5 Mistakes to Avoid When Establishing a Company in Japan
by Mashum Mollah Business Planning & Opportunities 09 January 2019
Japan is a notoriously hard market to break into. But once companies do, many experience massive success. There is a lot of advice out there about what you need to do to expand your business into Japan, but almost equally important is learning what not to do. Read on for 5 mistakes to avoid when establishing a company in Japan:
Relying on e-commerce in lieu of the retail experience:
While many Western companies have begun to transition their retail models to e-commerce platforms, Japanese retailers still rely heavily on brick-and-mortar experiences. According to Noriyuki Matsuda, CEO and founder of Sourcenet, a popular Japan-based software company, retail locations are essential for driving sales and brand awareness. This is because there is still a large population in Japan that relies on the assistance of sales associates when choosing products, says Matsuda. Retail electronics sales were upwards of $85 Billion in 2017, as opposed to electronics sales on Amazon, which only accounted for $10 Billion worth of the market share. If you want to increase your chances for generating revenue, don’t skimp on the retail experience.
Failing to do market research:
While the Japanese market has a lot of potential for revenue and growth, there is not a product or service out there that is “one size fits all.” It is unwise to assume your business will be successful in Japan just because it is successful in another location. Proper market research is expensive, but it’s much cheaper than a failed business endeavor.
Thinking simply translating product information is enough:
Aside from translating your packaging information and branding into Japanese, often you need to rename your products altogether. Certain words and phrases do not directly translate into Japanese, so their meaning is lost on that audience. For example, Disney’s “Frozen” was changed to “Anna the Queen of the Snow” for the Japanese market because the word “frozen” alone would have no significance. Consider alternative names for your products and services that are more likely to resonate with the Japanese customers, and increase the chances for your business to catch on.
Not learning proper business customs:
Everything from your sales tactics to your approach in meetings must follow specific business etiquette. Someone hands you a business card? Promptly accept it with both hands and make sure you read it before putting it away. Attending an important business meeting? Don’t expect a big decision to be made during that time. Traditionally, business meetings aren’t conducted to make decisions, but rather to collect pertinent information. An easy way to get your business black-listed in Japan is not to learn proper Japanese business customs.
Not ensuring your business infrastructure is ready to go overseas:
Sometimes business mistakes have nothing to do with choices made by the subsidiary, but more to do with the corporate structure back home. Make sure your organization has strong leadership that is good at delegating to assure your new Japanese venture doesn’t get caught up in corporate politics taking place hundreds or thousands of miles away.
Work with an expert in transitioning businesses to the Japanese market like SMEJapan. Take the first step toward positioning your company as a global player, today!