Tips for doing business

Tips for Doing Business in Japan

Expanding your business to a new market can be a challenge. Add on cultural conventions, localization, and language intricacies, and your reading list just grew immeasurably. Japan is a market that requires some research ahead of going in.

Japan’s business traditions are unique and exacting, and may require some adjustment on your part; the way you did business elsewhere will likely not work here. This article provides an overview of some of the most common mistakes companies make when first entering the Japanese market, and offers tips to help overcome them.

Be careful when building the customer-brand relationship

Japanese customers have high expectations when it comes to the quality of the goods they use and the level of service they receive when making a purchase; therefore, many companies strive to make each encounter a great experience. The fact is, customers in Japan have little tolerance for bad service. According to a survey conducted by American Express International, 56% of Japanese customers switch and abandon a vendor after a single bad experience.

Don’t underestimate the language barrier

Japan ranks thirty-seventh on the global English proficiency index; 70% of people feel their English is poor. Secure a reliable partner for translations, engage an interpreter for business meetings, and hire local customer service representatives.

Be aware of the local competition

Strong local competition in Japan has sent many big companies packing. While eBay struggled in Japan and Vodafone lost over 59,000 customers to local companies in 2005, French retailer Carrefour had a short, expensive adventure in the country that lasted a mere five years.

Do your homework and learn from the mistakes of others. Conduct a comprehensive market research study in order to fully understand your competition, the key value points of your product/service, and localization needs to clearly communicate your brand. Building a meticulous strategy and preparing a solid financial plan in addition to research will give you the best chance for success.

Adapt your business model

Your business model performs well in your current markets, so it’s understandable you’d expect it to work everywhere else. However, cultural factors are often overlooked, which can result in total failure. An excellent example of localization done well was demonstrated by Starbucks when they took on Japan. The coffee giant abandoned their tradition of signing people’s names on their cups to honor the more conservative cultural attitudes toward personal privacy. While most customers rarely think twice about having their name advertised so publicly, customers in Japan traditionally refrain from giving out their first name so freely.

Proper business etiquette is critical to success

There’s a complicated system of titles and honorifics used in Japan, but one of the most commonly used ones is -san. Address Japanese people by their last name suffixed by –san. Avoid addressing people by their first name; this is considered impolite. Learning these basics of how to address a Japanese person shows that you’re respectful. However, using Mr./Mrs./ Miss are also acceptable forms of address.

Business cards have much more meaning in Japan than in Western culture. They serve as a formal introduction. Here are some tips for business card exchange in Japan:

  • Have your business card translated into Japanese.
  • When offering your business card to another person, hold it Japanese side up.
  • When receiving a person’s business card, take it with both hands and read both sides.
  • Even if you’re meeting a large group of people, take time to examine each business card upon exchange, and check the name and title on the Japanese side, even if your command of Japanese is far from perfect.
  • Never put the business card immediately into your pocket. This is a sign of disrespect.
  • If you’re participating in a formal meeting, put the business card on the table and refer to it if necessary.
  • Do not write any notes on another person’s business card.
  • Do not toss your business cards or place a pile on the table for other people to take one.
  • Never play with or bend the business cards; it is considered rude.
  • Forgetting a Japanese person’s business card is highly disrespectful. It implies the person is not important to you.

Japanese people are masters of self-control and avoid public displays of emotion. Their culture hinges on respect, modesty, and humility. This means that wild gestures or speaking loudly won’t be accepted during a business meeting.

Tiny details matter. We strongly recommend learning as much as possible about the people, their dynamics, and relationship and business-meeting habits before embarking on your journey. Having a reliable partner or consultant with a well-established presence in Japan will help you achieve a soft landing in the region and lay the groundwork for a successful venture.

Tips for Doing Business in Japan

Tips for doing business
Adela Szatvanyi

Author: Adela Szatvanyi, Regional VP, APAC

With expertise in commerce operations gained in more than 10 years at OSF, Adela oversees the business development activities in APAC and directing the digital commerce strategy. Adela and her team helped famous brands power up for online growth, supporting global luxury brands, large German sports apparel brands and one of Japan’s oldest cosmetics companies grow to a multinational commerce project.