With its home turf mired in a recession, Japanese peripheral vendor, Buffalo, has turned to overseas markets such as Australia looking for opportunity.
As to why companies such as Buffalo are looking outside instead of inside for growth, Buffalo Asia Pacific sales division general manager, Satoshi Inaba, paints a picture of a nation shrinking.
“Three years ago, the population in Japan started to decrease, so not only Buffalo but other vendors have had no choice but to think about overseas for growing their business,” he said.
According to Inaba, the recent consensus among a lot of Japanese companies is that Australia forms an important part of the foreign market, at least in Asia Pacific.
While Buffalo has made a name for itself selling products to consumers, Inaba wants the vendor to replicate its success with SMBs.
“Australia is a pretty mature market for SMB, with 6000 companies with 50 or less employees,” he said.
The “strength of retail” in Australia, with chains such as JB Hi-Fi, Dick Smith and others as an example, is also attractive to vendors such as Buffalo.
“Consumers in Australia have reasonably good buying power,” Inaba said.
“Especially when you compare it to other Asian markets, such as Indonesia, which are still growing but their average income compared to Australia is rather modest.”
While Inaba is in charge of the Indian market, where there is a big population and the buying power shows potential, he says that it is not quite up to the expectations of Buffalo.
“Australia really has the combination of good retail environment and buying power,” he said.
With this background, it is no surprise that Buffalo is working hard in cracking the Australian market, hiring a national business manager and recruiting local partners to do so.
As to why Buffalo has selected 2012 as the year of its Australian push, Inaba says it is because the vendor was “a bit spoiled” by being number one in its own domestic market for many years.
Even after the “Lehman shock” of 2008, Inaba says that Buffalo’s domestic business was down but the government provided support with incentives, such as discount coupons for TV sets that consumers could use.
“We have peripherals for TVs, so this side of our business went up as a result,” he said.
“The government’s support program following the Lehmann shock benefited us as well, though those days are now gone.”
When the Japanese government ended the program in 2010 and stopped all financial support the following year, vendors such as Buffalo had to once again sell their products in the domestic market by themselves without any government assistance.
“While we expected it, we didn’t really prepare for it,” Inaba said.
At that point, Buffalo had the choice to either look at the domestic market once again.
However, the vendor instead decided that its way forward was to not depend on the local, shrinking market anymore.
“So we made the choice to look towards the foreign market,” Inaba said.
Buffalo’s share in 13 main categories of computer and TV peripherals is number one in Japan, with Inaba admitting that the vendor essentially has “no competition” in the domestic market.
“We own and dominate the local market,” he said.
“However, when we look at the overseas market, we’re nobody.”
This is something Inaba is keen to change, starting with the Australian market.
“I consider the good buying power of the Australian people as one of the best,” he said, “which makes Australia one of the most important overseas markets for us in Asia Pacific.”
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