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“We do not have any competitors in this business”

Interview - July 11, 2016

Offering “total solutions” in the direct marketing services business has enabled Tri-Stage Inc. to stand out over the past decade and rapidly expand in Southeast Asia. President Isao Senoo discusses what makes the company so unique, its aim to bring as yet unknown Japanese products to the world, and its ambitious plans for further expansion into new markets in countries such as India, the Middle East and the US.



What opportunities do you see maybe for Tri-Stage after the imminent ratification of the Trans-Pacific Partnership (TPP) to continue to grow your global presence?

First of all, what we are doing in the Asian countries is that we want to sell the best that Japan has to offer. We want as many people as possible to purchase our products. In order to do this, we need to overcome our largest hurdle, which is tariffs. The tariffs are going to be abolished or greatly reduced as a result of the TPP, which will be very significant to us.


In addition to the TPP is the AEC in the Asian region. A lot of your operations are in Malaysia and Cambodia. How much potential do you see in the Asian market?

I believe that the biggest advantage or impact for us will be the AEC freeing up trade within the region. We conduct trade uniformly with countries in the Asian region right now. We have a partner in each of those countries, and we conduct direct marketing with them. The biggest advantage for us is that trade is going to become much less restricted.


You founded Tri-Stage with two partners 10 years ago, in 2006, to provide direct marketing solutions for companies. The name itself comes from “Tri” – the number three – as you are indeed being the liaison between the consumers and the clients. Can you give us a bit of a background on your history?

I started out in admin in an advertising agency. As you are aware, people who work in advertising agencies are not responsible for the success of the client’s product. I worked there for 20 years, but I always wondered in the back of my mind if there was a better approach. It seemed to be that in direct marketing you do not provide ads, but instead use the media to sell the company’s products. By really focusing on the media, you are contributing directly to the sales of the product.

If you compare it to the real estate business, we sell the land. We sell the media that makes it possible for our clients to sell their products, which I have been doing for 10 years.


Last year, Tri-Stage posted record net sales of over 32 billion yen with the aim of earning another 5.5 billion yen in the next two years from your subsidiaries in Southeast Asia. What is your strategy to continue growing and do you have plans to expand beyond Southeast Asia?

We have a variety of businesses. We have our existing TV-related business in Japan. We also have our website business in Japan. But we also do business with companies in Asian countries. In the next year, we are planning on taking our earnings from essentially zero to 5.5 billion yen.


Tri-Stage really embodies the global push that Abenomics aspires to instill in Japan. Your company has expanded very quickly in the last 10 years to Malaysia, Vietnam, Taiwan, Singapore, and most recently Indonesia. What are your further priorities for expansion?

I would say America. There are many US products coming into Japan and Asian countries, but we would like to take the best products from Japan and send them to other markets. We also want to take products from the US and bring them to Asian countries.


As you aspire to grow internationally, what are the key selling points that you use when promoting Japanese products?

This applies to Asian countries as well as China, but I think Japanese products are seen as highly trusted and very reliable by people in those countries. Japan and China might not have the best relationship at the moment, but the Chinese people see Japanese products as very reliable. They can count on our products. A large number of Chinese people are coming to Japan, and buying large Japanese products in large volumes. I believe the “Made in Japan” label carries a lot of weight. What I want to do is get Japanese products into greater use in Asian countries, and also discover potential new products in Japan. There are many good products that are not being sold abroad yet. I want to find these products, and export them.


You really are an ambassador for Japan because you are bringing Japanese products made with Japanese quality to the world. What are the biggest challenges you're facing?

Speaking of Asian countries, when we first began we planned to take our Japanese TV-shopping business model overseas. As we started looking at what was happening in each country in Asia, we realized that they are big importers. They do not really have manufacturers in their country, and we could not identify clients that we could target as customers.

We decided to change our direction 180 degrees. We would take products from Japan and sell them in Asian countries. The problem we faced was that each of the countries was different: different medias, religions, cultures, and languages. This made it difficult to use the same business model in each country. The only thing they had in common was that they bought products. We have multiple channels of communication, such as TV, retail stores, newspapers, and magazines. Our aim is to sell good Japanese products through this multi-channel marketing media. We target our products to each country. What might not sell in one country might sell in another. We make sure that what we bring to a country will sell.


