So Shinjin, pleasure to have you on the show. Thank you so much. Speaker 1: And thank you everybody for listening. Speaker 2: Thank you. All right. Speaker 1: Take it easy. Do I hop off? Unknown Speaker: Thanks for listening to The Ecommerce Lab By Ecomcy. Be sure to subscribe so you don't miss an episode. While you are at it, we would appreciate it if you could leave an honest rating and review on Apple Podcasts, Spotify or wherever you listen. That will make it easier for others to find out about the show and benefit from it. Want more? 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