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International Resources: Global Market Profile: Japan

 

As part of its commitment to providing its members with market analysis and insight, PMA has compiled the following information about Japan from Attaché Reports submitted by the U.S. Department of Agriculture’s Foreign Agricultural Service, as well as the CIA World Factbook, embassy sites, and business etiquette reference guides.

As part of its commitment to providing its members with market analysis and insight, PMA has compiled the following information about Japan from the Japanese Ministry of Agriculture and Attaché Reports submitted by the U.S. Department of Agriculture’s Foreign Agricultural Service, as well as the CIA World Factbook, embassy sites, and business etiquette reference guides.

Table of Contents

 

Fresh Fruit, Vegetable, and Flower Market

Fruit and Vegetable Market

The Philippines is the largest fresh fruit exporter to Japan, exporting the more tropical fruits such as guava, bananas, and pineapple. Major fresh fruit commodities exported to Japan from the United States are cherries, melons, grapefruit, oranges, and lemons. New Zealand, Mexico, South Africa, and Thailand are also important fruit exporters to Japan.

In the case of vegetables, China, the European Union, and the United States are the top exporters to Japan. Japan’s major fresh vegetable imports are: mushrooms, leeks, broccoli, radishes, peas, garlic, onions, and asparagus. Japan is considered one of the top five import markets for fresh vegetables. 

Currently agriculture counts for 1.6% of Japan’s GDP and 4.6% of the country’s labor.

The Japanese Market for Oranges: Japan is a large market for U.S. orange exports, and most of Japan’s orange consumption is supplied by U.S. exports. Orange consumption and imports grew until 1994, but have declined since. Demographic shifts are linked to changing orange consumption: older birth cohorts eat more oranges, and younger ones eat fewer oranges; within each cohort, consumption increases with age. Income changes appear not to be major factors in the decline in orange consumption, but price changes appear to be potentially important. A downward trend in consumption, not explained by the demographic variables, prices, or income, may continue in the future. *By Hiroshi Mori, John Dyck, Susan Pollack, and Kimiko Ishibashi - USDA ERS Outlook Report No. (FTS-33001) 16 pp, March 2008

Resolution of the U.S.- Japan Apple Dispute: New Opportunities for Trade: The World Trade Organization (WTO) ruled in June 2005 that Japan's phytosanitary protocol related to fire blight for imports of U.S. apples was not justified and was in breach of Japan's WTO commitments. In August 2005, Japan issued a new phytosanitary protocol that complies with the WTO ruling. With the elimination of the restrictive fire-blight protocol, U.S. producers have a new opportunity to export apples to a high-quality export market, at a significantly lower cost than before. This analysis estimates that over the long run, Japanese apple imports will increase by an average of $144 million per year but that substantial variation from the average import estimate would be likely because of fluctuating market conditions from season to season. *By Linda Calvin and Barry Krissoff- USDA ERS Outlook Report No. (FTS31801) 23 pp, October 2005

 

Fresh Flower Market

The market value of cut flowers in Japan is second after the United States, but larger than Germany, the UK and Italy. Japan is also the fourth country in production value after China, India and the Netherlands.

Presently, the Netherlands is the major supplier of cut flowers to Japan; other major exporters are Thailand, South Korea, New Zealand, and Colombia.  Chrysanthemum is the most popular cut flower in Japan as compared to other cut flowers.

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Consumer Trends

The Japanese are very concerned about food safety and traceability – commonly used terms are “Anzen” and “Anshin” that, respectively, mean “safety” and “peace of mind” regarding safety.  They place great importance on quality; producers that fail to recognize this will not succeed.  In addition consumers appreciate taste and all of its subtleties—and will pay for it.  Generally the people are well-educated and knowledgeable about food and its many variations

Consumers are highly brand-conscious; a brand with a quality image will sell.  In addition they care a great deal about seasonal foods and freshness—awareness and promotion of these characteristics, where appropriate, can significantly build product sales and value.  The japanese are increasingly health-conscious—(Witness the many television programs about healthy food. When a product's health attributes are highlighted on such a program, it quickly sells out at the supermarkets.)

Another important characteristic of Japanese consumers is that they “eat with their eyes” and often view food as art. A food product’s aesthetic appearance—on the shelf, in the package, and on the table—is very important in building consumer acceptance.

Keep in mind consumers generally have small families and homes with minimal storage space; thus, large packages are impractical.

There are differences in regional food practices, preferences, and tastes. To illustrate, a comparison between the Kanto and Kansai regions is in the chart below.

