Japan is one of the largest
and most developed
markets globally. PostCovid this important
market is expected torebound significantly. Isn’t
it time you looked moreclosely at Japan?

The
Japanese
ConsumerMarketOpportunities for
ASEAN and Insights for
growing your businessprepared by Weben Partners

Table of Contents
Executive Summary	

3

The Opportunity for ASEAN in Japan

3

Key Success Factors to Succeed in Japan

4

Be an expert; target a niche

4Focus on the consumer

4

Explain Features & Advantages; Sell Benefits

4

Select Sales Channels & Regions

4

Test then Expand

5

Quality of Product, Quality of Service

5

Follow the Export Roadmap

5Japan Overview	

7

The Japanese Consumer	

9

Population by Prefecture9Foreign Population in Japan

11

Japanese Homes & Households

11

Household Saving & Expenditure

12

Inflation

14

Segmenting Japanese consumers

14

General Characteristics of Japanese consumers

16

Shopping Habits

17

Penetration of Major Consumer Products

17Japanese Communications and Media

17

Major Industries	

19

Industrial Manufacturing

19

Agricultural Industries

21

Japan Trade Landscape	24

Retail Channels

24

Drug Store sales mix

26

Foodservice Channels

27

Typical Japan Route-to-Market structure (physical retail)27

Popular EC portals in Japan

28

Popular Consumer Products	

30

Opportunities for ASEAN	

33

Common Features of Japanese Consumer Products

36

Credits

38

2

Executive Summary
The Opportunity for ASEAN in Japan
Trade between Japan and ASEAN members is worth over $168b1 with imports slightly
exceeding exports. Japan’s largest trading partners in ASEAN are Thailand, Vietnam
and Indonesia. Japan is increasingly reliant upon ASEAN for manufacturing, the supplyof raw materials and for consumer goods.
Japanese corporates are more and more sourcing internationally, for example famousbrands like Uniqlo. There is also growing realisation that Japan has been too reliant
upon China as a source of supply, looking forward there will be greater supply
diversification benefiting ASEAN.
As Japan emerges from the Covid-19 pandemic, tourism from ASEAN members is
expected to rebound rapidly. Tourism is a very important source of foreign currency forJapan. There is a desire amongst many Japanese companies, especially those facing
labour shortages, to recruit staff and train managers from ASEAN states.
Unemployment in Japan is less than 3%. These developments have many implications,
one is the dramatic increase in ethnic food restaurants to cater for foreign workers.
There are now hundreds of Vietnamese restaurants in Japan.
The Japanese consumer is changing and becoming more interested to explore ASEAN
products whether they be health, cosmetics or furniture for example.
Historically selling consumer products in Japan meant a reliance upon physical retailchannels but E-commerce has broken this barrier to entry. E-commerce usage grewsignificantly during the pandemic. It is now possible to market and distribute products on
portals like Rakuten and AMAZON Japan without having a physical presence in the
country.
The Japanese consumer has also become addicted to smartphones. Consequently
Apps, software and games that are popular internationally have become much moreprevalent. This presents an opportunity for ASEAN members. It is significant that Japan
Incorporated lacks many of the IT skills commonplace overseas, Japan is more open toimporting and using foreign digital skills, know-how and software.

1 Source Weben research, 2021 date3

Key Success Factors to Succeed in Japan
Building and growing a business in Japan requires focus and dedication. Consumers arefussy and demanding, it is not a market for quick-wins. These tips will improve yourchances of winning in Japan.

Be an expert; target a niche
Japanese society values dedication and expertise, it is willing to pay for this, whether it isthe expert chef who has trained for years or the specialist skin doctor. Brands who focus
on a specific target segment or narrowly defined product portfolio usually experience thegreatest success in the long run. Foreign brands who have succeeded in Japan typicallytarget a specific consumer segment or product category.

Focus on the consumer
In this report we show it’s possible to segment the Japanese consumer not only bydemographics but also by lifestyle and attitudes. Understanding your consumer deeply,
using segmentation techniques, is an important success factor for marketing. Only when
you understand well the needs and barriers of your target audience can you select themost relevant parts of your offer to drive trial. Understanding the consumer has become
more important in the E-commerce era when manufacturers have direct control over themarketing mix and messaging.

Explain Features & Advantages; Sell Benefits
Many manufacturers fail to distinguish adequately between the features, advantages andbenefits of their offer. Features are the physical characteristics of a product, for example
the raw material it’s made from. Advantages are how that raw material is different fromcompetition; however consumers do not ultimately buy a feature or advantage, instead
they buy its benefit. If the product is lighter than competition or it can be stored moreeasily, these benefits are the drivers of consumer sales. Understanding and focusing on
the right product benefits in Japan is critical. Benefits can be functional or they can beemotional.

Select Sales Channels & Regions
Japan is a large country geographically with several major urban centres. Foreigncompanies tend to focus on Tokyo as it is the default first-point-of-call. It is not wrong totarget Tokyo however it is such a large city and complex, it is also more competitive; andcostlier. Likewise many new brands immediately aim to sell in the largest CVS2 chains.

2 Convenience Stores

4

Whilst these aims are laudable, they may not be realistic and may not be sustainable.
Selecting which regions and sales channels is a key strategic decision.

Test then Expand
Whilst developing Japan specific products is not necessarily required, it is true that mostsuccessful foreign products sold in Japan have been adjusted, either in formulation,
packaging or claims. Getting the right product mix takes time and development. Whilst test
marketing, meaning selling in a defined retailer, region or portal, is not widely
acknowledged, many brands follow this approach. Test marketing also allows the brand to
manage its budgets and supply chain.

Quality of Product, Quality of Service
Consumer complaints are a serious matter in Japan and since the market is highly
competitive, viewed negatively by trade customers. This requires manufacturers to beabsolutely sure of their offer before launching. It is not uncommon for foreign brands torepack products in Japan, on one hand it allows the adoption of local packaging; and it
allows a quality audit. Likewise Japan is famous for its consumer service standards andcleanliness. Foreign brands wishing to succeed in Japan need to build a team on the
ground that understands and delivers exemplary customer service.

Follow the Export Roadmap
Japan is a sophisticated and complex market that requires investment in time as much as
resources to conquer it successfully.
We recommend following an export roadmap, like the one below to guide your thinking
and drive your plans.

