Japanese buyers are drawn to premium, high-end goods and services offering higher returns on trade investment. Japan has made a name for itself as a nation of quality and innovation and has staked its future on this value proposition. Along with this comes a strong commitment and loyalty to business partners, once acquired.
The mainstream of the Japanese economy remains cashed up, both in terms of individual savings and liquidity and in terms of corporate balance sheets. Japan is now faced with the dilemma of how best to utilise its significant assets in uncertain times. Many hope that the early positive results of ‘Abenomics’ (the economic stimulus reforms introduced by Prime Minister Abe’s LDP government) may jolt the country back into growth.
The Japanese are showing resilience and often demonstrate a stronger predilection for change under pressure. Understanding where and how changes will lead to new opportunities for Australia is both a challenge, but also a unique window of opportunity.
Business culture
Business etiquette and practices are important. The Japanese are extremely polite and place importance on respect and social rank. You may be showered with elaborate compliments while your host remains humble and plays down their achievements. Australians who show modesty will be well regarded by Japanese people.
While business meetings during the day can seem to be slow and often skirting key issues, night time drinking and dinners are often the time when more useful information is fed back to you. The Japanese equate being indirect with being polite, so starting a business meeting with ‘small talk’ will help to get the meeting off to a good start. Australians can misunderstand this indirectness and interpret it as indecisiveness or non-commitment from the Japanese side. In these situations, it pays to be patient.
English is not widely spoken in business and government, with some exceptions, such as in trading companies. If a meeting is conducted in English, be sure to speak clearly and avoid Australian idiomatic expressions and jokes. Meetings in English are rare and an interpreter is generally required.
Punctuality is a must and it is usual to arrive at a meeting at least 10 minutes before the appointed time. In the event that you are running late, it is polite to call ahead to advise the approximate time of arrival. All appointments should be arranged with companies prior to your arrival. It is inappropriate to take friends, spouses or children to business meetings and it is also not common for spouses to be invited out for business dinners.
Product brochures and a company profile should be taken with you when you visit a Japanese company for the first time.
Business meetings invariably begin with the exchange of business cards and are given and received in both hands and laid respectfully on the table. Do not obscure business cards with documents on the table, put card away in your pocket or write on it during the meeting. If time allows, have your business cards printed with your name and company name in Japanese, but not your business address as this is meaningless.
Breakfast meetings before 9.00am are not usually possible, although meetings after 5.00pm are more common. Most large companies will not meet on Saturdays but some medium to small sized companies will accept meetings on Saturday, although this should not be taken for granted.
Seating arrangements are used in formal business meetings. The most important guest sits furthest from the door and the host sits closest to the door. If in doubt, wait to be seated or ask where you should sit.
Gifts are not necessary and it is inappropriate to offer expensive gifts, particularly on first meetings. Small gifts, such as company pens, can be presented once business is ready to commence or has commenced. It is generally considered impolite to open gifts in front of the giver.
Japanese people also try hard to avoid open conflict and so may answer ambiguously or even agree to an offer that they have no intention of accepting. One productive way of solving this problem is to prepare a brief, but clear memo describing the situation and obligations of both parties and present it as a record of the meeting. This will test the Japanese side’s position on the issue as they will be forced to respond.
Setting up in Japan
The Japan External Trade Organisation (JETRO) provides an overview of the laws, regulations and procedures related to setting up a business in Japan, as well as an easy-to-follow flowchart outlining the basic steps and a model case which shows approximate start-up costs.
JETRO is a Japanese government-related organisation that works to promote mutual trade and investment between Japan and the rest of the world.
The Australian and New Zealand Chamber of Commerce in Japan (ANZCCJ) is another source of information and contacts for businesses looking to set-up in Japan.
The Tokyo Metropolitan Government’s Business Development Center offers an information service for foreign companies and entrepreneurs who are already operating in or are considering establishment of a business base in Tokyo.
Banking and finance
Japan is a mature market economy with a well-developed and sophisticated banking and financial system. Three mega financial groups – Mitsubishi UFJ (MUFG), Sumitomo Mitsui (SMFG) and Mizuno FG – dominate the banking sector. These financial groups are comprised of retail banking, trust banking, investment banking and asset management related businesses.
There are over 100 major regional banks, with Yokohama, Fukuoka Financial Group, Chiba, Hoku Hoku Financial Group (Hokuriku and Hokkaido) and Shizuoka being the top five regional banks in terms of assets.
Some of the major foreign banks active in the market are:
- ANZ
- Bank of America
- Barclays
- Commonwealth Bank
- Credit Suisse
- Deutsche Bank
- Goldman Sachs
- HSBC
- National Australia Bank
- Societe General.
Other major Japanese financial institutions include general insurance, life insurance, investment banks, asset managers and investment advisors.
