INSIGHTS

Mirakl Japan board member Kamal Kirpalani on how the marketplace platform provider is delivering a bold, new value proposition to transform Japanese companies’ digital business

Having worked with customers in virtually every country in Europe and the Americas, there’s very little that Mirakl Japan board member Kamal Kirpalani hasn’t seen.  He can tell you straight up what’s different about a market and what isn’t.  In the case of Japan, he doesn’t believe that Japanese businesses are as risk averse as they’re purported to be by foreigners and Japanese alike.  Rather, he sees a demanding yet “incredibly rewarding” market where customers are receptive to bold, new solutions.  Foreign cloud companies can win over new customers as long as they have the right value proposition and “deep commitment.”  Read on to find out more about this expat’s take on doing business in Japan.  The interview has been edited for clarity.

You’ve worked around the world.  The experience and perspective you bring to Mirakl Japan are extremely valuable.  

I hope so (laughs).  I was based in Paris for 17 years, overseeing EMEA.  I’ve worked with customers in the Nordics, the UK and Ireland, Benelux, the Germanic and southern European countries as well as Dubai and South Africa.  I spent seven years in the Americas.  I’ve worked in Canada as well as LATAM.  I’ve been in sales my entire life.

Mirakl was established in Paris in 2012.  I’ve been with the company since the beginning, initially as an investor.  I joined the company in an operational capacity in 2014 and helped launch our U.S. headquarters in Boston, in 2015.  

I’ve been in Japan since July of 2022, and I love it.  It’s extremely civilized and safe.  The people are exceptionally polite and the food is fantastic.  My family has adjusted well.  Despite a few challenges early on, they are quite happy now.

The company is doing very well too.  We’ve signed five customers, one of which is live, and we have a strong pipeline.  We currently have 11 employees and we’re hiring rapidly.

What’s your role at Mirakl Japan?

I’m a board member at Mirakl Japan. I think of myself as training wheels on a bicycle (laughs).  

I educate the sales team on Mirakl’s value proposition, advise them on deals and help structure them so they benefit the customer as well as MIrakl.  I assist with post-sales, especially customer success.  I’ve also helped the global team adapt the product so they comply with local legal requirements and have the functionality to support customers’ needs.

Just like training wheels, I will come off once the team becomes proficient in Mirakl’s value proposition and key processes.  As you know, training wheels eventually become a nuisance more than an asset (laughs).  I’m on a two-year assignment but will stay in Japan as long as the team needs me. 

Mirakl offers a unique solution, and seems to be proposing a major shift in how companies do business.  Could you begin by explaining what a marketplace platform is?  What are its benefits? 

Certainly.  Mirakl offers a marketplace platform that enables retailers and B2B businesses, such as manufacturers and distributors, to open up their channel to third-party sellers.  Our customers can offer a broader range of products with competitive prices and exceptional service without the risk or cost of buying more inventory.  They can deploy their own marketplace as part of their online business strategy with greater speed, scale, agility and profitability. 

In retail, Amazon, of course, is the preeminent marketplace.  In transportation, Uber is the largest transportation company in the world, but they don’t own any cars.  In accommodations, Airbnb is the largest accommodation company in the world, but they don’t own any real estate.

By contrast, traditional companies with a pipeline model have to buy goods, store them, resell them and make a margin.  They will never be able to offer the assortment of goods that platform companies offer.  And if they do, it’s often a slow and cumbersome process with low margins.

What are the keys to successfully implementing a marketplace?  What are the challenges?

It’s essential that companies align their marketplaces with their core strategy.  When companies treat a marketplace like a pilot project that’s not fully integrated into their core business, if they launch a marketplace as a separate site, for example, they have a much harder time succeeding.

It’s also important that companies adopt marketplace best practices.  We have experience with more than 450 customers in over 40 countries and provide our customers with expertise and guidance in areas like seller management, quality control and customer care. In addition to technology, it’s essential that companies implement the right business processes.

Finally, management needs to think big, and they need to be committed.  Marketplaces have the potential to transform a company’s digital business, but this can also be disruptive to the status quo. It’s important to embrace an expansive vision for the marketplace and ensure that the incentives of commerce heads and merchandisers are aligned with this objective, so that they support the growth of the marketplace instead of fighting it.

The “big think” required to adopt marketplaces seems to run counter to Japanese companies’ purported risk aversion.  What’s your take on Japanese companies’ appetite for risk?

Contrary to conventional wisdom, I don’t think Japanese companies are risk averse. I’ve worked with companies around the world and they all have specific needs and idiosyncrasies.  Mirakl is bringing an entirely new proposition to the market, yet we’ve still been able to sign large deals with very traditional companies.  

I believe it comes down to our value proposition.  I believe we’re offering the right value prop to the Japanese market, at the right time.  

Also, we have exceptionally talented people on our team.  For this, I credit Japan Cloud.  They’ve helped us hire some very good people.  It can be a challenge for startups with no name recognition to hire good people in Japan or in any mature market with many established, reputable companies.  I also believe the fact that we’re a local joint venture with Japan Cloud, which has a track record of more than 20 years, lends credibility to our name.

One thing I’ve noticed with Japanese companies, however, is that they tend to have a “Japan is different” mindset.  They tend to believe that business processes that work globally won’t work in Japan.  They want to know what companies in Japan use your product.  They want local proof points and references, the implication being that if you haven’t worked with Japanese customers, then you can’t support them.  This could be interpreted to mean that they are risk averse.  

