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Making it big in Japan (from outside Japan)

In the blizzard of newsworthy announcements about venture capital investments, massive business deals and takeovers, it is easy to forget the 90 per cent of business people who don't hit the news but form the bedrock of our society.

In Japan, foreign business owners take risks to develop new products and services in an already competitive market but lack the support of the Japanese establishment.

" Just as we started to grow, the overall economy started improving under Abenomics, and Tokyo experienced what has become a chronic talent shortage." 
Robert Rann, Entrepreneur behind Grape Off

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In the last eight years, these foreign business owners have had to deal with a massive shift in the Japanese market, firstly with the demise of foreign banking after Lehman and then with the aftermath of the Tohoku earthquake and permanent disappearance of many foreign, senior executives.

As a result, dozens of foreign-owned companies have either quietly gone under, been sold off, or are struggling to morph into something quite different. The media space is a good example, where over half of the foreign players have moved on. The imported food, education, recruiting, IT, and personal services sectors have also been hit.

But what does not kill us makes us stronger. Those with the fortitude to remain in business during the last harsh eight years are now starting to benefit from Abenomics and are doing so by dreaming of interesting and robust products and services.

Such a person is Robert Rann of Grape Off, who has demonstrated the all-important ability to morph with the changing global business trends to survive and thrive.

A LOT OF HATS

Rann's story is a fascinating one. At 56 years old, he's been a police officer, an international lawyer, in-house counsel to investment bankers, a turn-around consultant for internet companies, online marketer, resorts sales manager and consultant, and most of all a wine connoisseur. That's a lot of hats, and the result is he is a highly experienced entrepreneur and businessman.

We first came across Rann shortly after he arrived in Japan, when he was helping out a media firm, and a little after that when he was appointed the CEO of an internet recruiting firm called Asia-net.

Ran shares some of his insights below.

Llyod: The wine sector in Japan is a crowded one and the competition has to be severe. What got you into the business?

Rann: Well, I love living in Japan - the people, the culture, and the lifestyle are all great. My background is an international lawyer with experience in start-ups, online marketing, real estate, resorts and 35 years as a collector of wines.

I was always frustrated I could buy wines in the US and Europe for $US10 to $US20 that were fantastic but could never find those wines in Japan - so Grape Off was born.

Llyod: Wine is a competitive business, how is Grape Off different?

Rann: Firstly we are unique in that we represent great wineries that have never been sold in Japan before. People like to discover great new flavours, and since we only buy winery direct they can now get those wines at the lowest possible price. I love to pleasantly surprise my customers!

Secondly, we have been diligent about getting our wines in front of the best audience, meaning the team and I wore out a lot of shoe leather getting into many of the finest hotels in Japan.

In fact, we currently have one of the few exclusive contracts with the Hilton Hotels in Japan, for their Wine Experience III. That program features 30 different Grape Off wines at their 12 hotels around Japan.

Llyod: What have been your biggest challenges so far?

Rann: Web marketing is far more complex than it used to be and the IT undertaking was massive, taking much longer than I expected.

In addition, just as we started to grow, the overall economy started improving under Abenomics, and Tokyo experienced what has become a chronic talent shortage. As a result, it took us more than a year to hire a sales team - but we're there now.

Another big challenge was established importers had sewn up exclusive relationships with the famous-brand wineries, so we had our work cut out scouring the world for the best new wine makers missed by others.

Although you may laugh, it was a tough job tasting over 100 wines for every new winery we actually took on. We have a tasting team of eight people who must unanimously agree the wine we are tasting is good enough for Grape Off to import - so organising that team is no small feat either.

Llyod: What are your favourite wines?

Rann: I would have to say our PureCoz Napa Valley Meritage, which is an amazing 'big' red wine often compared to Silver Oak but better priced.

And the Chateau Franc Mayne Grand Cru Classe, which is a classic French Bordeaux. As for whites, I love the Napa Valley Bread & Butter Chardonnay which President Obama recently ordered for his TPP meeting in the Philippines, and Purity from PureCru, which is a specially made white wine for red wine drinkers.

Llyod: What do you think of Japanese wines, especially the Chardonnays coming out of Nagano and nearby regions?

Rann: To be honest, I am a bit surprised how poor the quality of wine is in Japan considering how the Japanese have perfected almost everything else they touch like, beer, French, Italian and almost any other cuisine, but they have yet to rise to international standards in wine.

With that being said there are a few wine makers in Japan starting to impress the market -- but they are still the minority in the trade.

Llyod: Where are you taking Grape Off in the future?

Rann: We have so many things going on at Grape Off right now. We currently have almost 100 different wines, multiple wine clubs, including two not-for-profit clubs offering customers a chance to do something good and get something good.

Each month we make donations to each NPO to help support their activities in Japan and internationally, in return for their members buying several bottles every month.

We also plan to launch an international wine training program where we will take our customers abroad to learn more about wine at the actual wineries.

Terrie Lloyd is a long-term technology and media entrepreneur living in Japan. This is an edited version of his weekly blog from Japan Terrie's Take.

The views and opinions expressed in this communication are those of the author and may not necessarily state or reflect those of ANZ.

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