Ask Japan market entry master Kazuhiro “Steve” Takayanagi how your foreign firm can market to Japanese companies, and his answer is straightforward.
“Companies in Japan, large or small, do not want to take risks when they purchase goods or services,” he says. “They’re concerned about their reputation if something goes wrong, so they rely on connections they can trust. To become a trusted connection, you first need to be known. Once you’ve made a connection, with time and effort, you gain trust. And someday that connection may become a client.”
Takayanagi-san highlights a common fault that I see with the vast majority of solicitations I’ve received from businesses outside Japan through LinkedIn over ten years of high visibility online: “You sell my stuff, take the risks, and I’ll give you some of the profit afterward—if we’re successful.”
So, my time, knowledge and connections, on a commission, or ‘success basis’ only, risk front-loaded, no guaranteed income. Let me tell you exactly why that doesn’t work—and what does.
Unless you’re a large company with international reach and presence, the impact of your brand in Japan is negligible. It’s hard enough for any business to answer the question “Why should someone buy our product or use our service rather than all the others out there?” When you’re outside the country, have no success stories here or even history in Japan, and your product/service isn’t localized, it’s unrealistic to expect to win any deals here. It’s also very unlikely that you’ll find someone local to represent you properly.
Time, Trust and Connections
Your product or service may be killing it elsewhere and your reputation and USP may be stellar, but if you’ve got no boots on the ground in Japan and no direct contact with potential clients, you aren’t even at square one. Longstanding personal relationships, trust and shared institutional memory between firms have eroded a bit in recent years, but they still form the bedrock of business in Japan.
The people who contact me are naturally looking for a magic portal to whisk them past all that, in the form of a trusted, connected and competent agent. But most foreigners and Japanese as well would not turn away from what they’re already doing and successful at to focus on something that takes time and money and leverages skills and relationships built over years, essentially for free—especially for some offshore company they’ve never heard of.
Longstanding personal relationships, trust and shared institutional memory between firms have eroded a bit in recent years, but they still form the bedrock of business in Japan.
Most companies that contact me apparently never ponder that, however. They don’t try to build rapport, or do any qualification or due diligence. They dive right in to tell me who they are, what they do and why I should care—and of course about all the tons of cash I’d make representing them in Japan. All I need to do is launch an entire business and have them funnel the goods through me. No thanks. That approach doesn’t inspire trust, loyalty or enthusiasm.
What does work is upfront money or a retainer deal.
For example, someone I know is in the final stages of setting up a retainer with an import/export firm, after helping them sign an agreement with a market entry consultant and establishing a traditional bricks and mortar sales channel, for a New Zealand Honey brand.
They have no less than 5 other companies wanting to do the same thing but without the budget and so getting them into Online stores like Amazon and Rakuten is the plan. The agreement calls for them to work a certain number of hours on the company’s behalf, with more possible, at a set rate. Additional Marketing and advertising pushes, for example, to drive traffic to the web stores for the products, can also be quoted, approved and implemented.
A willingness to invest begins the relationship, and that is a foundation for doing more together.
Homework and Groundwork
Client-vendor relationships, customer behavior, purchase preferences, seasonal buying patterns, quality expectations—all that research data you have locked down for familiar markets will likely be of limited value here. When you fly blind you run into things, and usually not to positive effect. That’s what you’ll be doing if you don’t budget some funds to create a market entry strategy.
If you do have a budget for preparing a market entry strategy for Japan, you’ll need to secure reliable market intelligence, determine your ideal partner profile and be honest with yourself about how committed you are to doing business in or with Japan. Many firms here offer market research, competitive analysis, risk assessments, distributor and sales partner options and an action plan for the operational and financial aspects of entering the Japanese market. If you don’t know where to start contact me and I can help.
Doing business in Japan doesn’t mean you must have an office and staff. It can mean a whole range of things, from visiting Japan to meet people in person, to partnering with a firm or engaging a local Japanese person or resident foreigner to represent you and your business—someone who’s willing and able to execute all the necessary social and sales rituals to raise the awareness of your products or services to potential clients.
Having someone in Japan helps you:
- Get things done—on the practical side, handling official procedures, finding and engaging resources, pinpointing companies that may become clients or partners, and identifying people to meet who might help
- Represent your business in Japanese—a lot of Japanese decision makers are not comfortable operating in English or other languages, so translation and interpretation are essential
- Demonstrate commitment to the market—A willingness to commit resources shows that you’re serious about establishing and growing relationships, even before a deal is anywhere near the table
Before you commit any resources to Japan, however, here are some things to do:
- Read reports from foreign chambers of commerce in Japan, Japan market reports from each major economy’s national trade organizations to their business communities, the Japan External Trade Organization (JETRO), and the BIJ blog and LinkedIn group
- Link up with and talk to people on LinkedIn and elsewhere connected to Japan and the industry, products or services you want to market here
- Seek out people in your home country who’ve done serious business with Japan
- Plan right from the start how you will maintain the momentum you will create by coming to Japan
Not only will this initial research help you assess the potential of your product or service in the Japanese market, it will give you direction on who to connect with, build rapport with and ask questions of. You’ll also begin to develop that crucial trust and an immediate, relevant network to tap.
Bottom line: If you want your brand to be handled properly in Japan and get the attention it deserves, you have to invest both time AND money.
If all this sounds tough and overly complicated, maybe I can help. Feel free to contact me (after absorbing all of the above, of course).
Another resource is the person I quoted at the beginning of this post, Kazuhiro “Steve” Takayanagi (https://www.linkedin.com/in/kazmcqueen/).
You might also consider BIJ expert Rupert Sutton, who wrote the following BIJ article:
How To Select A Powerful Sales Partner In Japan? https://www.businessinjapan.com/select-powerful-sales-partner-japan/
This Post was written by Jason Ball, a “Fixer” and people Connector, in Tokyo