5Start by assessing the opportunity for your business/category in Japan, using research, toidentify what is the likely size of prize versus your ability to execute.
If you are confident that the market opportunity is attractive, you should define who will be
your target customers, whether they be consumers, shoppers or trade buyers.
The business model you choose, for example establishing your own brand or supplying
private label and how to sell is important. You will also need to think how best to execute
your plans whether that means appointing a distributor or setting up your own operation in
Japan.
It’s important to have a team with experience of international markets, certainly with
supply chain expertise if you are shipping from overseas. 

The Japanese trade is fragmented and there are many channels and intermediaries. In
this report we outline the trade landscape and the major sales channels.

Many exporters assume their distributor or sales partner will manage ‘sell out’ activities.
This can be the case, however we strongly encourage ASEAN companies to engage
deeply in what marketing activities will be most successful in driving trial (penetration)and how to build frequency (loyalty). 

Finally, you should develop a business plan for Japan. The plan serves a number of
purposes: it forces you to think through carefully where you will focus and why; it acts asa check list; and it ensures buy-in from key internal stakeholders.

6Japan Overview
Japan has a population of 125.1 million and GDP per capita of US$39,340. It is one of thelargest consumer markets in Asia-Pacific. For ASEAN businesses looking for new markets
it represents a significant opportunity.
To succeed in Japan there are some key facts reading its size and demographics whichhave important implications for starting a business and then expanding it. APAC3 line4

Key Fact

Implication for ASEAN Companies

Japan has the 11th largest population
globally however it is declining slowly
driven by a low birth rate, limited
immigration and ageing. Almost 30% of the
population are aged 65 and over. Life
expectancy for men is 81 years and 87 forwomen.

Deciding which groups of consumers totarget is critical. For example the market in
Japan for aged/senior products is now
bigger than the market for baby goods.
Given the absolute size and complexity ofJapan it is a mistake to target a wide rangeof consumers, instead those businesses
which succeed usually have a narrow, tighttarget market.

Japan’s GDP/capita is 3x larger thanChina; in APAC³ only 3 countries havegreater GDP/Capita (Singapore, Australia
and Brunei).

Whilst it is true that Japan is a wealthy
country, it is also true that not all Japanese
are wealthy; 16% of the population live
below the poverty line⁴. This means ‘value
for money’ is critical. This has become
especially important in 2022 as the Yen has
depreciated rapidly against the US$ andother currencies resulting in price increases
for many imports.

Japan is located in Northeast Asia andconsists of 6,852 islands, including four
major islands. Most people live in coastal
areas. The climate is temperate with four
distinctive seasons.

Products which are designed for tropicalclimates may not always be appropriate, or
may need to be adjusted, for example
wooden furniture which may crack inJapan’s cold winters.

3 Asia Pacific
4 Source: Weben partners research

7

Key Fact

Implication for ASEAN Companies

There are seven major cities in the country,
and the Tokyo trade area, located almost in
the centre of Japan, is the largest tradearea in the world with a population of 38
million, while the Osaka trade area has apopulation of 19 million.

For most consumer products the greater
Tokyo area accounts for around 40-50%
of sales. However there are significant
business opportunities in other regions
and often these are overlooked byforeign brands. Like most capitals, Tokyo
is typically more competitive than otherregions.

The Japanese Government took very strictmeasures against coronavirus, especiallyborder controls, which have only recently
been eased. Although the vaccination rate
is over 80% the virus remains prevalent.

The COVID-19 epidemic significantly
changed consumer purchasing
behaviour and accelerated online
shopping. In 2021 almost 53 percent ofhouseholds with two or more people inJapan purchased goods or services
online, a record high⁵. 

Japan’s literacy rate is 99% and there is anabundance of broadcast, print and digital
media. Japanese consumers are
information hungry.

Most Japanese consumers do not make‘snap’ buying decisions. They rely
heavily on word-of-mouth
recommendations and often researchcarefully, including reading reviews. For
businesses to succeed it’s important toprovide detailed product information andcompany history in Japanese to build
credibility plus Japanese web and social
media presence.

high5

5 Source: Statistica

8

The Japanese Consumer
Japan is experiencing significant demographic changes. Currently the population is 125
million but is forecast to drop to 119 million by 20306.
Another key point is that the 15-64 age group, the so-called working population, is lessthan half of the total. This has caused a labour shortage. Japan’s unemployment rate iscurrently 2.6%7 one of the lowest in developed economies.

Another significant fact is that there are slightly more men in the lower age range group,
whereas in the elderly, women far exceed men.

Population by Prefecture
The greater Tokyo area, often called Kanto, which includes Tokyo, Saitama, Chiba andKanagawa is the largest conurbation. It is followed by the Kansai region which includes
Osaka, Hyogo, Kyoto and Nara. Aichi, which is where Nagoya is situated, is the third. Most
major Japanese companies have a head office plus several branch offices in other cities
like Fukuoka or Sapporo. Fukuoka in particular has grown fast in recent years driven its
close location to Korea, China and Taiwan, the city’s numerous Universities and its
reasonable cost of living.

6 Source: OECD
7 Source: CEIC

data

9

10

Foreign Population in Japan
Japan’s foreign population has steadily increased and currently exceeds 2.8 million. Three
countries account for the majority of Japan’s foreign population: China (0.78 million),
Vietnam (0.45 million) and Korea (0.43 million). The Vietnamese population in particular
has grown rapidly as many Japanese companies are keen to hire trainees for jobs inJapan and also internationally.
Recently Japan has recognised it lacks the IT skills required to drive its economy.8
Japanese businesses are lobbying the Government to give more visas to IT workers. IT,
software and related services represent a significant business opportunity for ASEAN
firms.
Another consequence of Japan’s foreign population has been the rise of ethnic foodrestaurants. For example there are over 2000 restaurants9 serving Indian food in Japanand over 550 Thai restaurants. These can be found in most regional cities as well as the
major metropolises.
The market for ethnic food10 in Japan was $765 million in 2020 and is growing around
10% per annum, faster than the overall Japanese food market.