Examples of Differences in Japanese Regional Food Preferences

Tokyo (Kanto region)

Osaka (Kansai region)

· Somewhat less food cost-conscious

· More salty foods

· More spicy products

· More Western products

· More cuisine variety

· Prefer pork

· Prefer buckwheat soba noodles

· Very food cost-conscious

· Less salty foods

· Less spicy products

· Somewhat fewer Western products

· More traditional Japanese foods

· Prefer beef

· Prefer wheat udon noodles

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Trade Agreements

Japan has Economic Partnership Agreements with the following countries:

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Food Standards and Regulations

The Japan Food Sanitation Law (also addresses labeling requirements) stipulates food standards and regulations.

Also visit http://www.ers.usda.gov/Briefing/Japan/issuesandanalysis.htm. Verify all relevant import requirements with your Japanese customers. They will normally have the most current information on Japanese regulations.

Vegetable Policies in Japan: This publication provides a detailed description and analysis of policies used by Japan to support its vegetable producers and to regulate vegetable markets. Domestic policies include compensation to farmers when market prices fall below a moving average of historical prices, subsidies to make farms and processing more efficient, and subsidized hazard insurance for greenhouses and some field crops. The government has provided incentives to divert land from rice into vegetables. At the border, tariffs are less than 13 percent, except for a tariff-rate quota on dried beans. Phytosanitary rules prevent imports of some vegetables. *Kenzo Ito and John Dyck USDA ERS No. (VGS293-01).

 

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Entering the Japanese Market

For most new-to-market exporters, the first contact will often be in written form. Potential distributors (and possibly end-users) will usually expect to receive a cover letter specifying your intentions together with the usual product literature. In addition, it is often customary to provide a company profile which may include general information on the nature and corporate history of the exporter. The company profile may include information such as the year founded, number of employees, annual revenues, business philosophy, target markets, major customers, names of senior executives, main bank, paid-in-capital, etc. It is also customary to provide a fax or e-mail outlining what is to be discussed prior to the engagement.

Where possible, it is often best to obtain introductions to potential business contacts from reputable third parties. Third parties may include private individuals, firms, organizations, and even public sector agencies and trade associations with whom the business contact may have had a pre-existing relationship. So-called cold-calling is almost unheard of within Japanese business culture; however, some have been known to achieve some success with this technique.

Business hours in Japan are from 9:00 a.m. until 5:30 p.m. but many Japanese business people return to work following dinner until around 9:00 p.m. Avoid scheduling meetings during holidays, because almost everything shuts down in Japan. Major Japanese holiday and business break periods include: the New Year holiday (approximately December 28 through January 7); Golden Week, a combination of national holidays (April 29 - May 5); Obon, an ancestor respect period lasting for about one week in mid-August during which many companies close and business people take vacations.

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Export Business Reminders

  • Before coming to Japan, use the many sources of information, for example, the U.S. Foreign Agricultural Service, state agricultural offices, state/regional trade organizations, and Japanese External Trade Organization regional offices in the United States.
  • Build at least a minimum team within your company to help on the Japan market.
  • Limit your number of trading partners, but avoid exclusive agreements with any one company.
  • Use metric terms.
  • Quote Cost Insurance and Freight (CIF) pricing, unless the importer requests Free on Board (FOB) pricing.
  • Ensure that all sales documentation is correct.
  • Be patient regarding requests for documentation, ingredients lists, production process, and quality assurance and respond to such requests with diligence and in a timely fashion.
  • Use letters of credit to reduce risk.
  • Hedge export values with your bank if you are concerned about exchange rate risk.
  • Set up wire transfers for payments.

