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Starting a Business in Japan: A Guide for Singapore Entrepreneurs

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Starting a Business in Japan: A Guide for Singapore Entrepreneurs

Japan, known for its cutting-edge technology and robust economy, offers a plethora of opportunities for Singapore businesses looking to expand internationally. With a population that values quality and innovation, succeeding in Japan can signify that your business has met the high standards of a discerning market. This article delves into why Japan is an ideal destination for business expansion, the support available for Singapore businesses, and practical steps to establish your presence in the Land of the Rising Sun.

Why Japan is a Great Place to Set Up Your Business

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Japan stands as the third-largest economy in the world and a global leader in manufacturing, retail, and services. With foreign trade accounting for 37% of Japan’s GDP, valued at US$4.94 trillion, it’s a prime market for international businesses. The IMD World Competitiveness Yearbook 2022 highlights Japan’s key economic attractiveness factors:

  • Reliable Infrastructure: Japan’s infrastructure, including the renowned Shinkansen (bullet train) network, is unparalleled. This connectivity is crucial for businesses looking to establish efficient logistics and distribution networks.
  • High Educational Levels: The country boasts a well-educated workforce, essential for industries requiring skilled labor.
  • Policy Stability and Predictability: Japan’s stable political environment ensures consistent economic policies, providing a secure landscape for business operations.
  • Skilled Workforce: Japanese employees are known for their exceptional work ethic and dedication, often working beyond contractual obligations.
  • Access to Financing: Businesses have access to various financing options, facilitating smoother operations and expansions.

Government Grants You Can Tap On

Singapore businesses looking to expand into Japan can leverage the Market Readiness Assistance (MRA) Grant. This grant aims to support SMEs in their international ventures by covering up to 50% of eligible costs, capped at S$100,000 per company per new market. Supported activities include:

  • Overseas Market Promotion: Costs associated with participating in trade fairs and overseas marketing initiatives.
  • Overseas Business Development: Expenses for market research, feasibility studies, and business matching services.
  • Overseas Market Set-up: Costs for setting up offices, including rental and administrative expenses.

Singapore Brands that have successfully entered Japan

Case Study 1: Love, Bonito in Japan

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Overview: Love, Bonito, a popular Singaporean women’s fashion brand, entered the Japanese market by understanding local preferences and adapting their strategies accordingly.

According to Inside Retail Asia, Singapore-based omnichannel fashion label Love, Bonito has opened its first physical store in Japan as part of its international expansion, following the recent launch of two flagship stores in Hong Kong and Indonesia. Located on the fourth floor of the Atre Ebisu shopping centre, the pop-up store will open until the end of this month. By localising their approach and leveraging digital marketing, Love, Bonito gained a foothold in Japan, enhancing brand visibility.

Case Study 2: Charles & Keith

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Overview: Charles & Keith, a renowned Singaporean footwear and accessories brand, expanded to Japan in Shibuya Center-Gai, Tokyo. This flagship store not only represents CHARLES & KEITH’s second global flagship store, but also holds special significance as it was crafted in partnership with the internationally acclaimed architectural firm, David Chipperfield Architects Milan.

Case Study 3: TWG Tea

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Overview: TWG Tea, a luxury tea brand from Singapore, successfully entered the Japanese market by emphasizing the premium quality and rich heritage of their products. They opened their first overseas branch in Jiyugaoka city in Tokyo as they carry many Japanese fans.

Overcoming Challenges

Despite the attractive opportunities, entering the Japanese market comes with its challenges. The language barrier is significant, as Japanese is the primary language of business. Additionally, Japan’s complex social and labor insurance systems require meticulous compliance.

Market Expansion Consultancy

To overcome these barriers, partnering with experts is crucial. Creative For More offers comprehensive business matching consultancy, connecting you with local industry experts and providing targeted market analysis. Our services include:

  • Navigating Regulatory Frameworks: We guide you through Japan’s regulatory environment, ensuring compliance and smooth operations.
  • Market Research and Analysis: Our team conducts in-depth market research to help you understand local consumer behaviour and market trends.
  • Talent Acquisition: We assist in recruiting top local talent, building a team that aligns with your business objectives.

Conclusion

Expanding your business to Japan can be a transformative step, offering access to a dynamic market. With the right strategies, government support, and expert guidance from Creative For More, Singapore businesses can successfully penetrate and thrive in the Japanese market.