We're going to start from the perspective of being a younger company that's gone through the last few years beginning our exporting into the Japanese market. What we've learned primarily is that the standards we meet and often exceed here in the Canadian and U.S. markets don't resonate or meet the standards in the Japanese market. Our perspective comes from educational resources put in place for new exporters who don't have offices in Tokyo since 1980, as an example.
I've outlined some of the challenges we've faced. We are pretty strong in terms of our company and our branding, the quality of our product and our position in the marketplace. Our Japanese distributor, whom we've worked with for three years, has shed light on details of our business that we didn't necessarily know existed. The primary challenge has been our legal requirements when we are asked questions.
We make, as I'm sure you know, a gentle detergent for lingerie and knitwear. We sell in department stores in Canada, the U.S., the U.K., and a little bit in Australia. The standards we meet in our market are very different.
An example is that our product, Soak, is what we call in Canada “readily biodegradable”. In the Japanese market, they need to know the percentage of biodegradability, but our raw material suppliers in the North American market aren't required to provide information to us beyond readily biodegradable. I use this as an example because I spent six months doing nothing else but trying to find out the percentage of biodegradability of our product, to something like 10 decimal places per millilitre.
What we're looking for as small businesses, or businesses that are beginning to export, are resources available for helping navigate these channels. There are certainly issues of communication and semantics, and your customer always providing a translator and your not being able to have your own translator. They do come around to where one would go to find out this information. There are other examples.
For example, we refer to our product as skin care for clothing. That's marketing terminology. When that was translated in Japan, our product was put through a big stack of skin care related tests as to whether the product was safe for the skin, but it's not used on the skin. It's used on clothing, on sweaters or whatever. When we refer to things like skin care for clothing, which is marketing speak in North America, being able to translate that in a way that doesn't result in another six months of testing and studying of our product is challenging.
Being a member of many organizations, we went to the Organization of Women in International Trade, the Canadian Association of Importers and Exporters, Export Development Canada, JETRO, DFAIT to try to find local Japanese organizations. However, their primary focus was on bringing Japanese products into Canada, not helping to export Canadian products. We do have lots of really good connections.
What was a little alarming was the lack of availability of resources of people who had actually made products here, packaged them, put labels on them and sold them into the Japanese market. We do ask all of our distributors to do their own regulatory work, so from that perspective, they were putting secondary labelling on the product. They were incorporating duties and tariffs and such into their pricing structure and creating their own price because they were our Japanese distributor.
There was certainly a list of things that we had to resolve, but we weren't able to ask the questions. If I can't ask my manufacturers what the percentage of biodegradability is, and they can't ask their suppliers of raw materials what their percentage of biodegradability is, then I have to use every secret card and favour that I have to try to get an answer to one question. There are no comparable standards from one product to the next.
Those are the main concerns. Those and making sure that the resources are put in place to help new companies that are just starting out on exporting with Japan, to give them the opportunity.
It was really interesting to listen to the conversation about beef and pork and to learn that a company that has a plant with tens of millions of dollars of manufacturing is experiencing similar problems. For example, our customers here trust us, but our Japanese customers want proof.
How do I prove that there's no residue left? Sears Canada has not asked me to prove there's no residue left. We've displaced a product that was in their store for 25 years, and it sells. We get orders every week.
Those kinds of questions come up, and there's no one out there who can answer them with us. It's nice to see that we have similarities, or that we'll still be answering the same questions 20 years from now.
That's the kind of thing we do. We are reformulating our product and are really hesitant to present our new formula to our Japanese distributor, because we know that we have to amass something like six months' worth of research and data. When we go to suppliers we say to them that if they want to use a certain ingredient, they have to assure us that they'll be able to get certain information from from their raw material suppliers. They are not legally required to supply us, and don't want to supply us, with that because it's competitive, and they've probably never had to answer that question, so they don't want to supply the information either, and so on and so forth.
We are looking at going to them with new formulas and new products that we've just developed, but it's a little terrifying, because we know that we're just at the beginning of another full year of this kind of research and planning. As was said previously, our Japanese distributor was our largest distributor worldwide. They took our business very seriously. They took our relationship very seriously. We see the potential as being really strong, if we can maintain it.
Thank you for having us here.