Japan is a country that offers many opportunities for foreign businesses, especially startups that want to tap into its large and sophisticated market, its world-leading R&D capabilities and technologies, and its high-quality business environment and regulations. However, entering Japan is not without its challenges, as the country has its own unique culture, language, and business practices that may differ from those in other markets. In this article, we will explore some of the key aspects of Japan’s go-to-market program, which is a comprehensive action plan that outlines the approach and steps to attract and win new customers, enter new markets, increase market share, and achieve projected sales and marketing goals, revenue, and ROI.
Why Japan?
Japan is the world’s third largest economy, with a GDP of $4.9 trillion in 2020, and the fourth largest importer and exporter of goods and services. Japan is also home to nearly 4,000 listed companies, considerably more than other leading markets in Asia, indicating the country’s high liquidity and market depth1. Japan’s consumers are known for their high purchasing power, sophisticated tastes, and loyalty to quality products and services. Japan’s businesses are also eager to adopt new technologies and innovations, especially in fields such as robotics, biotechnology, renewable energy, and digital transformation.
Japan is also a trusted partner for foreign businesses, as it offers a free and fair, rule-based market that is creating a productive and promising business environment for foreign investors. Japan is improving transparency in both business practices and administrative procedures, and harmonizing its regulations with global standards. Japan’s quality business environment and rule of law offer low risk and higher value-added opportunities to foreign investors2.
How to Enter Japan?
Entering Japan requires a thorough understanding of the market, the customers, the competitors, and the regulations. It also requires a clear and compelling value proposition, a well-defined target segment, a differentiated positioning, and a tailored marketing mix. A go-to-market strategy is a vital tool to help foreign businesses plan and execute their entry into Japan, as it provides a roadmap for achieving their objectives and overcoming the potential barriers.
A go-to-market strategy typically consists of the following elements:
A go-to-market strategy typically consists of the following elements:
- Market research: This involves collecting and analyzing data and information about the market size, growth, trends, opportunities, threats, customer needs, preferences, behavior, pain points, decision-making process, and buying criteria, as well as the competitive landscape, the industry structure, the distribution channels, the pricing strategies, and the regulatory environment.
- Market segmentation: This involves dividing the market into smaller and more homogeneous groups of customers based on their characteristics, needs, and behavior, and identifying the most attractive and profitable segments to target.
- Value proposition: This involves defining the unique benefits and advantages that the product or service offers to the target customers, and how it solves their problems or satisfies their needs better than the alternatives.
- Positioning: This involves creating a distinctive and favorable image and perception of the product or service in the minds of the target customers, and communicating how it differs from and superior to the competitors.
- Marketing mix: This involves developing and implementing the optimal combination of the four Ps: product, price, place, and promotion, to deliver the value proposition to the target customers and persuade them to buy.
What are the Challenges and Opportunities?
Entering Japan is not a simple task, as foreign businesses may face some challenges and difficulties, such as:
However, entering Japan also offers some opportunities and advantages, such as:
- Language and cultural barriers: Japan has a unique and rich culture, and a complex and nuanced language, that may pose communication and understanding problems for foreign businesses. For example, Japanese customers may be more indirect and polite in expressing their opinions and feedback, and may value long-term relationships and trust over short-term transactions and contracts. Foreign businesses may need to adapt their communication style, their marketing messages, and their business etiquette to suit the Japanese culture and expectations.
- High entry costs and risks: Japan is a highly competitive and mature market, with well-established and dominant players, high customer expectations, and strict quality standards and regulations. Foreign businesses may need to invest a lot of time, money, and resources to enter and establish themselves in Japan, and may face a high risk of failure if they do not meet the market requirements and demands.
- Limited access and visibility: Japan has a complex and fragmented distribution system, with multiple layers of intermediaries, such as wholesalers, distributors, retailers, and agents, that may limit the access and visibility of foreign products and services to the end customers. Foreign businesses may need to build strong and reliable partnerships with local distributors and channels, and provide them with adequate support and incentives, to ensure the effective and efficient delivery and promotion of their products and services.
However, entering Japan also offers some opportunities and advantages, such as:
- Government support and incentives: The Japanese government is actively promoting and supporting foreign direct investment (FDI) in Japan, as part of its economic growth and revitalization strategy. The government is offering various incentives and subsidies to foreign businesses, such as tax breaks, grants, loans, and preferential treatment, to encourage them to enter and expand in Japan. The government is also providing various services and assistance to foreign businesses, such as information, consultation, matchmaking, and facilitation, through its inward investment promotion agency, JETRO.
- Innovation and collaboration opportunities: Japan is a global leader and hub for innovation and technology, with world-class R&D capabilities and facilities, a large pool of skilled and talented human resources, and a strong intellectual property protection system. Japan is also a gateway and a platform for collaboration and networking with other Asian markets and regions, such as China, Korea, ASEAN, and Oceania. Foreign businesses can leverage Japan’s innovation and collaboration opportunities to enhance their products and services, access new markets and customers, and create synergies and value with local partners and stakeholders.
- Market diversification and expansion opportunities: Japan is a large and diverse market, with different regions, industries, and customer segments, that offer various potential niches and gaps for foreign products and services. Japan is also a dynamic and evolving market, with new trends and demands emerging from social and environmental changes, such as aging population, urbanization, digitalization, sustainability, and health and wellness. Foreign businesses can explore and exploit Japan’s market diversification and expansion opportunities to create and capture new value and growth.
Conclusion
Japan is a country that offers many opportunities for foreign businesses, especially startups that want to tap into its large and sophisticated market, its world-leading R&D capabilities and technologies, and its high-quality business environment and regulations. However, entering Japan is not without its challenges, as the country has its own unique culture, language, and business practices that may differ from those in other markets. Therefore, foreign businesses need to develop and implement a go-to-market strategy that outlines the approach and steps to attract and win new customers, enter new markets, increase market share, and achieve projected sales and marketing goals, revenue, and ROI. By doing so, foreign businesses can overcome the potential barriers and leverage the available opportunities and advantages, and succeed in Japan, the world’s third largest economy.
We are always on the lookout for new opportunities to partner with talented and passionate entrepreneurs who have a vision to change the world. If you have a great idea that needs funding and support to grow, we invite you to apply to join our community and programs. Whether you are looking for seed funding, Series A, or beyond, we have the right solution for you.
Join our community now!
We are always on the lookout for new opportunities to partner with talented and passionate entrepreneurs who have a vision to change the world. If you have a great idea that needs funding and support to grow, we invite you to apply to join our community and programs. Whether you are looking for seed funding, Series A, or beyond, we have the right solution for you.
Join our community now!