Newsletter: October 2009
Japanese consumers and business culture offer lucrative trade. However,
companies should be aware of the do's and don'ts of doing business in the
land of the rising sun. Even global giants Nokia and IKEA stumbled after
getting their homework wrong.
Contrary to popular belief, the Japanese market is very open and receptive,
but you have to know the rules.
"Nominication"
The word "nominication" – a combination of "communication" and the Japanese
word for drinking (tea rather than alcohol): "Nomimasu". Nominacation is the
art of social business networking to develop trust before deals are
discussed in detail.
Companies are warned about some potential hazards. These included ignoring
local etiquette, trying to bypass local staff, and skimping on presentation
or after sales service.
Firms should do proper research into a market that is unlike any other in
the world. Whatever you want to supply in Japan, there are always a couple
of local producers. Japan is highly sophisticated so you have to be sure
that you know what else you can add to the product to make it fly. Many
companies still under-estimate this.
Another catchword in Japan is "patience", which translates into a
series of personal face-to-face meetings with clients.
The Japanese public loves a novelty, but they also need to feel personally
connected to the product they are buying.
Once Japanese customers find a brand they like, they are very loyal. But
that loyalty must be earned through sound research, promotion and marketing.
The Malaysian-Japanese free trade agreement (FTA) signed on December 2005
and came into force on 1 January 2006, brings a further boost through
tariff reductions and more friendly regulations. The treaty has greater
symbolic than short-term financial benefits as many tariffs were low in any
case. Besides, Japanese consumers, ravaged by years
of economic hardship, are starting to follow new trends. There is a tendency
to eat out cheaper and spend less on clothes. Consumers are turning their
yen over twice before spending. Producers will have to be smarter at finding
ways to sell their unique, add-on value brands.
Doing Business the
Japanese Way
Free trade agreement
with Japan is expected to enhance business opportunities, but budding new
entrants must first master the unique market.
FTA benefits
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of October 2009