Insight interAsia (IIA) provides consulting services to technology-based companies that are interested in doing business in Asia.

The most common services provided by IIA include:

Branch Office Setup

"Representative Offices", "Branch Offices", and "Subisdiary Companies" mean widely different things in every country in Asia and each entity has detailed restictions as to what its operations can and cannot do. Likewise, each has very different tax implications locally and for the home office.

The company NLco BV in the Netherlands makes advanced tooling that is used in the liquid injection molding process. The liquid injection molding process is used to create plastic and rubber molds used in everyday products throughout the world. Generally, the process is known to be fairly labor intensive, even though the machinery used is quite advanced.

NLco BV has been doing business in Asia for several years, as there is little liquid injection molding done in the Netherlands (or Western Europe) but most of the market has been in Asia for nearly 20 years. More specifically, some countries in Asia that previously were known for their liquid injection molding such as Japan and Korea have nearly quit the business entirely during the past 5 years as the production has shifted to lower-cost markets such as China, Vietnam, Thailand, and Sri Lanka.

Over the years, NLco BV management is not sure whether or not it has helped create local competitors via its close relationships with its distributors in Japan and Korea. In fact, the company helped train its agents’ after-sales service engineers, some of whom later left their companies and started competitive companies or went to work for other OEMs’ agents.

NLco BV management decided that it was time to establish their own local presence in Asia and not use agents or distributors, especially in the newer markets. But, it was unclear what to do: representative office, branch office, subsidiary company, or a stand-alone separate company? It was equally unclear in which market(s) to set up the new operations.

When NLco BV first contacted Insight interAsia we started with 6-month retainer arrangement. We went to the Netherlands to meet with the NLCo BV management at their headquarters and learn as much as possible about the details of the relationships with the existing agents and distributors. We also wanted to hear the ideas of management about the future of the liquid injection molding markets worldwide. We agreed immediately that NLCo BV should be looking to set up its own operations in Asia and that the company should not be looking for new agents in the new markets (or the older markets). We then explained that each country in Asia varies widely as to scope of work that is available and tax implications that are levied on the various operations schemes, i.e. representative office vs. branch office vs. local company.

We returned to Asia and began work on looking at the newer markets. We investigated the size of each market and the projected growth in each. We talked to several existing and potential customers in each of the new markets, and we also interviewed some customers in the older markets in Japan and Korea who has exported much of their processes to China and Vietnam. We learned that one of the older markets—Taiwan—was still quite strong in the liquid injection molding market, although Taiwan was increasingly outsourcing the work to China. We then met with economic development officials in the “new market” countries to learn what incentives would be available to NLCo BV should they decide to establish some form of operation in those countries.

We prepared a detailed presentation and met with NLCo BV management again at their headquarters. We explained the information we had collected, our analysis, and our recommendations, which are detailed below:

Immediately sever the relationship with the Korean distributor. Even though Korea is not the hotbed of liquid injection molding that it once was, the distributor has become an incubator for engineers leaving the company and starting businesses that export technology to China (technology based on NLCo BV’s intellectual property).
Transfer the responsibility of the Korean market to the Japanese distributor, which has an office in Korea used to distribute other products)
The Japanese distributor is doing well and would be a good partner to establish a joint-venture with in China. They have Japanese customers who have outsourced worked to subsidiaries in China and, therefore, bring with them an immediate list of customers.
Send a factory-based engineer to live in Taiwan for 2 years and work closely with the Taiwan agent. Re-evaluate the relationship with the Taiwan agent in 2 years, as the market may have changed radically in that time as more of the processes in Taiwan are outsourced to China. During that time, the factory-based engineer from the headquarters will gain deeper insight and closer relationships with the end-user companies that are increasingly outsourcing to China.
NLCo BV Thailand Corp, a wholly owned subsidiary of NLCo BV, should be established in one of the industrial zones just north of Bangkok and close to the airport. It is relatively easy for employees here to get to the other Asian markets of importance on non-stop flights.
A Branch Office of the new company should be set up in Vietnam and Indonesia. The Branch Offices can perform sales and service functions. Both countries offered lower tax rates on the operations if more locals are employed than foreigners.
A Representative Office should be set up in Pakistan, which we learned is fast-growing market for the lower end of the liquid injection molding market. The Rep Office is allowed to gather information and perform sales/marketing work on behalf of the parent company, but it cannot handle any transactions…therefore, there are no tax implications. The Rep Office can easily be changed to Branch Office status in the future (and transact with money) should the market develop further.
Likewise, a Rep Office should be set up in Colombo in Sri Lanka. The market is relatively small and unlikely to grow much. Sales/marketing and after-sales service are allowed for a Rep Office in Sri Lanka as long as money is handled by the parent company.

