With its economy size and maturity Japan
has been one of markets that have attracted worldwide business owners and
companies outside Japan, but has remained one of a few markets too difficult to
enter and penetrate. Possible reasons may include its language, geographic
"the far east" location, unique culture of over 200 year isolation
from the rest of the world, and so on.
Is it still too difficult to enter and
penetrate Japanese market in today’s globalized economy and society? And, is it
really wise for you to give up doing business in Japan without understanding
its market, customers, and what it is like to do business in Japan?
The answer is no.
Japanese market is attractive with its
size, maturity and stability even though its population is decreasing and other
emerging markets look more promising. Furthermore, the country is safe and
clean compared with many other countries in the world, which is what most of
people who have visited or relocated to Japan say. Moreover, the upcoming 2020
Tokyo Olympics will surely provide great business opportunities to stakeholders
around the world, not limited to those in Japan.
Let me briefly explain what I mean.
1. Japan - rich country with
its big and mature market, but still untapped by many companies
1) Big, stable and ripe for
business expansion
It may be one of the most mature markets in
the world, but Japan is home to a wealth of untapped development possibilities.
As the third largest market in the world after North America and China, Japan’s
fertile ground is ripe for business expansion. With government initiatives to
boost economy called Abenomics
as well as upcoming 2020 Tokyo Olympics, Japan truly offers opportunity worth
exploring.
Japan enjoys stable economy. There is very
little possibility of drastic economic fluctuation that negatively affects
foreign investment entering and penetrating Japanese market such as sudden
sharp appreciation of JPY to USD or any other foreign currency, sudden change
in interest rate and so forth.
Politics is stable and it is very unlikely
that the leading party will change for the time being, which means Japanese
government policy will be stable and Abenomics initiatives will continue.
With this background, Tokyo Metropolitan
has partnered with JETRO (Japan External
Trade Organization) and opened Business
Development Center Tokyo in April 2015 to provide services and incentives
for foreign companies.
Many projects are planned and ongoing to
develop and transform Tokyo area, not just where the athletes will be playing
sports or Tokyo Bay area during 2020 Tokyo Olympics. This means better business
environment in Tokyo.
So many improvements are ongoing in Tokyo
and other cities and regions in Japan to make their cities friendly for
tourists and visitors around the globe, when we have more and more tourists
coming into Japan not limited to major places like Tokyo and Kyoto, such as
Hokkaido, Nikko in Tohoku region, Hakone in Kanagawa, Takayama in Gifu,
Hiroshima and Kyushu.
2) Ideal market for
high-value, sophisticated products and services
Japan, a mature market, is great for
well-targeted products and services of high value. It is an ideal market to
test marketing of new and innovative products and services. Japanese customers
are probably the most difficult ones in the world to please and satisfy. If you
can satisfy them you have high probability of being able to satisfy consumers
of other markets. Japanese do, however, pay for the products and services they
do value.
Why don’t you seriously think to explore
Japan’s potential with an experienced in-market partner, if you have not done
so?
2. Globalization - free flow
of goods, money, people and information
1) History of proactive
interaction with the world as well as isolation from the world
With very limited and fragmented
information about it, Japan may be regarded as a mysterious country and you may
have no clue of how to make a market entry and do business in Japan. Many
people do say that it is an exclusive market, often mentioning of the over 200
years of national isolation from the world during its Edo period.
But, on the contrary, Japan used to be
extremely proactive in interacting with the world, absorbing different
cultures, adapting them to meet its local needs and creating something new.
This is from around AC 600 until today, first from Korea and China, and then
from the west.
2) With drastic changes in
the last decades the world becomes far smaller today
When Margaret Thatcher was leading UK and
Ronald Reagan US around 1980, there was no direct flight between Japan and
Europe. I lived in Osaka, so I had to fly from Osaka to Tokyo to Anchorage to
finally arrive at London Heathrow Airport which took a whole day door-to-door.
Also, there was limitation in carrying cash with us from Japan when travelling
abroad. The amount was insufficient for us to do shopping as we do today.
The general public could not make
international phone calls as we do today. To make one international call from
Japan we had to make a reservation and the line did not necessarily get through
smoothly. And the cost was about 1/3 of the average wage of a Japanese worker.
There was no Internet so we could neither
communicate via Skype nor browse web content online. Therefore, the only way
for Japanese living abroad to obtain Japanese content was to receive Japanese
books, newspapers and magazines sent from Japan. The other option was to drive
hours to London and buy them in Japanese departments or book stores.
There were neither YouTube and Ustream nor
no access to Japanese TV and video content online abroad. From around 1982
employees of some Japanese companies in Japan recorded some TV programs in home
video tape using their personal VCR and sent to Japanese colleagues abroad.
This was the only way then to access to Japanese video/TV content from abroad.
Today we have access to information around
the globe and can deliver message to the world by the Internet. We also have
access to products and services around the globe and can shop online. This
means companies and business owners outside Japan have access to Japan and can
deliver information, products and services, and communicate with business
partners and customers in Japan to do business regardless of their location.
This is advantageous since Japan is a well-developed for online business.
According to a
survey result by MarketingProfs.Com, Japan is the forth e-commerce market
in the world after China, US, and UK.
And today, the Japanese government and
people are basically open to people (tourists and relevant business persons,
athletes etc.), goods (products and services), capital and information (content
and entertainment) coming into their country.
Lastly, I would like to emphasize is that
successful Japan market entry and penetration is not something only for large
companies but also can be achieved by SMBs and individual business owners.
This Post was written by Megumi Oyanagi: Bridge
between Japan and Global, Japan Market/Marketing Professional, the Author of “7
Things to Know to be Successful in Business in Japan”
