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5 things to consider before expanding into Japan8 min read

If you’re running a successful business in English-speaking countries and are thinking of expanding into Japan, what do you need to know to make it a success?

I’ve worked as a PPC operator, a marketer, a translator, in customer support and as a website creator. I’ve been involved with a number of companies trying to get into the Japanese market and have seen the difficulties they’ve faced.

When you are planning to expand into the Japanese market, thorough planning is necessary. In this blog, I will outline 5 things to consider before you expand into Japan.

1. Do your market research

Market research is crucial when you enter into a new market. This may seem obvious. Who would try to expand into a new market without decent market research? More than you might think!

I’ve seen several cases where the next market was chosen just because the company succeeded elsewhere. That’s a risky strategy. What works in one place doesn’t necessarily work elsewhere.  

Know your competitors

The first thing you need to know! Who are your competitors in Japan? What are their unique selling points? What attracts customers? What kind of services are they offering? Knowing your competitors will give you an outline of your marketing strategy.

Know your customers

If you already have some Japanese customers, asking them to fill in a questionnaire is a useful way to find out why they are buying your products. Analysing their buying behaviour will give you useful insights. Your unique selling points for Japanese consumers may not be the same as in your existing markets.

I saw a company that thought their product was popular in Japan because they saw lots of website visitors coming from Japan. However, it turned out that the visitors were not Japanese – they were Chinese people using a Japanese IP address. If they had looked more carefully at those customers, examining details such as their names and email addresses, they could have spotted this easily.

Communication

As a marketing manager, my first task was to check a company’s reputation in Japan. I often found negative reviews of them posted online. Why did this happen?

In many cases, before they posted the negative reviews, the customers had contacted the company. However, they were ignored or the company didn’t communicate very well. If you are aiming to succeed globally, you need to listen closely to local customers. Their complaints might even provide some insight on how to drive success.

2. Create a localised website

A Japanese website is vital if you’d like to attract Japanese customers. A recent survey by PayPal, which analysed the buying behaviour of shoppers in various countries, found that only 5% of Japanese customers used foreign shopping sites, which was the lowest among 32 countries. It was thought that the language barrier was one of the reasons for this low proportion.

Source: PayPal Cross-Border Consumer Research 2016
Source: PayPal Cross-Border Consumer Research 2016

If there are similar products available on English and Japanese sites, which do you think Japanese customers would prefer? By having a Japanese customer-friendly site, you can lower the language barrier and immediately increase the number of potential customers.

Language difference

If you have the option to do so, I would recommend creating a Japanese website independently from your existing site. This will give you the ability to create a completely localised website.

However, if you already have an English website, you may be planning to make a Japanese site based on it. In this case, be aware of the differences between the two languages. If your site looks foreign, it will put off Japanese visitors.

Japanese is a very different language to English. Even if each word or phrase is translated precisely and the original site looks good, you may still end up creating a strange-looking website. It is very important that you let the translators check the full context in which each word will be shown.

Format and style

Look at other Japanese websites for inspiration. How do they use images and what kind of fonts are they using? Do they have many photos of the product? How are the product descriptions shown? You will probably find that Japanese websites tend to be colourful and have detailed product descriptions with many photos.

Japanese characters require special fonts to look natural, so you can’t just use the same website template and replace the English words with Japanese ones.  

How-to guide in Japanese

If you don’t have a Japanese site yet, or don’t have the resources to invest in creating one, how about adding several pages of “how to use our website” in Japanese? This lets you clearly show that Japanese customers are welcome and encourages them to try your service.

3. Understand Japanese consumers’ buying behaviour

Japanese shoppers love quality products. They like new things and limited editions. They are sometimes hard to convince but once they like your products, they become your loyal customers.

Tell them who you are

In order to target Japanese consumers, information is very important. When they visit your website, they usually try to get as much information as possible about who you are. Let them know about your company and why they should be buying from you.

Remove their concerns

The same report by PayPal also revealed that Japanese shoppers were reluctant to buy from overseas because they worried about when something went wrong. Japanese consumers tend to avoid any problems after buying products. If they are not sure, they just won’t buy from you.

Source: PayPal Cross-Border Consumer Research 2016
Source: PayPal Cross-Border Consumer Research 2016

When I was working in customer support, we often had calls from customers saying, “I saw this on your website. Is it correct?” They just wanted to double check.

It is therefore vital to include information such as shipping methods, payment options, how to contact customer support, and all key company information, all in an obvious place on your website, to remove their concerns. They are always looking around to be reassured that the company is trustworthy. Your customer service starts from your website.

Super customer support

The Japanese expectation of customer service is very high. They enjoy a high level of customer service elsewhere in their daily life. To attract Japanese customers, you need to provide super customer support.

High expectations of quality

When working at one company, I was contacted by a Japanese customer claiming that the product he received had a scratch and stating he’d already posted it back. About a week later, the returned product arrived in our warehouse and was put back in stock as “Returned as new”. The scratch was so small that the person who checked the item didn’t even notice it.

Japanese shoppers can be very strict about quality. However, once they are satisfied with the quality, they will become your loyal customers and spread the word.

Word of mouth

One of the most effective ways of removing Japanese shoppers’ concerns is word of mouth. If you already have Japanese customers, encourage them to write reviews. The actual words of other Japanese consumers will be very effective.

4. Make the most of online advertising

When you are just starting to get into the Japanese market and your brand is not yet well known, using paid search platforms will help raise your brand visibility.

AdWords and Yahoo! Japan

There are two main platforms in Japan – AdWords and Yahoo! Japan. They have different audiences and networks, so we recommend using both platforms to reach a larger audience (see my previous blog for more detail on Yahoo! Japan).

Google-Yahoo

Social media

Social media can also be a very effective tool. Line is the most popular social media, followed by Facebook and Twitter. It is often said that Japanese people use social media slightly differently from people in western countries, so if you’re planning to use social media to target Japanese shoppers, an in-depth understanding of local users’ behaviour is key.

5. Gain an understanding of Japanese culture

There are many stories about big brands entering the Japanese market. However, there are also many stories about big brands withdrawing from Japan. What makes the difference?

Create repeat customers

Japanese shoppers love new things and are very curious. When famous big foreign brands arrive in Japan, people are very willing to try their products. For example, when Krispy Kreme came to Japan about a decade ago, there were very long queues outside their shops. A lot of TV stations went to film the long queue. The brand names spread quickly across Japan and caused a sales boom.

A few years later, the long queues disappeared and many shops were closed down. People had tried their products out of curiosity but because they didn’t adjust their products to the Japanese taste and lifestyle, they failed to create repeat customers and so the boom didn’t continue.

Adjusting yourself to Japanese culture is the key. To be successful in the Japanese market, you need to build a reputation and repeat customers.

Know the country and its people

In this blog, we’ve looked at just some aspects of the Japanese market and its people. Sounds like a difficult market? Don’t worry! If you think about how you built a successful business in your own country, therein lies a key lesson. You know your customers and unique selling points in your home market. And this is because you know the country and the people.

Plan carefully and listen to the local people. If you already have some Japanese customers, it means there is something which attracts them and makes them want to buy from you. Make them your strength and your advocates. Talk to your customers, analyse their behaviour and it will set you on the path to success in the Japanese market.

If you’re looking to break into the Japanese market, or keen to optimise your existing digital marketing activity there, get in touch – we have both an internal Japanese team, plus several in-market Japanese Croudies through our global network of digital experts, and we’d love to help!