• Australia
• Chile
• China
• India
• Japan
• Mexico
• Russia
• South Africa
• South Korea
• Spain
• United Kingdom

International Resources: Global Market Profile: Japan

As part of its commitment to providing its members with market analysis and insight, PMA has compiled the following information about Japan from Attaché Reports submitted by the U.S. Department of Agriculture’s Foreign Agricultural Service, as well as the CIA World Factbook, embassy sites, and business etiquette reference guides.

Entering the Japanese Market

For most new-to-market exporters, the first contact will often be in written form. Potential distributors (and possibly end-users) will usually expect to receive a cover letter, specifying your intentions together with the usual product literature. In addition, it is often customary to provide a company profile which may include general information on the nature and corporate history of the exporter. The company profile may include information such as the year founded, number of employees, annual revenues, business philosophy, target markets, major customers, names of senior executives, main bank, paid-in-capital, etc. It is also customary to provide a fax or e-mail outlining what is to be discussed prior to the engagement.

Where possible, it is often best to obtain introductions to potential business contacts from reputable third parties. Third parties may include private individuals, firms, organizations, and even public sector agencies and trade associations with whom the business contact may have had a pre-existing relationship. So-called cold-calling is almost unheard of within Japanese business culture; however, some westerners have been known to achieve some success with this technique.

Business hours in Japan are from 9:00 a.m. until 5:30 p.m. but many Japanese business people return to work following dinner until around 9:00 p.m. Avoid scheduling meetings during holidays, because almost everything shuts down in Japan. Major Japanese holiday and business break periods include: the New Year holiday (approximately December 28 through January 7); Golden Week, a combination of national holidays (April 29 - May 5); Obon, an ancestor respect period lasting for about one week in mid-August during which many companies close and business people take vacations.

Japanese society is still very male-oriented. Females should be aware that conducting business might be more difficult due to this tradition.

Saving face for both themselves and their counterparts is extremely important to the Japanese. It is Japanese custom to not say “no,” because many feel it is embarrassing or an insult. There are many techniques used in order not to insult others. These tactics include ignoring requests, stating the request will be extremely difficult, claiming it to be inconvenient or under consideration, or following a response with a hissing sound made by sucking air between their teeth, etc. Japanese will never do anything to intentionally cause one to lose face. The action of saving face should be reciprocal. You should try to never openly criticize, insult, or put anyone on the spot.

Understand that the absence of an upper-level Japanese business person at your first few meetings is not uncommon nor considered rude. The role of the higher levels of Japanese business is much different that in Western cultures. They are often there to maintain unity and spirit of the wa (the circle which is essentially the working community). It is important to establish good relations with everyone within a business from the junior-level to the upper management. 

Gift giving is expected on many business occasions in Japan. Gifts must be given at the initial meeting and mid-year (around July 15) and at year end (January 1). Regional U.S. gifts or company logo gifts are appropriate. Quality is important, but the gift does not have to be expensive. The packaging of the gift is as important as the gift itself and should be done professionally, pastel colors are often used for wrapping. In Japan, sets of four are considered unlucky (the number 4 is pronounced the same as the word for death). You should try to give gifts in odd numbers, but not 9. Gifts that can be shared among a group are appropriate. You should avoid gifts that relate to funerals, such as lilies, potted plants (although bonsai is acceptable), lotus blossoms, camellias, or white flowers of any kind. Small cakes or good chocolates are much appreciated. Other good gifts include imported scotch or cognac or name-brand items. Do not be offended if your gift is not opened upon receiving, it is common to open it later.

Major fresh fruit commodities exported to Japan from the U.S. are: cherries, melons, grapefruit, oranges, and lemons. The Philippines is the largest fresh fruit exporter to Japan, but its exports are more tropical like guava, bananas, and pineapple. New Zealand, Mexico, South Africa, and Thailand are all important fruit exporters to Japan.

In the case of vegetables, China, the European Union, and the United States are the top exporters to Japan. Japan’s major fresh vegetable imports are: mushrooms, leeks, broccoli, radishes, peas, garlic, onions, and asparagus. Japan is considered one of the top five import markets for fresh vegetables.  

Currently agriculture counts for 1.6% of Japan’s GDP and 4.6% of the country’s labor.

