Debunking Preconceived Notions about Entering the Japanese Market: Insights from Business-to-Consumer Companies in the Business-to-Business Sector
In the dynamic world of global business, entering new markets can be a daunting task. However, for brands like Costco and Starbucks, success in both the New York City and Tokyo markets has been achieved through strategic approaches that prioritize trust, adaptation, and discipline.
Rebecca Takada, the Founder of Outfoxr, a company specializing in market expansion, revenue growth, and global business strategy, has guided numerous brands through this process.
One key strategy for foreign brands entering the Japanese market is building trusted local relationships. Canadian agri-food exporter naturSource discovered that establishing direct relationships with Japanese buyers through face-to-face engagement was essential. This approach, which requires understanding the needs of the local market intimately, has proven effective in Japan where buyers tend to respond better to personal interactions.
Another successful strategy is adapting pricing and product selection to the local market. Costco's global success, including in Japan, is partly due to its membership business model, which encourages customer loyalty and predictable revenue. The company also limits the markup on products and offers a carefully chosen selection optimized for cost and volume, making it appealing to value-conscious Japanese customers.
Expanding physical presence gradually is another crucial aspect of Costco's expansion strategy. The company opened a warehouse in Japan alongside others worldwide, allowing them to scale while maintaining quality and margin.
Demonstrating value and exclusivity through membership models has also contributed to Costco's success in Japan. Their model, which offers cash-back rewards and exclusive deals, creates a loyal customer base that appreciates the value proposition. This strategy resonates well in Japan where consumers are willing to pay for quality and exclusivity.
Building partnerships and local support through trade missions and credible introductions is another successful approach. Foreign brands benefit from support from respected partners and trade missions, which help overcome initial trust barriers in Japan's business culture.
Starbucks, although not detailed in the search results, is known for tailoring store designs, menu items, and service styles to Japanese preferences, enhancing local acceptance. This approach, which emphasizes cultural adaptation and sensitivity, is a common successful strategy for foreign brands in Japan.
Success in the Japanese market requires matching hard data with cultural nuance and telling that story consistently. For communications professionals, the mandate is to pressure-test every element against Japanese expectations and craft messages that prove the company has done its homework before the first customer walks through the door.
Starbucks' growth in Japan was fueled by seasonal beverages, partnerships, and its LINE loyalty card with 10 million followers. Netflix, another successful foreign brand, crossed the 10-million-subscriber mark in Japan at the end of 2024, after years of underwriting local anime, dramas, and reality series.
However, not all foreign brands have found success in Japan. Walmart, for instance, spent two decades attempting to graft its everyday-low-price DNA onto the existing mid-market grocer, Seiyu, eventually divesting its last 15% stake in March 2025, marking a full exit from Japan due to margin pressure, brand confusion, and an inability to localize assortment.
B2B brands can learn from the mistakes and successes of B2C brands when entering the Japanese market. They must take these concepts into account in their customer experience efforts and business dealings with Japanese professionals, but localizing to the market requires more than these three concepts.
Omotenashi, Anshin, and Anzen are important concepts in the Japanese culture, representing hospitality, peace of mind, and safety respectively. Brands must incorporate these values into their customer experience to thrive in the Japanese market.
In conclusion, foreign brands like Costco succeed in Japan by combining a strong value and membership-driven business model with patient, ongoing relationship-building, localized adaptation, and a focus on delivering consistent quality and exclusivity. This blend of disciplined operational strategy and cultural engagement forms the cornerstone of success in the Japanese market.
- Rebecca Takada, the founder of Outfoxr, has helped numerous brands, including Costco and Starbucks, to gain success in the Japanese market by emphasizing strategies like establishing trusted local relationships, adapting pricing and product selection, and expanding physical presence gradually.
- Costco's membership business model, which favors customer loyalty and provides cash-back rewards and exclusive deals, has contributed to their success in Japan as it resonates with consumers who are willing to pay for quality and exclusivity.
- For B2B brands entering the Japanese market, learning from the successes and failure of B2C brands, such as Costco, and incorporating the Japanese values of hospitality, peace of mind, and safety (Omotenashi, Anshin, and Anzen) into their customer experience, is crucial for thriving in the Japanese market.
