3 Critical Factors To Consider When Entering the Japanese Market

      There was once a time when Japan was revered by the world for spewing out the latest cutting edge technology one after the other. The Sony who brought us the Walkman, the Nintendo’s who brought us Mario, the Nissan who brought us Asimo. All of these sectors were once dominated by the red and white flag bearing tech giants.They created buzz, drove imitators and established fans across entire industries.

     Fast forward to 2016, and its quite apparent that the times have changed and the environment that once provided a treasure trove of devices, ruled by large corporations and multi conglomerates, are now tied down by the very practices that brought it to the forefront. The well established hierarchy has been set solid and your authoritative value is measured not by skill, but by the gray hairs on your head. Original ideas will more likely than not, fall on deaf ears.  

     The  “senpai” and “kouhai” relationship, which literally means means superior and inferior/junior, reflects a concept in culture that goes back thousands of years. In principle it states that those that have come before you have gained valuable experience and your senpai’s word is law. No questions asked, follow it, and you will avoid conflict. This approach produces steady and predictable results with relatively high quality. The problem begins when your customer base evolves to starts to want different things, and those at the top fail to look at what is going on at ground level. 

The country that invented emojis for cell phones, put TV and mobile payments on mobile devices more than ten years ago, before the iPhone even existed, is now being ran over by silicon valley startups. A generation has emerged where ability and skill trumps experience, and this "go get em” culture has disrupted the industry so heavily that conservative industries are struggling to keep up.

      Do not be mistaken. Start-ups and entrepreneurs run aplenty in Japan. However those who decide not to enter in corporate society after four years of college and start off on their own are seen as rebels rather than innovators.  Absent are the Y combinator’s who have created a culture to support and nurture start ups.

Still dominant are the companies who’ve cemented their place in Japanese society since WW2. 

    Those who are familiar with trying to penetrate the Japanese market with their businesses are well aware of how difficult it can be to be successful and the reason behind it is that the background of Japan's business culture is ignored time and time again. American business propositions present new business models, one that will disrupt the market and be supposedly be successful, just like it has done in the US. Whether that be a digital solution or an actual product many will not find the same success in Japan if they choose to ignore the backstory. 

       Many will uproot their trees, put it on a boat and plant it in Japanese soil. Only to find out that because the soil is different, the tree will eventually die. Product and services stand out so much to the point that it is no longer of value for them to stick their neck out in an environment that is not as welcoming as they once thought. Adapting your business model to the Japanese market means much more than translating your website into Japanese. I’ve seen business after business fail to take root in this unique market because assumptions are made that similar business practices will be as successful as they did back home. Rather than bringing over a tree, bring your seeds to plant instead. 

NETWORK
The professional sector is a chess game of relationships and connections. Planting seeds means creating valuable connections with those who have established networks in your sector. To drive your business you have to work from the inside out, rather than receive all your input from HQ back home. By establishing a solid network of people who can vouch for you and give you insider advice you will be doing yourself a huge favor.

Unlike the US though, the best networking is done at night in bars. Many call this “nominication” which combines the Japanese word for “drink” and “communication”. The best information is shared during nights around the bar table and turning down a drink from a business partner is downright insulting. So loosen up the necktie and use these drinking sessions to build solid relationships and exchange valuable business information over cold beer. You can also use these sessions to test your newly learned Japanese. Showing that you are trying to understand the culture goes a long way.

TRADITION
   This not only means  being aware but also respecting traditions that have been in place for thousands of years. Simple actions like exchanging business cards is actually tied to tradition that goes back a long time. For example, if you were to receive a business card and immediately put it in your back pocket, your partner would feel insulted and may not continue to do business with you in the long run. Here you are placing your butt next to their entire business history!  

Being the peaceful country that it is, they would rather avoid conflict then tell you of your transgression, however, the relationship might tend to slowly degrade, and before you know it there is no longer contact between the two of you. There are pages upon pages on how to exchange business cards and so I won't write it all here in this one article but I recommend picking up a book on doing business with the Japanese before heading over there.

AUTHENTICITY
A successful product allows itself time to fester within the product sector so much so, that the Japanese can think and feel that it has been there all along.  

Businesses like McDonalds, KFC and Denny’s have done this so well that many Japanese are surprised that these business not only exist in America, but they are surprised to find out that they are originally from America!  Much like the "Made in the USA” brand can add product value in the US, the “Made in Japan” brand can add tremendous product value in Japan.

Just look at the local store. Produce, meat, fabric etc; all of these products sell for twice or three times the price of similar products made in neighboring countries. A mango from Japan could cost 10x a mango from Thailand. That $20 mango might look insane to the outside world, but to a local, that is $20 well spent on a quality, name-branded, cared and bred at home mango. If your website is not edited by someone who can be in charge of  Japanese communication, your site will look and feel inauthentic. If this is detected by the general population, they will dump your services before it even gets a chance to get off the ground.

I've wrote of three of the factors that you must understand before doing business in Japan. But this is the beginning of the rabbit hole. The challenges are high and obviously it is not an easy path. But the ones who come in with guns blazing are the first ones to fail and wonder why they have failed. If you can tread this narrow path and make it in Japan, the rewards will be plentiful and you will be that much a better businessman for doing so.