With 125 million citizens and the world’s third largest GDP, Japan is an important market force.
With 125 million citizens and the world’s third largest GDP, Japan is an important market force.
In fact, it comprises approximately 10 percent of the world’s economy. Several global technology revolutions emerged in Japan and the country has recently embraced Western technologies. More businesses are partnering with Japanese companies to develop new products and services, fund research and development projects and test new technologies. It is also a large exporter and can provide an important gateway to the Asian market. Japanese employees tend to have a strong work ethic and employer loyalty, making this workforce an attractive option to help launch new businesses and take advantage of opportunities in the country.
However, entry into the Japanese market can be intimidating for many foreign businesses. These obstacles are discussed in more detail below, along with a unique option involving a PEO that can help overcome them.
What Are Common Challenges to Entering the Japanese Market?
There are several challenges to entering the Japanese market. Japan is not a western country, and not all products or services will resonate with the customers. Companies may discover that they need to adapt their product line or marketing to appeal to this country’s citizens.
Another significant obstacle for many startups is that substantial investments may be necessary to launch a business in Japan. This demand for high amounts of capital can make the expansion to the Japanese market particularly risky for small- and mid-sized companies.
Perhaps the biggest obstacles for companies is dealing with various bureaucracies in Japan. This country has a network of complex regulations, certifications and procedures that make it more difficult for companies to do business in the country, especially foreign countries. Government intervention may prevent many businesses from expanding to the Japanese market.
