Japan is one of the world’s largest economies, ranking third behind the USA and China, and even then punches above its weight in terms of cultural power, prestige and global interest. Understandably many organisations, startups and businesses are eager to get a foothold in the Japanese market. But if your organisation has ambitions to start doing business in Japan, how should you start? I reached out to a number of experts: business owners with years of diverse, hard-won experience in the Japanese market. Here’s our guide to help your business flourish in Japan. Focusing on three key points: language, mindset and diversity.
Language
Japan is a relatively monolingual society. Despite attempts by the Japanese Government to increase English competence Japan hovers at an unimpressive 78 out of 112 in the EF English Proficiency Index. This means that step one of any business plan when it comes to entering the Japanese market should be Japanese language proficiency. Everything else springs from that. Ed Thompson is a marketing consultant and founder of the ConceptDesign I/O consultancy. Having lived and worked in Japan since the mid-90s he puts it plainly, “You will either need to learn the language at an adequate business level, or you will need staff and/or partners to help you fully navigate most business interactions.” Julien Tirode, an event organiser for 13 years and now bar owner agrees, “always use Japanese language to promote your activities.” Ed elaborates that all effective international business starts with clear mutual understanding, “it is usually in the context of messaging and communication where I have seen certain types of disconnection arise.”
This kind of advice might sound obvious, but it’s notable how wrong an approach can go if language is not handled properly. Stop and think before you reach for Google Translate or cheap auto-translation software. Romen Barua runs both a talent acquisition firm and supercar rental service in Tokyo. He makes the point that translation isn’t simply about flipping words from one language to another in a binary way, but about holistically altering how you communicate, “language, it’s not “translating” but trusting someone to re-write and brand in the correct way.” The two different businesses he runs have different markets and so require very clear approaches, “one business is services so it’s fairly easy [to translate in a straightforward way], the other is luxury branding which is super tough. Too many mistakes can be made when you try and translate your vision into the Japanese language. You need to re-start the entire UI-UX discovery process ideally from the perspective of a Japanese business owner and user. I made this mistake previously and burnt a lot of cash.” A thorough translation approach therefore might require comprehensive rethinking, rewriting and redesigning of content.
This kind of language ability will also help to make genuine connections with existing businesses and potential partners in Japan. Ian Chun has lived in Japan for 20 years and runs an e-commerce export company selling Japanese tea globally, procuring tea from Japanese suppliers and then shipping it across the world. “I think my Japanese language fluency and understanding of Japanese culture (for example, that I can express an understanding of umami flavour in foods) helps in approaching suppliers, in finding suppliers and getting ultra conservative industry members to work with me.” These suppliers now form the trusty backbone of Ian’s flourishing business.
Knowing your limits seems to be the message here. No matter how great your initial business plan is, you need to have, improve or hire the skills required to communicate your idea to consumers in a language and style they understand. If you’re caught lacking it’ll be very clear. However, this kind of effort shouldn’t be seen as an unnecessary burden. As Ed points out, “the deepest connections and long-term opportunities will come from cultural and language competence.”
Mindset
When trying to do business in Japan it’s important to understand that different consumers have different wants, needs and priorities. Japan is a complex place and cultural differences can be nuanced. But what is certain is you can’t just copy/paste your existing marketing and business outreach material, translate it into Japanese and call it a day.
Suryanarayanan S. works in program management for Amazon in Tokyo and illustrates this with a case study, “the expectation in terms of customer service, value (価値観) of a product or service are entirely different. Case in point is Amazon implementing unattended delivery in Japan which was not initially well-received”. Japanese deliveries are usually carried out face to face, which can result in a lot of missed-deliveries needing to be physically attempted multiple times. Amazon attempted to disrupt this by rolling out unattended “drop-off” delivery to the Japanese market, which led to mixed results and consumer concern about potential loss and theft.
Suryanarayanan continues with another example, explaining that conforming to market expectations might require a business to go against their own initial processes or instincts. “Japanese consumers tend to value more (quantity) information on a single page/screen – this is typically found in e-commerce platforms such as Rakuten, or in printed promo materials etc. While non-Japanese consumers find it very confusing while presented information in such form, it is standard UI/UX for the Japanese consumers. “
Getting these basic cultural elements right is important: you don’t want to make consumers confused, annoyed or hostile towards you. The specifics of what to do and how to do it will depend on the product or service being sold. The Japanese retail, banking, travel and entertainment industries will all have their existing systems of doing business, so prepare yourself by researching how the industry you want to enter currently works in Japan.
That being said, disruption is inevitable in the world of business, so simply blindly conforming to existing standards and ways of doing business isn’t always the right call. Suryanarayanan continues, “With a declining population and stagflation, the value perceptions of Japanese consumers are changing drastically. The biggest challenge for an entrepreneur or a marketer in Japan will be how to appeal to the right senses of the Japanese consumer.” In other words, how to appeal to the right sensibilities and fit in, while also pushing the envelope.
Internal Challenges
Differences will also exist in terms of internal company processes: the Japanese businesses and employees who are hired to help an organisation succeed in Japan. Steven Lejeune founded My Circle International Digital, a marketing agency in Tokyo, five years ago. “Major business misunderstanding can come from valuing results over process in western culture. In the west we tend to implement strategies, see what comes out of it and make adjustments when necessary along the way. Learning from mistakes and failure. When dealing with Japanese professionals, you almost have to come up with a cookie cutter type of plan packaged in a safe and somewhat conservative way. Avoiding risk.”