Doing Business in the Japanese Market

Japanese business people, no matter how Western they may appear, do not always approach business relations in the same way as Americans or Europeans. First impressions are important. Some differences are simply due to the language barrier; others are due to differences in deeply held traditions and practices. If you maintain a polite, patient, and professional manner, the likelihood of committing a serious faux pas will be greatly diminished. As non-Japanese, the visiting foreigner is understood to be unfamiliar with the minutiae of Japanese cultural practices and is often granted considerable latitude. To help bridge the gaps:

• Dress professionally and conservatively: men in dark colored suits and women in conservative attire.
• Speak slowly and clearly to every Japanese person, even if you know he or she speaks English. Make sure not to use slang or idioms.
• Use clear-cut, simple words and expressions when writing in English. Use e-mail and fax, rather than telephone, whenever possible.
• Make appointments as far in advance as practical.
• Be on time for all meetings; the Japanese are very punctual. Meetings should start and finish on time.
• Physical contact is not always comfortable. You should wait for your Japanese counterpart to either bow or initiate a handshake, and then reciprocate accordingly.
• At meetings, the senior-most individuals are introduced first. In Japan, the guest/visitor generally is seated facing the door/exit.
• Upon entering a meeting, all coats should be removed and only put back on upon leaving. If you walk around, it is customary to drape your coat over your arm.
• When entering a meeting, the highest level executive should enter first. Then you will be introduced from the highest to lowest ranking executives in the room.
• Following the initial bow or hand shake, business cards are exchanged.
• Carry plenty of business cards (meishi: may-she), normally at least 100 for a one week visit. Present them formally at each new introduction—and be sure they have your personal information in Japanese on the back (preferably phonetically). http://www.japan-guide.com/e/e2227.html
• Expect negotiations to require a number of meetings and probably several trips to reach agreement. Early discussions may appear less fruitful than reality.
• Japanese often give small business deals to evaluate your performance and see if you can meet your commitments. Always remember the Japanese are often looking for long-term business partners.
• Where possible, provide written materials and/or copies of your presentations. During a verbal presentation, it may be advisable to repeat key points for emphasis. If necessary, use the services of a professional or experienced interpreter. Remember, look at the people you are conducting business with, not the interpreter, and interpretation will at least double the amount of time required to deliver your presentation.
• Be prepared for misunderstandings; use tact and patience.
• Do not be concerned with silence or long pauses. While periods of silence during a meeting can be unnerving to a westerner, Japanese business people are usually using the time to ponder a comment, question, or reply.
• Body language and non-verbal communication is still commonplace. Frowning during a presentation often indicates disagreement. Look for facial expressions and body language to indicate the flow of the meeting.
• Japanese will often close their eyes when they want to listen intently.
• Be aware that in Japanese, “Hai,” (yes) may mean, “I understand,” not, “I agree.”
• Using a Japanese lawyer during negotiations indicates a cooperative spirit.
• Using the party that conducted the initial introduction to discuss bad news is a common practice.
• Limit the discussion of business at evening meals, or when drinking with new Japanese counterparts; these occasions are for getting to know one another and building trust, which is very important for your Japanese counterpart.
• When attending a social event or a business meal, do not drink until a toast is offered by your host, or until you are given the invitation to begin.
• Social events normally do not take place at a person’s home. Therefore if you are having dinner, your host will treat. Also allow your host to order for you.
• Many outings will include “hostess bar”, businesswomen should not attend these outings. Suggesting alternatives for future outings is acceptable. Alternatives can include Sumo wrestling or karaoke bars.
• If you are invited to a Japanese counterpart’s home, consider yourself very lucky. Be sure to remove your shoes before entering the home. There will be slippers provided for you to wear. Also, be sure to change slippers for appropriate rooms, such as wearing bathroom slippers in the bathroom.
• Never point your chopsticks, and when not using them, rest them on the provided chopstick rest.
• Gestures often carry very different means. The “O.K.” sign means money in Japan. Shrugging your shoulders or winking; however, means absolutely nothing.
• Pointing is considered impolite. Also, to beckon, face your palm downward.
• Do not blow your nose in public; although, sniffing, snorting, and spitting is allowed. When you do blow your nose, always use a disposable tissue.
• Try to avoid all forms of personal contact, especially between males and females.

Consumer Preferences, Tastes, and Traditions

These ideas may help you focus your product approach. Attention to catering to customer preferences is a key to success in the Japanese produce market. Japanese consumers:

• Are very concerned about food safety and traceability – commonly used terms are “Anzen” and “Anshin” that, respectively, mean “safety” and “peace of mind” regarding safety
• Place great importance on quality—producers that fail to recognize this will not succeed
• Appreciate taste and all of its subtleties—and will pay for it
• Are well-educated and knowledgeable about food and its many variations
• Are highly brand-conscious—a brand with a quality image will sell
• Care a great deal about seasonal foods and freshness—awareness and promotion of these characteristics, where appropriate, can significantly build product sales and value
• Are increasingly health-conscious—(Witness the many television programs about healthy food. When a product's health attributes are highlighted on such a program, it quickly sells out at the supermarkets.)
• “Eat with their eyes” and often view food as art. A food product’s aesthetic appearance—on the shelf, in the package, and on the table—is very important in building consumer acceptance.
• Have small families and homes with minimal storage space; thus, large packages are impractical.
• Japan standards increasingly differ from U.S. standards; consequently, Japanese consumers will expect imports to adhere to Japanese standards, including the Japan Agriculture Standard organic standard.

