How can Chinese companies accustomed to making quick money succeed in the Japanese market? | Overseas Market Insights

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Since last year, Nancy, who often travels between China and Japan, has noticed that there are significantly more business people on flights from Shanghai to Tokyo. From Tokyo to Osaka, there are not only a continuous stream of tourists, but also more Chinese enterprises are pouring in.

The changes don't stop there. A few years ago, every time Nancy returned to China from Japan, her suitcase would always be filled with cosmetics and snacks. Now, when going to Japan, she has to remember to bring a few Anker power banks, the latest panoramic camera from Insta360, or a DJI drone. The latest products of these brands are popular "souvenirs" among Japanese friends.

Judging from the actual foreign trade data, in 2023, China's exports to Japan reached $157.52 billion, accounting for nearly 1/4 of Japan's total imports. Japan is also China's second-largest export destination.

If a brand wants to achieve globalization, Japan is an unavoidable "treasure market" - it has long-term potential but extremely high entry barriers. "Chinese enterprises are used to making quick money, so the challenge is not whether the products are good or not, but whether they can be patient and make long-term in-depth efforts. Once they gain a foothold, they can enjoy generous returns for a long time," said Song Yixuan, who studied and worked in Japan for many years and has served as the person in charge of the Japanese market and the director of new retail in Japan for several Chinese companies.

01 Driving Force of Growing Demand: The "Side Effects" of Aging, the Rise of E-commerce, and Economic Recovery

Prime Particle is a cross-border eyewear DTC platform that was launched in the United States and Japan in early 2024. "Initially, our focus was on the United States. There was no DTC brand in the Japanese eyewear industry, and the consumption habits of the Japanese are relatively fixed, so they may not easily accept new things. Especially when buying glasses online, users need to fill in optometry information, and the older group may not be able to complete it." said Sun Jingxuan, the founder of Prime Particle.

However, to his surprise, judging from the actual data, the average customer acquisition cost of online advertising in Japan is lower than that in the United States, and one-third of the sales come from users aged 30 - 60, and this group also has a higher and more stable repurchase rate. Sun Jingxuan said, "Later, we gradually shifted our budget towards Japan. After the Sino-US tariff issue emerged, Japan has become our primary market."

Prime Particle's performance in Japan that exceeded expectations reflects two major characteristics of the Japanese consumer market. Firstly, there is a huge demand gap behind the "silver economy." According to data from the Cabinet Office of Japan, in 2023, the proportion of the population aged 65 and above in Japan reached 29.1%. The large elderly population not only needs to regularly purchase reading glasses but also has a demand for home medical facilities, smart home products, and other age-friendly products. The labor shortage problem caused by the aging population has also given rise to more demand for unmanned and automated products in the production and service sectors.

These market gaps have not been filled by Japanese enterprises in a timely manner, which has become an opportunity for Chinese brands. We have reported on PIX Moving, which launched the unmanned product Robobus in response to the shortage of public bus drivers caused by the aging population in rural Japan; Iwith Robotics noticed the shortage of cleaning staff in Japanese convenience stores and launched an intelligent cleaning robot and an age-friendly interaction system.

Secondly, the rise of online channels. Japan has always been known for its developed offline consumption, and its e-commerce development level lags behind that of the United States and China. It was not until 2020, when the global pandemic "boosted" the accelerated development of the global e-commerce market, that Japan was no exception.

A report released by the Ministry of Economy, Trade and Industry of Japan in 2021 showed that in 2020, the scale of B2C e-commerce in the goods sales category increased by 21.71% year-on-year to 12.233 trillion yen. Japan's well-developed logistics infrastructure also provides a guarantee for the rapid growth of e-commerce. Except for islands such as Hokkaido and Okinawa, logistics and distribution in other regions can basically achieve next-day delivery. Statista predicts that the online shopping penetration rate in Japan will reach 89% in 2025.

Under this trend, Chinese cross-border e-commerce platforms have entered the Japanese market one after another in search of new market growth points. Since 2020, SHEIN, Temu, TikTok Shop, TAO launched by Alibaba, and JD.com have successively launched their Japanese sites. In January 2024, the number of Temu users in Japan exceeded 15 million; in September, the number of SHEIN users in Japan reached 8.04 million, exceeding the online user scale of Uniqlo (6.48 million) in the same period.

It is still difficult to judge whether these platforms can maintain a high growth rate in Japan, but it is clear that attracting a large number of users in a short period of time has met the long-neglected but persistent demand of Japanese society for low-priced goods.

This demand has been further amplified as Japan emerges from the "lost 30 years" and its economy gradually recovers. The rapid rise in prices, as a by-product of economic growth, has caused great pain to the Japanese people. According to data from the Ministry of Internal Affairs and Communications of Japan, in June 2025, Japan's core consumer price index (CPI, excluding fresh food) increased by 3.3% year-on-year, and the growth rate has remained above 3% for the seventh consecutive month. Coupled with the surge in foreign tourists, there was even a phenomenon of people scrambling for rice in Japan.

This change in the consumption ecosystem is undoubtedly beneficial to Chinese high-cost-performance products. Chinese brands, leveraging their supply chain advantages, are taking advantage of the "lighter" online channels to quickly enter the Japanese market.

For example, Prime Particle borrowed the "SHEIN" model. Through big data and AI technology, it integrates the resources of a large number of small and medium-sized factories in China, and schedules and distributes upstream inventory and spare production capacity according to the front-end order demand. As a result, the number of SKUs on the platform exceeds 5,000, with more than 600 new products launched every week, while the price is only half of that of the leading offline brands in Japan.