Making structures clear and avoiding risk are two points that repeatedly stand out in discussions with professionals working in Japan. Romen concurs, pointing out that that even within Japanese professionals there can be a wide diversity in terms of mindset and attitude, “my first GM hire was Japanese but he spent a big portion of his life and career in Europe as the “overseas” director. When he returned to Japan he joined a global OTA where again the culture was globally minded-Japanese employees or international school folk, who are a different bubble and very different from the average Japanese consumer.” It’s important to find the right professionals, at the right stage of their career, who can connect you with the wants and needs of the wider consumer.
Even beyond these more abstract questions about mindset and mentality an important task is to centre your organisation and quantifying the material reality of the market you are entering. This can range from industry price-points, marketing trends, service expectations, logistics, technology and beyond. Ed elaborates, “I noticed from the early 2000s that there was always a difference in the ways that Japanese consumers / companies would adapt and use digital media. In many ways this was driven by the peculiarities of mobile carriers and media platforms at that time. Over the years, this has been less so with the wholesale adoption of smartphones and dominance of global social media platforms (IG / FB / TW). But there are still rare cases where global standards can be upended by legacy technology.”
You might have heard jokes about Japanese offices still using fax-machines or Japan being the last hold-out of the once illustrious filp-phone. Sometimes these are lazy stereotypes, but there can be a grain of truth to be had in terms of respecting industry difference and preference across culture. Do your research and if you don’t know, find someone who does. Just copy/pasting your existing assumptions and mindset isn’t going to lead to good results.
Diversity
Whenever you try and analyse a whole country or market there’s going to be a degree of simplification. To some extent this is unavoidable but it can and should be mitigated. Essentialising an entire country and culture can lead to out-dated thinking which can easily hinder business and sour relationships.
Ed explains that while differences can exist, often entrepreneurs will use the nebulous idea of “cultural difference” as an easy crutch. Sometimes the reality is that there isn’t a profound cultural barrier at play, but that the aggrieved organisation simply hasn’t taken the time to learn how business is conducted in Japan.
When problems occur, “this is usually covered with a blanket phrase that [in Japan] ‘ways of doing business are opaque’. The proper way of looking at it is that there are some heavily entrenched methods and practices for how business is conducted in Japan.”
Ed uses a case study to illustrate this. He was working for an international whisky company who was urging his team to push their product directly to Japanese consumers. Ed quickly realised that the whisky company simply didn’t have the right marketplace knowledge or sales team to pursue this B2C route. Instead Ed focused on fostering connections and orders from popular and highly respected bars in the nightlife district of Ginza in Tokyo. “Once the campaign was perfected as a hybrid B2B2C, we were able to expand the our efforts from Kanto to Kansai and subsequently cover 20+ locations to drive growth in annual sales by 7-10%.” Sometimes slowing down and focusing on business fundamentals and strengths is the answer to seemingly confusing barriers.
Ian’s position running an export company, interacting with Japanese producers and international consumers, gives him a unique perspective from which to understand any differing outlooks. “I don’t think it’s useful to take a general approach to “Japan” vs “non-Japan” My customer base of tea connoisseurs is, for example, much more educated about Japanese tea than Japanese people in general. I think you need to look at a specific market and understand it…understand when a market is a high context situation or low context situation.” A high context situation being a culture or market that requires extensive assumed knowledge, vs a low context situation where information is provided overtly and directly.
Ian gives a further example of this, “As we refocus our company to take on the Japanese market, we are not going to market to the same customer profile but rather examine what our strengths are, and where the opportunities are in the market: specifically, we think that there is an opportunity to create a brand focused on incorporating Hawaiian influences into traditional Japanese products, and with tea specifically, creating interesting Hawaiian-Japanese themed flavored tea products.” Cultural blending, not cultural flattening is the way forward.
A Changing Population
It’s also important to respect Japan’s internal diversity. While Japan is relatively monocultural by global terms, it is gradually diversifying, with foreign residents now representing 2.3% of the population. With these changes come different consumer wants and needs.
Suryanarayanan makes this point, “The non-Japanese consumers in Japan, while low in number compared to the general population, tend to be more global in their outlook (for instance they are already working/living in a different country). It’s therefore important not to generalise the entire foreign population in Japan & not treat them as a homogenous group.” Emphasising that, “The communication style & messaging need to be different for Japanese & non-Japanese consumers.”
However, this works both ways- and illustrates why specific market research is so important. Julien explains that, for his particular market of nightlife and entertainment, he actually uses the same messaging and advertising content for Japanese and non Japanese attendees. “In my case, marketing and promotion is exactly the same for Japanese and non Japanese customers. I’m proposing to them a service [which allows them] to meet and interact, in as many ways as possible, (Language exchanges, cultural meetings, Dating events…).”
Everyone is looking for the same culturally-mingled experience, so the alterations Julien makes are in the building blocks of his advertising, namely the language. He promotes in a bilingual way using both Japanese and English/French. This is why context is so necessary. Julien’s business is focused on connecting and blending Japanese and non-Japanese consumers. While for an organisation targeted squarely at non-Japanese consumers in Japan the messaging may need to be totally different as Suryanarayanan suggests. No one-size fits all.
On Track For Success
Entering and succeeding in the Japanese market is a significant task for any organisation. Preparation and research are the bedrock of any successful market introduction. But with the right tools success can be effectively chased and potential pitfalls avoided. Focusing on solid language competency, understanding differences in mindset and priorities and respecting the diversity and richness of the culture a business is seeking to enter are all vital and will lead to success from day one of launch, far into the future.
Many thanks to all of the industry professionals who took part in giving their perspective for this article.
Ed Thompson, Website, LinkedIn
Ian Chun, Website
Julien Tirode, Website, Facebook, Instagram
Romen Barua, Instagram 1, Instagram 2
Steven Lejeune, Website
Suryanarayanan S., LinkedIn
Far Side Virtual 