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Japanese E-Commerce Consultancy Business is Good--in America

The largest Japanese e-commerce consultancy business is not to be found in Japan but in the United States--Portland, Oregon to be exact.

TKAI, Inc. has experienced strong demand for its services and undergone fantastic growth in its seven year existence.

"Our revenues will be up 250% this year and our net earnings will increase more than twentyfold," said Tim Clark, President of TKAI, Inc. "We've been profitable since startup, but our net earnings were quite small initially."

Services offered by TKAI include strategic consulting, online marketing and custom and syndicated research, as well as consulting assignments from startups and other consultancies, involving strategic planning and competitive intelligence research.

"This is extremely interesting work but it's all highly confidential," added Clark. "Early next year we should be able to share more about what TKAI, Inc. is doing in these areas. But increasingly we are becoming a Japan-specific consultancy for a variety of projects that relate to the online world in more diverse ways."

"For example, last month we were asked whether we could produce Japanese language packaging for a series of new modems and ISDN routers with Japan specs being manufactured by a U.S. company," he said. "You can see the new packages at Comdex in Las Vegas next month."

Companies that have sought out TKAI's expertise or are continuing to do so reflect a mixture of those names now commonly found online. Businesses such as Amazon.com, Cyberian Outpost, Duty free shoppers, JCPenny, Neiman Marcus, United Media (snoopy.com, dilbert.com), or telecom and high-tech firms including British Telecom, Nokia, Nynex and Zoom Telephonics. In the unlimited potential that is the Internet/e-commerce market in Japan, all have similar opportunistic goals.

"Often they want to leverage existing assets overseas or are considering new services specifically designed for Japan," Clark noted. "In some cases they want to understand how Internet usage in Japan intersects with a core service--for example, cellular telephone usage. In others they want to use online techniques to perform research more quickly and cost effectively than they could using traditional methods. In these cases they are often trying to understand how Internet usage overlaps with the purchase of traditional products or services--perhaps how the Internet can be leveraged to conduct PR or marketing efforts."

Although to many it might seem like a hindrance to cover the Japanese e-commerce market from Portland, Oregon, TKAI, Inc. has established many working relationships with various media outlets and partners/vendors Yahoo! Japan, Nikkei, Asahi.com, Acara, and BIGlobe among others.

"First, our cost base is 20-40% what it would be in Tokyo, yet we have exactly the same access to the Japanese Internet that we would have if we were physically located in Japan," said Clark. "Second, we are able to adopt the offshore perspective that many clients need. Third, we can easily talk to both clients and partners/vendors in Japan during business hours. Finally, we're located between Silicon Valley and Seattle and can easily visit our clients in person at low cost."

And while the debate continues on the perceived strengths and weaknesses of the Japanese market, Clark is ultimately upbeat.

"Hundreds of thousands of Web users in Japan have successfully purchased online from U.S. companies such as Amazon.com, Cyberian Outpost, and CDnow, and used their Visa or other credit cards to dollar-settle transactions using servers located in the U.S. So this issue has not been a showstopper for the offshore applications that are spearheading international e-commerce in the business-to-consumer sector. But financial settlement is much more expensive within Japan, so it becomes a challenging issue when you start looking at in-country operations."



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