A good night’s sleep is good business

What would you say has been an impact of Abenomics on manufacturing or indeed on Nishikawa Sangyo specifically?

At first, Abenomics brought us monetary easing policy. This has caused the weakening of the yen and at the same time made us run toward the end of deflation, which lasted many years. The deflation we have faced means “the cheaper, the better”, so everybody went to China to make less expensive but lower quality products to bring back to Japan. The higher positioned brands like us have suffered from those products, overseas products that are of lower price and quality, and we were also concerned if we were able to properly continue to keep the brand image. Price reduction was very hard for us, but Abenomics has changed the mindset people had during the deflationary period, not only ours but also the consumers’. This is the biggest change, and at the same time, Prime Minister Abe knows that we need to reform or change our system.

For example, we have to review the current industry, we have to change weaknesses into strengths, and we have to export our excellent products to the world. There are the major three arrows in the first stage. Of course, the re-organization of the current industry is most important, as it is what Prime Minister emphasized. It may not be easy, but maybe we can change this to an opportunity. For example, as you may already know, we are an ageing country with a shrinking population. This means that we need more money for nursing care for elderly people in the future. Medical cost is a big problem as well, but he says we will overcome this problem. We have a big asset to export to all countries, including China and others.

Such Asian countries have a lot of momentum, but they are also rapidly ageing countries, so it is clear that we have to focus more on health products and lifestyles, which will be good for all of us. Of course he says that exporting gives us a good opportunity to re-consider what Japan is or what the key identity of Japan is, as well as our products and services to export to other countries. I think this is a big change that Abenomics has brought to us and to our customers.

We have also been told by several interviewees that it has been as much about changing mindsets and perspectives and having a more internationally oriented and confident Japanese private sector, as it is to have high quality products. Do you feel this with your peers in the private sector, that there is more confidence?

Yes, I do feel so. The TPP will be a trigger to give us a big change, in terms of exporting and tourist business. For example, we, Nishikawa, are facing a big wall to overcome in terms of exporting, because there is high taxation on the textile industry, maybe 30%, which was very expensive for us.

We have to establish specific rules about business relationships, for example individual rights or investment, when entering the US market. Rules are pretty different from each country to each country, especially in the Asean countries. For us, of course, we would like to enter Asean countries, but we still do not know well about what is the law or what is the rule in those countries. We sometimes face a problem due to the fact that it is not clear how much is the stipulated minimum percentage of local workers against the total employees in a local office. This kind of matter can be a high risk.

The TPP will make the figures of rules and risks regarding international trade more clear and easy to understand. This will make people, especially the executives, to have a bigger chance to invest or export to the other countries.

This year is the 450th anniversary of your company. Can you give us a little bit of background on how your company grew from one single passion or person to being one of Japan’s leading brands today?

Niemon Nishikawa started our company in 1566. He started as a peddler bringing and selling products from one place to another. I think it is in the roots of our business to literally deliver a solution to customers in another place or market, and it gives some new know-how. This was our first stage.

At the first stage, our business was basically to sell textiles or linen for mosquito nets, which was a special product of the region where Niemon Nishikawa was born and raised. Nishikawa the second (Nishikawa II, who was called Jingoro) was first to ever start using green and red color for mosquito nets. He was the first to adopt designs into a very functional product. Before that, they were just an un-dyed or unbleached product, so it was an innovation.

Currently, Jingoro Nishikawa, my father-in-law is the 14th generation and I am a candidate for the 15th generation. Jingoro Nishikawa, the 14th, always says to me that only serial innovations make the history of tradition. This is the basic point of this business. I am currently working to bring innovation, and I also always tell this to the people of this company. Of course, every year, it can happen. Everybody can create changes. We had not thought much of exporting our products until I joined the company and expressed a new point of view that some of our products are suitable for the overseas market as well, because our staff’s perception might have not been sufficiently international.

It sounds like this is the future. You were talking about the TPP, the decrease in the yen, which allows exports to be easier and more lucrative. What are your priorities as the president? Where can you see opportunities?

The first priority of our series of actions is to set our mind on competing with other companies worldwide; that kind of mindset is very important. The second priority is to rediscover the domestic market. People sometimes say that Japan has a decreasing population, but I always say, “We still have enough population, over 120 million, and they are mostly in employment and relatively rich in comparison with other countries.” Of course, the majority of Japanese people is classified as the middle class and they are becoming health conscious year after year. That means compared to different fields of textile merchandises, like apparel products, our products have more similarity to big home appliances, which are designed to last 15 or 20 years. After you buy one of them, you may be 20 years older when you replace it with the new one. This means it is very difficult to create a new customer base, even though the product itself is good. We have to change our customers’ minds.

