Top 7 Challenges of Doing Business in Japan

Challenges of Doing Business in Japan

The Japanese economy is one of the most successful in the world. Today, Japanese culture continues to shape our world and influence all of us. As the world’s third-largest economy, Japan is the world’s second-largest importer and exporter.

While there are many different ways to start a business in Japan, it’s important to understand that the country is unique. As a result, many challenges come with being a foreign business owner in Japan.

Here are 7 of the top challenges of doing business in Japan

Japan’s Unique Culture and Customs

When doing business in Japan, you are always at risk of forgetting how different Japanese customs are. So even if you’re used to doing certain things one way at your home or workplace, you may need to learn another method while working in Japan.

Here are some common examples of ways Westerners have difficulty when it comes to understanding Japanese customs.

More abstract concepts such as privacy, honesty, reliability, and tradition (in personal life as well as business) must be explained in terms that both foreigners and natives can understand.

For instance, where we view these as personal issues, they see them as challenges or problems to overcome as a team. And so must translate this concept into their context.

Likewise, questions others do not feel compelled to ask include inquiries about personal life.

Just stating a name and expecting the person to know it is generally considered weird in Japan. Names are personal attributes, and each individual has one and then the more important part of the name is the family name and not the first name, and there is a depth in that. It’s not about individuality but the team or the family and traditions. In most of the mega Japanese corporations, the concept of working for life still stays good in Japan.

People also tend to hold back information regarding their names because it is considered rude and pushy coming from an outsider. It makes people uncomfortable.

However, it’s best to avoid asking questions that can be interpreted as probing for medical details or personal things, i.e., what is your birthdate?

Work-life balance

There’s a reason Japanese business is more productive than their American counterparts. Research shows that employees in Japan work an average of 60 hours per week, compared to only 48 hours working among Americans.

That extra 12 minutes every hour almost always makes a difference in productivity.

And while many companies have put in place policies to encourage workers to take breaks during their shifts, it rarely happens.

Consumption is still very important for Japanese businessmen, but they understand that production is also crucial to success.

They realize that if they want to succeed, they need both producers and consumers. The idea that a person can be successful without either has probably never occurred to them.

This concept is new to the United States, which means that many people don’t consider this issue until later in life. Nevertheless, having independence is something people value here.

For example, most Americans believe that since they work so hard, they deserve a lifestyle where they work less. However, the truth is just the opposite. Most Asian countries devote too much time to producing things and not enough to spend with family or enjoy life.

More often than not, money and happiness talk right back to each other. People do not spend enough time living what they love because they assume that way will lead to pain.

However, no matter how much you enjoy doing something, overdoing it will cause pain.

Dealing with bureaucracy

Dealing with government agencies is a necessary part of doing business in any country, but it can be especially frustrating when you are already operating within the bounds of the law. However, there are methods to deal with bureaucracies.

Most situations can be handled by putting simple paperwork into the right channels. However, when things become too complex, it may be time to speak with your bureaucratic ally about how they can improve their system or whether they can help you solve your problems.

You can also try talking with your political supporter and other friends who value your contract. Let them know that all systems must be stopped until this problem is resolved.

If nothing changes, then maybe it’s time to change your relationship with this company. Keep networks of businesses aware of your situation so you can move more quickly if something opens up.

Finding talented people

In many cases, startups struggle to find employees who are willing and able to work with them. A large part of this comes from language differences.

Since most Japanese employers use recruitment agencies that help customers find jobs, there’s very little knowledge of how to recruit someone inside the company.

In addition, due to cultural differences, Japanese workers prefer to be given clear goals and instructions instead of being told what to do. This can make it difficult for companies to identify talent in an employee.

Another challenge is that some departments within companies seem to lack leadership. For example, nobody will look out for market trends if no one is responsible for marketing.

This is why some companies have combined functions such as sales and development into single individuals who both perform each function.

If are you an English-speaking tech talent looking for a job in Japan? Or would your company like to hire someone who speaks Japanese and can work with clients onsite in any country worldwide? Need more information about how this exciting opportunity works, visit EmploymentJapan.com.

Getting customers

Customer satisfaction is very important in Japan. If you want to succeed in business, then you need to understand this culture first.

Your customer base will increase if you provide good quality products and services at fair prices with fast delivery. People love shopping from businesses that treat them well.

You also have to keep in mind that internet sales are still growing in Japan, so there are a lot of opportunities for overseas companies to take advantage of that market.

Handling customer complaints

In any country, the business loses customers when they are not satisfied with their service. However, there is no official way to complain about a company’s services in Japan. There is “soft complaining,” which can be done by email or speaking in private, but there is no public portal through which everyone can join.

Some companies created online complaint forums as a way to connect with other people who were complaining about the same product/service. But these were rarely monitored, and when they were, the comments would usually be deleted for being inappropriate.

As a result, most businesses have learned how to resolve complaints quickly and quietly without making an issue too big. Many simply ignore problems that unhappy customers bring them at one time or another.

This can backfire and greatly affect your business if someone else has a problem with your service or item. When this happens, you will lose both new customers and repeat business.

To avoid this, think about why you want to take on this challenge before you do anything. And take steps to resolve the concern quickly and properly.

Protecting your brand

Despite its well-known reputation for being direct and to the point, doing business in Japan can be very different from how we do it back home.

For one thing, there are no words like “protection” or “brand” here. But you still want to protect your company and its name, right?

Well, there are many ways to protect your brand, but they all boil down to two things: registration and advertising.

Registration means that you get to use your product name and put it up on shop fronts to attract customers. You also need to make sure that nobody is using the same name as yours (even if it’s not a name).

To register a name, you have to pay fees and promise to keep your name active. The validity term of a trademark in Japan is ten years from the registration date.

Final Words

If you’re thinking of starting your own business in Japan, you may have a few challenges on your mind. We’ve listed some of the most common problems that people face when doing business here in Japan. If you’re planning to move to Japan and set up a business, these challenges will no doubt affect your life here. However, if you’re already living in Japan, hopefully, you won’t experience as much trouble.

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