What is Trade Compliance and Why Does it Matter?

In today’s global marketplace, companies do business both within and outside Japan. Your supply chain depends on following various trade agreements, international trade regulations, and tariff classification.

Yet, even with these specialties, many companies unintentionally receive import and export violations, and these violations lead to hefty penalties and fines for failure with trade compliance functions.

International business is more complex than ever before, and this is why you need a clear understanding of the rules of export control, customs authorities, and export laws. As a result, exporting and importing have become an essential part of day-to-day operations. Since your business relies on global trade, your company needs to ensure that your operations have solid global trade compliance.

To remain competitive, companies must have a comprehensive understanding of the laws and regulations which govern their imports and exports. Very simply, that’s what trade compliance is all about!

What is trade compliance?

Trade compliance means to comply with international export, trade, and financial laws.

Who is required to comply?

Businesses from across all industries are obligated to adhere to compliance requirements. It is not just a regulation for security-sensitive industries such as telecommunications, IT, research, aerospace, or financial institutions. The penalties for non-compliance can be severe.

Why does trade compliance matter?

Trade compliance is vital for importing and exporting and is a responsibility for all businesses. The larger the business, the greater the compliance expectations. In order to be compliant, you must understand what rules and regulations applicable to your business. To be compliant means to meet the demands of customers and suppliers while supporting sustainability, long-term growth, and competitive advantages. These are key elements to a successful global supply chain.

Benefits of being trade compliant:

  • Corporate reputations and employees are protected by facilitating legal and responsible trading.
  • Exposure to fines and penalties are minimized.
  • Promotes customer satisfactions by avoiding shipment delays.
  • Saves money by avoiding delays, investigation and penalties.


Consequences of non-compliance:

  • Shipment delays
  • Financial penalties
  • Criminal sanctions

Key elements of trade compliance:

  • Tariff classification – The correct classification of goods using commodity and tariff codes is fundamental for customs compliance as well as establishing correct duty rates, the origin of goods, Intrastat, export control, and many other customs procedures.
  • Preferential origin is associated with a specific trade agreement between two countries or blocks of countries. If the goods you’re exporting have a preferential origin, they are likely to attract reduced or nil rates of duty when they enter your customer’s country.
  • Non-preferential origin is where it dictates the origin of the product being shipped. The rules associated with the identification of origin are specific to the rules of the importing country.
  • IncotermsIncoterms have globally recognized trade terms used to clearly define the responsibilities of the buyer and seller along the shipment lifecycle, they are integral to a contract so that both parties are clear on delivery, costs, risk, and responsibility.
  • Licenses & Permits – It is your responsibility to check if you require a permit or license when importing or exporting certain products. There are controls, for example, on military/paramilitary goods, technology, medicines, chemicals, artworks, plants, and animals.

Your goods will be confiscated and will be delayed if you are importing and exporting without the right license.

  • Exports controls – Certain products are subject to export control legislation as they could have harmful uses. it is your responsibility to classify all products against the appropriate legislation. This will ensure the correct license requirements can be established.
  • Customs Management – Have a clear plan of action if your business is subject to a customs investigation.
  • Screening – Screening customers, vendors, and transaction data against sanctioned, politically exposed persons and other risky entities will help ensure you are not inadvertently doing business with an undesirable person.
  • Valuation – Every shipment must have an appropriate valuation associated with it, which should be defendable if challenged. The valuation must comply with one of the six valuation methodologies approved by the World Trade Organization (WTO) and be declared on the Single Administrative Document (SAD or form C88).

Market Entry in Japan

Having local help on board is essential in order to be successful in Japan Market Entry. Don’t know where to start? We can help!

COVUE is a trustworthy Japanese company that has import licenses for many product categories. Let COVUE’s regulatory experts help you to speed up the market entry process so can that you can focus on your business. We’re here to help! It’s what we do best!

The Japanese Government about extending the state of emergency.

Japan will decide Friday on whether they will extend COVID-19 state of emergency. Tokyo, Osaka and seven other prefectures were set to be released from the state of emergency beginning of next week.

The infection numbers in Japan’s latest coronavirus wave have not lowered and are leaving the medical system under considerable strain. Many prefectures have requested for the government to extend the emergency. Health minister Norihisa Tamura said he will be making a decision based on expert’s evaluations. The current state of emergency is set to end Monday in 9 prefectures including Hyogo, Kyoto, Hokkaido, Fukuoka and Okayama.

The new end date for the state emergency might be June 20 now. Osaka Governor, Hirofumi Yoshimura said it is up to the central government to decide on the end date but that only extending the date for a short period of time would be insufficient.