Japanese Homes & Households
The number of Japanese households is 57.8 million, which is increasing, contrary to the
population’s decline. There is a growth in single person households plus there are also
more couples who do not have children.
Japanese homes are small by western standards. In Tokyo the average home is 66m²,
however this number obscures a wide range, 1.4 million households live in less than
20m².11 In other cities the living space is slightly larger. On average, however across thecountry, space is at a premium, explaining why small, foldable, easy to store items arehighly valued.

8 Source: JALT call journal 2022 survey: Only 50% of Japanese University students could explain what is a ‘search engine’ with one

third responding ‘I don’t know’
9 Source: Times of India, 2018
10 Indian, Mexican, SE Asian foods, source Fuji Keizai
11 Reuters Japan

11

The urban population exceeds 93% and the home ownership ratio averages 61%.12
Currently 22% of Japanese households have children and the average number of children
per household is 1.68. There has been a continuous rise in the number of working women,around 70% of mothers with children are employed.

Household Saving & Expenditure
In the mid-1970s Japanese household savings exceeded 20% per annum, however sincethen it steadily declined. Just prior to the Covid-19 pandemic it was 2.8%. During the
pandemic savings increased dramatically to 12% driven by Government handouts andreduced expenditure.13

12 Sources: Macrotrends, Statistica
13 Source: Japan Centre for Economic Growth12In the last few years, Japanese household expenditure has eased slightly due to concerns
about future security, and as discussed above the decision to save more during theCovid-19 pandemic. Food is the biggest component of household expenditure followed bytransport and communication. Household expenditure which includes mortgage or rental
payments has remained largely constant.
Household expenditure varies by age group. Seniors have the highest savings but also
spend more on medical care and recreational activities like gardening. They also spend
more on hobbies or self-development and learning. By contrast for young adults housing is
one of the highest components of their expenditure followed by transportation andcommunication expenses. For those in the 30-50s they spend slightly more on eating out.

13

Inflation
For the last decade or more, prices have remained very stable in Japan with very few, ifany, major increases. At the time of writing, there are clear signs this is changing. Japan isa net importer of many raw materials like agricultural commodities and oil. The Ukraine
crisis, the weak Yen and also the rise in international freight costs, have resulted in priceincreases. In 2022 for example the leading beer companies all increased prices as has
McDonalds, twice.

Segmenting Japanese consumers
A deep understanding of the consumer is essential for success in the Japanese market.
Whilst the Japanese are one heterogeneous group, ethnically, this should not be confusedwith believing that all Japanese are the same. In fact the opposite is true.
Cultural differences do exist due to regional, historical, and other influences. For example,
one of the most prominent differences in Japan is between the Kanto region (aroundTokyo) and the Kansai region (Osaka, Kyoto, and Nara), where culture, dialects, foodflavours, and consumer behaviour differ greatly. One example, Natto fermented beans
which are very popular in Tokyo are consumed much less frequently in Kansai.
Besides these differences , there are significant attitudinal and behavioural differences. A
good example is the Japanese attitude to politics and elections. The average turn-out for ageneral election is around 50%, far lower than most other democracies. Amongst those
who vote many do not change their voting habits, ever. This leaves a small minority whochange their voting choices very frequently. In the author’s experience this behaviour ismirrored in many consumer products categories.
Segmentation, the process of grouping and describing consumers, based upon similar
beliefs, attitudes or behavioural characteristics therefore becomes paramount.
The example below is a psychographic segmentation of the Japanese market.14 This
segmentation helps ASEAN companies who to target and how to communicate with thetarget market through on pack messaging and other forms of communication.

14 Source: Abeam consulting

14

Psychographic grouping in general
Group-Peer influenced

Focus on theintentions of others

Innovationoriented
10%

Followers
26%

Focus on your own
beliefs

Pragmatists
16%

Reluctant toself-actualisation

Active inself-realisation
Soft-liners
16%

Inwardlooking
3%
Focus on the inward
world

Stabilityoriented
17%
Skeptical
thinkers
12%

Focus onconservative values

Individualistic

Innovation-oriented (10%): These skew to males 34 years old and above, curious about
many things, uses various media to collect information, often shop at specialty stores
Pragmatists (16%): Many are above 60 years old, have high curiosity, collect information,
proud to be Japanese, quality conscious, enjoy their own time since children became
independent
Followers (26%): More men young to middle ages, the largest group, conscious of both
quality and price, not satisfied with their current life
Stability-oriented (17%): More female and elderly, proud to be Japanese, conservative tomaintain the status quo, quality conscious especially on foods, uses various channels for
shopping, find happiness through relaxation
Soft-liners (16%): Most are above 60 years old, have no particular characteristics, areprice-oriented, use various channels for shopping
Sceptical thinkers (12%): Skew to young and middle-aged females, no specific standard
for value, not much contact with TV and newspapers, low desire for self-improvement andto be valued by others, price-conscious, low level of life satisfaction
Inward-looking (3%): More prevalent in the younger generation, lack desire to berecognised by those around them, and resigned to life, low media engagement, buy things
online.

15

General Characteristics of Japanese consumers
The following are some broad observations of consumer habits in Japan.
Act in groups
Prefer unity (being the same as everyone else) and do not want to stand out
Often use vague phraseology out of consideration for others (to avoid conflict of
opinion)Don’t easily show emotions
They respect manners and rules, and consider punctuality to be a matter of courtesy
Generally have stereotyped images of foreign countries (all Thai food is spicy, allGermans drink beer etc). Note English is not widely spoken and even before thepandemic Japanese had reduced overseas travel
Have a strong preference for well-known brands and manufacturers (security, trust,brand loyalty)
Tend to be disciplined, not willing to get emotional, and value “sameness”. These
characteristics frequently lead to "fads and booms" in consumption

16

Shopping Habits
The majority of Japanese consumers shop for groceries several times a week. There areseveral reasons; homes are small and so storage space is limited. The consumer values‘freshness’ and pays close attention to ‘sell by dates’. As a consequence there is a very
wide range of retail outlets. Most Japanese visit several different retailers for shopping
unlike in the West where shopper loyalty is higher.
Recent surveys have shown the Japanese shopper spends less time in store, and this wasparticularly notable during the pandemic, meaning brands have to fight harder to get good
shelf locations and stand-out.

