Though Japan has been one of the most lucrative consumer and industrial markets in the world, it is also one of the world’s most challenging markets, requiring special knowledge and special talents, as well as extraordinary commitment, patience, and persistence.
Japanese companies have a distinctive characteristic and flavor that only the Japanese can fully understand and accept, and foreigners who have not acquainted to the “taste”, and has an appreciation for Japanese companies over a long period of time, will inevitably find them truly difficult to deal with.
Generally one cannot successfully establish contact and develop a business relationship with a Japanese company without following the business protocols suited to the Japanese market, in the right order and in the right way.
From the business sense, traditionally, Japan has been the second largest destination of Indian exports (major exports include gems, marine products, iron ore, cotton yarn, Information technology to a certain extend). India is also a major importer of goods from Japan, and its importance has been growing in recent years (major imports include machinery, plant-related products, transport equipment, and electronic machinery). Japan is the fifth major trading partner of India having a share of 3.1% in India’s total exports and imports 2007-08.
Also from a market perspective, the Economic Cooperation between the two nations has been buoyant with Japan’s total loans to India amounting to $4,239.0 million in 2008, grant aid were of the order of $ 399.2 million, while technical cooperation totaled to an amount of $ 179.5 million.
Also to mention the sectors that have attracted Japanese investment in India include transportation and infrastructure (28%), telecommunications (18%), fuel (13.5%), chemicals (12.17%) and trading (6%).
In spite of the above mentioned growing figures, Japan as a revenue contributor to individual Indian conglomerates overall revenue pattern, is still much less than 5% and averages at 2% normalized. Thereby the untapped market potential in Japan for the Indian companies, across various spectrum of business sectors is very huge, and showcases a promising growth, if taken up in the right path.
Also as the world’s second largest economy, Japan offers a wealth of investment and market opportunities to international businesses. Doing business in Japan, however, is not without its challenges for foreign businesses. Japanese culture is well known for its unique etiquette and traditions and international business is not exempted from these influences. Understanding Japanese culture, ethics and business values is of paramount importance to any organization wanting to conduct business in today’s rapidly progressing Japan. This would require the
professionals and business teams to build more successful business relationships with Japanese colleagues, partners and clients, and to have a deep understanding of the Japanese business market.
Key Points you should consider about Japanese market
- Japanese culture: beliefs and customs
- Japanese cultural values and attitudes in the workplace
- Japanese organizational structure and hierarchy.
- Management and working styles for doing business in Japan
- Communication styles when doing business in Japan
- Challenges and solutions for doing business in Japan
- Business Analytics as an indicator of the investors attractiveness of the Japan market.
- Overview of Japanese economic, demographic, political and business
Also myself having lived and worked in Japan for over a decade, face business challenges on a very regular basis, while interacting with our own fellow business groups in Japan, which does indicate the toughness of the potential market.