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An Effective Approach for A Global Tech to Enter and Scale Business in Japan (2)

Here in Nagano, it is getting warmer these days, which is a sign of early spring!
While there is little bright news, looking up at the sky on a clear day will make myself feel a little better:)

Today I will continue to write about the topic from the last time. Last time, I asked my readers the question, “What kind of options do you think global tech companies have when expanding into Japan?”, and listed the following three options for reference:
Option 1) Try to expand first with your own human resources;
Option 2) Appoint a famous person who has great reputation, achievement, and connection in Japan as a country manager/director;
Option 3) Try to sell to a known ad agency/advertiser someone at the tech company had met at an event etc.

Option 1) is definitely the approach I do not recommend to global tech companies. Given the size of Japan’s e-commerce market and the fact that it is one of the most developed developed countries, it seems that there are quite a lot of tech companies interested in entering the Japanese market (in my experience, 7-8 out of 10 companies base the above facts on their interest in our market). However, even if you try with your human resources that lack Japanese business customs and market understanding, it will fail most of the time. This is because there are many differences from other north American or European markets. Even if you ask a market research company to acquire the above knowledge, the probability of success will remain low without this experience of market entry and expansion.

Option 2) is probably one of the most successful approaches for global tech companies. For example, Criteo, one of the most successful companies in expanding into Japan, appointed someone with a high level of knowledge in marketing technology, experience at Overture and Amazon, a wealth of connections, and is familiar with domestic and overseas businesses as the managing director in Japan. The company made accurate personnel selection and necessary initial investment for market entry and expansion. As a result, both marketing and sales had been improved at a high level, and in a short period of time, they have achieved rapid growth in the retargeting display space so it was widely used by the majority of domestic e-commerce companies here in Japan.

On the other hand, in this option, the first selection must be so critical. Establishing a local office in Japan or hiring talented people requires a considerable amount of initial investment. Therefore, it can be said that it is an option that strongly asks how much determination to take on the challenge of entering and expanding the Japanese market.

What about the last option, option 3)? In recent years, the leading Japanese ad agencies and brands have begun to actively participate in events such as CES and DMEXCO to collect information. I think it is natural for global tech companies exhibiting to think about partnering with these participating companies. However, I feel that in many cases they can only expect a success rate that is almost the same as option 1). This is because the overwhelming majority of people end up with “information gathering.” It requires considerable determination, and resources on the part of Japanese companies to support the expansion of such global tech companies entering the Japanese market, which has a completely different language, cultures, and market conditions. Therefore, it is an option that requires negotiations while properly confirming the past achievements of support for entering and expanding the Japanese market.

I think I should explain our approach next time, as I wrote a lot this time:)
I hope it helps you guys even a little.
Stay tuned!

SOPHOLA, Inc
Founder & CEO
Masaki Iino
PS: Yes, I love such sandwiches.