One of Tri-Stage’s strongest characteristics is its very unique business model to provide total solutions services to its customers, as you explain in your audio CD – Sellable Television Commercials. These services include product development, planning, distribution, design, after-sales services, and for example connecting the customers with 10 call centers instead of only one. Can you outline this management strategy and how it differentiates you from your main competitors?

First, I would to like to emphasize that we do not have any competitors in this business. We are the only company that provides total solutions. If competitors do arise in the future, we intend to hang on to our competitive advantage, which is partly because we were the first. First come, first served.


Abenomics is aspiring to stimulate and facilitate entrepreneurism. Tri-Stage was ahead of this before Abenomics was even a policy. You were an entrepreneur founding this company. Do you feel that entrepreneurism is becoming more of a mainstream respectable career?

There has been a definite change in this regard. A lot of that came from Silicon Valley in the US. We had massive numbers of people who went there to learn. They returned to Japan, and set up companies. We now have a supportive relationship between Silicon Valley, and Japanese companies. We have entrepreneurs going there from Japan, and it is something that has emerged very recently and has skyrocketed.


When you're going into Asian countries, do you feel that having a more aggressive strategy is working?

When you look at Asian countries, one thing they have in common is that they have a lot of energy and vitality. They all have a relatively young population with the average age being in the mid-twenties. They have a lot of vigor. When you look across the board, you really cannot decide which country to enter. You cannot pick certain countries and say, “Okay, we are doing to leave them out” or, “We are going to focus on this particular country,” because they all have a common vitality. For myself, I said, “Let’s pick out certain countries, and focus on them.” However, the younger guys in my company were not in line with that policy.


In an interview in the Japanese magazine Keizaikai, you said Tri-Stage is trying to attract younger targets. What is the marketing mix that you are honing to tap into these younger markets?

The upper middle, I think in terms of age, but we are looking at where the money is. We are looking at the wealthier population, and also a rank below them. I guess you would call it the upper-middle class because Japanese products are still considered somewhat expensive in those countries. We are targeting those classes of people that have a little more spending power.


Is this the same in America? You mentioned that that was one of your next targets.

America does not have the huge income spread that exists in other countries. Americans have Japanese products there already. If they want something, then they can go out and buy it. They do not have to jump on a plane and fly to Japan. For example, there is a huge Japanese retail store in New York.


When Tri-Stage was established in 2006, you decided to develop a corporate governance to create a company that will “continue for a century”. Why is it important to not only think about short-term profit, but aim for a sustainable company in a society where trends are changing constantly and you have to adapt to new customers’ needs almost every month?

We are a listed country, so of course we have shareholders. They are important, and we need them in order to grow; but in order to grow we also need our employees. We cannot run the company on management alone. Our employees are the most important element that we possess. If we are going to continue employing them, our employees have to number one in our strategy. If they enjoy working here and want to continue working here, then the company is going to continue being in business.


Tri-Stage embodies Abenomic’s global push. What advice would you give to other Japanese CEOs and chairmen who want to follow in Tri-Stage's footsteps, and create global companies?

There has been a huge shift towards China among Japanese companies. In our case, we have not focused on China as much. We focused more on Asian countries because they are young, vigorous, and the future, in our opinion. Behind that, there is also India. Next to India, there is the Middle East. I believe there are many business opportunities in these areas, especially India. Of course, if you put all of the countries of Southeast Asia together, they would fit within India. We cannot avoid going into India at one point, and I think a lot of companies are focusing on India. I myself see the Asian market as very promising. I would tell others, “Do not just look at China. There is more out there besides China.”


As a media company, what would you say is the new brand of Japan as it leaves behind two decades of poor economic growth and deflation? What would you say to attract foreign investors to invest in the country?

As I said before, Asian countries are importers. They are not manufacturers, but Japan puts a great deal of care into manufacturing. Manufacturing is really where it is at in Japan. In our approach to manufacturing is extremely detailed. It is very comprehensive. We put a lot of care into the small details. I think that is what foreigners come to see in Japan. That is what Japan has to offer to foreigners.