Sleep plays a very important factor in healthy lifestyles, worker productivity, and even personal behavior. So how difficult is it to educate people on the benefits and the necessity of your product? I know you do seminars and factory tours. Do you see a lot of positive responses from them?

Basically, the most difficult part of our bedding business is due to the fact that everybody already has beds. Secondly, during your sleep, you are closing your eyes and you are losing your consciousness, so you do not know what is happening and you cannot actually see what is going on inside of your body or your head. Nowadays it is becoming easier to visualize what is going on, how the bed or mattress works, and what kind of temperature or humidity is the best for your sleep. What will happen if you have a good sleep or what will happen if you don’t have a good sleep? Technologically, it is becoming easier and less expensive to check what is going on. This is a big change, but most of the people still cannot see what is happening to their body during their sleep because they do not have sufficient and right information about the updated science and technologies concerning sleep.

Our approach is quantifying the benefits of sleep and making it tangible and easier for ordinary people to understand by using the updated technologies. This is realized by our expert team of sleep science, which is our own sleep science laboratory and has a 30-year history, as well as close communication with universities and research laboratories. We are doing research and development to continuously accumulate know-how, which is one of the most important parts for our future. This is an important asset for the future.

An organization, which is one of the most important of our R&D partners, has just built a new research building for sleep and this is one of maybe 10 projects concerning new Japanese technology that were funded by the government. This is obviously very important for our future of both our domestic and worldwide business. The R&D team will scientifically show us what is happening and what a good sleep will do for you with some evidence found by its research. For example, a good sleep can make your immune system stronger, help prevent your skin ageing, have a positive effect on memory capacity, and so on.

We conduct a seminar to show end-consumers certain parts of the research so that people can have a stronger interest in sleep and change their mind or perception about sleep. Also, these seminars are for health-conscious people who do exercise and eat healthy foods that have low calorie contents and contain fewer sodium additives but do not pay enough attention to sleep to rest their body and mind. And, we introduce that they also need better sleep to keep their health during the seminars. These three elements, exercise, good food and good sleep, are the triangle of a healthy life.

Nishikawa Sangyo really puts innovation at the heart of everything. Can you maybe outline some of your technical breakthroughs and what we can expect next from Nishikawa?

When we have this kind of research in our laboratory, we first study what kind of factors affect quality of sleep, for example, lights, sounds, pressure, temperature, and humidity. The second subject is how we can overcome problems that prevent good sleep. This is the basic of our motivation for innovation.

The products have had and will have better performance, and be easier to make. For example, we are employing a new technology to reduce pressure and help good blood flow that will give you the best balance and hold a better natural posture during your sleep. Another characteristic of our mattress is the cutting of material, which has now become more sophisticated than ever. We have also made some change in materials, the anti-sweat foam is one of the examples. We also offer made-to-measure pillows. If you use this special scale to figure out shape and line of your head, it tells you the ideal height and size of a pillow that perfectly fits you. Different heights are prepared and a pillow has pockets (from 6 to 14) to insert fillings where you can adjust the height by yourself, and there are variation of fillings such as charcoal pellets and buckwheat husk smell.

Is this technology pioneering? Do you know of other companies who are as advanced in absorption of smell?

I think we have a good partnership with other industries. We actually always visit many material exhibitions, and I believe this action helps our innovation and production a lot.

In line with your brand of quality, you use some of the world’s most famous athletes to represent your product, including Neymar and Sana Tanaka. You also partner of course with ANA to provide first-class passengers with your air cyclone blanket, again aligning your brand with excellence. How would you describe your marketing strategy?

As I have explained, some people do not recognize how better sleep is important for your better life. In order to disperse this, it is good to introduce to ordinary people examples of well-known athletes who are very keen to keep in condition, in order to fight and perform well. They always need to continuously train hard to get a better performance, but at the same time they also need a rest to recover. Too much training can cause an injury, so you need a good sleep. We have close communication and contracts with Mr Neymar, Mr Tanaka, one of the top ice skaters Yuzuru Hanyu, Mr. Matsuyama, and many other athletes in baseball, football, volleyball, and golf. Even some athletes who have no contract with us but love our products always use our products everyday. This is totally different to a mere marketing activity. It is not only for image purposes; we also actually provide them with support to attain the best performance. So this is why they rely on us, trust us.

