Unilever Japan’s president and CEO Fulvio Guarneri may be new to this country. However, despite only having arrived in July, he’s proven to be a quick study. Three months spent studying Japanese consumers from all walks of life have given him a good idea of the local market.
“My job is intrinsically linked to people’s lives, much more than [is the case] with most jobs,” he says. “We need to observe people — see what they do, how they behave — to gauge what the future trends might be.”
Guarneri, who joined Unilever in 1997, has worked in various parts of the world, including Russia and the Balkans, so he has the background to compare the consumer markets of different regions. “Japan is very different from any other country in the world in many respects,” he says. “Consumers here are very sophisticated and well-educated. They have a high awareness of product specifications, and they are very knowledgeable — they know what they want, and they know why they’re buying it. They praise a lot, but also complain a lot if a product is not up to their standards. Our customer support centre here receives a lot of calls, much more than in any other country, because people here want to interact with the products and with the brands.”
That said, Japan is still a challenging market for a foreign firm — even one like Unilever that has been here more than 50 years. “This is a very highly evolved consumer market,” says Guarneri. “And it’s a very big market — one of the biggest in the world in any fast-moving consumer goods category.”
One major challenge is the high quality of the goods that are already here, according to Guarneri. “In the sector we operate in, there is a high level of local competition, maybe the highest in the world. It’s often difficult to import because the consumers’ expectations are so high.
“If there is even a misplaced label or a scratch on the package, a product is considered off-quality. Or, the orientation of design elements — the wording or illustration: on the left side or the right side. In some markets, it doesn’t matter which [one is selected] — or if it’s a little off-centre,” he continues. “Here, it matters. If it’s wrong, it sticks out, looking like a mistake. And people respond by complaining, or by not buying the product.”
Guarneri is quick to point out that none of this is by way of complaining; it’s just the nature of the Japan market. “There are lots of rules and regulations here, it’s true. But these don’t change — that’s the key. Being regulated doesn’t mean it’s a hostile relationship. In Japan, if you follow the rules, everything becomes simple — you know what you have to do. For business, in the end, it is the certainty of the rules that matters.”
On Guarneri’s watch, the keyword at Unilever will be “sustainability” — in every meaning of the word. “Our ambition is to double our business globally, while reducing our environmental footprint and increasing positive social impact. We aim for constant, profitable and responsible growth, ” he says. Guarneri wants to position the Japan unit at the forefront in this regard. “As an example, we are working to move our factories to renewable energy. We are also very keen on sustainable agriculture, and on advancing opportunities for women. I think these are very important because, after all, two billion people a day globally buy Unilever products. We have a huge impact on people’s lives.”
The firm’s sustainability vision is integrated into brands and innovations. “Offering 21 fair-trade-certified flavours, Ben & Jerry’s ice cream is definitely one of the brands that will be the flagship of our sustainable business in Japan, along with sustainably sourced tea in partnership with the Rainforest Alliance, an organisation that is committed to decent wages for plantation workers.”
Guarneri points out that Unilever considers Japan an extremely important, strategic market. “We are planning to double our business globally, while improving social responsibility and decreasing the impact of our operations on the environment; and we want to do this in Japan as well.”© Japan Today