▲The new packaging designed by Farmstead.
Readers who know a bit about the Japanese market are all well aware that Japan is the most challenging market in the world. After brand redesign, how should we enter the market? Let’s take this journey together!
Originating at Yuchi in Nantou, the Sun Moon Lake Black Tea is a local specialty with local sales as a percentage of total revenue increasing from 11.5% in 2009 to 28% in 2014. Sun Moon Lake BlackTea has over 80 years of history. If you know about this black tea, you must know about the Father of Taiwanese Black Tea, Arai Kokichiro. Thanks to Mr. Arai, the tea farms of Yuchi have been planted with 3,000 hectares of black tea since 1938.
To transform the image of Sun Moon Lake Black Tea, Farmstead printed the phrase “Since 1938” on the new packaging; this date marks the period of thriving tea production in Yuchi. To understand the origin of black tea in Yuchi, Farmstead visited the Gunma Prefecture in Japan, home to Arai, who went on to plant and promote black tea in Taiwan.
▲ The old packaging of Sun Moon Lake Black Tea.
You must understand Japan’s sales channel culture!
1. Most of the large sales channels do not involve making purchases directly from the manufacturer. Rather, purchases are made through agents in Japan. To expand the sales network, we recommend finding appropriate agents.
2. Generally, the commission paid to department stores or select shops amounts to between 25% and 40% of the sales price before tax, whereas for agents, the commission is 12% to 20% of the pre-tax sales price. Therefore, Taiwanese manufacturers should control the price paid to agents to within 40% (agents are responsible for product labeling, organizing counters, or occasionally delivering small batches of stock, all of which incur costs)
3. Intermediaries exist within hyper sales channels and even between agents and manufacturers. Intermediaries are responsible for mediation between the two parties; they do not act on your behalf but without them, the two parties cannot connect with each other.
4. Japanese owners deem constantly changing agents as indicative of faulty products; therefore, prudent selection of agents and not arbitrarily changing agents are highly recommended.
5. Most of the large sales channels do not involve making purchases directly from the manufacturer. Rather, purchases are made through agents in Japan. To expand the sales network, we recommend finding appropriate agents.
6. Large sales channels have an account system, in which only agents holding a channel’s account can sell products to that channel. When selecting agents, you should enquire about the agent’s status in trading with other major sales channels.
Source: Tracy Tsuei, Japan Representative of Taiwan Design Center
Farmstead observed the superb landscape looming behind Sun Moon Lake, the name of which contains the words “Sun” and “Moon.” Thus, the new packaging contains illustrations of a lake with the “Sun” and “Moon” forming a simple visual symbol. MingLiU font is used to elude a sense of age, thereby highlighting the history of black tea in Taiwan.
▲ Farmstead sets an emotional intension in order to grab the targeted audiences in Japan market.
Tea names originally included “Hongyun (red rhythm) Taiwan Tea No. 21,” “Mountain Tea of Taiwan” or “Hongyu (red jade) Taiwan Tea No. 18.” Through design, the names were changed to “Sun Moon,”“Lady 21,” or “Misty Mountain,”which are more intuitively associated with Sun Moon Lake.
Active approaches are required to promote Sun Moon Lake Black Tea to the Japanese market. Thus, the next step for Farmstead is to participate in the September gift show in Tokyo. Such participation is aimed at exposing the product to Japanese traders and accepting the challenges involved in market circulation. Because products must pass quarantine and inspection tests before they can be imported in Japan.
Words｜TGA Consultancy Team
Photos｜FARMSTEAD, TGA Consultancy Team