Yamato, Shanghai Port join to help Japanese companies hawk wares in China

Japanese delivery service to tap into Chinese demand

TOKYO -- Logistics group Yamato Holdings will form a joint venture with terminal operator Shanghai International Port (Group) to provide support for smaller Japanese manufacturers seeking to tap strong Chinese demand for their household products.

Software developer Sino-Japanese Engineering and tech firm Planet, both headquartered in Tokyo, will also contribute to the 30 million yuan ($4.34 million) venture, which will begin operating in January. A subsidiary will chip in on behalf of Shanghai International Port.

Planet, which counts several major household products manufacturers like Lion and Unicharm as shareholders, hosts online trading services for about 1,000 makers and wholesalers. But the operation is wholly domestic. Both Sino-Japanese and Planet will create a new system based on the existing services which will connect Japanese manufacturers with Chinese retailers.

The service is expected to be used by about 100 Japanese everyday item suppliers and by Shanghai Bailian Group, China's largest retailer, which runs supermarket and department stores.

The Japanese companies will enter product information in Japanese, and the joint venture will translate the data into Chinese. That way, Chinese businesses can make orders in their native language.

Shanghai International Port operates terminals at the Port of Shanghai, the world's busiest container port. The company will handle customs clearings for Japanese goods at the port, and an affiliated logistic firm will deliver the items to Chinese clients. Yamato will be in charge of deliveries in Japan, and will also provide ships.

The joint venture will collect payments on behalf of the partners. Earnings at the new unit will come from trading fees and delivery services.

Shopping sprees in Japan by Chinese tourists have waned in the face of tightened regulations by Beijing. But Japanese goods are still in high demand in the mainland, especially diapers, toothbrushes and beauty products. Many Chinese retailers are looking to expand those product lineups.

Meanwhile, it is said that it takes at least 100 million yen ($888,000) a year for a Japanese company to open and maintain a Chinese arm. That creates a barrier for smaller companies, which are limited in funds and manpower. Japan is home to an estimated 600 small to midsize everyday good manufacturers, and those companies are looking to expand offshore to combat a domestic market that is graying and shrinking.

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