When overseas companies want to enter the Japanese market, they usually start out with two options when it comes to handling their business in the Japanese market. One is to hire a local Country manager, and the other is to cooperate with a local enterprise to handle local business ventures. But which of these two options is better or more suitable depending on the company scale? This has been a major point of contention for the many people looking to enter the market. This article will analyze the advantages and disadvantages of these two methods, and inform you regarding the proper way when it comes to choosing the right Japanese Country manager and Japanese Business partner, suitable for readers who are planning on breaking into the Japanese market!
Current status of the Japanese market
Japan is the third largest economy in the world, with more than 117 million Internet users. If you want to develop overseas markets for your products or services, Japan is definitely a market that cannot be ignored.
According to the 2018 survey report by the Japanese Ministry of Economy, Trade, and Industry, there are 3,287 companies under foreign ownership in Japan, among which 43.2% are European companies, 27.4% are Asian companies, and 23.1% are American companies. This percentage has not changed much in recent years. 62.4% of the reasons given by these foreign-owned companies for entering the Japanese market are due to factors such as “Japan’s high-income level and a large number of customers for goods and services”. At the same time, 57.6% of the companies believe that the biggest hurdle to growth in Japan is “Difficulty in finding exceptional personnel suitable for the task. “(Source: Ministry of Economy, Trade, and Industry)
Breaking into the Japanese market has never been easy. Apart from the language barrier, cultural differences have also proven to be a major gap. Content that is applicable in other countries may not work properly in Japan when translated from its original language. Therefore, local personnel will inevitably be required to assist in tasks such as marketing businesses when starting out. Many companies will directly hire local managers to form a local team. Companies can also choose to find cooperation partners for assistance if on a relatively tighter initial budget.
The pros and cons of hiring a Japanese Country Manager V.S. cooperating with a Local Digital Marketing Firm
Cooperation with local internet marketing firms is a suitable option for companies with a tighter initial budget who have just entered the Japanese market. Because the time investment required to establish relationships with cooperation partners is relatively shorter, the results can be obtained within a faster time frame. In contrast, reviews and selections for hiring local managers will require a relatively lengthier time frame, making it more suitable for companies that have already established a stable market in Japan.
- Cooperation with local internet marketing firms
Pros: Will only require payment according to the tasked item, allowing rapid deployment marketing for market testing
Cons: may run into language or cultural barriers with the Japanese cooperation partners
- Hiring a Japanese Country manager
Pros: In the long run, you can build your own marketing team and expand the market scale.
Cons: requires an upkeep cost, finding exceptional personnel suitable for the task may take a considerable amount of time initially.
How to pick a suitable Japanese Country manager?
There are a few common mistakes overseas companies need to be aware of when hiring Japanese managers.
- Over-reliance on recruitment agencies and executive searches
Overconfidence in the candidates provided by executive searches may result in a lack of the following investigations.
2. Insufficient interview time
It takes at least two hours to conduct a proper face-to-face interview. You may also want to invite potential candidates to dine together in order to discuss each other’s ideas and goals in a more casual setting.
3. Insufficient background checks on business management experience and skills
Building a team in Japan will require experienced business management skills. It is vital for you to check whether or not your candidate has a relevant background. Sadly this aspect is often overlooked.
4. Omitting investigations of the candidate’s business and private connections
Being well connected is an integral part to becoming a country manager. When interviewing, please check whether or not the candidate has a certain amount of connections within the industry. Having this layer of relationships will not only help your business develop without a hitch in Japan, it also demonstrates that the candidate maintains a confidential and friendly relationship with others within the industry and is worthy of trust.
It is indeed quite difficult for you to find a Japanese manager 100% suited to your company, but as long as you avoid the above mistakes and check to see if your candidates possess the following traits required of an excellent Japanese manager, you can ensure that your Japanese Country manager will contribute to the success of your business in Japan.
- Understand the difference in workplace culture between Japan and the company’s country of origin
- Can communicate in fluent English with the headquarters team
- Work initiative
- Has access to deep business and private connection resources
- Ability to establish product roadmaps and marketing strategies
- Ability to conduct business, marketing, and training
- Ability to identify and solve problems
- Ability to lead the team
The time and money required to find a suitable Japanese manager and building a team is quite considerable. We recommend that you find a local cooperation partner in order to quickly gain a foothold when first entering the Japanese market, before establishing your own team and expanding the market scale once you are familiar with the Japanese market.
How to pick a suitable cooperation partner?
There are several options when it comes to picking a cooperation partner that can help you break into the Japanese market, including local internet marketing firms, agents, or wholesalers. Besides making sure that you can communicate properly with your cooperation partners, it is imperative to know whether or not the other party understands your country’s culture and can help with eliminating the differences in workplace culture between the two countries. Furthermore, make sure that your cooperation partners understand your corporate values and goals, to better you assist in your rapid growth in the Japanese market.
One of the biggest advantages in choosing to cooperate with local companies is that you can use their connections to expand your own business in Japan through cooperation. If you choose to cooperate with a larger company, the company will possess relatively deeper connections but the cost of market testing will also be relatively higher, thus it is preferable if you could find a small but experienced local internet marketing firm such as Cakutama, which possess over a decade of practical SEO experience in Tokyo along with a multitude of cooperation experiences when it comes to overseas customers, to assist in internet marketing in order to help you get a feel for the actual test market results when first entering the Japanese market.
In order to quickly break into the Japanese market, it is recommended that you cooperate with local internet marketing firms for the best value. However, once the scale of your company starts to gradually expand locally, hiring local managers to build a team will become an invaluable option. Whether you choose to cooperate with a local company or hire a manager to build a team, you can refer to the common mistakes and the methods provided in this article when it comes to hiring managers and selecting cooperation partners. I hope this information can help those who are planning on entering the Japanese market. If you have any questions regarding marketing in the Japanese market, please feel free to contact us!