Finding out your Market Potential in Japan
The key first step for any business is to find out whether it is worth putting the investment of time and resources into a market like Japan. You may have an inkling your products and services will work in the market, you may even have had some intermittent interest from Japanese buyers or consumers. So how do you go about finding out your market potential in the easiest way possible to help make a decision about market choice for your company?
There are four ways to consider:
- Desk-based research: A lot can be done with some dedicated and expert searching online. Find out which of your competitors are in Japan already, what they are doing here, how have they modified their market strategy (if at all). Have a look on Rakuten (Japanese major e-commerce platform) or Amazon.jp to see which product lines are on sale, which ones are not.
- Test your products: Use platforms like Rakuten or Amazon.jp to test out your products on the market in a low-cost way. Do Japanese consumers like them? Do they buy them?
- Speak to Japanese buyers at international trade shows: Japanese buyers may be reluctant to approach you, so approach them. They are the experts. Ask questions about potential in Japan. Show them what you have, ask their opinions about whether they think it will work in Japan.
- Get an initial market assessment from experts: The Department for Business and Trade in Japan can provide you with an initial assessment of the chances for your product in the market: Contact a Market Specialist here. Alternatively contact the team at Export to Japan for further guidance.
10 Tips for evaluating Market Potential in Japan
- Research and understand cultural nuances.
- Identify market needs and trends.
- Understand the local partnerships networks and ecosystem.
- Navigate regulatory and bureaucratic procedures.
- Understand the need for localisation.
- Be aware of consumer preferences.
- Be aware of economic factors and calculate financial viability.
- Consider E-commerce and digital presence.
- Conduct risk assessment and required flexibility.
- Long-term strategic planning and patience.
Listen to our podcast discussion with Rupert Sutton, a leading expert on the requirement and methods of assessing market potential in Japan.
Finding the Best Route to Market in Japan
When you are confident of your market potential in Japan, you will want to find out the best way getting to market. Here we cover the general information you will need to consider when you plan your market entry strategy.
The key question most exporters consider is can we do this ourselves, or do we need a local partner to make it in Japan? Although in the past Japan’s traditional business culture would have usually involved multiple layers of intermediaries between your products or services and end-users, this business style has changed dramatically over the past decades. Appreciation of cost cutting, easier communication and a rise in English-capable employees has increased the potential for entering Japan directly yourself. That said, the majority of small and medium overseas companies enter with the support of local partners.
See the full article on Finding the Best Route to Market here.
Setting up a business in Japan
Setting up a business in Japan is not as onerous as one might think. With the need to promote start-ups, the Japanese government lowered the required capital for setting up a joint stock company (KK) to 1 yen from 10 million yen. Theoretically, it is possible to set up an entity in 14 days.
There are the 4 main ways for setting up a business in Japan:
- Representative office
- Japan branch office
- Japanese subsidiary
- Limited liability partnership (LLP)
For more detailed information, see the full article on Setting up a Business in Japan here.
Last updated December 2023: Steve Crane OBE