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  • hollandleo hollandleo Jun 1, 2004 3:51 PM Flag

    Expedia Preparing for Entry into Japan

    Recently, I heard that a couple of gentlemen working in the Corporate Development side of Expedia with regards to their go-to-market plan for Japan. Apparently, as of 1.5 weeks ago, an agreement was in the final stages for Expedia to setup a partnership/alliance with JTB to resell their travel offerings as well as occupy office space in their Shinagawa (Tokyo) office.

    Apparently, Expedia is very green in their plans to provide a go-to-market plan. First, the agreement appears to exclude a lot of national travel and focus mainly on International travel. Also, relationships with JAL and ANA tend to be undefined and leaning more towards not including the establishment of these relations with Expedia. If this is still the case with the agreement per 1.5 weeks ago, then why enter the market with limited options when national travel is a significant portion of the market? Second, Expedia has used Booze Allen as a consulting arm to help them justify and put into place an understanding of how they will enter the market. One of the concerns I heard coming from the corp dev folks is that Booze Allen was raising the concern that Japanese will not purchase over the Internet with a credit card and that it will be difficult to make the transition. This is entirely false and Dell Computer and Yodobashi Camera have shattered this misguided fact. My bigger concern for Expedia is how they plan on establishing a relationship with the consumer when the consumer has traditionally utilized a trusted agent relationship at a local branch store (which is everywhere!) for recommendations and the necessary legwork by these agents they have utilized for some time to find the right price, etc?

    Second, Expedia just recently promoted Barney Frank as President of Asia/Pacific. Barney has no experience whatsoever in the Asian markets, which is a potential liability when it comes to understanding business culture and the way of doing things. As an example, those at Expedia were concerned with the fact that JTB were taking so long in the negotiation process and in getting answers back from them re: the partnership details. This is simply just a fact of doing business with the Japanese culture. If patience and respect aren�t applied and one becomes too pushy to receive an answer it will break the deal. In addition, there were some obvious language barriers between translators and Expedia. Those barriers showed themselves when JTB understood the agreement between Expedia and themselves was slightly different than what was thought. The misunderstanding was more of understanding in Japanese the tone and expression in the negotiations rather than taking the translation (chokuyaku) at face value, which is commonly done. If Barney is going to manage this relationship, he has a steep learning curve to ensure these issues don't crop up again.

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