Last week, a reporter from The Telegraph in the UK contacted me for my views on the challenges of market entry in Japan.
My market entry manifesto is below:
- Language is no barrier for those who know how to communicate. Being skilled at international communication means being able to understand people, even when you do not speak a common language. Even between English speakers, we often misunderstand the meaning others want to convey. Ask questions to confirm understanding, give examples to illustrate what you mean, and when your counterpart’s meaning seems vague, it is never rude to ask for clarification, even in Japan. Don’t just let it slide.
- Market validation is as crucial for success in Japan as anywhere else. Do yours diligently. Don’t rely on standardized reports of others or the advice of JETRO or any other trade promoting organization. Treat with skepticism to prognostications of supposed Japanese industry insiders. Even if you hire a professional firm for help, it is always better to do your own market validation in parallel. Meet with prospects, ask your questions, validate your assumptions. You understand your business best.
- Like everywhere, a superlative leader for the business is crucial for success. A Japanese guy with industry contacts is not enough. The conventional wisdom is often to hire an older Japanese man with industry experience and connections to lead your business. I have never seen a successful case using this approach. Industry experience does not necessarily translate into business acumen and leadership capability. People who view their Rolodex as their primary value will often hesitate to do what is necessary for your business if they think it might violate the interests of their contacts. Their contacts will take precedence over your business.
- Just because a Japanese person tells you something about Japan does not necessarily make it true. Being Japanese does not make a person an expert on business in Japan. Take advice from such people with a massive grain of salt. If all advice from Japanese people were followed, Seven-Eleven, Costco, Uniqlo, Michelin, BMW, Adidas, and Godiva would never have even started in Japan, much less achieve their raging success!
- Demanding customers are the rule in Japan and an asset. Companies like Adidas and Michelin develop products specifically for the Japan market, and they sell them worldwide successfully as they are the best in class. You can do the same.
- Brand strength at home does not necessarily translate into brand strength abroad. Be prepared to invest in building your brand in Japan, no matter how well-known you may be outside of Japan.
- Value is universal, even in Japan. If you have a great product with breakthrough technology and unbridled service, you will succeed in Japan like anywhere else. Michelin, a French company, supplies top of class tires to all the Japanese automobile and truck manufacturers, as well as to Japan Airlines for its fleet.
- The most successful businesses in Japan buck the system, not adapt to it. You should too. Fast Retailing, a Japanese company, turned the clothing industry on its head. Softbank redefined service in consumer telecommunications. Ito-Yokado, now 7&i Holdings, revolutionized retail in Japan with Seven-Eleven. Starbucks superseded the notion of a coffee shop in Japan. Honda Motors, back in the day, ignored ministerial directives when it entered the car market. What do you intend to disrupt?
- Gaining a foothold in the Japan market is no more difficult than any other if you invest in the right things first. You can replace Japan with the name of any country for all the points above, and the same will still hold true.