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Doing Business in Japan

WHAT DO YOU NEED TO KNOW BEFORE ENTERING THE JAPANESE MARKET?

BY MITCH TOMIZAWA

2Map of Japan

3Cherry blossoms nowstarting late March every year

New business starts in April. Spring starts with cherry blossom

New academic year start in April.

New graduates start working for companies and government

Individual income tax returns due March

Many Japanese listed companies close its fiscal year at end of March

On April 1, people still take things seriously.

4Tokyo Metropolitan train

systemMost convenient and punctual in city life

5Tokyo subway system

They say 179 stations exist

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Japan Country Statistics

Name: Official name of the country is JAPAN

As united small islands of 6,852, of which people lives

only on 437 islands (6.7%) with no residents in the remaining 6,415 islands.

Population: 126 MM (rapidly aging population)

100 years ago the Japanese population was around 30 million. It grew by four times to the peak of 127,840,0000 in 2004. It is estimated to return to the level of 100 years ago in 2100.

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GDP Comparison

Ranking: 1. US 16,244.58 (@US$1 bil) 2013 figures (nominal)

2. China 8,221.02 　 (1/2 is investment)

3. Japan 5,960.27 * (60% is individual consumption)

*Equal to the sum of India, Aus. Korea, Indonesia and Taiwan. Additionally

25,263 Japanese companies doing business in 136 countries employing over 5MM staff.

4. Germany 3,429.52

5. France 2,613.94

6. UK 2,476.67

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Two business approaches

1. Do business with Japanese customers in Japan

Products- price sensitive (cheap)/insensitive (expensive)

Volume driven/ quality driven

Over 3000 international companies doing business in Japan

TPP negotiation will influence company strategy significantly especially for price elastic products.

2. Do business with J companies globally.

take advantage of local opportunities to start business with J companies.

J expats most appreciate local invaluable business support, and never forgets.

In both cases, find the right and most qualified Japanese leader for your new operation. You need to select the right person for the job, or nothing happens.

9Statistics: I Companies in Japan

2,875 I companies

employing 510,000 staffFROM WHERE #employed

From Europe 44% 270,547

From US 27%210,042

From Asia 22% 29,993

OWNERSHIP:

100% ownership69%

50%<X<100% 17%

50% 6%

1/3<X<50% 7%

INDUSTRY: 

Wholesaler43.5%

Manufacturing17.7%

Services12.7%

ICT10.1%

Financial 4.6%

Retail 4.2%

10# of J companies active offshore(more than 25, 000 companies)

# of J companies and Name of Country where J companies have operations

6,091 (24%) -------- China 2,276 (13%) ------ US

1,853 (7%) ------- Thailand 1,220 (5%) ------ Hong Kong

1,111(4%) ----- Singapore 989 (4%) -----Taiwan

862 (3%) ----- Indonesia 847 (3%) -----UK

829 (3%) ----- Malaysia 815 (3%) -----Korea

11Top 5 countries where J companies started operation in 2009 – 2012(est.)

2009 2010 2011 2012(est.)

1.China China China China

2.US India India Indonesia

3.Vietnam US Thailand Thailand

4.Thailand Thailand US US

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You should know first

Japan Business groups:

Japanese business is still along the so called relationship driven business. It will take a bit longer than you might imagine but once established it will last long based on trust between parties.

Toyota: 23 cos with diverse industries; Panasonics: 4;Hitachi: 12;Sony:12;

Seven & I group: 23;NTT group: 10;Mitsui: 25;Sumitomo: 34;Mitsubishi: 39

Group companies share information to strengthen business ties.

JETRO (Japan External Trade Organization) can help.

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Epilogue JAPAN AND NOW

14You know where you are heading for before riding on it.