In this article, we will explain why foreign companies choose to expand into Japan.

Why Enter Japan?

Many companies desire to enter Japan for various reasons. Japan, being the third-largest economy in the world after the United States and China, with a population of over 100 million and high incomes, offers a large volume of products and services, making it an extremely attractive market.

According to a survey by Japan’s Ministry of Economy, Trade, and Industry, as of March 2020, there were 2,808 foreign-affiliated companies in Japan. This is only about 0.07% of the total number of companies in Japan, estimated at around 4.21 million.

Looking at the origin countries of these foreign companies, European companies lead with approximately 43%, followed by Asian companies at about 29% (of which Chinese companies make up about 11%), and American companies at about 21%. Companies from other countries account for about 7%.

While the Japanese market has significant allure, it also possesses unique barriers that can hinder foreign companies from entering.

Japan has a completely different language and a very distinct business culture. Without understanding Japanese values and national character, marketing efforts are bound to fail.

Therefore, we recommend gaining specialized knowledge for success in Japan before starting a business there.

Particularly, caution is advised for companies that plan to enter Japan with the mindset of replicating their marketing success from their home country.

While it’s true that Japan often adopts services and cultures from the West with a slight delay, the key to success has been understanding the Japanese temperament and customizing accordingly.

Replicating current success in Japan is a rarity.

summary

Foreign companies aiming to enter Japan’s market, the world’s third-largest economy, face language, cultural, and localization challenges. Understanding Japanese values and customizing strategies are essential for success, as replicating success from home countries is rare in Japan’s distinct business environment.

Author Profile

Mr. Takeshi Amano, CEO of Admano Co., Ltd.

Mr. Takeshi Amano is a graduate of the Faculty of Law at Nihon University. With 12 years of experience working in the advertising agency industry, he discovered SEO and began his research during the early days of SEO. He self-taught and conducted experiments and verifications on over 100 websites. Using this expertise, he founded Admano Co., Ltd., which is currently in its 11th year of operation. Mr. Amano handles sales, SEO consulting, web analytics (holding the Google Analytics Individual Qualification certification), coding, and website development. The company has successfully managed SEO strategies for over 2000 websites to date.

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