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Business Protocol

  • Dress professionally and conservatively: men in dark colored suits and women in conservative attire.
  • Make appointments as far in advance as possible.
  • Be on time for all meetings; the Japanese are very punctual. Meetings should begin and finish on time.
  • Physical contact is not always comfortable. You should wait for your Japanese counterpart to either bow or initiate a handshake, and then reciprocate accordingly.
  • At meetings the most senior individuals are introduced first. In Japan, the guest/visitor generally is seated facing the door or exit.
  • Upon entering a meeting all coats should be removed and only put on upon leaving. If you walk around it is customary to drape your coat over your arm.
  • When entering a meeting the highest level executive should enter first. You will be introduced to the highest to lowest ranking executives in the room.   
  • Following the initial bow or hand shake, business cards are exchanged.
  • Carry plenty of business cards (meishi: may-she), normally at least 100 for a one week visit. Present them formally at each new introduction—and be sure they have your personal information in Japanese (preferably phonetically) on one side.
  • Expect negotiations to require a number of meetings and probably several trips to reach agreement. Early discussions may appear less fruitful than reality.
  • Japanese often give small business deals to evaluate your performance and see if you can meet your commitments. Always remember the Japanese are often looking for long-term business partners.
  • Where possible, provide written materials and/or copies of your presentations. During a verbal presentation, it may be advisable to repeat key points for emphasis. If necessary, use the services of a professional or experienced interpreter. Remember to look at the people with whom you are conducting business and not the interpreter.
  • Saving face for both themselves and their counterparts is extremely important to the Japanese. It is Japanese custom not to say “no,” because many feel to say so is embarrassing or insulting. There are many techniques used in order not to insult others. These tactics include ignoring requests, stating the request will be extremely difficult, claiming it to be inconvenient or under consideration, or following a response with a hissing sound made by sucking air between their teeth, etc. Japanese will never do anything to intentionally cause one to lose face. The action of saving face should be reciprocal. You should try to never openly criticize, insult or put anyone on the spot
  • Do not be concerned with silence or long pauses. While periods of silence during a meeting can be unnerving to some, Japanese business people are usually using the time to ponder a comment, question, or reply.
  • Body language and non-verbal communication is important. Frowning during a presentation often indicates disagreement. Look for facial expressions and body language to indicate the flow of the meeting.
  • Japanese will often close their eyes when they want to listen intently.
  • Japanese society is still very male-oriented. Females should be aware that conducting business may be more difficult due to this tradition.
  • Be aware that in Japanese, “Hai,” (yes) may mean, “I understand,” not, “I agree.”
  • Using a Japanese lawyer during negotiations indicates a cooperative spirit.
  • Using the party that conducted the initial introduction to discuss bad news is a common practice.
  • Understand that the absence of an upper-level Japanese business person at your first few meetings is not uncommon nor considered rude. The role of the higher levels of Japanese business is much different that in Western cultures. They are often there to maintain unity and spirit of the wa (the circle which is essentially the working community). It is important to establish good relations with everyone within a business from the junior-level to the upper management. 
  • Limit the discussion of business at evening meals, or when drinking with new Japanese counterparts; these occasions are for getting to know one another and building trust, which is very important for your Japanese counterpart.
  • When attending a social event or a business meal do not drink until a toast is offered by your host, or until you are given the invitation to begin.
  • Social events normally do not take place at a person’s home. Therefore if you are having dinner, your host will treat. Also allow your host to order for you.
  • Many outings will include “hostess bar”, businesswomen should not attend these outings. Suggesting alternatives for future outings is acceptable. Alternatives can include Sumo wrestling or karaoke bars.
  • Gift giving is expected on many business occasions in Japan. Gifts must be given at the initial meeting and mid-year (around July 15) and at year end (January 1). Regional gifts or company logo gifts are appropriate. Quality is important, but the gift does not have to be expensive. The packaging of the gift is as important as the gift itself and should be done professionally, pastel colors are often used for wrapping. In Japan, sets of four are considered unlucky (the number 4 is pronounced the same as the word for death). You should try to give gifts in odd numbers, but not 9. Gifts that can be shared among a group are appropriate. You should avoid gifts that relate to funerals, such as lilies, potted plants (bonsai is acceptable), lotus blossoms, camellias, or white flowers of any kind. Small cakes or good chocolates are much appreciated. Other good gifts include imported scotch or cognac or name-brand items. Do not be offended if your gift is not opened upon receiving, it is common to open it later.
  • If you are invited to a Japanese counterpart’s home, consider yourself very lucky. Be sure to remove your shoes before entering the home. There will be slippers provided for you to wear. Also be sure to change slippers for appropriate rooms, such as wearing bathroom slippers in the bathroom.
  • Never point your chopsticks, and when not using them rest them on the provided chopstick rest.
  • Gestures often carry very different meanings. The “O.K.” sign means money in Japan. Shrugging your shoulders or winking; however, mean absolutely nothing.
  • Pointing is considered impolite. Also, to beckon, face your palm downward.
  • Do not blow your nose in public. Sniffing, snorting, and spitting is allowed. When you do blow your nose, always use a disposable tissue.
  • Try to avoid all forms of personal contact, especially between males and females.

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Government Resources and related links

Links

Government Links

 

 

 

 

 

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