Top tips for Doing Business in Japan

dos and don’ts in Japan

In this post, I would like to share a few Recommendations/Tips for Doing Business in Japan.

From the feedback obtained from the analysis of over 50 EU Success Stories in Japan, we can list up the following general recommendations for business executives doing business with Japan::

• Adopt a Long-term approach, show commitment and perseverance
• Plan regular visits to Japan in order to establish personal contacts and understand customer needs better
• Appoint/hire Japan dedicated, committed and trained staff
• Choose carefully your market segments
• Cope with the demand for high-quality and customised products. Everything should be perfect: from product and communication to packaging and delivery.
• Show some flexibility towards requests to adapt the product. Supply both standard and tailor-made products.
• Provide a first-quality service without compromise!
• Find the ideal local partner with a well established distribution network in your field.
• Adopt a step-by-step approach: if a first project is successful, a new project in a different field may be considered.
• Demonstrate your commitment to your client’s interests and needs. Invest time in developing business.
• Face patiently the long cycle of questions and answers
• Supply as much detailed product information as you can
• Keep your word and promisses made to customers
• “Do not let your Japanese partners be bothered by minor problems: as much as possible, try to smooth the path for them” (Dissaco GSS, logistics, 2002)..

Further, when entering the Japanese Market, here are a few do’s and don’ts:

Do’s:

• When entering, devote time to research / planning / preparation and have a long-term approach and business plan. Think of your competitive/key strategic advantages. Adapt or customize your products if necessary.
• When setting up business in Japan, especially in the case of Joint-Ventures, Investments, Acquisitions involving entity issues, seek appropriate legal/professional counsel. Hiring an experienced third party provider simplifies the entire process, improving the communication with the Legal Affairs Office and the Japanese banks.
• Set realistic hiring expectations: there are limitations in finding competent bilingual employees! Some staff with less English ability turns out to be better professionals than some of their colleagues speaking fluently English.
• In order to have your Japanese website run by your subsidiary, make arrangements as soon as possible to register your domain name in Japan (“.co.jp” domains or “.jp” domains are preferable)
• As companies in Japan are contractually committed by their corporate seals or “hanko”, only allow access to company corporate seals to trusted and authorized individuals.
• Initial resistance to change from outside disappears when Japanese are convinced of the need for this change. Therefore, prove and convince at each level of the organisation. After that, execution can be very quick.
• When going for Indirect Sales (Agents/Distributors), carefully select the right partners, who are ready to prioritize your products. The dedication and the great focus of the distributor can be equally essential to the success of a product release
• When going for a M&A, beware of Human Resources Management issues: the previous boss of the bought back company sometimes becomes the new boss of the subsidiary
• When going for a Joint-Venture, keep the Japanese cultural touch of the operation: what counts most is to be local, that is, to be a Japanese company in Japan.

Don’ts:

• Don’t rely too much on second chances (rebuilding or starting over), as Japanese businesses and consumers are hard on “losers”. Try to get it right from the start by carefully planning.
• Don’t close an operation/office and re-open it later. Be consistent in your actions and directions.
• Don’t neglect localization of your products: it is partly responsible for the high cost of conducting business in Japan!
• Don’t adopt a “Sales push” approach (pushing your existing products sold on other markets, without analyzing the Japanese market first) instead of a “Market-driven” approach.
• Don’t rush into an exclusive distributor or Joint-Venture agreement, only to find out later that the agreement is difficult to end when circumstances change.

To conclude, here are a few inspiring quotes of successful Belgian companies in Japan, as well in the B2C as in the B2B business areas: