Nihongo dekiru? Since Amazon.com opened for business, its biggest foreign market has been Japan. The company has about 193,000 customers here and they ring up about $34 million worth of sales. Mind you, the domestic Japanese market for online book sales is only $46 million. (In the name of full disclosure, I’m one of those 193,000; I’m not, however, a stockholder.)
It’s not hard to figure out the key to Amazon’s success: Even when you add the cost of shipping purchases halfway around the world, buying books from the U.S. still costs less than buying them here. A lot less. (That isn’t unique or new: Photography buffs are well acquainted with the “42nd Street Camera” phenomenon, in which a camera costs less in NYC than in the country where it was made.)
Eager to stick more fingers deeper into that pie, Amazon last week opened its Japanese Web site (and reportedly had 400 sales that first night). Developing a Japanese-language site makes a lot of sense, given the rapid expansion of the local e-commerce market. Half of Japanese Net users have said they want to buy a book or magazine online.
Laws against book discounting have raised questions about the venture. (Those laws are precisely the sort of barriers that must be surpassed before we see anything resembling an “e-Japan,” as I have explained ad nauseam in previous columns.) Why bother opening a high-cost center in Japan when Amazon already has a big chunk of the market? Even though discounts are a key part of the Amazon identity, company execs say they can compete on other grounds than price. There is stock — 1.1 million Japanese titles. 600,000 foreign ones — a mere mouse click away; e-mail notices of new releases by favorite authors or on topics of interest; and good service (offering free replacements of spoiled covers and other gestures that have won my heart over). If it wins customer loyalty for those services or wherever else it finds a competitive advantage, Amazon will clean up when the discounting laws are taken off the books.
Amazon has been ahead of the curve in internationalizing its product; Japan is the company’s fourth market, after the U.S, Britain and Germany. More companies will follow suit: Non-English users are expected to surpass English-speaking internauts in 2002. IDC, the Net consultancy, estimates that by 2003, 60 percent of Net users will reside outside of the U.S. and the non-U.S. share of the $9.5 trillion e-commerce market will reach 46 percent.
It’s odd, then, that 37 percent of the Web sites of Fortune 100 companies offer a language other than English. I guess that is an improvement: Two years ago, it was just 32 percent. (Japanese companies seem willing to put English on their sites, but the English versions tend toward the laughable or are often “under construction.”) According to Forrester Research, another IT consultancy, 67 percent of companies say that getting software to handle foreign languages is their biggest headache.
Carl Hoffman, the president of Basis Technology, the company that designed Amazon’s Japanese software, explained the difficulties in preparing a Web site, in an interview last week. The details are fascinating, and a bit numbing. Getting software to read all the different letters of different alphabets is incredibly tough. Throw in Asian, Cyrillic, Greek, Arabic syllabaries and you had, in Hoffman’s measured judgment, “a huge mess.”
Recently, however, software makers have rallied around Unicode and the result is an emerging global standard. Unicode will banish the mojibake — those strange kanji that pop up in e-mail or in odd places on Web pages.
“Artificial technology barriers will be falling down,” said Hoffman. “E-commerce sites will be completely and totally multilingual. They will respond to you in your language.”
He should know: Basis is the industry leader in the internationalization of Web sites and software. It sells its own software or does the work itself for individual clients. Amazon has become a strategic partner, and has taken a seat on the Basis board, after Basis developed its international auction site.
Language is just one part of the challenge of internationalizing a business. Translating Web sites is easy; rewriting the source code so that it accommodates all languages is considerably tougher. Then there is the problem of managing the content in those different languages. Companies want to localize for each market, but headquarters will want to ensure that the quality of the Web site and the message itself, no matter what language it is in, is up to standard and on point. But that is still only the beginning.
“Think of selling a car,” says Hoffman. “You have to translate words on the dashboard as well as the owner’s manual. But you also have to move the steering wheel, redesign the engine to meet local emissions standards, reposition the turn indicators.” We’re talking re-engineering.
Selling household items to Japan, for example, means creating a Japanese Web site and providing Japanese labels for all the items. It also means repackaging to fit Japanese homes, targeting sales campaigns to the biannual bonus seasons, hooking up with Japanese banks and credit card companies to take care of payments.
Cultural adaptation goes a long way beyond products and marketing. A company that wants to internationalize has to re-examine its basic business organization. Mark Mason, executive vice president for global strategy at Basis, explained that “now, you have to focus on nontechnology barriers to market entry.”
Mason is an expert on foreign investment in Japan, and the behavior of Japanese multinationals overseas. “Historically, there have been huge barriers to doing business in Japan, and technological advances mean that they have been pushed to the forefront. But,” he adds, “there is a huge new set of opportunities.” There’s probably even a book or two on the subject. I know where to look.
Brad Glosserman (firstname.lastname@example.org)