BUSINESS/ECONOMY

Mail-order treasure

GEOFF ELLWAND August 29 1988
BUSINESS/ECONOMY

Mail-order treasure

GEOFF ELLWAND August 29 1988

Mail-order treasure

For Canadian companies attempting to penetrate the Japanese market, the costs are often exorbitant. A small, centrally located Tokyo office with a secretary can cost up to $500,000 a year to operate. Now, Canadian Timothy McGauley, co-owner of the Adanac Trading Company Inc. in Tokyo, has developed a low-cost alternative. Last month, he published the first edition of a glossy, 160-page Japanese-language mail-order catalogue. It displays more than 400 consumer products manufactured by 80 smallto medium-sized Canadian companies. McGauley contends that he can deliver those products to Japanese consumers for 30 to 50 per cent less than they would pay for similar domestic products. But Japanese shoppers will not be convinced by price alone. Said McGauley: “They expect good service. You don’t see a sign saying ‘No refund, no returns’ in Japan.”

After working as an independent importer-exporter in Tokyo for 15 years, McGauley said he concluded that Canadian consumer goods were not selling well because they were poorly presented and marketed. His solution was the high-quality mail-order catalogue, which the Canadian Embassy in Tokyo supported by purchasing 5,000 copies, for distribution to Japanese companies, for $90,000. Gerald Milot, commercial counsellor with the embassy, said that for small Canadian manufacturers, the catalogue is an economical way to display their products, which cost far less than similar Japanese goods even when high import tariffs are included. A fulllength mink coat appears in the catalogue for $6,000, while a similar coat sells for at least $15,000 in Japanese stores. A reversible nylon parka is advertised at $495 compared with $1,000 domestically.

The catalogue will be displayed in 40 to 50 major post offices in Japan by the end of October. Masanao Soma, deputy director of Japan’s international postal service, said that mail-order houses in the United States, Britain, France and Canada have been invited to display their catalogues at special counters. But he noted that Japanese consumers may be reluctant to use their services because of long delivery times. And, so far, orders have been only trickling in, but McGauley said he is optimistic that a deluge will soon begin.

-GEOFF ELLWAND in Tokyo