Doing Business in Japan

Often, business is about the bottom line. Are you profitable, and if you are, can you do more to raise your revenues even higher? It’s a no-brainer that the next cause of action would be to expand. And with Japan coming in as the 3rdlargest economy in the world, it’s awash with opportunities.

For companies whose focus is in expanding internationally, Japan offers tremendous growth opportunities in a truly distinctive market. Japan boasts of a thriving and increasingly growing middle class with a disposable income. This populace also embraces new technologies and innovations and is accommodative of businesses offering exquisite products.

In Japan, small companies enjoy the country’s stable business environment which features robust infrastructure and friendly clientele. The Japanese are especially hungry for businesses with a specialty in high tech products/service, consumer goods, and manufacturing.

Although Japan lags behind in terms of the ease of doing business, coming in at a wanting 39th globally, you can still set up a business in two weeks’ time.

All said and done, Japan, as any new market does, has its challenges. Therefore, in order to succeed, businesses need to do adequate research before deciding to set up shop. Below, we look at some tips to help you start your journey to doing business in Japan.

1.   A solid marketing campaign

Japanese nature of a business and the local business environment is advanced and nowhere close to the usual European business environment. The country offers a variety of marketing avenues businesses can use to get their products and services in front of their target audiences. Of course, the approach each business chooses depends on resources at hand.

Transitioning a business to an international operation is intricate and goes beyond procedures or investments. Acclimatizing your business to the local culture is one of the easier ways of getting some footprint as a new business.

So how do you do this?

You acclimatize your business by marrying your product/service to local predispositions and eccentricities. This is what effective marketing does – enabling you to grow faster by understanding local culture and tailoring your products along cultural lines.

In this regard, the bulk of businesses go wrong when they try to replicate their international business models in Japan. eBay at one point tried to replicate their international model in Japan and it wasn’t long before they realized their mistake and were forced to retreat. To date, eBay does not exist in Japan, despite it being one of the oldest and biggest e-commerce sites in the world.

2.   Foster personal relationships

In Japan, business success relies on relationships to a very large extent – and relationships can’t just be established in a day as they rely on trust, which takes time to establish. To penetrate the Japanese market, it is vital that businesses have strong networks. It’s also crucial that you understand the environments, networks, and relationships in which both your competitors and partners work.

The Japanese largely avoid conflict by all means and they do this by being overly polite and courteous. In western culture, this kind of warmth and reception is identified as the will to do business. However, in Japan, just because you were treated with all the bells and whistles is no guarantee of a deal.

In light of this, one of the best strategies for doing business in Japan is engaging a local with experience dealing with foreign companies and with an understanding of local business culture. That way, the local contact is able to read the cues, language, and behavior exhibited by acquaintances and translates them to you.

3.   Use a VPN for local market research

The purpose of using a virtual private network (VPN) not only in Japanbut worldwide, is to secure your online transactions and communications against cybercrime, but beyond that, it’s useful for localized Google searches.

For starters, European businesses searching for information from their actual IP address might yield disappointing half-truths. To counter that, Europeans can use a VPN to change their IP to access global search results. With the passing of a law in Europe that protects the “right to be forgotten”, individuals and businesses can now request that Google remove negative information that would incriminate the complainant or that the complainant does not want to be known. This case illustrates that Google has been made region-specific in recent years, and the best way to access content from a certain point of view is not to use a local sub-domain – such as .jp for Japan, but to change your IP entirely.

By changing the VPN server you connect to, you are able to access information as though you are in Japan when you are in physically in Europe and vice versa. With that, you are better equipped to identify gaps in the market to spot opportunities even before you venture out.

4.   Understanding the business etiquette

That the culture of business in Japan highly values cultural sensitivity, respect and etiquette is no surprise. Before shipping business to Japan, it is therefore imperative that you learn the local customs and values as these will help you relate better to the locals.

Obviously, the majority of partner businesses, competitors, and even your clientele will not expect a foreign business to get everything right the first time. However, identifying with their culture and respecting it will be a huge factor in the success you eventually enjoy.

A story is told of a company that packaged its product in fours for sale in Japan. What they did not know is the word “four” sounds like “death” in Japanese, and therefore unlucky. As you can already guess, that mistake spelled death for the company in the Japanese market, no pun intended.

Conclusion

For European companies looking to expand into Japan, it’s imperative that you first rethink your business culture and understand that it’s a different ball game altogether. With the right networks, contacts, and understanding of Japanese business culture, success in Japan will be as easy as it would in your native country.

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