ALPAKA´s experience – Peruvian material, Estonian design, Japanese market
The original Estonian version of the article by Herdis Pärn appeared on AUKE´s website on 9.02.2016.
What is ALPAKA?
ALPAKA produces products out of alpaca fur and wool. Although so far the company has mainly produced interior design merchandise, in the recent years they have also moved more towards fashion products. Despite being a small business ALPAKA is actually one of the largest producers of alpaca fur rugs and cushions. This is due to the fact that there are not that many companies out there that focus on this rare material.
ALPAKA’s raw material comes from Peru. Peru is also where the majority of the production takes place. However, most fur products are finished in Estonia.
ALPAKA was founded in 2007. The idea came from Kristjan Sillaots who nearly 15 years ago went backpacking in Peru and realized he wanted to stay there longer. He realized that alpaca products have potential, as the material is of good quality and is becoming more popular around the world.
The company exports around 80% of its production to around 30 different countries. The largest markets are Germany, Switzerland and Austria. Throughout the years Japan has also been amongst the five largest markets. The company has now new partners in Taiwan and interest has been shown by Koreans. In Japan, the company´s main clientele are wholesale companies, designer stores and boutiques. The clients are usually women in their 40s-60s as they are usually those who decide how the interior of the household should look like.
Maarja Suiste, ALPAKA´s area sales manager, says that the first clients on the Japanese market were found at the Maison & Objet fair in Paris, a trade event the company visits twice a year. “Japan seemed like an interesting market and we had the opportunity to take part in EU-Gateway business mission during the years 2011-2013.” The Gateway is a project that helps small and medium-sized EU companies to enter Japanese and Korean markets. The project includes preparation courses on the local (business)culture and meetings with different consultants and representatives of local companies.
Maarja does not agree with the popular sentiment that Japan is an aging market and that one should no more look towards it. “I think Japan is still a land of vast opportunities. By population, the state is larger than any European country and the elderly have substantial savings. Those are people who appreciate quality and can afford products of higher value.”
“Furthermore, in East-Asia, Japan is a trend setter just as Paris and London are in Europe. It is interesting to note that the Chinese clients also travel to Japan to buy luxury goods, as they often do not trust their own market/production.”
Japanese studies background came in handy
Maarja Suiste herself has a MA degree in Japanese studies from Tallinn University, Estonia. While dealing with Japanese clientele she uses her language skill in order to have more in-depth and productive conversations. “When I joined ALPAKA I was forwarded the transcripts of earlier exchanges with Japanese clients. I noticed that the responses were short and not very thorough. There was no talk about what the clients felt lacking and what could have been done better. Once I started contacting them in Japanese, we started receiving much more background information. Therefore my studies have helped me a lot in my work.”
She also thinks that this has been a general advantage of ALPAKA. “At fairs you only have a very short time period to introduce your product to clients. This can be done much more efficiently by using their mother tongue. The communication is a lot faster and people are more eager to give you proper feedback or discuss why some merchandise has not sold as well as expected.”
What should one know about Japanese business culture?
“While speaking about Japan, quality is always very important” claims Maarja. “The Japanese are very pedantic – the merchandise always needs to have the same quality. Not just the product itself, but also the packaging! There is a gift-giving culture in Japan which means a lot of high quality products are gifted on special seasons and occasions.” She also tells us that you need to stick to shipping deadlines, otherwise your shipping will be cancelled or you will not receive a follow-up order.
As elsewhere, knowledge about local customs and consumer behavior can go a long way. Maarja recommends, “one should look around at potential stores to see what are the people´s preferences in taste and color like. “Therefore, visiting Japan is very important. Both for getting a better understanding of the market and for strengthening the communication with locals. “You need to make a decent market research and look around what the competition is up to. In the case of ALPAKA we have received lots of help from training seminars and meetings with consultants or potential clients.”
“Besides quality, you also need that special ´something´ that makes you stand out. In our case, it is the rare alpaca material. We have products of two different price ranges and this generates a need for different partners. We are now doing more and more targeted sales and focus more on special orders and solutions. Japan is unique because no other market purchases such a vast amount of alpaca fur teddy bears from us. This is related to the ´cuteness´ culture in Japan.”
Maarja concludes our conversation with the following “if I would have to pick two keywords about doing business in Japan, they would be ´quality´ and ´patience´. One needs to realize that things take time and success does not appear overnight.”