Exporting to Japan

Japan is currently the third largest economy in the world with a GDP of $5.18 trillion (IMF, 2019). In the 4 quarters to the end of Q1 2019, UK exports to Japan amounted to £14.6 billion, an increase of 8.5% from the same period the previous year (ONS, 2019). UK brands with a presence in Japan include Lush, Ted Baker, Burberry and Fortnum & Mason. Multinationals like Barclays, GlaxoSmithKline and Rolls-Royce also have a presence.

Stable business environment

Japan is an advanced economy and a stable place for the UK to do business, with strong economic and political ties between the 2 countries. A track record of success at home can be effective here if you are willing to take some steps to adapt to Japanese business culture.

Large consumer market

Japan has a large, rich and highly-educated consumer market who are early adopters of new products and services.

Growth of e-commerce

The e-commerce market in Japan is set to increase by 29% between 2018 and 2022 to be worth $203.90 billion, according to Worldpay’s 2018 Global Payments report.

Ease of doing business

29th

out of 190 countries (World Bank, 2019)

Currency

Japanese yen

Business languages

English is widely spoken in business

GDP per capita

$41,020

UK is $42,560 (IMF, 2018)

Economic growth

0.8%

Time zone

GMT + 9

Opportunities for exporters

There are opportunities for UK companies across a broad range of industries. Our trade advisers in Japan have identified particular opportunities for UK businesses in the following sectors.

Doing business in Japan

Preparing to export

Tax

You can find information on tax in Japan for businesses in JETRO’s guide on taxes in Japan.

Customs

The Japan Customs website introduces the customs system and trade procedures. It also provides links to regional offices.

Standards and technical regulations

Japanese domestic standards often differ from international norms.

The Japanese Standards Association has responsibility for Japanese industrial standards covering a wide range of business areas and topics.

Intellectual property

There are Japanese laws on the registration and protection of IP rights relating to patents, utility models, trademarks and copyright.

Japan’s trademark law offers equal protection for Japanese and foreign nationals. UK companies who want to develop business in Japan can register their trademarks with the Japan Patent Office.

Operating in Japan

Routes to market

The Japanese market is unique, as are its methods of doing business and building client relationships. It’s important to perform thorough research before deciding on a strategy for operation in the market.

Options which may work well for you are:

  • establishing direct relationships over time - doing business in Japan can be profitable, but you’ll find things can move more slowly than Western Europe or the US. Commitment and stability matter. It’s likely to take time to meet with the buyer, receive a first trial order, and when trust has been established, become a supplier. This process can take up to a couple of years, even for local Japanese salespeople.

  • using agents and distributors - as in other overseas markets you can appoint an agent or distributor who can assist with negotiating the difficulties of language and culture.

  • setting up a company - many exporters find that appointing their own manager or setting up a company, rather than using a representative, is a more focussed and successful way to break into this complex market

JETRO (Japan External Trade Organization), the government agency responsible for inward investment, can provide free office space in central Tokyo and several other locations. Whilst Tokyo would seem to be the obvious location, Osaka is an excellent option with lower start up costs.

Business relationships

You will work best with Japanese cultural differences if you:

  • make a long term commitment and do not expect to generate short term results
  • demonstrate your commitment to the market through regular engagement
  • are very information-oriented
  • are not deterred by the bottom up and consensus building decision-making process
  • take trial orders seriously as this is a key element of building relationships
  • build personal relationships

Read the Department for International Trade (DIT) Japan’s business etiquette guide for more details on business behaviour in Japan.

Next steps

DIT can advise you on doing business abroad, and help put you in touch with other people who can help such as lawyers and distributors.