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Noriyuki MatsudaFounder and CEOSourcenext
Japan is a notoriously difficult market for foreign brands to crack. And potential entrants would be wise to look beyond translation services when seeking to tap the country’s $3 trillion consumer market, according to Noriyuki Matsuda, founder and CEO of software company Sourcenext. eMarketer’s David Green spoke with Matsuda about the biggest and most basic mistakes many companies make when entering Japan.
eMarketer: What are some of the primary considerations overseas brands should think about when localizing in Japan?
Noriyuki Matsuda: Translation is mandatory, but product name is also very important. Sometimes we change the name of a product, an app or even a movie title. For example, Disney changed the name of “Frozen” to “Anna and the Queen of the Snow” because the English name doesn’t mean anything to the Japanese.
Package design matters, too. Sometimes it’s too Americanized. In Japan, retail stores still generate lots of revenues. To sell at retail stores, packaging and product name are really important.
Last is price. Japan’s commodity prices have not changed for the past 25 years, and companies need to account for that.
eMarketer: What kinds of design changes might be needed to appeal to conusmers in Japan?
Matsuda: In Japan, people like bright colors such as red, yellow and green. When Americans see the website of [Japan-based ecommerce giant] Rakuten, they’re very surprised that there are so many bright colors and tiny letters. When we bring US products over to Japan, we usually design them to be brighter, shrink the text size and include a lot more sales points for the product.
eMarketer: What are the most common mistakes brands make when they come to Japan?
Matsuda: Everybody thinks translation is everything, but not doing the translation well enough is a basic mistake. Usually foreign brands don’t do anything with packaging, and that’s a huge mistake.
To get into retail markets, they should also have the right partners. Retail shops are the key for success, and overseas companies never understand their importance.
eMarketer: That’s surprising. In Japan, retail shops are still essential for driving sales and brand awareness?
Matsuda: Yes, they’re very important. The electronics retail shop market size is $85 billion, but Amazon gets only $10 billion. The reason for that is there are so many older people who need help. If they buy from Amazon, they don’t get any help. But if they buy in a retail shop, they get free help from store staff. It goes beyond what you see in a Best Buy in the US.
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