Japan, certainly not only the land of the rising sun!
Japan enjoys great popularity again since the downgrading of Corona and the associated easier entry. The weak yen and the associated low prices currently make Japan very interesting as a travel destination.
In the business world, however, Japan is not always associated with as many positive aspects and arguments as it is among tourists. There is often talk of it being difficult to do business in Japan. Japanese would rather buy Japanese products or foreign companies would not have access to the Japanese market.
These are just two of the common prejudices often cited as reasons for a lack of presence on the Japanese market. The large number of successful foreign companies shows that this is not the case. These are by no means only large, globally active corporations. Many small and medium-sized companies have also gained a foothold in Japan.
What are the basic requirements for a successful business start in Japan?
For a successful start, some homework has to be done first. Research and analysis of the Japanese market with a view to Japanese and, of course, non-Japanese competition are indispensable. What potential can be found in the target group or market you are aiming at? Surprisingly for many, this is relatively easy in Japan compared to other countries. The countless associations and organizations in the respective markets offer a wealth of numerical data. At the same time, there is almost nothing in Japan that is not the subject of publications and papers. However, research is quite time-consuming and requires care in interpreting the data as a basis for decision-making. Perhaps that is why many companies neglect it or do not do it at all, which can easily lead to wrong decisions or overlooked sales potential.
To enter the Japanese market, a business partner with market experience is usually required. This can be Japanese trading companies operating in the same market, but also foreign importers. In any case, it is important to find the right business partner. An independent consultant, who is well connected in the trading community and already accompanies the company during the search, accelerates the process enormously and guarantees a broad search without restrictions due to language barriers.
Once potential partners have been identified, the task is to determine their mutual potential, economic motivation and conceivable synergy effects. It is extremely important to create a level of communication with the potential partners that enables them not only to communicate, but above all to understand each other precisely, taking into account any cultural customs that may be easy to overlook. Very often this part in particular is not as easy as it often seems: in addition to the language barrier, non-verbal communication must also be included in one's perception. As is well known, a "yes" in Japan does not necessarily mean a "yes". For a successful market entry, it is therefore almost indispensable to have an advisor on site who understands and can interpret the negotiations, but at the same time does not pursue his own interests.
Final negotiations about the conditions with a then regulated contract conclusion conclude the business partner search.
Of course, it is also possible to start directly with an own branch office. As a rule, however, this is not done for reasons of cost and risk. As with the search for a business partner, the support of an independent consultant is also advantageous here.
Of course, there are already companies represented in Japan that have not achieved the desired success. Here, however, the arguments put forward are often not fully correct. From the non-Japanese side, one very often hears that everything is different in Japan - be it due to frustration about the results achieved, be it due to a lack of understanding for the negotiations and the business partners, be it due to misinterpretation of the contents discussed. From the Japanese side, there is often talk of a lack of understanding of the business partners, a lack of empathy or a lack of flexibility. But in Japan in particular, there is nothing that cannot be corrected.
The remedy can be a renewed analysis, as is done when entering a new market. Do the decision-makers really understand exactly the market, the business partners and the product requirements? Especially when it comes to the product, minimal changes to the product - even if it's just the packaging or design - can often make all the difference. Here, too, an independent, accompanying consultant can act like a catalyst. He mediates between the business partners and speeds up the processes.
It goes without saying that the points addressed in this article can only represent a small sample of the challenges that frequently arise.
AAA-Advisors is able to support you with experienced German consultants, in Germany, locally in Japan and with a broad network in different industries and associations. Our membership and active participation in the German-Japanese Chamber of Commerce in Tokyo ensures the necessary contacts and business talks. In addition to market access support, optimization of existing organizations or processes and consulting in personnel decisions, we also offer active participation as an advisory board or supervisory board. We are at your disposal for a non-binding and free consultation.
Pictures: private / WHh
