All foreign companies with unique offerings should seriously consider the Japanese market. Japan is among the most dynamic and advanced countries in the world – a technology powerhouse that can play a valuable role in your firm’s overall competitiveness. (image: Tokyo at dusk)
Benefits of Doing Business in Japan
Incentives for U.S. businesses exporting to Japan include:
- strategic stepping stone for other Asian markets
- strong political, trade and social ties with the U.S.
- highly-educated consumers who are early adopters of new products and services
- large and rich consumer market based in urban areas
- Tokyo metro population is the world’s largest at around 35 million
Strengths of the Japanese market include:
- America’s 4th largest trading partner and the world’s 3rd largest economy ($4.9 trillion in 2013)
- a cutting-edge business culture
- an increasingly globalized outlook
- strong intellectual property (IP) protection
- hunger for new trends and technologies
- high levels of disposable income, particularly older people and young singles living with their parents
Japanese companies and consumers appreciate quality and are willing to pay for it. However, market penetration can be a challenge.
Key factors include:
- the degree of local or third-country competition
- the number of regulatory hurdles to be overcome
- cultural factors such as language, service and quality expectations, and business practices.
Tariffs on most imported goods into Japan are actually low. However, cultural, regulatory, or other non-tariff barriers exist that can complicate market entry. In spite of these challenges, many American companies can and do successfully adapt…and thrive.
Did you know?
- In 2013, U.S. companies exported $65 billion of goods (including $440 million from Colorado) and $46 billion in private services to Japan (mainly through licensing royalties and fees).
- United Airlines has a nonstop Denver-to-Tokyo flight on the new Boeing 787 Dreamliner.
- Japan is a fascinating place to do business. Friendly people, ancient traditions, and a unique perspective combine for lasting relationships and memories.