Doing business in Japan – Reg Clark

With the Rugby World Cup in Japan in 2019 and the Olympics in Tokyo the following year it’s natural that sports brands and businesses should be looking to that market for opportunities, online and there is every sign that despite the continued sluggishness of the Japanese economy as a whole there is demand in certain product areas prompted by these events which can be exploited.

Rhino recently signed a breakthrough licensing deal for sportswear and leisurewear with Itochu Corporation, therapy one of Japan’s leading general trading companies or ‘sogo shosha’  and the largest in the textile and apparel sector.

What then are the factors which can give rise to success in dealing in this very singular, but very large market?

I have a personal belief that there is a tendency in dealing with the Japanese to focus far too much on what might be called ‘cultural trivia’ –  bowing and name card exchanging etiquette for example.  Whilst the mastering of such esoterica can be useful,  there is no substitute for the sort of sheer common sense and general sensitivity which you would hope to bring to any cross-cultural exchange.  Look your opposite number in the eye, shake their hand firmly but politely,  listen patiently without interrupting unduly.

The routes to market are slightly unusual in Japan and it’s a brave company which attempts to deal directly there as a principal.  Most prominent international brands operate in this market via intermediary trading companies – which don’t exist as such in the UK and Europe – and they come in all shapes and sizes. Choosing your partner if you go down this route is the most important decision you will make.  Consult widely through all channels available to you, including governmental, have as many discussions as you can reasonably manage and don’t hurry the decision.  The Japanese have a decision making process called ‘nemawashi’ (literally, ‘root-binding’  a process which more firmly establishes a plant) –  they won’t proceed with a split decision but keeping talking until a full consensus is achieved.  Don’t be too impatient if it takes longer to ‘seal the deal’ than you would normally expect. It almost always does.

Interpersonal relations go a long way in Japan – the ones which were critical to Rhino’s deal with Itochu go back 35 years.  That is not to say that without that length of association success can’t be achieved, but work hard on personal relationships (business socialising is very important in Japan – it’s helpful if you happen to enjoy that kind of thing) and take a long view of such matters.  Loyalty is a massively important factor in Japanese society – with luck efforts to cultivate relationships can pay off hugely and for a very long time.

Japan has created many sports brands which challenge on the international stage –  ASICS, Mizuno, Uniqlo, Molten, Descente spring to mind – and the challenges of their domestic market are not inconsiderable. Foreign brands in general can on the other hand often have considerable cachet if handled carefully.  It’s all to play for there in the coming years – the climate of opportunity for non-Japanese sporting brands to make strides in this important market has in my opinion never been more propitious.

About the contributor:

Reg Clark is Group CEO of Rhino, the world’s leading supplier of technical equipment for rugby and one of the game’s fastest growing brands.  He recently received a Foreign Minister’s Commendation from the government of Japan for contribution to UK-Japan relations.