Japan has the world’s third largest GDP, representing around 10% of the total global economy. With its population of 125 million people, nobody can deny its role as a technological powerhouse in particular. It’s appeal as a potential market is, therefore, clear, but companies often remain hesitant about taking the step of trying to expand into the Japanese market after a string of high-profile failures such as Vodafone, Cable and Wireless, Boots the Chemist etc.

What Do You Need to Get Right?

Customers – Upon being told that Japanese customers can be very demanding, it can be easy to fall into the trap of thinking that they are very demanding everywhere in the current climate. While this is fundamentally true, it lacks the attention to detail you need if you want to succeed. Japanese customers will often have quite different needs and/ or tastes to European or American consumers so products might need redesigning with different features in order to succeed properly.

Internal Expertise – This leads to the second point. Many of the companies that have not been successful in Japan have taken management teams from Europe or America that have won awards and installed the very same teams in Japan, and then wondered why it isn’t working well. Often, drastic changes in thinking and management methods are necessary, and a good understanding of the local language and culture is obviously essential to this.

Competition – Japan is no different from any other market, you are likely to be entering a competitive market that will not welcome a newcomer. In fact, Japanese companies have a track record of developing strategies specifically to compete against and keep out new entrants, which is generally regarded as one of the reasons that eBay’s attempt to move into the market was not successful. The only way to combat this is with robust market research on who your competition is likely to be, and what their strengths and weaknesses are.

Cautious Market Research – Another common error made by both European and American firms is to replicate market research techniques used in their home markets in Japan. However, Japanese culture is generally extremely being polite which can result in lots of extremely warm and positive market research that doesn’t translate into actual sales because it does not reflect real opinions.

Demonstrate Commitment – Your potential new customers will want to see signs of your commitment to Japan and the Japanese market, not that you are going to bail at the first sign of trouble. This is likely to be more of an uphill struggle due to the somewhat patchy track record of European and American firms in Japan, so will require some patience and persistence. Look to build some long-lasting, sustainable relationships and take an interest in the local areas and you are far more likely to be successful.