Insight interAsia then toured Asia with the NLCo BV management and introduced them to our economic development contacts in Indonesia, Vietnam, and Thailand.

We also introduced them and their Japanese agent to a potential joint-venture partner for the Chinese market in Guanhzhou. We then were enlisted by NLCo BV to help negotiate with the Indonesian and Vietnamese officials for more favorable incentives. After that, we were asked to help find local talent with the skills to work for the various Branch Offices.

Please contact us for more details on how we can help your company succeed in Asia.

Manufacturing Outsourcing Arrangement

A small start-up company in New England—founded on technology that spun out of MIT—has a proprietary technology that is integral to making high brightness LED’s, especially blue and green. NewCo realizes that very little blue and green LED manufacturing occurs in the USA and that most of the global market is in Asia: Taiwan and Japan, in particular. However, the company is nervous about intellectual property leaks that could ruin their business very quickly. The company realizes, though, that it is not cost-effective to manufacture their LED driver products in the USA and that manufacturing should be close to the end-users.

When NewCo contacted IIA we met with them and their patent counsel to learn the key points of the IP that made their LED drivers so unique. We learned during that visit that NewCo also had in-house competence in designing custom LED drivers quickly and efficiently.

We then investigated the market in Asia by visiting potential end-users of the products (and the design services). We found most of the customers to be in Taiwan, Japan, and Korea to a lesser degree. Some smaller customers were found in Singapore and Malaysia and one relatively obscure customer was found in Israel. By talking to several key people in Asia, we also learned of some potential customers for NewCo in Europe. However, it was determined that over 90% of the market was in Asia and most of this was focused on Japan and Taiwan. Our findings also led us to agree with NewCo’s initial belief that IP leaks could destroy their business very quickly.

The company did not have enough capital to stand up its own manufacturing facility in Asia, so we agreed that a highly reputable partner had to be found which would have strong internal firewalls to prevent IP leakage (especially to China). We found a company in Taiwan that was willing to guarantee they would never outsource via subcontract any of the manufacturing of NewCo’s drivers to China.

IIA was then an integral part of the negotiations with the company in Taiwan. It was agreed to by the Taiwanese that only the CTO (a part owner) would know enough details of NewCo’s IP to be potentially harmful to the company. He also agreed not to physically travel to China for 2 years. We believed this was the best possible solution for NewCo, and to date the relationship is going very well.

Asian Operations Audits

OzCo Pty Ltd in Australia had been doing business in Asia for more than 30 years and considered the Asian market more important than their domestic, North American, or European markets. Their products were mostly based on natural resources. Very pure copper was the most profitable export for them and 90% of their highest purity copper was shipped to Asia for use in electronic circuitry.

When OzCo Pty Ltd first contacted Insight interAsia, the company had two branch offices in Japan, one in Korea, and one in Taiwan. The branch offices had been operating for several years and were staffed by mix of Australians and local hires. They also had a sales agent in Singapore. OzCo Pty Ltd was concerned that the cost of sales had grown significantly in the past few years and that profits were falling. They also sensed there was trouble in the local operations as local hires were not staying at the company as long as they had in the past. In management’s view, competition had not increased dramatically nor had customer demands.