The main product of the hair removal device brand Ulike is priced at around 40,000 yen on the Japanese Rakuten platform, which is much lower than Japanese brands such as Yaman (the price is generally between 50,000 and 80,000 yen). It topped the sales list of its category within less than two years of entering Rakuten.

02 Japanese Users Are Demanding but Highly Loyal, and Enterprises Need to Earn Trust with Patience

"Japan is a very special place. If an enterprise only wants to copy past experiences, it is likely to be rejected," Song Yixuan found that many enterprises that come to her for advice on Japanese business are used to thinking about making quick money and hope to see clear returns within one or two years. "This logic doesn't work in Japan."

For a long time in the past, Japan has been an exporter of consumer products and advanced lifestyles. Like the European and American markets, its domestic market is highly mature. Moreover, the social gap between the rich and the poor is relatively small, and the middle class is the backbone of consumption, generally having high requirements for product quality, design details, and service experience.

"Some enterprises think that as long as a product sells well in China, they can simply move it to the Japanese market without any changes, just by changing the packaging. This extensive way of going global may work in other markets, but Japanese consumers don't really accept it," Song Yixuan said. When many merchants sell their products to Japan, the Japanese translations on the outer packaging and instructions are not authentic enough, or the Japanese font design does not conform to local conventions. "Japanese consumers are very sensitive to these details, and there are still many negative reviews on e-commerce platforms."

Zhang Jian also deeply feels the Japanese market's extreme pursuit of details. He is the operation manager of Eisen Intelligence, a smart pet products company. "For the same product, the requirements for the product information to be filled in before it is launched in Japan are much higher than in other regions. After placing an order, Japanese distributors especially emphasize that the appearance should be delicate and repeatedly confirm the details of the functions."

Some merchants, seeing the global brand effect of "Made in Japan," have come up with an "alternative" way to go global, that is, to commission local small and medium-sized enterprises in Japan to produce cosmetics or daily necessities and then label them as "Made in Japan" and sell them back to China or export them to Southeast Asian countries. In Song Yixuan's view, this approach is obviously not a long-term solution and essentially reflects a lack of confidence in their own supply chain and brand power.

"Japan is indeed a market that is difficult to break into, but on the other hand, Japanese consumers are highly loyal. Once you build up the trust of users in your brand, they will follow you steadily," Song Yixuan said.

Moreover, Japanese consumers' pursuit of high quality also means that they are willing to accept a higher average customer price, which brings higher profit returns to enterprises. Zhang Jian gave an example, saying, "A pet drying box product we developed last year has a price acceptance range of 600 - 1,000 yuan in China, but it can be sold for 2,000 yuan in Japan. So we firmly believe that if we do a good job in quality in Japan, the brand can develop well."

03 From the "First Employee" to the "Three-Person, Four-Legged" Model, Weaving a Local Business Relationship Network

The trust culture is not only reflected between brands and Japanese consumers but also serves as the cornerstone for enterprises to establish cooperation with Japanese customers. "Our experience is that the Japanese business culture attaches great importance to trust. Once a trust relationship is established, Japanese customers will not easily break it and are willing to cooperate with you in the long term," said Cao Kuangning, the vice president of PIX Moving. Building a trust relationship requires spending a long time in the early stage and making in-depth efforts in the Japanese market.

The key to in-depth development in the Japanese market lies in gradually integrating into the local business ecosystem and reweaving a relationship network based on local employees, partners, and investors. "Although a brand can quickly increase its sales through e-commerce channels, it will find that it is very difficult to further expand offline channels," Zhang Jian introduced. Japan's distribution system is relatively closed, and it is necessary to rely on local trading companies or retail giants to open up the distribution network.

When Chinese enterprises seek financing in Japan, they will also encounter similar implicit "local circle" barriers. Pang Shouguo, a business manager at Daoxin Asset, once shared that although the financing cost is extremely low under Japan's long-term low-interest rate policy, foreign-funded enterprises actually have great difficulty in applying for loan quotas and preferential interest rates from official institutions. "They need to find local service institutions to set up a framework; otherwise, it is very difficult to enjoy this financial support, and they may not even be able to open an account."

The Japanese VC field is also relatively closed. "Many VC investors can't even speak English. We were able to contact many institutions only because we have local partners in Japan. Otherwise, just communication would be very difficult," Sun Jingxuan said.

Therefore, finding a local "first employee" or partner in Japan has become a breakthrough for Chinese enterprises to integrate into local channels and gain the trust of customers, or they can refer to the "three-person, four-legged" model formed by Japanese enterprises in their overseas expansion in the past to form a deeper interest bond.

The "three-person, four-legged" model refers to a joint venture company formed by a Japanese manufacturer going global, a local enterprise, and a Japanese trading company. By binding the interests of multiple parties, while leveraging their respective capabilities and advantages, they can act in concert during the decision-making process, thereby gaining stronger competitiveness in the market. Although under the "three-person, four-legged" model, an enterprise needs to coordinate the interests of multiple parties, which may slow down the profit-making speed, it is beneficial for the enterprise to take root locally and achieve long-term and stable operation.

Lin Xuefeng once introduced the wave of Japanese enterprises going global forty years ago in an article. He wrote, "The localization of multinational enterprises means reweaving a local interpersonal network. This kind of connection beyond business can form an economic community that penetrates everywhere and is intertwined in multiple ways. And this structure is very difficult to break apart." The establishment of an economic community is also crucial for Chinese enterprises going global to Japan at present.

This article is from the WeChat official account "Hangzhou Qiantang Enterprise Going Global Service Base," author: Zhejiang Enterprises Going Global. Published with the authorization of Qiantang.