Last updated: 15 Aug 2013
Doing business
Current business situation
Japan is one of Australia’s most important and strategic international business partners with an ever-evolving partnership that extends over 50 years.
With a population of 128 million, Japan is the third largest global economy. The Japanese market is characterised by consumers with high levels of disposable income, and companies with a strong global orientation and willingness to invest in sustainable, long-term products and services.
Japanese buyers are drawn to premium, high-end goods and services offering higher returns on trade investment. Japan has made a name for itself as a nation of quality and innovation, and has staked its future on this value proposition. Along with this comes a strong commitment and loyalty to business partners, once acquired.
The mainstream of the Japanese economy remains cashed up, both in terms of individual savings and liquidity, and in terms of corporate balance sheets. Japan is now faced with the dilemma of how best to utilise its significant assets in uncertain times. Many hope that the early positive results of ‘Abenomics’ (the economic stimulus reforms introduced by Prime Minister Abe’s LDP government) may jolt the country back into growth.
The Japanese are showing resilience and often demonstrate a stronger predilection for change under pressure. Understanding where and how changes will lead to new opportunities for Australia is both a challenge but also a unique window of opportunity.
Business culture
Business etiquette and practices are important in Japan. The Japanese are extremely polite and place importance on respect and social rank. You may be showered with elaborate compliments while your host remains humble and plays down their achievements. Australians who show modesty will be well regarded by Japanese people.
While business meetings during the day can seem to be slow and often skirting key issues, night time drinking and dinners are often the time when more useful information is fed back to you. The Japanese equate being indirect with being polite, so starting a business meeting with ‘small talk’ will help to get the meeting off to a good start. Australians can misunderstand this indirectness and interpret it as indecisiveness or non-commitment from the Japanese side. In these situations, it pays to be patient.
English is not widely spoken in business and government, with some exceptions, such as in trading companies. If a meeting is conducted in English, be sure to speak slowly and clearly, and do not use Australian idiomatic expressions or humour. Meetings in English are rare and an interpreter is generally required.
Punctuality is a must in Japan. It is usual to arrive at a meeting at least five minutes before the appointed time. In the event that you are running late, it is polite to call ahead to advise approximately when you will be arriving. All appointments should be arranged with companies prior to your arrival in Japan.
Partners - it is inappropriate to take friends, spouses, or children to business meetings in Japan. It is also not common for spouses to be invited out for business dinners.
Product brochures and a company profile should be taken with you when you visit a Japanese company for the first time.
Business cards are handled in both hands and laid carefully on the table. You will need to bring at least 100 business cards with you to Japan. Business meetings invariably begin with the exchange of business cards. Don't place the card in your pocket or write on it. If time allows, have your business cards printed with your company name and name in Japanese. Don't have your business address translated to Japanese as this renders it meaningless.
Seating arrangements are used in formal business meetings. The most important guest sits furthest from the door and the host sits closest to the door. If in doubt, wait to be seated or ask where you should sit.
Gifts are not necessary and it is inappropriate to offer expensive gifts, particularly on first meetings. Small gifts, such as company pens, can be presented once business is ready to commence or has commenced. It is generally considered impolite to open gifts in front of the giver.
Resolving conflict – Japanese people also try hard to avoid open conflict and so may answer ambiguously or even agree to an offer that they have no intention of accepting. One productive way of solving this problem is to prepare a brief but clear memo describing the situation and obligations of both parties and present it to the Japanese side as a record of the meeting. This will test the Japanese side’s position on the issue as they will be forced to respond.
Links and resources
Government, business and trade
Japan External Trade Organization - www.jetro.go.jp
Ministry of Economy, Trade and Industry - www.meti.go.jp/english/index.html
Ministry of Finance - www.mof.go.jp/english/index.htm
Ministry of Foreign Affairs - www.mofa.go.jp/index.html
Ministry of Internal Affairs and Communications - www.soumu.go.jp/english/index.html
Australian and New Zealand Chamber of Commerce in Japan - www.anzccj.jp
DFAT Smartraveller - www.smartraveller.gov.au/zw-cgi/view/Advice/Japan
DFAT Japan Information - www.dfat.gov.au/geo/japan/
News and media
Japan Times - www.japantimes.co.jp
Asahi Shimbun - www.asahi.com/english
Japan Today - www.japantoday.com
News on Japan - www.newsonjapan.com
Metropolis - http://metropolis.co.jp
Please note: this list of websites and resources is not definitive. Inclusion in this list does not imply endorsement by Austrade. The information provided is a guide only.