Examples of Japan market entry


During this 10 years living in Japan I have seen foreign companies entering and leaving Japan. After a while it becomes really interesting to see how some companies plan their Japan market entry. Although I have seen companies fail that had researched the market in advance, done a lot of planning, but failed in the end; when at the same time some companies seem to jump into the market without much preparation and – promptly fail.
While I have seen Ikea becoming now truly successful, although there were not so promising steps done in the past, I have to say now Ikea seems to have gotten everything lined up perfectly for their success in Japan. They have set up model rooms when Japanese end users struggled to imagine how to create then the same style in the smaller sized Japanese homes. Additionally Ikea is quite frequently found on TV to explain the concept. Although market entry might not be easy, I believe with some preparation and decisions done locally, there is a real possibility to success.
Another recent example of a larger global company seemingly now in the process of planning their market entry into Japan: Best Buy. Have a look at their job description as published on LinkedIN.

Considering that LinkedIn is not yet popular at all in Japan and has so far only about 400,000 members, I wonder why the ad was set up using LinkedIn as a tool. Compare this figure then to the total Japanese working population of about 80 million (based on the date from the website of the Ministry of Internal Affairs and Communication), then I wonder why Best Buy is focusing on LinkedIn. The job description says that they need a Japanese national speaking fluent English. Foreign languages are not really the strength of the average employee. I was not able to find exact figures, but I have heard many times the figure of 5% of the working population can speak fluent English (not considering now what actually fluent means). Calculated this means then a potential target size of about 4 million English-speaking Japanese. But still Best Buy seems to prefer to focus a minor share of the LinkedIn group members to look for the one of the most critical position for the future success: Starting member of the Japan site.
Let me add one question: Considering the strength of local companies like Big Camera, Yodobashi Camera, Yamada Denki and all the others, what competitive edge could Best Buy bring to the Japanese market? I was trying to find one argument, but gave up after 24 hours. I can only wonder if we ever see a Best Buy store actually open in Japan, because I truly cannot see any strategy in their approach.

Brought to you by Sibylle Ito (伊藤シビル)

6 thoughts on “Examples of Japan market entry

  1. I tend to agree with you about this Best Buy marketing attempt to move into Japan. LinkedIn is not even the most popular way of connecting to professionals here in many parts of the U.S. Pinterest seems to have move way out ahead and getting bigger and bigger each day! Best Buy has really taken on a Goliath in trying to “best out” the local Japanese giants you mentioned. I agree!

    • Dear Grenbee,

      I have to say I am surprised that you say US is not so popular in the US. So far I got a sense it is a must to join in the professional world in the US. I know for Europe it is XING, but simply assumed there is more or less every professional in the US is registered with LinkedIn. Thanks for giving me your insights.
      Hmm, let’s wait and see for the action of Best Buy in Japan. Maybe I have a chance to get some good deals for the store opening and then store closure. There is always a bright side, although I am not sure whether there will be a bright side for Best Buy.

      Thanks for all your comments,

      Sibylle

  2. Hi Sybille,

    Best Buy have pulled out of the UK after a short a johriku project there. Their home market is not doing well either, suffering from recession and the shift to online retailing.

    American business being what it is, the senior managers responsible for the Japan project will profit handsomely, and change companies.

    They might enjoy a Best Buy boom in the first year (novelty sells), but the established ‘big box’ stores will have large enough war chests to win the battle.

    • Dear Michael,

      thanks for your news about Best Buy having already pulled out of UK. I know the US market for Best Buy must be bad, because everytime I go into the same Best Buy there are less customers. Last time on a weekend there were less then 5 potential customers at a larger site including me!
      Yes, you might be right someone might profit quite a bit for having this clever idea to approach the Japanese market 😦
      How low can you go on price? You still have to consider the costs. Best Buy is from the beginning disadvantaged, because their total number of goods heading to Japan is for sure lower than compared to the local competition. I don’t know whether I should admire or cry for the person coming up with the Japan market development plan.

      Let’s wait and see,

      Sibylle

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