Why Expanding to Japan is a Smart Move for Your Business
29 October 2024
For companies seeking a solid foothold in Asia, Japan offers a strategic, high-value market with untapped potential. As one of the world’s most stable economies, Japan combines consumer sophistication, high standards for quality, and an unparalleled commitment to innovation.
From its advanced infrastructure to a skilled workforce, Japan provides a foundation for long-term business success. Although entering this competitive market requires thoughtful planning and local insight, the potential rewards—access to a sizeable, high-spending consumer base and a regional position in Asia—make Japan an ideal destination for companies ready to expand.
Japan’s Strategic Market Potential
Despite recent economic shifts, Japan remains the world’s fourth-largest economy with a GDP of over $4 trillion. What’s more interesting is the buying behavior of Japanese consumers. They value quality, innovation, and trust in brands, often translating into higher spending on products and services that meet these expectations. For businesses offering top-tier products or those that stand out in terms of design or functionality, this preference can open doors to loyal, high-value customers.
For example, Japanese consumers often lead global trends in the tech, automotive, and wellness sectors. Companies that enter Japan have the opportunity to shape and tap into these markets, gaining an edge that can ripple through other parts of Asia.
A Business Environment Built on Stability and Opportunity
When you set up shop in a new country, stability matters. Japan’s political landscape is one of the most stable in Asia, providing businesses with a predictable environment in which they can plan and grow long-term. The government actively supports foreign investment through incentives and assistance programs, with the Japan External Trade Organization (JETRO) at the forefront. JETRO provides free consultations, guides, and incentives that make the entry process smoother.
Japan’s business-friendly policies don’t stop there. In recent years, the government has started implementing several measures to cut red tape and offer tax relief and financial support in priority areas like technology, healthcare, and renewable energy. These programs simplify the logistics of setting up a business, which is a major advantage for companies considering Japan as a base.
Advanced Infrastructure and Technology that Powers Businesses
When it comes to infrastructure, Japan’s reputation speaks for itself. The country is home to a highly efficient network of public transportation, including the renowned Shinkansen (bullet train), which connects major cities swiftly and reliably. This extensive transit system not only ensures seamless business operations but also facilitates easy access to various markets across the country.
Additionally, Japan’s logistics infrastructure is highly advanced, playing a critical role for businesses in retail, e-commerce, and manufacturing. For instance, Japan ranks highly in logistics performance, often placing among the top countries in the World Bank’s Logistics Performance Index, which evaluates countries based on logistics effectiveness and efficiency that rely on digital infrastructure, Japan offers some of the fastest internet speeds in the world, which are essential for supporting cutting-edge tech operations, remote work, and data-heavy business activities. According to reports, Japan’s average internet speed is among the highest globally, allowing companies to leverage technology effectively for their operations.
For businesses that rely on digital capabilities, Japan offers some of the fastest internet speeds in the world, enabling tech-driven operations, remote work, and data-intensive activities. The reliable digital infrastructure supports innovation and keeps businesses connected and productive, allowing them to focus on growth and efficiency.
In essence, Japan’s advanced infrastructure and technology create an environment where businesses can thrive, ensuring that they are well-equipped to meet the demands of a competitive landscape.
A Highly Skilled, Educated, and Disciplined Workforce
One of Japan’s most significant assets is its people. The workforce is not only highly educated but also highly skilled in fields ranging from engineering and manufacturing to finance and customer service. There’s a strong emphasis on technical skills and a culture of continuous improvement, which creates a workforce that’s both efficient and dedicated to quality.
Companies expanding to Japan will find a talent pool that’s disciplined, quality-focused, and stable, often with lower turnover rates compared to other markets. For businesses focused on high standards and operational consistency, this workforce culture is invaluable.
Japan’s Trade Advantages and Strategic Position in the Global Market
Beyond a skilled workforce, Japan’s strategic trade agreements provide businesses with significant advantages for scaling across Asia and the world. Expanding into Japan doesn’t just mean gaining access to a robust domestic market—it also offers a gateway to the broader Asia-Pacific region and beyond. Japan is a member of several key free trade agreements, including the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (TPP 11 Agreement) and the Regional Comprehensive Economic Partnership (RCEP). These agreements lower tariffs and simplify trade processes, making it easier and more cost-effective for companies to do business across a substantial network of countries in the Asia-Pacific.
Additionally, Japan’s geographic location positions it as a strategic base for businesses looking to expand into neighboring markets like China, South Korea, and Southeast Asia. This regional access, combined with favorable trade agreements, means companies can efficiently scale operations and connect with a diverse range of international markets. By establishing a presence in Japan, businesses not only gain a foothold in Asia but also tap into a country with strong economic ties to North America and Europe, creating a springboard for global growth.
Why Now Is the Right Time to Expand Your Business into Japan
With its resilient economy, advanced infrastructure, skilled workforce, and high standards in quality and innovation, Japan remains a prime choice for global businesses. For companies looking to grow, Japan is more than just a market; it’s a strategic foothold in the Asia-Pacific, opening doors to one of the world’s most dynamic regions.
Expanding into Japan isn’t just about entering a new market—it’s a strategic move to place your business in one of the world’s most innovative and stable economies. Now is a great time to benefit from Japan’s increasing support for foreign businesses, its diverse consumer base, and its efficient infrastructure. Our market entry services are here to help you build a solid foundation and navigate Japan’s unique business landscape, ensuring your company doesn’t just enter Japan but thrives here.
Are you ready to take the next step? Let’s explore how Japan can become the next milestone in your business journey.
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Resources:
Japan: Reaching the consumer, Santander Trade https://santandertrade.com/en/portal/analyse-markets/japan/reaching-the-consumers
Invest Japan Business Support Center (IBSC), JETRO https://www.jetro.go.jp/en/invest/jetros_support/ibsc/
Japan to tackle red tape to boost renewable energy, nippon.com. https://www.nippon.com/en/news/reu20210423KBN2CA14H/
Logistics Performance Index (LPI) Global Ranking 2023, The World Bank. https://lpi.worldbank.org/international/global
Median Country Speeds (Latest), Speedtest Global Index. https://www.speedtest.net/global-index
Free Trade Agreement (FTA)/ Economic Partnership Agreement (EPA) and Related Initiatives, Ministry of Foreign Affairs of Japan. https://www.mofa.go.jp/policy/economy/fta/index.html