In terms of business opportunities, Japan is probably one of the most underrated country in the world. Since the 1990’s, many Western companies have rather focused on China, making it their priority in Asia in terms of sales and investments. However, many have made the experience that it is in fact much easier to make good money in Japan given that the country still retains the highest purchasing power of all Asian countries.
With the prospects of an aging society and a shrinking population, many Japanese companies are currently seeking for opportunities to grow outside of their home market. For that purpose, they need foreign partners. Simultaneously, the Japanese market also offers many niches for foreign businesses, whether it is industry or retail. Start with finding distributor and go from there to establish your own local office or company!
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 also ageing rapidly. The demographic transformation and the great need for modernization throughout the health sector will create an increased demand for medical equipment, care and health services. Japan is already the largest market for medical technology after the United States of America.
Biotechnology is one of the strategic sectors that the Japanese government is actively promoting. It 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 1990’s. 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.
The two most important aspects of business success in Japan are to deliver high quality and to provide good after sales service. Japanese customers are known to be very choosy, but once you have convinced them they remain strongly loyal. That is true for individual retail customers as well as for companies. If you can deliver precisely what they want, they may also be inclined to pay high prices. Margins in Japan are therefore often higher than in many other Asian countries.