Penetration of Major Consumer Products
Similar to ASEAN countries, ownership of mobile phones is very high at 96% of the
population.15 Colour TVs are similarly popular. Car ownership is 80% but varies
considerably by prefecture. It is lower in cities like Tokyo due to the extensive public
transport network plus the availability and cost of parking.
Although many Japanese hang washing outside to dry, there has recently been a growth inclothes and bathroom dryers. As mobile phones have become pervasive, the ownershipand popularity of digital cameras has declined. Now less than 60% of households own
one.
Linked to the comment above regarding digital skills, the household penetration of either
tablets or PC is 45% and there are a significant number of households who still have a
facsimile machine (42%).

Japanese Communications and MediaJapan’s literacy rate is 99% and there is an abundance of broadcast, print and digital
media. Japanese consumers are information hungry. Japan has 5 major national
newspapers, Yomiuri (6.86 million copies a day), Asahi (4.3m), Mainichi (1.93m), Sankei(1.03m) and business newspaper Nihon Keizai (1.75m). Other than national papers,
almost 50 general regional papers.

15 Source: Japan Cabinet office survey, 2022

17

It is fair to say that most newspapers have a particular focus or political leaning. The
Yomiuri has a conservative bent whilst, Seikyo which is a Buddhist religious publication
linked to Soka Gakkai, has a strong following. There are also several sports focused
publications, Nikkan sports is one of the most popular, as well as many weekly andregional publications.
Tying up with a newspaper to promote brands is one route to market option for ASEAN
companies. The Asahi Shinbun for example, which is one of Japan’s most popular dailies,
also with a strong online presence, has its own E-commerce channel. Other opportunitiesare ‘free-papers’ like the home-delivered “Living Newspaper” with 6 over million copies
distributed nationwide, or “Town News” with 2 million copies in Tokyo and Kanagawa area.
Many brands targeting housewives link up with these publications.
Given the wide prevalence of smartphones, there is very wide usage of social media inJapan (SNS). LINE is the most popular SNS with 88million MAUs.16There is a slightfemale bias to LINE users and over 50% are office workers. 90% of LINE users are in the
10-50 year age bracket. Besides LINE, Twitter is extremely popular in Japan and is theplatform’s second biggest market globally. Instagram is the third most popular SNS,followed by Facebook. Facebook has an older audience demographic in Japan.17

16 Source: Softbank. MAU=Monthly average users
17 Source: BigBeatInc

18

Major Industries
Japan has long enjoyed the reputation for its exports, in 2020 its trading surplus exceeded
US$5.86b. Recently due to the weak Yen Japan has recorded a trade deficit, driven by theoil price.
There are over 186,000 manufacturing establishments in Japan and manufacturingaccounts for 20% of Japanese GDP.18 For ASEAN businesses understanding what are
Japan’s major industries by prefecture is important to identify business and supply
opportunities.

Industrial Manufacturing
The table below summarises the major manufacturing industries by prefecture including
the names of relevant corporations. Share19
Prefecture

Major Industries

Hokkaido

Foods, Oil products, Iron and Metal products, Newsprint (25% domestic share¹⁹, thelargest single plant in the world)

AomoriFoods, Nonferrous metal, Electronics device, Stocking (Atsugi factory)

Iwate

Foods, Transportation vehicle, Electronics device, Lacquerware (70% share), Charcoal

MiyagiFoods, Electronics device, Ink-stone (90% share), Frozen seafoods

Akita

Prism, Camera (Nikon factory), Lacquerware

Yamagata

Electronics device, Foods, Slippers (25% share)

Fukushima

Medical products, Electronics device, Automobile parts, Kitchen table (23% share, Cleanup factory), Machine-made yarn

IbarakiMetal products, Foods, Plastic products, Crude medicine (40% share, Tsumura factory)

Tochigi

Automobile parts, Electronics device, Camera lens, Medical products,

Gunma

Automobile, Electric products, Foods, Ballpoint pen, Amusement (recreational) equipment

Saitama

Automobile, Chemical products, Medical products, Lens

Chiba

Oil products, Chemical products, Iron & Metal, Soy sauce, Snap button, Electric bed

Tokyo

Publication, Airplane engine, Electronics device, Leather goods, Fishing equipment

Kanagawa

Automobile & parts, Electrical machinery, Oil products, Chemical products

Niigata

Foods, Chemical products, Electronics device, Western-style dining utensils, Rice cracker

ToyamaMedicine, Fastener (YKK), Aluminium sash, Copper products

18 Source: World Bank
19 The share numbers indicate % share of Japanese domestic production, unless stated otherwise

19Ishikawa

Construction machinery, Foods, Gold leaf (99% share), Metal foil, Lacquerware

Fukui

Textile, Production machinery, Eyewear, Japanese paper

Yamanashi

Production machinery, Electronics device, Gemstones and precious metals, Wine, NecktieNagano
Gifu

Electronics products, Production machinery, Sawing machine, Car audio, Guitar, Ski andskate goods
Automobile parts, Production machinery, Cutlery & knife, Tile, Ceramic food and drink
ware, Apparel, Furniture

Shizuoka

Electrical products, Music instruments (YAMAHA), Paper & pulp products

Aichi

Automobile & parts (TOYOTA), Iron and steel, Production machinery, Wool, Fabric

Mie
Shiga
Kyoto
Osaka
Hyogo
Nara
Wakayama
Tottori
Shimane
Okayama
Hiroshima
Yamaguchi
Tokushima
KagawaEhime
Kochi
Fukuoka
Saga