The Osaka prefectural government is requesting the central government to extend state of emergency due to shortage of hospital beds. It will request together with neighboring Kyoto and Hyogo prefectures. Tokyo is also considering making the same request. Norihisa Tamura said new cases are declining in Japan overall, but worsening in specific areas.

Japan’s vaccine rollout has been slow compared to other developed nations. Only 2% of Japan’s population have received 2 doses of COVID-19 vaccine.

Source: Japan Today

Doing Business In Japan: Important Etiquette Rules You Need To Know

Every country has a unique culture and is used to do doing things a certain way. Doing business in Japan is a bit different compared to other countries. Japanese are more formal, calm, and reserved. Take a look at Japan’s values and what it means in the business industry.

  1. Silence is Golden

In a business setting, silence is more professional than an overabundance of talking. Silence demonstrates emotional self-control and wisdom. In western culture, we are more outgoing and loud when it comes to communicating. When developing a business relationship in Japan, have a formal and introverted approach in the beginning.

  • Group Solidarity is Paramount

Japan is a group-oriented culture contrast to the west where we believe individualism is valued over group solidarity. In japan, singling out an individual is embarrassing for them. The concept of a team is important for the Japanese. When giving out recognition, make sure to address the entire group.

  • Business Cards are Talismans

A business card is an extension of their identity in Japan. Accept the business card with both hands. If you are standing, read it briefly and place it in a card holder. If you are seated, place it on the table during the meeting. It is considered disrespectful if you place the card in your pocket or wallet. If you are presenting your business card, turn the Japanese side faced up and hand it to them with both hands. Don’t toss or slide the card across a table.

  • Age Equals Seniority

Japanese respect elders. Treat older executives with a more marked deference than the younger ones in the group setting you are interacting with. Greet the senior person before you greet the others as well as offering your business card to seniors first before the others.

  • Hard Sell Doesn’t Sell

Japanese do not like to be pressured or confronted. When pitching your business proposal, approach the presentation in a gentle and persuasive way. Don’t emphasize so much on decisions and deadlines. Focus on points you mutually agree on and build on that. Take you time during the pitch. Japanese see rushing the process as disrespectful. Use the time that you find wasted during the meeting, to build trust and cement the business relationship.

Market Entry in Japan

Having local help on board is essential in order to be successful in Japan Market Entry. Don’t know where to start? We can help!

COVUE is a trustworthy Japanese company that has import licenses for many product categories. Let COVUE’s regulatory experts help you to speed up the market entry process so can that you can focus on your business. We’re here to help! It’s what we do best!

Radiation checks on food conducted across Japan

Since the nuclear accident at Tokyo Electric Power Company Holdings, Inc.’s Fukushima No. 1 nuclear plant in March 2011, food products have continuously been checked for radiation. Nearly 17 prefectures are testing food products that are not listed in the guidelines such as vegetables, fish, and other items. These tests comfort domestic and overseas consumers even though it is rare for these products to exceed the national standard for radiation. The Yomiuri Shimbun has discovered that 11 prefectures are conducting radiation tests on their own.

For food items such as rice and vegetables, the national standard of maximum acceptable radiation levels is 100 becquerels per kilogram. Japan is much stricter compared to European and the United States standards. The European Unions’ maximum is 1250 becquerels per kilogram and the United States’ is 1200 becquerels per kilogram.

The provisional standard for maximum acceptable radiation level was originally 500 becquerels per kilogram, but it was revised to 100 becquerels in April 2012. The standard for infant food and milk is 50 becquerels. However, the standard for drinking water is 10 becquerels per kilogram. The areas to be inspected for radiation in food are determined by the government’s Nuclear Emergency Response Headquarters.

As of March 17, 2021, wild mushrooms, wild mountain vegetables, and meat from birds are now required to be tested by prefectures in eastern Japan. These products can no longer to shipped if the radiation levels exceed the national standard.

According to the Health, Labor, and Welfare Ministry, 54,412 items were tested nationwide in 2020, and only 0.23% or 127 items exceeded the national standard. One of 127 items came from an unknown origin. The other 126 items underwent an inspection. The Fukushima Prefecture will continue testing. They are also testing tomatoes, cucumbers, and other vegetables that not required for inspection. As of 2015, no radiation has been found in these products. The prefecture will continue testing to rebuild trust again and dispel the long-lasting negative rumors after the nuclear accident.

15 countries restrict imports from Japan and even require inspection certificates.

Import Products to Japan?

