Marketing strategy to reach the Japanese online market and to establish Japanese internet presence

For the most successful marketing strategy to penetrate Japanese market, it is essential to know unique Japanese market structure, distribution system, their behavior to do business, and especially for the online marketing, the characteristics of Japanese consumer, and to watch quickly changing market sequence all the time to correctly forecast the future situation , and to establish well localized marketing strategy.

Japanese market structure:
Conventionally, retailers consist of department stores, super markets, convenience stores, specialty shops and small private retailers' shops, and manufacturers and importers supply to wholesalers and the wholesalers supply to retailers.
Currently, consumers' demand is concentrating to the merchandise priced highest or lowest. This is called "Two extreme end phenomenon". This trend yielded "Super mall" and "100 Yen shop" as a successful new concept of retailer. "Super mall" is like a spacious theme park with amusement facilities and beautifully designed shops, and shoppers enjoy their shopping in gorgeous and relaxing mood.
On the other hand, 100 Yen shops are expanding their size and variety of merchandise. Their motto is "Demolishing of current price" and 85 Yen shops have appeared already.
These trends have come from current Japanese economical situation of "Low-consumption and high savings society" caused by their anxiety for the future life and their characteristics.

It is reported that currently, average Japanese people are saving more than 10% from their income.

Click on Japanese Consumer page for more information about Japanese consumer.

As explained in this page, they tend to save money buying the most inexpensive merchandise for daily consumption and, when they buy the consumer durables for their appealing of status etc., they tend to buy the highest priced from their savings.

Distribution system in Japan:
Basically, manufacturers or importers deliver to wholesalers at the price of 40-50% of retail price. The wholesalers deliver to retailers at the price of 65-70% of retail price. Therefore, the cost of manufacturers or importers should be less than 30% of retail price. Currently, the movement of doing direct business between manufacturers or importers and retailers are expanding for creation of competitive retail price.

Japanese behavior to do business:
Many corporate systems are structured for cooperative employee performance. An employee submits an application for approval, for such things as a new project, a new plan, purchasing or even business trip (called "Ringisho") to the chief who passes it along to a higher level where it is again passed up the chain of command. If the application is approved, it is sent to accounting section, and then to purchasing where the order is placed. In this way, responsibility is shared by many people. It takes very long time and this system seems very inefficient however, once the decision is made, the subject is performed in whole enterprise scale as a company mission.

Click on Characteristics of Japanese People page for more information.

Japanese consumer:
Japanese people have their own unique characteristics, considerably different from, sometimes contrary to, that of Westerners. Consequently, Japanese consumers have their unique buying behavior, buying motive, their preference on merchandise and taste on design etc. Therefore, the marketing strategy to penetrate Japanese market should be localized to this Japanese characteristics.

Current rapidly changing market sequence:
Current Japanese market sequence is rapidly changing. The sales of department stores and super markets are declining with no effective countermeasure. However, they are making effort to improve their system. It is important to watch what their future strategy will be.
As explained in the above, Japanese market situation is rapidly changing. "The super mall" and 100 Yen shop have appeared as a successful new concept of the retailer in current situation of "Two extreme end" consumer demand. A coffee shop has quickly grown forming franchise system with its particular policy. It is important to watch all over the market as current market situation has much possibility to yield new prospective business.

Localization:
As stated in the above, market structure, distribution system, Japanese behavior to do business are considerably different from that of western countries, it is very important to localize the marketing strategy, especially it is essential for online shops to localize web site and shopping follow-up.

Please refer to Localization page for more information.