Japan, the number 3 market of the world
Japan is the third largest economy in the world. The value of imported goods is very high: import of goods and services is around 19% of the Japanese total GDP.
Japan is seen as a premium market for products and services. However, the Japanese market can be highly regulated, and you will need specific knowledge for any international business to succeed. Currently several restrictions are being lifted to facilitate freer trade resulting in emerging business opportunities.
How to find your agent or distributor in Japan?
Tokyo is the capital and also the biggest sub-market in the country. Osaka is the second spot in this highly urbanised country.
Japan has its unique business traditions and ways of doing business. Therefore prior knowledge of local culture, demand, consumer behaviour and pricing strategy is critical to successful international business ventures. Therefore you will need a Japanese distributor or a Japanse agent. An intermediary will help you overcome the knowledge gap and the cultural differences.
Alliance experts can find the right agent or distributor within 6 to 8 weeks
Alliance experts helps companies with entering new markets profitably. Our Tokyo based representative will help you with the first steps into this market.
We have a clear and structured approach to find the best partner
We first want to know what kind of partner you are looking for. Based on your information, we make a long-list of 15-20 potential partners that fit your description. After your approval we find the right decision maker, approach him or her personally and share your business profile with them. This mostly leads to 3-5 companies who are suitable as your partner and interested in working with you. Once we have found these companies, we plan your meetings and accompany you during the first visits.
What are business opportunities in Japan?
The Japanese market can be highly regulated, and you will need specific knowledge for any international business to succeed. In the current age of globalization, several restrictions are being lifted to facilitate freer trade resulting in emerging business opportunities.
Japan provides several support mechanisms for business and provides a legally safe environment for doing businesses. With several Japanese trade shows internationally and inside Japan, there is enough opportunity for information exchange.
Most Business opportunities in Japan are in the following sectors:
- Alternative Energy – owing to a high population density, clean energy is a priority; the Fukushima nuclear disaster has added to the urgency for clean fuel
- Pharmaceuticals & Healthcare – demand for products and services in this sector is growing with a steadily increasing aging population, referred to as the ‘silver’ market
- Wealthy Nation – As Japan is the third biggest economy in the world, there is demand for high-quality consumer products
- Advanced Engineering & Tech – Japanese businesses are interested in cutting technologies to maintain their superiority in designing and manufacturing internationally winning products
- Food and Drink – Given a large population density and ever-diversifying food habits, Japan needs food imports
- Gaming & Music – Japan is a major gaming centre and has the second largest music industry in the world
Business opportunities for the 2020 Olympics
On September 7th, 2013, the International Olympic Committee (IOC) announced that Tokyo had been elected for the 2020 Summer Olympics, beating Madrid and Istanbul. In light of this event, Tokyo now presents several potential opportunities that will strengthen the country’s economy, particularly in the green energy sector. Japan aims to pursue plans in investing in green energy.
Overview of opportunities around the Tokyo 2020 Olympic games
- Tourism and Hospitality Business: refurbishing of hotels, event management, food and beverage services
- Security and Safety Business: stadium security, public safety and security, people flow management
- IT: tourism software and applications, mobile payment solutions, stadium security, cyber security
- Transportation Infrastructure: renewal of public transportation infrastructure and vehicles, traffic management solutions, eco-friendly transportation services
- Building Industry: upgrading of existing buildings like in isolation, energy management, weatherproof exteriors, eco-friendly interiors
Environment, energy, and transportation technology
One of the three main projects scheduled to be completed by 2020 is the Olympic Village will be in Harumi and the village will be powered by hydrogen – residential facilities, training centers, and buses. After the event, it will be converted into a high-class residential area. Technical issues and other challenges have yet to be resolved such as an affordable pipeline network construction.
Fuel cell vehicle development
This second main project has a broader target: the deployment of 6,000 fuel cell vehicles (FCV) and 35 stations by 2020. Subsidies from national and local governments were provided in January to lessen the costs of buyers. Several popular car brands benefit from this in terms of endorsements, marketing, and sales.
Residential fuel cell generated energy
The third hydrogen based initiative is the hydrogen fuel cell production of electricity in the residential sectors. The goal: to equip 150,000 new houses by 2020 and to have one million new apartment blocks provided by hydrogen FC. The use of FC generated electricity in commercial and industrial sectors will be introduced in 2017.
To improve the friendliness of the city to non-Japanese in 2020, smartphone applications for translation, geolocalisation, and information access will have a high demand to facilitate the stay of foreigners.
There will be an enormous amount of data during the mega event due to circulating online information, online sales, online results, and online competition watching and such data would require top notch protection.
Big data and sensing
Big data centralizes data from multiple sources and when processed can contribute to identifying patterns, defining problems, and making decisions. This is quite helpful for when traffic is concerned to help identify areas of congestion and make the information readily available to the public. This could also prove helpful during instances of earthquakes like for evacuation purposes.
The EU and Japan funded two existing projects which will be of significance during the Games. First, the ClouT – a joint research initiative which aims at empowering citizens through a collaborative communication platform. It involves industries, research centers, universities, and municipalities from Japan and three EU member states: Italy, Spain, and France. The second project is the 1 Gigabit Olympic project and the goal is to deliver 1-gigabit connection during the Games. This one was launched in 2014.