We met with each of the offices’ personnel independently and asked for their opinions anonymously…we did not ask for names or titles and these staff were free to tell us anything they wanted to in English or in the local language. We also met with key customers and asked about OzCo Pty Ltd’s product quality, service, pricing, and communications. Finally, we met with the home office staff who dealt with the Asian offices on a regular basis to learn about their backgrounds, experience, career goals, language skills, and daily work processes.

At the end of audit we presented to OzCo Pty Ltd management our findings, analysis, and recommendations. The key points are detailed below

China was an important and growing market and OzCo Pty Ltd has essentially ignored it, believing that customers in China could not afford the high-end products. The sales force in China was used to working with lower-end products being sold to industries that did not need the high-purity copper. An American competitor was making headway in the China market selling only the higher-purity products and OzCo Pty Ltd needed to act quickly by installing some tech savvy salesmen.
The Korean branch office suffered from local employee turnover because OzCo Pty Ltd’s pay structure was well below market values. Also, it was believed by the Korean employees that the home office could not communicate with them well and didn’t care about their efforts. It was also believed that the local manager did not push the home office hard enough to help him make the Korean operation successful. As employees quit, other employees not used to the higher-purity products had to take over the sales. These employees were not trained in the subtleties that allowed them to convince customers of the reasons for the higher prices of the top end product line. The same American competitor was offering somewhat better pricing, too, but not low enough to explain the loss of market share and profitability.
The Japan operation had become too complacent and was only interested in meeting their budgeted quota. They had no incentive to grow the business even though the overall size of the Japanese market had increased; the internal budgeting process between the OzCo Pty Ltd home office and the branch office actually penalized the Japanese managers for growing revenues beyond their conservatively forecasted sales projections. Thus, they were losing market share in Japan but didn’t realize it.
We found that the Taiwan branch office was effectively doing more than its fair share. Many of their customers had set up operations in China and effectively left Taiwan, yet the Taiwan office was able to convince smaller customers for the need to use the higher-purity copper products. We recommended that the OzCo Pty Ltd home office bring their home office, Japanese, and Korean sales managers in charge of the high-end business to come to Taiwan for a seminar to be conducted by the Taiwan sales manager. The title of the seminar was “How to sell high-purity copper in a changing market…” and IIA attended.
We also found that at least part of the Taiwan’s operations success were due to the fact that the home office inside sales force (sales support staff) employed an Australian-Chinese woman who was very effective and bilingual. This had been an accident on the part of OzCo Pty Ltd home office management as this woman was not hired specifically because of her language skills or her effectiveness in sales support. In fact, the management was not even aware that she communicated with the Taiwan office primarily in Chinese. The rest of the inside sales force at the home office spoke and read only English and therefore could not field questions from Japan and Korea as quickly. Conversely, the newer employees in those countries were more hesitant to send questions to the home office in what they believed to be broken English. We recommended that management replicate the accidental model of the Australian-Chinese employee for Japan and Korea and that the inside sales personnel should travel to their sales territory at least twice per year to develop relationships with the branch office staff.

We had more recommendations than the OzCo Pty Ltd could possibly absorb into their internal operations within a year, so we broke out our list into:

Top Priorities to be implemented within 6 months
Medium-term goals for the next 3 years
Long-term goals and procedures to be incorporated into the ongoing business plan

We believe that OzCo Pty Ltd’s Asian operations are far more effective and cost-efficient after having worked with us. Contact us for more details on how we can help your company be more efficient and cost-effective in your exisitng Asian operations.

Marketing in Asia

XYZ Corp in Israel believes that it can sell its products in some Asian markets but feels its literature and website need to be translated in Japanese, Korean, and Chinese (two different versions: one for the simplified characters of mainland PRC and one for the traditional characters used in Taiwan). XYZ Copr also wants press releases translated and sent to the top technical news publications.