But again, we’ve been able to succeed in a very short period of time without local references, which says to me that Japanese companies are capable of thinking big and are willing to take risk.

Could you expand on what’s different about doing business in Japan?  And how is Japan similar to other countries?

From a sales and marketing standpoint, the top of funnel is very different.  In the U.S., we can get on LinkedIn and reach out to CIOs and CMOs at the top 200 retailers by reverse engineering their org charts.  Most do not respond but we could get targeted traction as long as we had a well researched value proposition.  We could do this at minimal cost. 

This is not the case in Japan.  As far as LinkedIn usage is concerned, Japan is where Europe was in the early 2000s.  

So we have to invest quite a bit in marketing.  We attend a lot of events and sponsor conferences.  These aren’t trivial investments.  Even then, the only asset we get are lists of people who registered, their titles and emails.  We could get this for free in other markets.

I should add that Japan Cloud’s PR has helped us a great deal.  We were able to get an article in the Nikkei soon after we set up shop in Japan.  This had a material impact on our business.  In the U.S., it took years for us to get into the Wall Street Journal.

Another difference is the post sales experience.  Japanese customers can be very demanding.  They are very clear about where you stand once the deal is signed: 

“You’re the vendor.  Your job is to help me, the customer, achieve the value that we discussed.”

In other markets, our position is that we provide the technology, which is just one piece of the overall value proposition.  You need to engage a systems integrator, as well as your IT department, to implement our solution.  We of course support customers through their implementation, but Japanese customers’ demands are much higher.  We’ve been asked to review their tech architecture as well as their implementation approach.  We’ve also had to translate all our contracts.

Other differences are a testament to Japan’s polite and respectful culture.  Japanese prospects will happily accept meetings because they are always willing to learn.  They will also tell you that your solution is interesting.  But it’s easy to mistake these signals for progress when in reality they can be false signals.  Their politeness could mean that they aren’t telling you up front what they really think, namely that they won’t buy your solution in a million years (laughs).  Rejection isn’t great to hear but at least you know where you stand.

As for similarities, at the end of the day, companies have a self interest in deciding whether a solution is good for their business.  Can they grow revenue?  Can they improve customer satisfaction?  Can they improve their competitive position?  And does our solution help get them there?  And then it comes down to assessing the business case.  What are the solution’s technical capabilities?  What is the cost of implementation?  Customers ask these questions in every market.  Japanese customers are no exception.

Moreover, I think it’s important to point out that Japanese companies have many similarities with countries other than the U.S.  They have a long-term orientation.  They are thinking five to 10 years down the road. This is very similar to Swiss or German firms.  Japanese companies’ decision-making is not top-down.  They are very consensus-based, which is similar to the way Scandinavian firms make decisions.  And again, the Japanese are very formal, which is very much like executives in Italy, France, Mexico or Spain.

None of this should be unfamiliar to people who’ve worked in other countries.  I think Japan is most unfamiliar to American executives, who tend to be very casual and informal, top-down in their decision-making, and very short-term in their thinking given their focus on meeting quarterly and annual targets. 

So I think Japan is most different for executives coming from the U.S. with an American mindset.  If you’ve done business around the world, Japan doesn’t seem that different.  

What concerns you the most about Mirakl Japan’s business?  What keeps you up at night?

I would say it’s balancing growth and customer success.  We’re a venture-backed, fast- growing tech company.  We’re all about growing the top line.  

But the consensus in Japan seems to be that we should think long term and invest in customer success, that we shouldn’t bite off more than we can chew and create a negative market perception.  We’ve been advised that we could shoot ourselves in the foot by growing too much, too quickly, and saddling ourselves with a lot of highly demanding customers.

I know that successful foreign SaaS companies in Japan, like Concur and Salesforce, focused on customer success before scaling.  These companies took more than a few years to scale their business in Japan.  But once they built a base of successful, referenceable customers, they accelerated dramatically.

I understand the logic, but it’s a tough sell to our leadership at HQ who have to keep investors’ interests in mind.  In a way, though, this is a good problem to have, since the implication is that there is demand for our solution and that how fast we grow is up to us.

Another thing that’s top of mind for me is that the team has the requisite knowledge to be successful before I depart Japan.  I want to make sure they don’t wobble once the training wheels come off.  This is where Japan Cloud can add tremendous value as well.

What advice do you have for cloud companies looking to enter Japan?  How about for executives considering expat assignments?

Do a lot of research.  How big is your market?  What are the challenges?  You need to be fully committed.  The leadership needs to be totally aligned.  You can’t come here to do a PoC.  It’s a demanding place to do business.  

But if you have deep commitment, it can be an incredibly rewarding market.  You can be the next Salesforce, Oracle or Concur.

As for advice to expats, it’s important that you reflect on your own motivation.  And you need to be open to change. You need to be prepared to get out of your comfort zone.  This means sitting in hour and a half meetings where everyone is speaking Japanese.  You’re the one who has to adapt.  You have to own the fact that you’re an outsider.  

Also, I recommend that you learn enough Japanese to be respectful.  “Hajimemashite” (“It’s a pleasure to meet you”) and “yoroshiku onegai itashimasu” (“Thank you” or “I look forward to working with you”) go a long way in showing respect and building good relations.

If you think you can do things the way you did back home, you’ll be disappointed.  But if you’re flexible, inquisitive and thrive on change, I can tell you that you won’t regret it. 

Japan will be a truly memorable part of your career.