This autumn, an influx of foreign rugby goers will head to Japan, most with very little experience of this nation that has become a haven for rugby fans in recent years. The result will be a diverse mix of Japanese and non-Japanese fans, as well as mainstream Japanese consumers who make up this area rightly referred to as the ‘Galapagos’ of markets.
Brands landing in Japan have a unique opportunity and entrance into this market. While it is opening up, the Japanese market has often seemed isolated. As culture experts, we urge businesses to ensure that their brand strategy coincides with the macro trends already forging their way through Japan.
Brands that are able to do this gain recognition, familiarity and closeness with Japanese consumers, who above all require trust in their brands; and need to see that their peers also trust them. This is partly why trends have such an ability to dominate Japan – the recent bubble tea boom is a great example of this.
Tapping into Japanese trends as a non-Japanese brand
One thing to be cautious of is the idea that a global trend will necessarily resonate in Japan.
For example, sustainability and reduction of usage of plastics is a key trend worldwide – but this has not yet become mainstream in Japan. In terms of clean energy and pollution, companies do aim to pursue more sustainable practices. For individual consumers, however, topics like ethical eating have not yet taken root. Rather, different diets, such as going vegan or gluten-free, are looked at with curiosity and some interest, but little attachment to consumer values.
Therefore, it is important to understand what trends are strong within Japan, and how brands can tap into these to tell their own brand stories. I set forth a selection of current macro trends below:
1) Work-life balance
Japanese work culture is notorious for its long hours and lifetime employment. Graduates enter their new jobs generally knowing they will be at that company for life, and promotions tend to be based on age and loyalty to the company. With this comes a high dose of security – and for the company, it ideally creates efficiency; people are often rotated around departments and become generalists rather than specialists. There are also downsides, such as intense pressure to fit in with the group, a lack of choice, a good deal of heavy drinking with colleagues to solidify relationships, and also very structured gender roles.
This is all changing however, as we see the topic of the ‘new working style’ (atarashii hatarikata) become popular in Japan. For the last year, Tokyoesque has observed a marked increase in the number of Japanese clients travelling overseas to better understand how to promote flexibility in the workplace. They are interested in companies like WeWork and the rise of the coworking space; wellness in the workplace; and female empowerment in business.
Take a look at this ad to see how some Japanese corporates are taking advantage of this trend to show their support for women in the workplace.
Rugby and the Olympics form part of a trend in Japan towards becoming more global. One of the main causes is awareness of a crisis. The Japanese population is reducing at one of the fastest rates in the world with forecasts estimating its population, which stood at 127 million in 2015, will fall to 99 million by 2053.
Because of this, most people in Japan agree that two things need to happen: first, Japan needs to prevent as much market shrinkage as possible by bringing in new talent to cover new roles – both by encouraging more mothers to return to work and by recruiting migrant workers. This in itself has already had an impact on Japan. It is now increasingly common, especially in Tokyo, to stay at hotels or visit shops manned by staff who speak Japanese as a second language, something that was rare even just ten years ago. This is having an effect on the capital that is reminiscent of London’s history.
Second, Japan needs to think externally, by encouraging as much export as possible. Japanese SMEs – which constitute over 99% of all Japanese businesses – are overwhelmingly domestic-only. The Japanese market was deemed a large enough piece of the pie for many years, but with a shrinking market comes a need to seek business outside their borders. The problem? A lack of cultural and language skills make it difficult to globalise. Hence, there comes a push from the Japanese government to put English language into school curriculums from an earlier age.
A number of Japanese companies are even mandating that English be a required language at work - which some construe as PR play-making companies appear globalisation-friendly. Whether or not this will be effective is yet to be seen.
3) Startup sector innovation
With events like Tokyo 2020, has come a strong push for Japan to display its best colours with technologically advanced products and services. Additionally, mergers and acquisitions are booming, with many Japanese businesses scouring global markets for startup partnerships or acquisitions. Many Japanese businesses now devote entire departments to innovation.
In 2018, 777 overseas M&A deals were struck, the highest ever by Japanese corporations. This means that non-Japanese businesses, including startups, are becoming more embedded in Japan’s ecosystem.
Similarly, Japanese startups are more common, especially in fintech, AI and cybersecurity. We have done extensive research on Japan’s early startup ecosystem and have seen more and more emphasis placed on innovation. The trick? Startup ‘disruption’ is not so common in Japan. Startups tend to succeed more when they learn how to work with Japanese corporates, rather than looking to massively change systems and infrastructure.
Look at the example of Line, Japan’s most-used messaging app, and its forays with innovative technology partners. Line recently started working with Nagasaki-based startup Saikai Creative, which uses AI technology to enrich the messaging experience by transcribing images to text.
Another example is the upcoming film Startup Girls – about a pair of female founders. The Japanese film taps into two trends at once.
Thinking in terms of Japan’s Rugby World Cup legacy
The legacy of the Rugby World Cup can indeed focus on the short-term impact of next year’s Tokyo 2020 Olympics & Paralympics, which will bring even more sports fans to Japan.
In the medium and long-term, however, there is more to Japan than its recent blitz of major events. As a trend-setter in the wider APAC region, success in Japan can promise wider success throughout the region. Companies should consider how to take part in Japan’s quest toward globalization.
Today’s Japan is not Japan of the past; a shrinking population has made it a priority to reconnect, broaden horizons abroad and create more opportunities for global business. If a brand can align with these incoming changes to the Japan market, there will be a wealth of opportunity.