Automobile, LCD panel, Candles, Locks and keys, Vending machines, Cultured pearls(Mikimoto)
Automobile, LCD panel, Candles, Locks and keys, Vending machines, Cultured pearls(Mikimoto)
Automobile parts, Foods, Gold and silver thread, Crape, Fan, Neckties, Ready-madekimonos
Chemical products, Iron & Metal, Electrical products, Medical products, Carpet, Thermos,
Towel, Whisky and brandy (Suntory), Toothpick
Iron & Metal, Chemical products, Electrical products, Hand-pulled saws, Rubber footwear
and goods, Sake, Abacus, Confectionery
Electronics device, Machinery, Textile manufacturing, Forestry, Copy machine, Socks,
Tights,Iron & Metal, Oil products, Chemical products, Knitting machine, Photographic equipment,
Alcohol
Electronics device, Foods, Electric machine, Calligraphy paper, Leather sports shoe,
Electric ironTelecommunication machines, Iron & Metal, Electronics device, Laptop computer (Fujitsu),
All-cotton yarn
Transportation machinery²⁰, Iron & Metal, Chemical products, School uniforms, Denim
jeans, Floral mat, Work clothes
Transportation machinery, Iron & Metal, Production machinery, Brushes (80% share), File,Safe, Chest of drawers
Chemical products, Transportation machinery, Oil products, Synthetic rubber, White
marble (80% share)
Chemical products, Electronic machinery, Electronics device, Religious furniture, LED(60% global share)
Oil & Charcoal products, Foods, Chemical products, Leather glove (90% share), Frozen
cooked food, Fans
Nonferrous metals, Pulp & Paper products, Towels
Foods, Production machinery, Pulp & Paper, Ceramics, soil and stone, Wooden steering
wheel for cars
Transportation machinery, Foods, Iron & Metal, Chest of drawers, Lantern, Ready-madekimono and sashes
Foods, Electronics device, Ceramic food and drink vessels and ornaments (Arita, Imari,Karatsu ware)

NagasakiFoods, Ceramic, Iron & Metal, Cultured pearl, Shipbuilding

Kumamoto

Production & Transportation machinery, Foods, Rice grass, Tatami mats

Oita

Transportation machinery, Iron & Metal, Digital camera (Canon factory)

MiyazakiFoods, Electronics device, Vascular catheter, Medical products, Broiler

Kagoshima

Foods, Electronics device, Ceramic, Formula feed

Okinawa

Foods, Oil products, Raw and brown sugar

20Machinery20
In terms of industrial production, the Chubu (around Nagoya) and Kanto (around Tokyo)
regions have the highest output, followed by the Kansai (around Osaka) region.
The automobile, electrical equipment and machine tooling industries are the main sectors
in these regions. Aichi Prefecture is the biggest. This is due to the headquarter locationand plants of Toyota Motor Corporation, and there are many supplying auto parts factories
in the surrounding area. Second is Kanagawa Prefecture, the home of Nissan Motor
Company, and third is Shizuoka Prefecture, where Yamaha, a manufacturer of musicalinstruments, motorcycles and motorboats, is a major producer.

Agricultural Industries
It is important to note that Japan has a substantial agriculture, fishing and aquacultureindustrial base too. These are summarised below.
This list also reveals the types of fruits and produce popular in Japan.

Prefecture

Agricultural Industries

Hokkaido

Dairy products, Potato, Onion, Wheat, Red bean

AomoriApple, Burdock, Garlic, Squid

Iwate

Seaweed, Abalone, Soybean, Lacquer

Miyagi

Paprika, Shark fin, Beef tongue, Oyster

Akita

Rice, Japanese sakeYamagata

Cherry, Pear, Bracken, Peach

Fukushima

Natto soybeans, Peach, French bean

IbarakiMelon, Chinese cabbage, Chestnut, Mackerel

Tochigi

Strawberry, Gourd, Barley

Gunma

Cabbage, Konnyaku, Cucumber

Saitama

Japanese mustard spinach, Spinach

Chiba

Radish, Spinach, Peanut

Tokyo

Radish, Japanese mustard spinach

Kanagawa

Cabbage, Radish, White gourd, Beef, Tuna

Niigata

Rice, Fish cake, Mushroom, Tulip

ToyamaRice, Leek, Radish, Tulip, Yellowtail amberjack, Firefly squid

20 Railway, trucks and other work vehicles

21

Ishikawa

Rice, Watermelon, Radish, Puffer fish

Fukui

Plum, Melon, Japanese Spanish mackerel

Yamanashi

Grapes, Peach, Watercress, Mineral water

NaganoLettuce, Apple, Bean paste

Gifu

Beef, Rice, Wood ear mushroom, Persimmon

ShizuokaTuna, Bonito, Eel, Japanese tea, Melon

Aichi

Shiso, Quail egg, White gourd, Clam,

Mie

Decorative plant, Japanese tea, Lobster, Sardines

Shiga

Turnip, Cabbage, Chinese cabbage, Ayu fish

Kyoto

Kyoto vegetables, Shimeji mushroom, Japanese tea,

Osaka

Cabbage, Garland chrysanthemum, Aubergine, Shirasu fish

Hyogo

Rice, Black soybean, Shirasu fish, Firefly squid

Nara

Persimmon, Strawberry, Flowers, Cedar

Wakayama

Persimmon, Plum, Hassaku orange, Navel orange, Mandarin, Fig, Japanese pepper

Tottori20th century pears, Watermelon, Sardines, Crabs,

ShimaneGrape, Melon, Yellowtail, Clams, Crabs, Horse mackerels, Sardines

OkayamaGrapes, Peach, Garlic chive, Mushroom, Sand lance

Hiroshima

Arrowhead, Mushroom, Lemon, Farmed oyster

Yamaguchi

Rice, Live blowfish shipments, Prawns, Sea bream, Monkfish

Tokushima

Shiitake mushrooms, Sudachi, Cauliflower, Lotus root, Cultured ayu fish

KagawaOlives, Garlic, Shimeji mushroom, Udon noodles

Ehime

Iyokan orange, Mandarin oranges, Kiwifruit, Cultured sea bream and pearl

Kochi

Aubergine, Chives, Root ginger, Bonito

Fukuoka

Bamboo shoot, Walleye pollack roe

Saga

Farmed soft-shell turtle, Farmed seaweed

NagasakiLoquat, Horse mackerel, Mackerel, Sea bream

Kumamoto

Watermelon, Tomato, Summer oranges, Melons

Oita

Dried shiitake mushrooms, Kabosu, Ginkgo, Shochu

Miyazaki

Cucumber, Kumquat, Broiler, Bell pepper

Kagoshima

Sweet potato, Peas, Pork, Broiler, Lily (bulb), Shochu

Okinawa

Pineapple, Sugarcane, Bitter gourd

Japan has limited land for farming and its agricultural industry has been protected byGovernment policies. That said, there are certain agricultural and aquaculture commodities
which are imported in large volumes, presenting opportunities for ASEAN firms. Whilst rice22

is grown widely across Japan, it imports over $500 million21 mainly from the USA, followedby Thailand and then China. Pineapples are very popular in Japan and besides Okinawa
cannot be grown in Japan; the Philippines exports over $125 million annually to Japan.
Japan imports over 1.9 million tons of fresh and dry fruits annually.
Fish is a very substantial part of the Japanese diet and per capita consumption of seafood
is high, domestic supply only accounts for around 60% of volume. Salmon from Norway
and Chile is common as are prawns and shrimp from ASEAN. Indonesian exports of prawn
to Japan exceed $250 million whilst Vietnamese exports are over $300 million. There isalso a substantial market in Japan for added value prawn derivatives like chitosan,
especially in health foods and supplements.
Besides these products, other significant agricultural import opportunities for ASEAN
include fresh and processed chicken and frozen vegetables (Thailand has a significant
share currently) and natural rubber (Indonesia and Thailand are No 1 and No 2
respectively). In addition there are substantial imports of coffee beans, cashew nuts driedbeans and cacao.