Let COVUE’s regulatory experts help you to speed up the market entry process so can that you can focus on your business. We’re here to help! It’s what we do best.

At COVUE IOR, we seek to make the import process simple, compliant, and accessible to all sellers of all sizes. COVUE is not an ACP. COVUE is the direct IOR: we own our license, and our compliance support is in-house. We trusted by 000’s of Sellers and Shipping providers.



Source: The Japan News ​​

Japan Market Entry: Why is it difficult

Considering Japan as the 3rd largest economy in the world, it should come as no surprise that more and more companies are expanding into Japan in order to tap into this lucrative consumer market.

Japan is a leading center for innovation, boasting a highly attractive business and living environment within one of the world’s largest economies. A survey by the Ministry of Economy, Trade and Industry (METI) found that Japan has a stellar reputation among Western and Asian companies, which are attracted by its R&D capabilities, personnel, and well-developed laws, such as intellectual property rights.

Many companies are also pulled to Japan’s shores because of its developed consumer base. The huge market is a trendsetter among regional economies and is utilized by many businesses as a test location.

Some 49% of businesses say Japan is an attractive as a test market, and 40.5% say it offers a good environment for business expansion.

 But, Japan continues to be one of the most difficult and challenging countries for market entry. The number of regulatory hurdles and cultural factors can make Japan a difficult country to penetrate. Having local help can be a big asset when expanding into the country.

Here are some of the challenges that you will have to face in order to succeed.

Starting a business
The process can be draining when starting a business in Japan. It is important to navigate the regulations and bureaucracy.

Language
The most obvious obstacle to doing business in Japan and/or with Japanese companies and consumers is language. If you plan to actually have discussions with potential business partners or customers, you’ll require a trained, experienced Japanese interpreter. This person needs to have an intimate knowledge of Japanese culture and traditions.

Culture
Relationships drive business in Japan, and it is important to show the right level of respect and to be polite and diplomatic at all times. Patience is essential when handling business relations, and observing local etiquette in terms of gift buying is important.

Gaining trust and respect
Japanese consumers and businesspeople expect integrity and high quality products and services. Gaining trust and respect can take some time, whether you’re forming a business relationship or selling a product to Japanese consumers

Market Entry in Japan

Having local help on board is essential in order to be successful in Japan Market Entry. Don’t know where to start? We can help!

COVUE is a trustworthy Japanese company that has import licenses for many product categories. Let COVUE’s regulatory experts help you to speed up the market entry process so can that you can focus on your business. We’re here to help! It’s what we do best!

Successful Business Practices Get Right in Japan

Any business that is thinking of entering the Japanese market must do their research of current companies that are already established there. Branding is an essential part of any business. The best thing to do is to apply these educational brand strategies to your business.

Japan is one of the most globally appealing markets for foreign businesses that are looking to expand their markets. With the title of the world’s third-largest market in terms of GDP, as well as 120 million people, populating the land of Japan giving good evidence and reason for brand expansion.

Branding however isn’t always easy once compared to the success of the based brands in their respected home markets. Commonly statistics have shown non-Japanese brands struggling to find the right approach to reach Japanese customers or fail to resonate with a Japanese audience. 

However, each strategy employed by different brands can differ to personalize to that business based on factors, such as business size, industry, as well as market research of similar foreign businesses established in Japan and what strategies they employ can help towards the success of establishing in the Japanese market.

UNIQUE VALUE PROPOSITION

Firstly, having a unique value proposition is the most important thing that successful brands employ in Japan. Japan is a mature, fully industrialized country with a sophisticated consumer market.

Furthermore, the natural system of Japanese businesses, especially home-grown brands is too focused on domestic markets and less so everywhere else in the world. Without possessing a unique value proposition, established domestic businesses that already compete for market share, can have a difficult time gaining a hold on the Japanese market.

Henceforward, the very first thing that foreign brands entering Japanese markets should take under consideration is whether or not their brand is bringing something new to the table.

What that something might be can vary, but ideally, it should be distinct and not easily imitated in order to help create a competitive advantage against domestic Japanese brands and businesses that operate in the same vertical or sector.

For example:

Starbucks has a great success in the Japanese market, and is one of the most popular brands, of any industry in Japan. The success of the company was not a result of a gap in the market industry. Competition was already high in Japan with numerous other coffee chains, such as Doutour and Veloce.

Nor is Starbucks’ enduring success in Japan a result of its popularity overseas. In fact, popularity abroad is by no means an indication of potential success in the Japanese market.

Instead, Starbucks’ concept of a “third place,” or a space for gathering and connection that exists between the office and one’s home, its unique menu of coffee-themed drinks, and its practice of being a non-smoking establishment all helped to differentiate Starbucks from existing competition in the Japanese market.

