Expanding abroad is a key goal of many companies. However, entering a culture with different operational and societal norms presents a host of challenges. At YOUNEEDS Co., Ltd. (“YOUNEEDS”), it is our mission to assist foreign companies entering the Japanese market. While it is difficult to plan for all eventualities, we aim to make the transition as smooth as possible. In this post, our editorial team share some common mistakes foreign companies make when entering the Japanese market, and how YOUNEEDS can help you avoid them.

Not Researching the Local Market

It is easy to assume that a successful product or service will meet with the same success anywhere. However, items which feel familiar to consumers from one culture may feel unfamiliar, or even alien, to consumers of another. Building familiarity and brand trust takes time. This is the case today, when the appetite for domestically produced items is especially high. For this reason, we believe that understanding the local market underpins all other areas of market entry strategy. At YOUNEEDS, we help our foreign clients do this in a number of ways. We provide consultations, examine market trends and help your company see what Japanese consumers really want.

To understand the local market, a combination of data-based research and hands-on experience is key. Market research must be tailored to the company’s specific needs. Learning about similar Japanese products and marketing scenarios helps foreign companies understand the potential and challenges of the Japanese market for their product or service.

How YOUNEEDS Can Help:
At YOUNEEDS, we conduct thorough market research as standard. We investigate potential clients, partners and competition. Using data-based methods to analyze the Japanese market, we look at how similar products were received in Japan. We also encourage our clients to reevaluate their product or service. Is it truly aligned with consumer needs in Japan? If not, we offer guidance on how to adapt your offering. Above all, we encourage a growth-mindset, open to suggestion and adaptation.

Misidentifying Targets

We often hear that, “a product for everyone is a product for no one.” It is alluring to want your product or service to appeal to as broad an audience as possible. However, highly specific services or products are more likely to meet with success. The same is true in Japan, where customers are extremely discerning and expect high quality in their products and services. We know that identifying businesses and demographics to target can be a major problem for foreign companies. This is often due to unfamiliarity with the Japanese corporate and consumer landscape. Another reason can be the emphasis Japanese companies place on long-standing domestic partnerships. This can represent a challenge for foreign companies looking to connect.

How YOUNEEDS Can Help:  
We encourage our clients to refine their offering for the Japanese market. Being clear on the product or service you are trying to market, as well as your target audience is vital to this process. Additionally, being flexible can help. Aiming for the same demographic as in your company’s home market will limit your success in Japan. We set you up for success by working together to ensure that your offering is aligned with your client base.

Not Looking Beyond Established Contacts

Relying on pre-established contacts when attempting to enter the Japanese market is another common stumbling-block. Forging new contacts despite linguistic and cultural barriers can seem like a challenge. The Japanese business landscape also places high importance on trust and long-standing relationships. This makes it difficult for foreign companies to attract interest from potential Japanese partners. Relying on pre-established contacts might seem like the only solution. However, depending solely on existing connections narrows your opportunities and slows down your market penetration.

How YOUNEEDS Can Help:
At YOUNEEDS, we assist companies in expanding their network in Japan. From potential business partners to industry insiders, we help you find your people. Broadening your network can open doors to new opportunities and collaborations. Moreover, it may even help you meet potential partners in areas you would not have considered. We do this through the provision of a tailored target list. This information helps you identify potential partners and clients easily. We find that foreign companies who embrace new connections tend to succeed in Japan. Cultivate multiple partnerships, attend industry events, and continuously build new connections in the market. This will help your company create a strong, diverse network in Japan.

Not Conducting Thorough Market Testing

Once you understand the Japanese market, your target audience is selected and you have some key industry contacts established, market testing is the next step. It is tempting to launch into marketing campaigns directly. However, rushed market testing can result in incomplete data, making effective planning nearly impossible. To avoid this common pitfall, we advise a steady, measured approach in which thorough market testing is undertaken at the appropriate pace.

Testing your product or service is revealing, shining light on unspoken and ingrained cultural assumptions. This stage is particularly important when entering the market from a culture which differs significantly to that of Japan, such as Europe or America. Design elements or color schemes may come across differently than you predict, while consumers themselves may hold priorities which differ from your original target base. The only way to uncover issues which may affect the success of your product or service, is to conduct thorough market testing.

How YOUNEEDS Can Help:
YOUNEEDS can arrange market testing on your behalf, as well as formulate any data gained during the testing. We believe that this will help you gain an accurate and informative picture of the potential success of your product or service in Japan. Based on this data, you can move forward with confidence.

Failing to Adapt

One of the biggest challenges when entering the Japanese market is the need to adapt your products, services, and even marketing strategies to local preferences and cultural nuances. A common mistake foreign companies make is assuming that their current branding or business model will work in Japan without modification. While confidence in a brand or service is important, it is essential to be open to adaptation and take a flexible approach. Japanese consumers value quality, attention to detail, and often expect a high level of personalization in their interactions with businesses. Adapting your product to meet these expectations is key to gaining traction in Japan.

To overcome this, flexibility is key. Identifying areas where offerings may need adjustment, whether it’s product features, packaging, or customer service approaches, is vital. By making these changes, your business will better align with Japanese consumer expectations, improving your chances of success.

How YOUNEEDS Can Help:
On top of market testing, we recommend thorough localization of your product or service. This could involve everything from translating labels into natural Japanese to tweaking design elements so that they resonate more with local tastes. We offer guidance and advice, helping you understand which parts of your offering may need to be re-imagined for the Japanese market.

Not Understanding the Hiring Landscape

After establishing your contacts, product and its target in Japan, bringing on a local team is the next step. However, hiring in Japan can be a complex process, especially for foreign companies unfamiliar with local labor laws, cultural expectations, and recruitment practices. Mistakes in this area lead to high turnover rates or issues with team integration, all of which can be critical issues when looking to expand your presence in Japan. Japanese employees often seek long-term employment, with an emphasis on stability, loyalty, and company culture. Foreign companies that offer stability and take local hiring practices seriously are more likely to source top talent with ease.

How YOUNEEDS Can Help:
At YOUNEEDS, our expert legal team and HR consultants guide our clients through the intricacies of Japan’s hiring landscape, helping you navigate everything from legal compliance to effective recruitment strategies. We encourage our clients to take the time to understand Japanese hiring culture and the expectations of employees. We help your HR team understand local expectations regarding job security, benefits, and company culture, and incorporate these into your recruitment strategies to attract the best talent in Japan.

In Conclusion

Success in the Japanese market requires careful planning, adaptation, and a deep understanding of local practices. From identifying your target audience to navigating the complexities of recruitment, there are many areas where foreign businesses can stumble. By avoiding these common mistakes and tailoring your approach to meet the expectations of Japanese consumers and employees, your business will be better positioned for long-term success in the Japanese market.

At YOUNEEDS, we are dedicated to helping foreign companies make a smooth and successful transition into Japan. With our comprehensive services ranging from targeted B2B lists to market analysis and recruitment support, we are here to guide you every step of the way.

Contact us here or on LinkedIn to learn how YOUNEEDS can support your business’ expansion in Japan.

---