Why doing business in Japan? Japanese market can be as challenging as it can be rewarding. It’s one of the largest economies in the world and should be considered seriously. Doing international trade in Japan somehow involves understanding the business culture and business etiquette, which are so important in this country. In this article, we will tell you why you should consider doing business in Japan. What are the best approaches to deal with your Japanese counterparts? What you can expect? And why, this could be your next new market?


Demographics JapanWith 126 million people, Japan is the 11th world’s most populated country. The real specificity of Japan is that it is regarded as a superaged country. Opposite to China or India, the Japanese population is decreasing. 26% of the population is over 65 years old. Once estimates that in 2060, Japan will lose 40 million people. Socially, this is undoubtedly a dramatic faith. But economically, the super aged-population brings numerous economic opportunities. In the coming years, tremendous business opportunities will arise in Medical devices and equipment, Pharmaceuticals, Healthcare facilities, and infrastructure, including in-home care, Biotechnology, Healthcare information technology, Safety-related products and services, Robotics, Leisure and travel, Educational services, Home delivery services, and Financial Services. Now is the perfect time for doing business in Japan and benefit from the “Silver Economy.”


What can I expect from doing business in Japan?

Japan marketJapan is the world’s third-largest economy after the US and China. Japanese consumers seek quality and have a high level of disposable income. Chinas’ cheap produced goods have no bright future here. Premium goods and services are the norms. Quality and innovative products are a natural fit for the Japanese market. When doing business in Japan, always seek long term commitment with your business partners but also with your customers. If they are satisfied, you can expect repeat business for a very long time. It is especially interesting in a world where customers are more brand hoppers than they have ever been. Japan is also a fantastic laboratory to develop new products, concepts, and to test the reaction of your target market. If it works in Tokyo, you can be reasonably confident that it will also be a success in the rest of the world.


What are the barriers to entry?

Japan Barriers to entryApart from the legal requirements and certifications needed for specific types of products, Japan is regarded as challenging to do business with. Some of the mains reasons are:

  • Japanese customers are demanding. It is both a curse and a blessing, and it should help raise the standards of your product and services,
  • Japan is a big country and will require a substantial investment,
  • Japan has many strong local companies offering a wide range of products. Local competition might be hard. We can not stress enough the point that entering the Japanese market should always be considered in a long term perspective.


What about Japanese culture?

Japanese cultureFor westerners, Japanese business meetings are associated with strong stereotypes, such as the importance of exchanging business cards and bowing. As we often say to our clients, “When in Rome, do as the Romans, when in Japan, do as the Japanese.” It is important to remember that Japan is an island. It was closed to foreigners for numerous centuries. Just as Darwin’s Finches in the Galapagos, Japanese customs have evolved in a closed environment. With just a bit of common sense, there is no need to worry. What is more important than the introduction rituals are the way and the slow pace at which a business negotiation with Japanese will be conducted. It is essential to understand that the negotiation process in Japan is more collective than individualist. All of the parties involved will have their say. It undoubtedly takes time, but it will ultimately strengthen relationships. It will also reinforce the long-term partnership with your business counterparts.


How to sell and market a product or service in Japan?

social network users in JapanWhen selling in Japan, the first question to ask regarding the sales channel is to choose between an agent and a distributor. An agent might be easier to find than a trustworthy distributor, but As always, you get what you pay for. For the agent to invest time in your brand and push the sales, the commission percentage will have to be attractive enough. The distribution channel is multi-layered in Japan. It means that identifying the right distributor for your product or service might be a long and complicated task. Once done and considering that you picked up the right distributor, you will enter in a potentially long term and mutually beneficial relationship. Due to the need for robust localization in Japan, the distributor will also be of tremendous help in defining the optimal marketing strategy and dealing with customer support. Social media is now essential to promote your brand in Japan. It should not be neglected and handled by real professionals.



Entering the Japanse market is challenging, of course, but it is well worth the effort. Remember that patience and localization are critical. Profits might take some time to appear. But, once your brand, product, or service will be respected, you can be confident that your customers will be faithful. With the right product or service, Japan should be one of your top priorities in your International Business Development Todo list. At Hashi Consulting, we are here to help you prepare your market entry strategy and save time and money when entering Japan.

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