Japan Business Information
Trading and Business Industry
Foreign companies have different possibilities for the penetration of their products and/or services in the Japanese market, depending on the field of activity objectives.
Different types of business enterprise:
1 - Licensing agreements for know-how, manufacturing and distribution
Your advantage: the notoriety and originality of your brand and/or products in your home country.
Situation in Japan: your field of activity has already matured in Japan. Some Japanese companies, already possessing a big market share as well as efficient operational tools in manufacturing and distribution, are searching for added value from abroad, in order to improve or create a new offer.
Advantages:
You find a Japanese partner who takes charge of implanting your brand and products in the market.- You have no need to establish a commercial entity in Japan; you license your know-how: technical knowledge, specifications, product design… You come regularly to Japan or your licensee visits you to obtain approval for product prototypes which are to be sold.
- Your licensee pays royalties for the use of your brand and know-how. A minimum guarantee is defined in the license agreement to guarantee an income, whatever may happen.
Elements of control:
A good level of regular communication with your licensee, the follow-up of your fixed schedule: presentation/prototype/approval, so that the quality and successful image of your products in your home country duplicates itself within the Japanese market.
Example: Marie-Claire (accessoiries), Gérard Darel, Agnès b. (eyewear et watches), Lulu Castagnette
2 - Importation Agreement
Your Advantage: You are a global leader in your field, your products high-tech and high quality, for which the manufacture is difficult to transpose to Japan.
Situation in Japan: Your activity distributors and consumers are looking for new original, innovative products. Japanese pricing regulations or fluctuations in the yen rate of exchange pose no obstacle to the importation of foreign products.
Advantages:
- An importation agreement with a Japanese distributor-partner is a less expensive solution. You don’t have any labor costs or any distribution network to organize or manage.
- Your Japanese partner manages the distribution and visibility of your products within the Japanese market.
Element of control: Your export price list (FOB, CIF, etc.) and a strong logistics system, which avoid late delivery or defective product issues that hamper market penetration and affect the level of confidence your partner has in you.
Example: Dolomite, Chocolat Richart
3 - Joint-venture
Your advantage: You have already established licenser activity in Japan and/or want to create a partnership with a local company, so as to guarantee yourself long-term development and the rapid and dynamic penetration of your products or services in the market.
Situation in Japan: Whether your field of activity is mature or not, your products’ specifications and prices respond to the high demands of Japanese consumers.
Advantages:
- You directly recruit an effective and responsible local managing team and, consequently, minimize salary costs and expatriate relocation charges.
- Your Japanese partner, who already has a distribution network, helps you gain time to attain market penetration
Elements of control: Set up your manufacturing and distribution network and follow up on your development strategy…with PMC.
Examples: Fabricant (manufacturing and distribution of the brand Lacoste), Agnès b., MCBDA (Brand Marie-Claire)
4 - A 100% Direct Subsidiary
Your advantage: You have unique know-how and/or a great brand image in the Japanese market. After carrying out detailed market research, your prospects for profitability are strong and your development could be rapid.
Advantage:
- You control all the steps of development for your offer in Japan: from manufacturing to distribution, image to publicity… and reap all the benefits of this strategy.
Element of control: Superlative knowledge of the Japanese market is necessary when building a viable business plan in which your investments are optimally divided among manufacturing, distribution, management, marketing, etc
Example: CEBE (Ski masks and eyewear)
The Case Of The Representative Office
A foreign representative office can be established by a private company (companies, associations) or a state enterprise (local communities, universities, public institutions)
Advantage:
- The presence of a local representative office where the employees quickly introduce your enterprise helps you to establish visibility and garner quick consumer brand recognition from the consumers you are targeting or clients and the main actors in Japan.
Element of control: A representative office has, at a minimum, an expatriate manager and a Japanese employee. The representative office cannot conduct business and its principal objective is to distribute information concerning your activity and strategic monitoring.
Example: Parrot Japan
Your office can be conveniently located in the PMC building, which allows faster development of your activities in Tokyo. Contact us: info@pmcjapan.com
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