21 Source: Comtrade, 2021 statistics

23

Japan Trade LandscapeJapan’s trade landscape is fragmented as there are a wider range of channels and morecustomers than in most other developed markets. As a general rule most retail customers
are chain groups requiring negotiations at a head office level. It is important to note thatmost chains have regional strengths; not all chains are national. This has important
implications for finding and working with a sales partner, agent or distributor who has wide
enough coverage capabilities. Online sales are growing steadily however online’s sharevaries dramatically by product category.
The table below summarises the key sales channels and the implications for ASEAN
companies.

Retail Channels
Shopping Channel

Key Fact

Implication for ASEAN

Supermarkets (SM)and General
Merchandise stores(GMS)

There are over
19,500 GMS &SM

In urban areas the average
shopper lives within walking
distance of 5-7 supermarkets.
Brands need to expand distribution
to win visibility/awareness. There
are over 70 chains, Aeon is thelargestConvenience stores(CVS)

There are over
56,000 CVS andtypically used for
top-up purchase

Urban & office staff may visit a
CVS several times a day. CVS are
critical for creating awareness of
new brands. Gaining listings in
CVS is challenging, co-developing
products for a specific chain may
be an easier option

Drug stores

There are over
17,500 stores.
Increasingly they
are promoting
food and healthsupplements

Brands have more latitude for instore marketing in this channel
than CVS or SM. Note Drug stores
have a relatively low priced image
amongst shoppers

24

CostcoAlthough Costco
has less than 30
stores in Japan
its sales volumes
are huge. It is a
top 10 retailer inJapan

Most Costco shoppers are houseowners (i.e. have more space).
Average basket spend >JPY30k($200). Some foreign brands incheese, wine and chocolate havedone enormously well in Costco

Import specialists

These include
Seijou Ishii, Ikari,
Kaldi andseveral others

This channel is an obvious startpoint for ASEAN brands. Importspecialists sell a wide range of
ASEAN food products. Note most
shoppers visit this channel 1-2x amonth only

Department stores

A key channel
for imported
brands including
fashion. There
are over 190
stores in Japan

Department stores are physicallylarger than import specialists andsome chains allow brands to build
shop-in-shop which is a form ofexperiential marketing

Electrical

A key channel
for homeappliances withover 2,600
storesThe physical space in these storesis quite large and it’s possible tobuild strong in store displays. UK
company Dyson has been very
active in this channel.

Home Centre

A key channel
for garden andhomeaccessories aswell as pet
products. There
are over 4,200
home centres.

Many overseas brands overlook
this channel as these outlets tend
to be in the suburbs. They havehigh traffic flow and parking which
is important if your products arebulky. Large home centre chain
Cainz has recently acquired Tokyu
Hands which merchandises a wide
range of International household,fashion and style items.

Car Accessory

This channel has
grown asJapanese are
keeping cars forlonger (8 years
on average) than
before. There
are over 1300
storesForeign cars and accessories
enjoy a strong and premium image
and besides regular car dealers it
is an important channel for tyres,cleaning equipment and othergoods. Autobacs is the largest car
accessory retailer and is alsopresent in several ASEAN markets

25100 Yen shops

There are over
8,500 outlets inJapan

This channel sells a wide variety
from clothing, stationery,
housewares to food. One of thelargest chains is Daiso. Much of
the merchandise is imported andleading chains work directly with
suppliers to reduce costs, it is alarge business opportunity for
ASEAN firms

Furniture

There are over
6,000 furniture &household goods
stores. This
channel was
declining but inthe last few
years it’srecovered by
Nitori (Sales JPY
811 billion) andMuji.

Japan is a significant importer offurniture for homes and offices.
Wooden furniture occupies thelargest share. Besides China,
Thailand, Vietnam, Malaysia, thePhilippines and Indonesia export
substantial quantities of furniture to
Japan.

E-commerceThis channel
now accounts foraround 12% ofsales in Japan²²,
though in somecategories (e.g.
electrical) it ismuch higher

E-commerce can broadly be
segmented into marketplaces (e.g.
AMAZON, Rakuten), Bricks nclicks E-commerce (e.g. Aeon,
Yodobashi) and personal shopping(e.g. Uber Eats)

Japan22

Drug Store sales mix
Japanese drug stores sell a very diverse range of products presenting a significant
opportunity for ASEAN. These include prescription drugs, OTC medicines, beauty
products, healthcare and baby foods, toiletry and pet products. Recently many drug storechanges have broadened their human food offering to include rice, processed and frozen
food, dairy products as well as confectionery.

22 Source: Government Commercial Vital Statistics 2021

26

Foodservice Channels
Japan’s foodservice industry is substantial and it is estimated there are over 1.4million
outlets.23 The industry suffered significantly in the pandemic as tourism came to a standstill and many employees worked from home. As Covid restrictions are eased thefoodservice industry is expected to rebound strongly.
Foodservice is an opportunity for ASEAN brands, especially those selling cooking
ingredients, seasonings as well as cookery utensils. Japanese pubs (Izakaya) many ofwhich are chains, feature a wide menu which changes regularly. These chains are always
looking for new menu items and dishes to entice and attract patrons. Likewise there areextensive numbers of hotels including all the major international brands. These hotels
often employ foreign staff and serve a wide range of international cuisines.
The other substantial foodservice channel are Quick Service Restaurants (QSRs).
MacDonalds is one of the largest. There are many bakery and donut chains. For example
Mister Donuts is popular and the franchise is owned by a Japanese company. For ASEAN
firms with a strong foodservice reputation, QSRs offer a significant business opportunityand have a very high profile with the consumer.

