Doing Business in Japan
Japan is the world’s third largest economy with 4.6 trillion GDP.The economy of Japan is the third largest in the world by nominal GDP and world’s second largest developed economy.
• 25% of the world’s high-tech products are made in Japan
• 30% of all cars are made by Japanese brands
Important Facts about Japanese Market
- Important to get Japan early with right partnerships in place
- Japanese companies are more likely to invest in their partner’s long term success
- Japan has 130 million tech savvy customers
- Japanese consumers are extremely loyal
- Three P’s are important: Partnerships, Pricing & Presence
However despite ample opportunities in the Japanese market many companies do not succeed and the reasons can be many.
Is it Diffult to Succeed in Japan
There is no other advanced industrial country with so little foreign investment. This is because for a long time foreign investors have been kept out. This policy has recently changed, and foreign investment is increasing rapidly.
It’s a very bureaucratic country in many ways, with a dense network of regulations, permissions, certifications, procedures, offices and authorities with approval procedures for many things, which don’t need approval in UK or US.
Japanese customers can be very demanding, and often have quit different tastes and needs than Western customers. Therefore in many cases western companies must redesign or redevelop products in order to succeed with Japanese customers.
Japan has many very strong local companies. Some big foreign companies have already withdrawn from Japan due to competition. You must be prepared for such competition with very thorough market research and strategy development. In order to win in Japan you must understand and must be prepared and able and willing to compete with local competition.
Given all these reasons, you may now understand why Japan is a challenging market for foreign companies. That is where Adam-i comes in. Adam-i as a inbound and outbound strategic consulting company based in Tokyo,has absorbed the market knowledge and gained know-how that is necessary in doing successful business in Japan. Adam-i provides complete business development support incuding training the staff, for GIT Park companies.
Relationships are important in every country, and even more so in a “high context” country as Japan. You need to build relationships, take care of your relationships, understand why and with whom you build relationships, and avoid certain kind of relationships.
How to Build Sustainable Business Relationships
Carefully plan your relationships in Japan, and understand your relationships. Be aware, that relationships in Japan are seldom defined by legal contracts alone, therefore it is crucial to work on the relationships and take care of them.
Be aware that the business partners in Japan will not tell everything they know and everything they think and feel. It will be easier in one’s own country to guess certain things, but in Japan this might be difficult.
Understand that the Japanese side and the Western side may view one and the same partnership differently.
Japanese business professionals are often extremely formal in their business attire. Not wearing a formal suit will end in disrespecting the client. A well-presented business attire will likely exemplify a positive and higher corporate standing.
For Japanese people exchanging “meishi” is like shaking hands. It is very awkward not to exchange “meishi” when you first meet. And the way you exchange business cards is also important.
Impress with facts and achievements, or the fame and power and size of your corporation. Bring documentation of your company.
Be on time and well prepared for meetings. If you are late for a meeting it is considered ‘rude’ in Japanese business culture.
It is impolite not to do your homework (= market research) about the companies and people you are meeting. Your position will be weak if you have not done your preparations.