Insight interAsia performs this type of service routinely. We are used to the technical terms and know how to translate them to be clear in the local languages. We also have extensive contacts at the most targeted technical publications and news websites is Asia

Please contact us if you are interested in enhancing your marketing in Asia.

Agent/Distributor/Importer Search

The ABC Company is based in the southwestern US specializes in the manufacture of powders which are used in, among other things, ultrapure welding processes. Such welding is required in vast amounts to build a semiconductor fab. The company currently enjoys US$ 10 million in sales annually, most of which comes from the US domestic market and only a small percentage comes from end-users who are performing ultrapure welding in semiconductor fab operations. The company has heretofore received some small orders from Japan, but no serious business relationships have developed.

The company knows that there are fabs being built throughout Asia and that each modern fab costs at least US$ 1 billion to develop. In each fab, there is at least US$ 50 million in ultrapure piping that is required and the company estimates that at least US$ 500,000 of that could be spent on their raw materials. Thus, they infer, they are losing significant revenues by not being involved more closely in the Asian markets.

When the ABC Company contacted Insight interAsia we enlisted the company on a monthly retainer and performed the following over the next 6 months:

Visited their facility in the US to learn more about their management, products, and corporate culture.
Performed a search for global competitors and for smaller competitors in Asia that ABC management might not be aware of.
Checked with possible customers to see if ABC matched their specifications.
Investigated if ABC’s products could be used in other industries in Asia
Reviewed country-specific requirements for ABC’s products (Japan, Korea, Taiwan, Singapore, China, etc.).
Looked into different agents, distributors, and importers in each country.

We then returned to ABC and made a presentation to the management with our findings, analysis, and recommendations:

ABC should use a network of agents and distributors in Asia. ABC was not in a strong enough position (yet) to open a local representative or branch office.
ABC’s existing product line will suffice for 80% of the Asian semiconductor fab market
Some tweaks to the manufacturing process at ABC will allow the company to make an enhanced product that will be able to compete for other 20% of the market. This higher-grade product will sell for 50% more.
Generally, ABC’s products are too expensive for the China market. If the product can be downgraded without impacting production costs of the main product, then it is possible to sell the lower-end product in China.
Regarding China, a US export license would be required but we believed acquisition of the license would be easy in ABC’s case.
The occasional orders coming to ABC from Japan were being used by Japanese competitors for testing and benchmarking of their own products.
ABC’s products could also be used in new flat screen panel fabs.
Some customers in Japan were interested in ABC’s powders for fuel cell applications.
New semiconductor fabs were a relatively small part of the overall Asian market for ABC. Older fabs routinely upgrade certain parts of the production line to make them even more pure (contaminant free) as the production technology advances. These upgrades are expensive and price is not usually an issue when the customer needs to implement the “latest and greatest” components.
The corporate culture at ABC was not well-suited to doing business in Asia. If they were going to enter the Asian markets seriously they would have to hire a sales manager who is based at the headquarters and is dedicated to working with only the Asian market
There are several sales agents and distributors to work with, but we highly recommended one each country for several reasons:

Japan: the agent is small, aggressive, used to dealing with US companies, sells to the right customers, does not have a similar product in its portfolio
Korea: the distributor has strong relationships with Samsung and deals mostly in chemicals. The distributor would be a good partner for ABC to manufacture locally in the future, should ABC decide to go in that direction.
China: an importer with an excellent reputation and sales offices in Beijing, Guangzhou, and Shanghai.
Taiwan and Singapore: a larger sales agent with operations in several Asian countries, although we felt their people in China were not the right the fit for ABC.
Malaysia and Thailand: no action required as the markets were not large enough for ABC to be concerned with at that time.

ABC management then made a two-week tour of Asia and we introduced them to the agents/distributors mentioned above. For the agents in Korea and China, we helped ABC negotiate the contract while ABC negotiated with the other agents by themselves.