Typical Japan Route-to-Market structure (physical retail)Historically speaking working with a retailer in Japan has required the involvement of awholesaler partner and often a trading house too.
Japan’s retail landscape is complicated by two key factors, the first is that retail space islimited with little storage space at the store level; and second there are cross shareholding
links between many retailers, wholesalers and trading houses (Shosha).
This arrangement has meant that manufacturers require multiple contact points to get
products listed, namely a wholesaler and sometimes a Shosha. It also means the flow ofmoney involves several parties, each taking margin. Managing these trade spends iscomplicated and often hard to track.
Shosha are typically involved in the bulk purchasing of goods, management of tradereceivables and financing. They can also take equity stakes in businesses, especiallybrands wishing to enter the Japanese market.
The diagram below illustrates this flow of goods and of money. In some cases, especiallyoutside of the major cities there may be several layers of wholesaler.
23 Source: Japan Food Service Association27

Trade system / structure for Consumer Goods
Manufacturer (with direct presence in Japan) / Importer

Shosha/Trading house
1st level Wholesaler
Directsales

2nd level Wholesaler

3rd level Wholesaler

Off line Retailer

Shopper / Consumer

Onlineproduct flowmoney flow

Source: Weben Partners Research

On top of this, many international brands without their own physical presence in Japan
have appointed a specialist importer who then sells to the above wholesalers and retailers.
These layers have made the cost of some imported products very high.
Direct trading, meaning selling directly to a retailer without any middle man, which istypical internationally has been slowly adopted in Japan. Some retailers have challenged
this concept recently, namely 100 yen shops, Costco and to some extent Aeon. Direct
trading is likely to grow driven by cost pressure, especially as the Yen remains weak.

Popular EC portals in Japan
E-commerce has increased the opportunity for foreign brands in Japan as it usually avoids
using selling through trading houses and wholesalers. As described above the retaillandscape is complex and requires significant investment in sales resources to enter. Ecommerce avoids many of these challenges.
It is possible to sell on a Japanese EC site without having a physical presence in Japan.
AMAZON for example allows vendors to list their products provided they have an importer28

of record24 and the vendor pays listing fees. That said it requires the vendor to manage themarketing, advertising and promotion themselves, in Japanese, which may not always bepractical.

EC SiteImplication for ASEAN firms

RakutenRakuten is a marketplace and has varied business divisions
including Books, Golf, Fashion, Dream, Beauty, Delivery,
Rakuten 24 (Direct), Auto, Rakuma, Rebates and Seiyu
Netsuper. It has over 54,000 shops on its portal.

Costs to open a store at Rakuten Ichiba: Initial fee of 60,000
yen, a monthly fee of 50,000 yen (20,000-100,000 yen on
average, depending on the usage fee), a sales commission of
2-4.5% of monthly sales, and other fees.

AMAZONJapan

AMAZON entered the Japanese market by selling books online
but has since become the go-to-destination for basic
necessities and consumer electronics. 

Selling costs on AMAZON Japan vary according to whether
you have a professional versus individual plan. AMAZON also
charges for holding stock and referral fees.

Yahoo
Shopping

Yahoo is the 3rd most popular EC site in Japan and hosts
872,000 stores. Yahoo charges affiliate partner commissions,
campaign and store point funding.

Other popular
EC sites inJapan

Besides the above there are many others. For electronic
products Yodobashi, Bic Camera, Joshin and Yamada Denki’s
online sites are popular. For fashion products Zozo is thelargest online platform with over 1500 stores selling 8,500
brands.

24 A company which ensures all the product’s legal declarations are compliant, also handles import paperwork but does not necessarily

take physical title to the stock29

Popular Consumer Products
There are literally thousands of new products launched every year in Japan. New
products tend to be launched in either the spring or autumn, although in CVS and DrugStores product rotation is more frequent. Retailers like new products as they are a driverof store traffic, as does the media. Japan has a wide variety of chat shows featuringgroups of celebrities and new products and fads are commonly featured.
The success rate of most new products is ironically limited, many leave the market
within weeks of launch. However, every year there are new products which create amajor impact. The examples listed below were all featured in the Nikkei Marketing
Journal in 2022 and cover a cross-section to illustrate different consumer needs anddesires.

Product

Summary

Consumer Target

Yakult Y1000

Y1000 is a probiotic drink
marketed by Yakult. The productis said to relieve stress andimprove sleep. Japanese
consumers are extremely healthconscious and take a proactive
approach to health management.

Office workers,
especially middle
aged females

Non-alcohol or
low alcohol
beverages

There are an increasing numberof Japanese who are concerned
about alcohol and its healthimpact. The market for nonalcoholic beverages in the country
is estimated to have expanded
more than four times comparedwith that of ten years ago.²⁵ Non

Young adults, bothmale and female

alcoholic beers are marketed by
all of Japan’s major brewers.

30

Electric kickboards (bikes)

Kick-boards’ popularity has
surged as the Japanese
government ruled no driving
licence is required and they canalso be ridden on pavements.

Young males

P&G Joy upside
down bottleThis bottle features a patented
no-flip cap technology whichallows it to stand on its cap anddispense from the bottom with aself-sealing valve that protects
against leaks.

Japanesehousewives.
Generally speaking
householdcleanliness is highand since space islimited, items which
drip can be messy

Retort Pavilion

Ready to cook foods like pastas
and sauces are ubiquitous in
Japanese supermarkets.
Preparing them requires either
boiling or a microwave. The
Retort Pavilion is like a toaster,when the food is ready it can beremoved by hand.

Busy people whowant a quick meal at
home

Maru-chanZUBAAAN!

Although these are instantnoodles they have the firm textureof matured noodles despite being
dry. They are made by Toyo
Suisan.

Families with primaryschool children

31

Shiseido's Ihada
Medicated Face
Protect PowderThis product protects the skinfrom UV rays, pollen and otherfacial blemishes. Sales were
three times higher than planned,
and the product experienced
several stock-outs.

Females as well as
acne sufferers

Laboratory growndiamonds

These are artificially createddiamonds which mimic mined,
natural diamonds. Lab diamonds
have become popular due to their
low cost and sustainability appeal.
Matsuya department store andwell-known jewellery shop 4°C
are selling under these their own
brand.

