Expanding into Asia? Why Aussie companies shouldn’t overlook Japan

In Australia, producers of high-quality consumer goods from fine wines to pearl jewelry have often sought to export once they have outgrown Australia’s small domestic market. Many have successfully built international markets on the back of Australia’s well-deserved reputation for the safety and purity of production processes and our ‘clean and green’ natural environment.

Over the past decade, there has been much excitement over growing markets in Asia, especially China, for Australian consumer goods. But there are more than a few reasons why now is the time to reconsider Japan, one of our oldest and most prosperous trade partners in the region. This is especially the case for companies seeking to test new markets through e-commerce.

Japanese consumers love premium goods and will pay more for high quality

Japan is one of the wealthiest countries in Asia in both absolute terms and individual spending power. It has been a high-income country much longer than almost all countries in the region, and its population is familiar with high-quality imports and accustomed to paying more for them. More than any other market in Asia, imports can compete on the basis of quality rather than price. It is less likely in Japan than other markets in Asia that local variations of your product will emerge to undercut your product once you have established yourself in the market.

Australian exporters of premium goods are particularly well-placed at the moment to take advantage of a trend in Japan to buy unique products from countries they would have visited if not for COVID-19 travel restrictions. Australia has been a hugely popular destination for Japanese tourists since the 1980s, which has contributed to a strong awareness of many Australian products in the Japanese market.

Japan is a great market to test through e-commerce


In the past five years, the increasing sophistication of e-commerce platforms has led to much greater uptake among consumers and made an e-commerce first expansion strategy much more appealing for exporters seeking to test new markets. Japan is a particularly good market to test through e-commerce for five key reasons.

First, Japan is the second largest e-commerce market in Asia after China, worth 353 trillion Japanese yen (AUD $4.2 trillion) in 2020. Japanese consumers were initially slow to embrace e-commerce because of the value they place on the in-person shopping experience. However, the COVID-19 pandemic has forced a rapid adaption of shopping habits. E-commerce in Japan grew 10.5 percent in 2020, reflecting a new comfort in purchasing online.

The second reason is that the Japanese e-commerce platform Rakuten, which is as popular as Amazon in Japan, is designed to provide a shop-like experience for online customers. As distinct from Amazon, which is more product-centric in the way it presents goods, Rakuten is designed to help you build brand recognition for your product, which is essential for convincing Japanese consumers of the quality of your product and building a loyal customer base.

Third, Japanese consumers enjoy very efficient delivery services. Japan is a highly-urbanised, densely-populated country with excellent infrastructure. Delivery of parcels is faster and more reliable than almost any other market in Asia. Throughout pandemic-related disruptions, Australian exporters have reported that sending goods to Japan has been considerably easier than exporting to bigger markets like the United States.

Fourth, there is a well-developed e-commerce consultancy sector in Japan that has grown up to support exporters to the Japanese market. These companies can assist you across the export process, from managing logistics, customs and distribution to setting up your online stores to managing returns and other post-purchase services.

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Fifth, if you are considering working with distributors in Japan or building partnerships with Japanese importers, testing the market through e-commerce is an inexpensive way of providing proof that a market exists for your offering.

​To succeed in Japan, you need to invest in product customisation and service

In addition to their willingness to pay for distinct, high-quality imported premium goods, Japanese consumers are also very loyal to brands they like. Whilst Australian exporters start in a strong position due to the general reputation for quality that comes with the Australian label, to build a loyal customer base in Japan, you should invest in customising products and high-quality customer service.

Japanese consumers will respond to product designed with their specific needs in mind. Businesses should adapt labelling and ensure all promotional material is in Japanese. Consider hiring a Japanese company to translate your website and ensure its presentation meets the preferences of your specific Japanese audience. High-quality customer service is also essential to building brand loyalty in Japan. Working with e-commerce consultants in Japan can help you ensure that returns and other post-purchase services are handled efficiently.

Getting these essentials right will ensure that testing your product through e-commerce can be the most cost-effective way of entering the Japanese market. It is also the fastest and easiest way to build a strong evidence base for investing further into what remains one of Asia’s largest and most promising markets for high-quality Australian goods.


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