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Market Entry in Japan: What You Need to Know to Succeed

Japan’s economy is burgeoning and so is that of the global economy. Because Japan’s workforce is growing older, however, the Japanese government is encouraging foreign businesses to enter many of its markets and “make their dreams come true.”

Market Entry in Japan

Indeed, the Japanese government continues to work to make foreign business investments as attractive as possible. For example, they are working to reduce administrative costs such as obtaining business approvals, licensing and social insurance, by 20% (compared to 2017).

Recent businesses founded in Japan from around the world include the German company KEB Japan Ltd. (electromagnetics), and Merck Ltd (chemical distribution). The Mingly Corporation from Hong Kong deals in real estate, and companies from United States include Teradyne Inc. (automation solutions) and Cabot Microelectronics.

Those are rather large enterprises, but there’s plenty of room in Japan for small and medium sized enterprises as well.

However, market entry in Japan is extremely complex because of Japan’s culture– both its culture in general and its business culture.

Here are a few tips on how to succeed in entering your desired market in Japan.

  1. Research your desired market

If you open a business in your own country, you will research your business niche thoroughly to make sure you offer what customers or clients will want to purchase. This market research is even more important when you are opening a small or medium-sized business in Japan. Understanding the Japanese consumer is important. The two largest markets in Japan are the “youth” sector and the “silver” sector – retirees.

  1. Study Japanese culture

Learning about the culture of the country where you are going to live, and work is essential. Even if you do not intend to live in Japan but simply want open a branch office of an already existing company, the benefits of understanding Japanese culture will pay dividends.

There is the culture of the people in general, and then there is the business culture. It is imperative to learn as much as possible about Japan’s business culture at the very least.For example, there are very rarely “mavericks” in a Japanese business. Group decision-making is the norm, and as a result there can be many delays in coming to decisions that may chafe those used to a faster business environment.

The Japanese expect excellence in the quality of the products they purchase and the service they receive afterwards.

  1. Study the language

When running a business in Japan, it is essential that your employees speak the language fluently. All documentation will more than likely be in Japanese.

As the owner it may not be necessary for you to learn the language – you can have a translator with you at all times. But your business associates will appreciate the fact that you care enough to be able to speak to them directly.

  1. Study the tourists as well as the locals

Japan’s tourism economy is booming. As a result, a niche for small businesses is that of catering to these tourists. The hospitality sector includes lodgings, restaurants, tour guides and translators. Millions of jobs exist because of the tourism sector, and there is room for many more.

  1. Engage an experienced business support services company

Do not try to navigate the complexities of opening a business in Japan on your own. Although the Japanese government is developing programs to ease the opening of foreign businesses in the country, there is still quite a lot of red tape that must be sorted through. An experienced guide is needed to ensure that all of the business formalities and legalities are completed, and regulations are complied with at all times. Consider seeking business support services in Japan to help you set up, operate, and manage your business in Japan.

The opportunities for business success in Japan are there. Do your research and make your dream come true in Japan.

After working as digital marketing consultant for 4 years Deepak decided to leave and start his own Business. To know more about Deepak, find him on Facebook, LinkedIn now.


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