Women who likejewellery but do nothave the budget for
natural diamonds

Men’s lace boxers

This are marketed by Wacoal
which is well known for making
bras. These lace boxer shorts
combine breathability, fit and beauty.

Men in their 30s-40s
wanting close fitting
underwear

Fruit vinegar
drinksThis brand is from CJ Foods in
Korea and in the space of just 2
years has gained listing in almost
every major supermarket. The
brand name translates as ‘beauty
vinegar’. Korean dramas, foodand cosmetics enjoy a strong,
although niche, following inJapan.

Health conscious
women and men

10 year ago25

25 Source: Vino-Joy

32

Opportunities for ASEAN
What are the most promising business opportunities in Japan? In the list below, we’ve
outlined 10 areas for ASEAN SMEs that wish to enter the consumer market.

Opportunity

Rationale

Key Requirements

1

Health foods forexample herbal
teas from Laosand Myanmar

The health foodmarket in Japan isworth over $6b. The
Japanesegovernment isencouraging ‘self
prevention.’

Health foods that target a
specific health condition orailment. There is a market in
Japan for traditional Chinese
medicine and there isconsumer interest in natural
health remedies fromoverseas for example Indian
Ayurveda. Luxury Singapore
tea brand TVG has recently
become popular in Tokyo.

2

Cosmetics

This category is
worth over $40b andwhilst is
predominantly
female focused
there are more men
buying personal
beauty products

Proven success in the homemarket in terms of efficacy
and popularity. Natural andpreservative free concepts
tend to be more popular.

3

Ethnic Foods forexample Laosticky rice or
Cambodia’s
Choy sum soup

Ethnic foods from
Chicken Rice to
Mexican are widely
available in Japan.
Brands like Lee
Kum Kee have astrong following. 

The ethnic foodopportunity also
includesaccessories like
cookware.

A hero product or format;
products which can becooked easily and simply;
ideally endorsed by chefs orother opinion leaders

33

4

Halal

Although Japan is
not a Muslim
country, there is
growing recognitionof the need for Halal
foods as tourism is
expected to reboundstrongly postpandemic

Most Japanese consumer
goods companies do notreally understand Halal, muchless the production
requirements or certification
processes. Endorsement of arecognised Halal body like
Malaysia’s Jakim.

5

Private Brands

Although private
label is not as big inJapan compared to
the West, mostsupermarkets havea private label
offering. Many
private label
products are
sourced fromoverseas. Aeon, 7&I
Holdings and Daiso
are potential
customers.

Experience in developing andsupplying private brands tomajor retailers.

6

Household andOffice goods

China sells large
quantities of officeand household
goods to Japan.
Recently many
Japanesecompanies arelooking for
supplementary
supply sources forexample from
Vietnam or
Thailand.

Space efficient products
which can be used in multiple
ways. Easily foldable, items
that don’t break or crack forexample during Japan’searthquakes or typhoons.

34

7

Software andApps

Since smartphone
usage is very high,most consumers
know the App store(Apple/Google) or
use LINE linked Ecommerce sites.

The most popular Apps inJapan are Messaging, Social
networking, Video and
Games

8

Animé

Anime is worth
around US$24b²⁶
annually to theJapanese economy

Recently non-Japanesecharacters have become
more popular including Sonny
Boy and Akira Agarkar
Yamada9

Old age products

As Japan’s
population ages andlives longer there isa requirement forfoods and devices toimprove the lives
and care of theelderly.

Products which are designed
for elderly use, for example
packaging which be read by
the colour blind. Endorsementof a well-known hospital or
medical body isadvantageous.

10

Pet products

Around 20% ofJapanesehouseholds have apet. Cats haverecently become
more popular thandogs

The majority of pet food andpet products sold in Japan
are imported. SE Asia
supplies a lot of fish based
products; most Japanesebelieve that fish should be themain part of a cat’s diet.

US$24b26

26 Source: JagranTV

35

Common Features of Japanese Consumer Products
Consumer Feature

Implication for ASEAN Companies

Corporate vs product brand

Clarify the roles of your corporate (company)
versus product brand, and decide which brand topromote, taking into account the future expansionof the product range. At first it’s advisable tochoose only one brand, as establishing a brandrequires a large investment of resources.
Promoting several brands could cause confusion.

For small and medium-sized companies entering
the Japanese market for the first time, it may bebetter to focus on the product brand, unless thecompany name is well known. Unifying the
product brand name with the company brand canalso be effective, especially if you areconcentrating on a particular product brand.

Obviously you should check and register yourtrademarks in advance.

Japanese language
packaging

Legally it is a requirement to have key information
like declarations, legal descriptions, ingredientsand company address in Japanese. Note mostJapanese cannot read English well either, nor
pronounce foreign names easily

Usage occasion and how/when to use instructions onpack

It is very important to educate the consumer onwhen & how to use your product or their usage ofit may be very limited (e.g. coffee can only be
drunk in the morning, cereals are only forbreakfast etc)

Product visuals or seethrough packaging

For new brands, consumers want to see what is
inside. This is why designing a pack that eithershows the inside or has clear visuals of thecontents is very important

Free phone number/callcentreMost brands in Japan have a free dial (0120-)number where a trained operator will answer
questions36

Easy open & recyclable

Japanese packaging is designed to be easy toopen, most packs have ‘open here’ notifications.
Also recycling rules in Japan are stricter thanmany countries so products like glass are lesspopular.

Display outers to fit
Japanese shelves

Some retail channels allow very little in store
shopper marketing activity. It may be possible tocircumvent these restrictions using display outers

37

Credits
Cover photo by Erik Eastman on Unsplash
Page 6 photo by Scott Graham on Unsplash
Page 8 photo by JJ Ying and Louie Martinez on Unsplash
Page 16 photos by PoChun Yang and Jérémy Stenuiton on Unsplash
Page 21 photo by Paul Einerhand, Helga Christina, and Ryo Yoshitake on Unsplash
Page 29 photo by Linh Nguyen on Unsplash
Page 33 scooter photo from Sankei Digital
Page 37 photo by Jérémy Stenuit on Unsplash
Credits photos by Victoriano Izquierdo, Lan Pham, David Clode, and Rokas Skeivys on
Unsplash38