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Japanese market: culture, issues, and prospects

Japan is the world’s third largest economy after the US and China and second largest computer and telecommunications market in the world. The country is famous for its consumers with enormous income, high-end goods and services. Japan is a true synonym with quality and innovation. This goes hand-in-hand with their commitment to business partners. Sounds enticing, though is it that simple to do business there?

Business culture
Japanese appreciate lifelong employment, workaholism, and a meticulous attitude to making decisions. Local people don’t like risking and making mistakes. However, the business culture is changing. Startups and venture investments imply risk-taking, while lifelong employment is being abandoned.

The Japanese value close and fair relationships with suppliers and partners. The Japanese market remains one of the most conservative nowadays. Besides, Japanese are into planning. They can spend a bunch of time on making detailed plans and expect the same from others.

Large vs small business
One of the major changes is that Japan is becoming more open. Today Japan is widely regarded as the country of private enterprises. Thanks to active governmental loyalty and support for small business, nearly 99% of enterprises refer to small ones. Around a half of them are family.

In every sphere large and small businesses cooperate with each other. For instance, many big companies make orders from small contractors. Japan is characterized by long technological chains consisting of small businesses for serving big ones. There is a law that doesn’t allow large enterprises to monopolize their activity, which protects the small business.

Loads of Japanese corporations strive to remain competitive at the world stage. Large companies have to urgently adjust in order to keep up with startups that work faster.

Startup ecosystem
The strategy of lifelong employment demotivates Japanese to start their own business. Though, Japan pays attention to startups and technologies from other countries. This is due to its economic policy that is called ‘Abenomics’. According to the total indicator considering the economic development, Japan has been at the highest level in the last few years.

Today’s Japanese market can be characterized by 3 things: high prices, serious competition, and conservatism. Despite Japanese economy is one of the most developed, it’s not really attractive from the investment perspective. Foreign companies have to struggle hard in order to enter the Japanese market. However, there are industries where the country is more open for foreign investments like telecommunication.

Japanese corporations collaborate with prospective foreign startups — arrange Hachathons, invest in technologies, conduct accelerating programs for open innovation model, and establish corporative venture funds.

Prospects
The amount of risky investments has been rising. First and foremost, the cooperation with Japan means the opportunity to enter a large consumer market. The country is placed 6-th in the Internet penetration. Besides the Japanese are the most scrupulous testers ever, they highly value cross-recommendations from partners and clients. Wherein, competing system integrators prefer receiving additional information from each other to ending up without any data at all.

Many Japanese firms have a list of longterm partners. The acquaintance with them may bring much benefit when entering the market of Southeastern Asia, China, or the USA.

Guys, would you love to start your own business and Japan? Share in the comments 💬


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