Content - Market Trends

Market Trends

In terms of business opportunities, Japan is probably the most underrated country in the world. Since the 1990s, many Western companies saw China as the country to be and invest in. But many made the experience that it is easier in Japan than in China to make good money because the Japanese have the highest purchasing power in Asia.

With the aging society and the shrinking population, many Japanese companies now look for chances to grow outside of their home market. For this, they need foreign partners. At the same time, the Japan market offers many niches for foreign makers whether it is industry or retail. Start with finding distributor and go from there to establish your own local office or company.  

Key Sectors  

Above all, automotive parts, retail, information technology and telecoms, medical technology, life sciences and environment technology see the strongest future prospects in Japan. The government has created an attractive framework which offers favorable conditions for foreign firms. In depth-surveys are available on the website of the Japan External Trade Organization (JETRO).  

Japan’s population is ageing rapidly. The demographic transformation and the great need for modernization throughout the health sector will create a strongly growing demand for medical equipment, care and health services. Japan is already the largest market for medical technology after the United States.  

Biotechnology is one of the strategic sectors that the Japanese government is actively promoting. Biotechnology is the underlying structure for several industries such as pharmaceuticals, agriculture, chemicals and the environment; and developments in biotechnology exert a powerful influence over a wide spectrum of the economy.  

Mergers and Acquisitions  

Corporate takeovers, mergers and acquisitions are much easier now than in the 1990s. M&A activity in Japan is expected to increase because of the decline in the practice of mutual cross-holdings, increasing deregulation, and a sense of the need for consolidation in all business sectors. Firms are concentrating on their core business and divesting themselves of subsidiaries or parts of firms. Not just book value, but also cash reserves and liquid assets are often higher than the stock market valuation, which makes the target firm vulnerable to takeover followed by breaking up and selling off the business.  

Demanding Customers  

The two most important aspects of business success in Japan are to deliver high quality and a good after sales service. Japanese customers are very choosy but once you have convinced them they show a strong loyalty. This is true for individual retail customers as well as companies buying goods and services from you. If you can deliver what they want, they also accept high prices. That gives you higher margins in Japan than in many other Asian countries.      

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