Doing business in Japan information
by Venture Japan
In September 2003, I met with an incredibly exciting e-commerce company in the US which, had they then entered the Japanese market, would probably now be earning millions of dollars doing business in Japan. Their product (a digital catalog application) is perfect for the Japanese market and I have an extensive network of contacts whom I could have leveraged to ensure its success. But at the final moment that digital catalog company decided not to start business in Japan because of "..things we heard from a friend of a friend who said that the Japanese market is too risky and too expensive to enter..".
That company could have earned substantial cash within 2003 and now be enjoying a growing revenue stream from Japanese sales - instead it is now on the verge of bankruptcy because its US competitors are forcing US prices down, its margins are insufficient and it has no alternate market to draw upon!
I first heard the infamous myths of the Japanese market when I first came to Japan in December 1991 with EDS Corporation, at which time they were widely proliferated by so-called experts of the Japanese market. Until last September, I had naively assumed that those myths and horror stories had long ago lost their impact, but clearly that is not so and that is why I decided to create this Web site. I have been fortunate, have earned a lot of money, had a lot of fun and met a lot of interesting people doing business in Japan. For me. doing business in Japan is so obviously good for any company, irrespective of its size, that I often fail to comprehend why more companies do not establish serious presences here - but then, I have the benefit of having succeeded in Japanese business for over a decade and I guess that changes my perspective somewhat.
Every market has its horror stories, but Japan, maybe because of its Oriental mystique, its complex and bewildering written and spoken language, and its astronomic property and consumer prices of the 1980s, seems to have more than its fair share. The truth of course is that the myths were (and still are) nothing more than convenient excuses to justify the shoddy performance and inflated fees, commissions, salaries and benefits packages being demanded by some of the bilingual consultants, managers, distributors and agents (the 'bilingual mafia') involved with the multitude of foreign companies that had entered the Japanese market during the economic boom of the 1980s.
Japan's markets may have changed dramatically during the last decade but the myths seem to have stayed pretty much unaltered. Maybe in part because they were proliferated in many books written about the Japanese market during Japan's economic phenomenon in the 1980s and since the bursting of the bubble in the early 1990s, there has been less interest in the Japanese market and fewer books written to provide updated information about doing Japanese business.
Unfortunately few foreign executives truly understand doing business in Japan and on the Web most of the available information about doing business in Japan is disjoint and out of date. The vast majority of foreign company executives never have the opportunity to come to Japan, and even those that do are rarely able to spend enough time here to become intimately involved with the Japanese market or to appreciate the fallacy of the myths and the golden opportunities that their companies may be missing.
So, what are these infamous myths?
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