August 2005
Personality

Lessons from Japanese Connection

Bijendra Shrestha is among the few Nepalis doing business with the Japanese. What are his learnings?

After passing his high school exams with just three points less than his friend who secured a position in the top ten list, Bijendra Shrestha joined a science college but soon left it and joined a commerce college to fulfil his childhood dream of becoming a businessman. He started a business even while in college, much earlier than he completed his MBA.

These days he is often invited to make presentations before graduate level students in technology (such as engineering) and his advice to them is to pursue MBA degree as well after completing the technological degree and start some business in Nepal itself. "I don't like to see our brains migrating abroad," he says.

The very first business he started was related to high technology. While pursuing his B.Com., he got an opportunity to supply high tech items to a hospital. A Japanese company was doing it earlier, but as it was not a big business they were not serious about it. That is perhaps why he got it and he did not have to invest a single penny. He would get the items on credit and pay the supplier after he received payment from the buyer.

That was way back in 1989. Then in 1993, he started importing new IT products for mass market. It was his company (Pacific Commercial Company Pvt. Ltd.) that introduced Imation diskettes in Nepal. Though they could not perform well due to the strong presence of Maxcell and Sony diskettes, the company conducted an extensive marketing - giving out free samples and providing them to retailers on unlimited credit. "I also wrote articles for magazines explaining why Imation was better," he recalls. Now Imation CDs and diskettes account for some 80 percent of the market, he claims.

Then he also entered the hardware sector and now is dealing largely in IBM. In 1999, he entered into software, starting a joint venture company with a Japanese partner targeting Japan as the market. "Our initiation helped to boost Japanese confidence in the Nepali market and now, in the IT sector, the number of units with Japanese investment outnumber those from all the other countries," he claims.

According to Shrestha, Japanese joint ventures are better for Nepal in the sense that there are cultural similarities between Nepal and Japan. "For example, when the Americans think of a business they think of something large but such large businesses of today may not exist tomorrow. Whereas, the Japanese go for slow but steady progress, which is more like the culture in Nepal," he explains. While the Americans want to deal with only those units in which the necessary facilities and manpower are already in place, the Japanese would always be ready to help the company develop and overcome such barriers. "What you need is to build up trust with them. The rest is quite simple," Shrestha adds.

This insight gives a valuable idea for the Nepali IT companies. The American job is more likely to go to India where the IT companies are large and established. Nepal will get only those US jobs for which there are no takers in India. But the Japanese like to deal with small companies and there is opportunity for Nepali companies.

About the apprehension of language barrier in dealing with the Japanese, Shrestha says this is not a big problem as Japanese investors are always ready to provide language training to Nepali employees. For the management staff, a rudimentary knowledge of the Japanese language would be enough as the Japanese counterparts speak English well, though with accent.

How easy is it to get Japanese business? "It all depends on marketing," he says, and points out that neither the private sector nor the Nepali government seem to be serious about marketing Nepal or the company concerned among the potential foreign investors. Everything related to IT is left to the Computer Association of Nepal (CAN). But you cannot expect CAN to be able to cater to every IT business. It would be a good idea if CAN is made a federation of associations related to different segments under IT.

On the subject of how he found his Japanese partner, he says, "My partner was toying with the idea of investing in Malaysia. When he thought he found a loyal partner in me, he decided to invest in Nepal because the Japanese have a soft corner towards Nepal as it is the birthplace of Lord Buddha."

His other advice to Nepalis thinking of joint business ventures with foreign parties who are willing to buy the product is that they should not invest only on the basis of an agreement. "First make sure that you can make the products that can meet the expectations of your joint venture partner. Then only should you go for it."

About the complaint of the lack of opportunities here, particularly due to the peace and security situation, Shrestha recalls a presentation he made in Japan two years ago during which the audience raised questions about the peace and security situation. In reply he asked them a question: "Where in the world do you find a place free of all security problems?" In his opinion, whatever the situation, the show must go on. The entrepreneur has to be aware of the situation and devise a business strategy accordingly.

About his own business sector-IT-he complains that though the government has identified it as a priority sector, the policies are not yet conducive for the development of this sector. Though IT is a sector in which the fact that Nepal is a landlocked country would not be a constraint but Nepal is landlocked also in terms of information. "Right now, the bandwidth Nepal has for connecting with the outside world is very limited. We need to have immediate interconnection with the Indian fibre optics highway."

About the government policy on IT, he recalls becoming a member of the National IT Development Council two years ago with the council being dissolved without holding a single meeting. Similar was the case with the Cyber Law. "The rules formulated to implement the law were announced when the original law was already outdated and needed amendment."

According to him, our bureaucrats did not understand the importance of IT till India started showing good results in it, though IT was introduced here earlier.

One important difference about IT business in Nepal and in India as pointed out by Shrestha is that in India the companies try to make sure that the job goes to Indians, but in Nepal the Nepali employers find it difficult to trust their fellow Nepalis.