Japan’s distribution problems could provide Atlanta information technology companies with a significant opportunity if they can develop creative business to business logistics software, said Yukihiro Moroe, managing co-director of the Japanese research department, Goldman, Sachs (Japan) Ltd. in Tokyo.

“There is great demand that is not being met and a lot of opportunity lost because of the inefficiency of the distribution system in Japan,” Mr. Moroe told GlobalFax following a conference sponsored by the Japanese External Trade Organization (Jetro) on Feb. 25.

As a partial resolution, small scale e-retail conducted from convenience stores is now common, he said. However, this alternative does not solve the country’s problems.  

      Since many Japanese products are sold on consignment from wholesalers, retailers must return any products that are not sold and that becomes very expensive, said Mr. Moroe. Following the economy’s recession in 1997, distribution of products in Japan has become limited to proven, successful channels and sometimes only to proven products, he said.

      Convenience stores, such as industry leader Seven-Eleven Japan, now provide e-retail services with online access for ordering goods such as CDs, tickets and books and charge a low fee for receiving delivered goods.

Customers place orders through multimedia terminals inside the stores which are also used to develop film and send e-mail. Deliveries are made three times daily to the stores and with 95% of the country’s population living within 5 miles of a convenience store, pickup is not a problem.      

However, convenience store e-retail does not solve the problem of receiving larger products as the stores have little storage space, said Mr. Moroe.

The Jetro event that focussed on business opportunities in Japan attracted about 180 business leaders, government officials and students to the Hyatt Regency downtown, according to a Jetro spokesperson.

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