They must be ecstatic; it is potentially almost a competitive advantage to use bedding products to sleep more restfully and wake up more refreshed.

Sometimes, elderly people who have back pain or some trouble with their body, visit us. About two decades ago, such people were the majority of our customers, but now because of our new strategies, younger generations ask their parents or grandparents to buy our products because they’d like to become like Neymar. This had never happened in this business field, especially in the bedding product market, because the mother or grandmother is usually the person who buys bedding items for their children or grandchildren.

Is it fair to say this is a new marketing strategy introduced by yourself to show younger people the positive health benefits by using some of the world’s great athletes?

Yes, I initiated it to show the active life of the athletes to our potential customers, including younger generations. And why should we have a close communication with ANA? Because they wanted to offer better flight services, other than safety and punctuality. They had offered good food and music, and as a next stage they needed a good sleep because most businessmen in business class or first class have to travel for business meetings right from the day of their arrival or the next day. It was recognized that facilitating a good sleep would be a good idea to enrich their services to customers. People who experience such a great flight with a comfortable sleep must become good repeaters. We had a series of special meetings and studies with ANA for this project, such as testing various types of samples in the specific environment of inside an aircraft during a flight, with low temperature and humidity.

As you go international, is the brand that you’re trying to create a more active, fresh, health-conscious brand?

Yes, good sleep is for everybody, not only elderly people, but also younger generations, active people, business people and even kids. This is the whole picture of our marketing, because sleep is for everybody; all we have to do is just to separate the story and select an appropriate image for each customer group.

Sustainability and environmental concern are also at the core of your business. Why are these practices not only smart and make good business sense, but also the right thing to do?

For me, the sustainability of the business or the sustainability of our company shows that our basic motto is right. The basic motto of ours is called “Sanpo Yoshi” in Japanese, which means good seller, good buyer and good society. There remain documents of our company that were written more than 200 years ago. These documents tell our rules. Number one, you have to follow the laws or every rule the government decided. Number two even though there is a shortage of the product, you cannot raise your price. Number three, is you have to work hard. Number four; you cannot do anything causing trouble to your society. These are the basic policies, which were written more than 200 years ago and will continue to exist in the future as the principles we must follow.

Although many generations suffered such various hardships as of the time war, the currency inflation, diseases, massive fires and disasters like earthquakes they found some truths to make the business better as well as conquering the difficulties. A good business will have cores that cannot change. Of course we always have to stimulate innovation but we also have to keep something important, which is called a basic thought, theory or the philosophy inherited in Nishikawa.

How do you want world leaders to understand Japan and its future?

Firstly, younger generations have a strong power to change Japanese society, but we should also maintain our own philosophy. It is a precise identity, that of Japan, and one of the most important parts of Japan that we have to keep. We should adapt it to the current business and I know many people who are trying to do so, which, I believe, is a good change for the Japanese people and society. Secondly, we are becoming a very health-conscious country, and therefore not only medicines to treat disease but also methods and goods for disease prevention are becoming important.

As you know, the medical costs and social security costs are already very expensive and expected to increase further, but if all money goes to certain companies in the medical industry, the money does not sufficiently flow. The situation of “winner takes it all” is not consistent with our philosophy. We should avoid such an imbalanced situation and advance to the next constructive businesses so that everybody can be happier.

You touched upon internationalization, you were saying that you were maybe thinking of expanding, so can we have some guidelines of where you want to go? Is it the Asia-Pacific region first and then expand into other countries?

Yes. We already introduced some of our products in Singapore for two weeks and we sold 7 million yen during such a short period. The sales record was the second best at the Takashimaya Department Store. This good experience and the result gave us a firm confidence that our products can be successfully accepted in foreign countries.

We will open our shop in Singapore first, and the Singapore shop will affect the other markets in all Asian countries. It is the path we are going on. Of course I would like to have our shops in New York and other major cities in the US and in Europe too. Maybe thanks to the TPP our dream may come true earlier than we expect, as a high tariff is one of the most serious barriers to overcome. 30% taxation is so difficult to overcome, but now it will be better. I strongly believe we should have more shops all over the world until 2020, which is the exciting year of the Tokyo Olympic Games.