IIA as your Agent in Asia

In some cases, Insight interAsia can act as your sales agent or importer. We have done this successfully in either of the following circumstances:

1. As a bridge between an old agent and new one

Unfortunately, sometimes agents go out of business or need to be fired quickly before other options can be put in place. IIA can act as bridge agent until another suitable and trusted agent can be found, contracted, and trained. This process may take a year or more, but we comfortable in every Asian market, and we can ensure that your business does not miss any opportunities. In some cases, this has led us to be a longer-term agent for companies in the semiconductor market.

For example, a British company UKCo LLC specialized in software for CAD systems that most often used in the automotive and aerospace industry for designing wiring harnesses. They had been using the same agent for 5 years in the Korean automotive parts market, which had been growing phenomenally recently. However, the agent also had in its portfolio other companies whose products were not selling well for a variety of reasons.

One day, after not hearing from the Korean agent for several days UKCo LLC learns via direct communication with a customer that the agent has ceased operations and no longer exists.

UKCo LLC contacted IIA and we became the "bridge" agent for one year until another agent could be found and trained. This arrangement worked well and: UKCo LLC and their new agent are doing well in Korea and the end-users do not even remember that there was a problem.

2. The products/services are semiconductor-related

Our staff come from a wide variety of small- and medium-sized companies in many industries, technologies, markets, and countries. However, if there is any common denominator among us it is at the intersection of these technologies in the semiconductor industry. Thus, even our staff who previously had no semiconductor market experience have been exposed to it while working at IIA.

IIA takes the role of a sales agent very seriously we would recommend ourselves and accept the position only if we believe we are the best fit for your company. We can provide a list of references of our principals should you be interested in pursuing this option with IIA.

Contact us if you need a bridge agent or if you are interested in using IIA as your agent/distributor/importer in any Asian country.

Technology/Market Studies

A frequent task that we are enlisted to perform is to determine if a company’s product—or a product they are interested in developing or otherwise investing in—has a market in Asia and, if so, where specifically in Asia.

Some of the questions that are answered in the typical IIA Tech/Market Study are:

Are there any IP infringements in Asia?
Who are the customers? Names? Addresses?
How much are the customers willing to pay for the new solution?
Who are the competitors and what do they do in Asia now?
Who are the best agents and distributors?
Would these agents be willing to work with us?
Are there existing technologies used in Asia that already fill the need?
How long are they forecasted to fill the need? Can they be improved such that the existing solution can survive even longer?
What do these solutions cost now? Is there room for further price reduction?
Can our new product’s merits be effectively marketed in Asia?
What is the risk of IP leakage or infringement if we take this new product to Asia?
Will our anticipated price match the individual markets’ expectations?
What will be the impact on our home office operations by taking this product to Asia?
What types of people and skills will we need internally to be successful with this product in Asia?
What are the expected costs of operating effectively in Asia?

Please contact us for more details on how we can help your company succeed in Asia by performing a Tech/Market Study tailored to your specific needs and goals.

Custom Projects

We are often asked to take projects that do not fit into any of the categories detailed above. Usually, these projects are smaller in scope and more specific. Some examples of recent Custom Projects are provided below:

Due diligence

For example, a US company is interested in working with—or buying—part of a company in Asia but cannot afford the exorbitant prices that a Wall Street-based firm will charge for the due diligence process. IIA can assist with the Asian part of the process at much lower rates and with more local and technical competence.

Technology-Market Tour

A company in Australia is convinced that their products and services are perfect for the China market. They would like IIA to arrange to take their management on a 2-week tour of the top potential customers in China for a market intelligence gathering mission. IIA can find the potential customers, arrange the travel, escort the group to the sites in China, make introductions, and follow-up with any business-related matters after the tour is complete.

Local patent search

Most often this occurs in Japan when we are asked by a non-Japanese company to investigate a patent filed in Japan.