Again, as in the United States, there are differences in regional food practices, preferences, and tastes. To illustrate, a comparison between the Kanto and Kansai regions is in the chart below.

Export Business Reminders

• Before coming to Japan, use the many sources of information, for example, the U.S. Foreign Agricultural Service, state agricultural offices, state/regional trade organizations, and Japanese External Trade Organization regional offices in the United States.
• Build at least a minimum team within your company to help on the Japan market.
• Limit your number of trading partners, but avoid exclusive agreements with any one company.
• Use metric terms.
• Quote Cost Insurance and Freight (CIF) pricing, unless the importer requests Free on Board (FOB) pricing.
• Ensure that all sales documentation is correct.
• Be patient regarding requests for documentation, ingredients lists, production process, and quality assurance.
• Respond to such requests with diligence and in a timely fashion.
• Use letters of credit to reduce risk.
• Hedge export values with your U.S. bank if you are concerned about exchange rate risk.
• Set up wire transfers for payments.

Further consult – www.fas.usda.gov/gainfiles/200508/146130440.pdf

Food Standards and Regulations

The Japan Food Sanitation Law (also addresses labeling requirements) stipulates food standards and regulations - www.jetro.go.jp.market/regulations/pdf/food2004nove.pdf. Also, visit http://www.ers.usda.gov/Briefing/Japan/issuesandanalysis.htm. Verify all relevant import requriements with your Japanese customers. They will normall have the most current informatiuon on Japanese regulations.

Advantages/Disadvantages to Doing Business in Japan

Information: Import/Export

In 2004:

• All agricultural imports from all countries (millions): $41,747, U.S. market share: 30%.
• Consumer food imports from all countries (millions): $22,386, U.S. market share: 19%.
• Fresh fruit imports from all countries (millions):$1,670, U.S. market share: 31%.
• Fresh vegetable imports from all countries (millions): 958, U.S. market share: 16%.
• Tree nut imports from all countries (millions): 456, U.S. market share: 40%.

The U.S. is the top supplier of consumer-oriented agricultural imports to Japan, China is second, and Australia is third. Note: $2 billion dollars of the $51.3 billion worth of internet transactions conducted yearly in Japan involve the purchase of health food and cosmetics.

U.S. Exports to Japan

*Calendar Year and Year-to-Date Comparison (In Thousands of Dollars)

U.S. Imports from Japan

*Calendar Year and Year-to-Date Comparison (In Thousands of Dollars)

Trade Agreements

Currently the Japan and the United States have no trade agreements. For more information on trade barriers and agreements visit: http://www.ers.usda.gov/Briefing/Japan/trade.htm and http://www.ers.usda.gov/Briefing/Japan/policy.htm

2006 Update to Japan Annual Exporter Guide

http://www.fas.usda.gov/gainfiles/200602/146176867.doc

Information Regarding:
a) market sector structure and trends available on page 15 of the guide
b) retail sector available on page 16 of the guide
c) Important import procedures on page 13-14 of the guide

Japanese Related Links and Resources

Currency - the currency of Japan is the Yen. Use the free currency converter to compare to dollars, British Pounds, etc.

Weather - visit Yahoo!'s up to date Weather for Japan.

News - check out all the latest Google news on Japan.

Intercultural Know-How - use the Intercultural Business Communication tool for tips on doing business in Japan.

Dialing Code - the international dialing code for Japan is +81.

Time -Japan is +9 hours GMT. Find out the current time.

History - read about the long and rich history of Japan.

Government Resources

• Japanese Ministry of Agriculture: http://www.maff.go.jp/eindex.html
• U.S. Embassy and Consulates in Japan: http://tokyo.usembassy.gov/e/info/tinfo-contact.html or  http://usembassy.state.gov/
• Carefully check your food additive admissibility: e.g., preservatives, stabilizers, flavor enhancers. See the Ministry of Health, Labor and Welfare website.
• Also check the Food Sanitation Law carefully for all food safety regulations.
• Background Notes on Japan