Ask a few people on the streets of New York, Los Angeles, London, Sydney or Singapore to name Japan's most famous export and you are likely to get the answer "Toyota" or "Sony." What you are unlikely to hear are washoku (Japanese cuisine) or the brand Undercover (a coveted Japanese streetwear clothing label).
The Japanese government is hoping to change all that with the launch of the Cool Japan Fund this week. The Fund is aimed at promoting Japanese products such as food and beverage, clothing labels, crafts, and content such as anime and manga, that may have achieved popularity overseas but have not seen that popularity translate to profit, often due to the lack of a good business model, or lack of funding and foreign headquarters.
Any concerns about "Cool Japan" being just a marketing slogan ("Cool Britannia" comes to mind), can be put aside. Close to $1 billion has been committed to the fund—which aims to also help under-the-radar companies with great potential that would not have been able to flourish without the cash injection—to expand abroad. The funds will come mainly from public coffers, with a portion from private companies such as ANA Airlines and advertising giant Dentsu Inc., which are already on board.
Hideaki Ibuki, director of the Ministry of Economy Trade and Industry's (METI) Creative Industries Division, said the ministry has already received about 90 proposals from companies seeking funds, according to the Wall Street Journal. Among them is Maeda-En which claims to have created "authentic" green tea ice cream two decades ago. The company would like to expand its business in Southeast Asia, but "we don't have a connection with a local bank in the region we're planning to enter," CEO Taku Maeda said in an interview. "Getting the government backup would certainly help us," he added.
Nobuyuki Ota, chief executive of the Cool Japan Fund Inc., and a former fashion executive who brought Issey Miyake designs to the world, told Reuters, "A state-backed fund can do what private investors cannot. Private investors sell their assets once their investment targets becomes profitable. We can be a long-term investor because it takes time for those small companies to grow."
Two major Japanese banks, Mizuho Bank and Sumitomo Mitsui Trust, have committed to the fund. Mizuho intends to offer financing and personnel support to clients interested in expanding into overseas markets, with a focus on traditional arts and crafts. Sumitomo Mitsui Trust will promote a consortium of various types of “Cool Japan” export businesses, including distributors, manufacturers and retailers, as well as help them establish business bases abroad.
One of the Fund's planned umbrella projects is the introduction of Japanese-centric shopping centers. The concept of a culture-specific shopping destination is not new, but it is certainly a good way of introducing Japanese products in a very targeted manner.
Seiji Horibuchi, founder and CEO of San Francisco's Viz Pictures and Viz Media, one of the first importers and translators of manga (comic books), opened the New People retail and entertainment complex dedicated to Japanese pop culture in the heart of San Francisco's Japan Town in 2009. A subterranean cinema shows Japanese contemporary movies, while the street-level New Store offers a curated selection of Japanese brands, some available for the first time outside Japan. Shops dedicated to Harajuku fashion are on level 2 and artists inspired by J-pop bring life to the mall's third floor. The Cool Japan Fund team may do well to learn from the New People mall's wins and losses.
Japanese cuisine, or washoku, is expected to join 20 other Japanese cultural traditions including kabuki and Noh, on UNESCO's intangible cultural heritage list next month. Characterized by the use of fresh, seasonal ingredients sourced from all across Japan, and presented attractively, washoku will be only the fifth cuisine in the world on the list, following in the footsteps of four others—French, Mediterranean, Turkish and Mexican. This should smooth the way for its wider introduction beyond sake and sashimi and bringing Japanese cuisine into new markets.
As a testimony to the depth and breadth of what Japan has to offer, Monocle magazine in its recently released annual The Monocle 100 list of quality products and services names several Japanese products including newcomer Yumiko Iihoshi ceramics, whose products are currently found only in her Tokyo studio; a 300-year old tea purveyor, Ippodo, which previously supplied the Imperial Palace; and Muji personal grooming tools. Muji is a well known entity, while the other two have the potential to be powerful brands outside of Japan and could be worthy beneficiaries of the Cool Japan Fund.
This story is played out all across Japan, and the Cool Japan Fund hopes to discover and bring some of these brands—perhaps the next Commes des Garçons or Uniqlo—to the world.