Landing a bid
Several factors are at play when landing a bid for the establishment of firms:
- Entering a partnership with a Japanese company can increase the chances through the Japanese-only procurement process.
- With the Games coming soon, companies which are market leaders in sectors and/or products have or those who have experience with executing projects for the Olympics or other large sports events might pose as a clear advantage.
The most important cultural pitfalls to avoid in Japan
Japan is not only a country that is teeming with business opportunities, but it is also culturally rich. Traditions hold a very important role in Japanese life. To achieve the optimum efficiency in your business, you must learn the Japanese business etiquette.
While the Japanese are extremely hard working, they display an equal enthusiasm for sports. The top sports in Japan are baseball, football, golf, sumo wrestling and martial arts. Important holidays in Japan are Showa Day, Respect for the Aged Day, The Emperors Birthday, etc.
Just like any other country, Japan has a way of doing business. As a foreign business person, you can increase your chance of making a good deal by learning some basics about the country’s culture, custom, and etiquette.
Etiquette for meeting
- Japanese greetings are formal and ritualised.
- Recognise that they are particular with social status. Give due respect and deference to someone based upon their status relative to your own.
- Because it is often perceived impolite to introduce yourself, wait for someone to do the introduction for you.
- While shaking hands are the way to greet in the western world, bowing is the traditional form of greeting in Japan. Deeper bow means deeper respect that you show. However, foreigners are not necessarily expected to understand all the nuance of the bowing, so bowing your head slightly will do.
Etiquette for clothing
- In Japan, you are expected to dress conservatively in a business setting.
- Men should wear dark-colored and conservative business suits.
- Women should also dress conservatively.
Etiquette for gift giving
- Gift giving is a form of ritual. The Japanese people are especially keen on how a gift is wrapped, even more than the gift itself.
- It doesn’t have to be expensive, you just have to do it right. Get some help from someone who knows the culture to decide which gift to give.
- Unless it’s a funeral, do not give lilies, camellias, or lotus blossoms. White flowers are also a no-no.
- A bonsai is always acceptable, but make no mistake of giving potted plants because these are believed to encourage sickness.
- Items should be given in odd numbers, except 9.
- Remember to have your gift wrapped when you buy one in Japan. It would be good also to choose pastel colours for wrappers.
- Also, your gift will not be opened immediately when received.
Etiquette for dining
Though this rarely happens, in case you are invited to a Japanese house:
- Remove your shoes before you enter and put on the slippers left on the doorway. Make sure also that you leave them pointing away from the doorway you are about to walk through.
- If you are invited for dinner, be there on time or 5 minutes late.
- Punctuality is appreciated in Japan. A large gathering may allow you to be late, but it’s still better that you get there in time.
- Wear smart attire in every invitation, unless it is specified that you can wear something casual.
- There’s a protocol to be followed as to where you should sit, so wait until you are told.
- The honoured guest or the eldest person will be seated in the middle of the table, and will be situated furthest away from the door of the room. He will also be the first to eat.
- Learn to use chopsticks. It will help you a lot. When using chopsticks, do not point them. After every few bites or when you stop to drink or speak, return them to the chopstick rest.
- You may not mix your food. In Japan, you eat a bit of one and a bit of the other.
- Do not finish off what’s in your glass if you do not intend to have more drink. An empty glass means you want more.
- Conversation is not common during a meal. The Japanese want to enjoy their food.
Just doing business is not yet it…
Many try to win contracts and do business with Japanese companies. You prepare, negotiate, have dinner, drinks, maybe go to karaoke together. You feel you have established good relationships with timely proposals and smart business plans that will bring your potential client nice profits. Next you wait and see. You are optimistic since no negative reaction and expect to get a green light positive answer. Then you may make some calls or send some emails but no reply. Finally one day, you receive some email saying they cannot proceed the business or you heard from someone they have signed a contract with another company. You are confused.
Why, what happened?
To explain concretely, another factor could be that you did not “sweat” with your partner regarding the work and proposal. This means your rival may have done much the same as you proposed, you and competitor were similar in most respects, but the difference is they were: 1) Often or always available, 2) Seen as immediate partner closely working together “sweating” with your potential client and 3) Therefore able to quickly adjust or get the job done better.
Of course this “sweating together” does not mean going to the sauna or playing golf. It is real work or pre-contract work, and it gives a strong impression.
What to do to win your contract?
While you just pitched the new business plan, your rival may have been active in other ways, more visibly with the client, obviously, daily, long hours, perhaps working already as on contract. As a result, your client feels and tangibly sees your rival worked harder and did this and that for them, and gives them the deal. Also, due to this style, the client naturally feels they want to do business with them rather than you since some sense of obligation is owed. If something happens, they may certainly count on this “sweat” collaboration, follow-up trust already built and help again.
Pay attention to the details and your “sweat” could be
- Sweat the details, offer to handle small points, work together in pre-contract collaboration.
- Assign a proactive, energetic working level window assistant that tries to “say yes”.
- Offer a draft business proposal, ask for input, accept many revisions.
- Visit, telephone, work even late at night with overtime, on-call and full-time impression.
- In short, establish feeling of “unity” and togetherness, by this sweat equity.