As a result, skyrocketing them through the roof in terms of market domination in Japan.

LOCALIZE OFFERING

Most successful brands in Japan employ the strategy of localising their offering specifically for the Japanese market and Japanese consumers. Localization means not just about the language, even though it is very important part when marketing to the Japanese audience.

Instead, we’re talking about going back to the fundamentals of marketing and the Four P’s—in this case “product.” In many cases brands may need to localize their product or offering in order to give the best chance of success in Japan.

To achieve this, it can be demanding of the business. Asking a certain level of both flexibility and recourses, these are many things that often businesses are apprehensive to the even the suggestion of it.

However, it’s not without reason that we feel so strongly about the need for thorough localization. Through the reflection of past brands failing to localize their brands in return shut the door to their Japanese market entry.

Even though many brands should localize, not every brand need to. IKEA did not have to localize their offering in Japan. At IKEA locations in Japan spaces and showrooms that better fit within the Japanese context of smaller homes, apartments and rooms with less space than those found in western markets had to be built.

For other businesses that sell furniture can mean trouble as Japanese living spaces are quite small requiring small furniture. As a result, IKEA adapted and had to make items like sofas specifically for the Japanese market, or risk missing out on selling those items to Japanese customers.

As a result, IKEA had to make items like sofas specifically for the Japanese market, or risk missing out on selling those items to Japanese customers.

UNDERSTANDING JAPANESE COMPETITION

The Japanese market is a place of high competition and most industries and verticals have numerous domestic businesses and brands already vying for Japanese customers. As such, understanding your competition has never been more crucial. Finding out what the competitions strengths and weaknesses are can strongly favour your business towards the success in Japan.

One of the strongest cases that can be made for doing a thorough competitor analysis in Japan comes down to positioning.

Knowing the positioning that each of your competitors have taken will help you determine the ideal positioning for your own brand within the Japanese market. However, you shouldn’t be surprised if a local Japanese brand has already staked out the position your business would have liked to have claimed for yourself.

In some cases, even if you are the dominant player in your home market, if your ability to position (or re-position) your brand in the Japanese market is fundamentally compromised, then it’s best to revisit our first point, while also taking into consideration what you’ve learned about the competitive landscape in Japan.

UNDERSTANDING JAPANESE CONSUMERS

Understanding Japanese consumers can show to be difficult for non-Japanese brands. The most successful foreign brands in Japan, however, understand that Japanese consumers are different than those in their home market and take that fact to heart.

While a foreign brand may not have the same level of understanding that a domestic brand made up entirely of native Japanese staff might have, the most successful non-Japanese brands all possess a firm grasp of Japanese consumers’ preferences, tastes, and behaviours. They accomplish this either through working closely with local agencies, trusted partners, or their own Japanese hires.

However, brands that fail often try to forge their way through into the market by themselves, providing direction from a distantly located HQ, without any knowledge or experience in Japan it can cause to be compromised.

The real answer to this section is that when it comes to learning about Japan and Japanese consumers, their cultures and values will go a long way in improving the business performance in the Japanese Market.

ADOPTING A MULTICHANNEL APPROACH TO MARKETING

One of the most underappreciated things that successful foreign brands do right in Japan has to do with their ability to develop an appropriate multichannel strategy for the Japanese market.

Essentially, with more businesses prioritizing ecommerce, brands must use multiple digital channels to reach Japanese consumers. In previous years, many businesses in Japan were able to get away with focusing on a single digital platform to drive business results.

However, the recent changes to the digital platforms, including the move away from third party cookies and issues surrounding online privacy, digital marketers in Japan face new challenges that make it necessary to adopt a multichannel approach.

However, when adopting a multichannel approach to your digital marketing in Japan, not only do you need a strategy for each digital advertising platform, such as Google Ads or social media, but also a cohesive media plan which brings it all together.

Successful brands in Japan are not one-dimensional in their marketing efforts, and they make use of numerous channels to achieve their business objectives.

CONSISTENCY IN ALL AREAS OF THE BUSINESS

Consistency is one of the biggest key factors that a business requires to achieve success as well as the ability to deliver and hit targets when it comes to sales, operations, marketing, and customer service.

Consistency in product and service is, of course, important to note because Japanese consumers have notoriously high expectations. In the realms of both B2B and B2C.

Japanese consumers tend to be very particular when it comes to quality of customer service and often require a good amount of communication in order to be satisfied.

Brands that only engage in periodic or sporadic advertising, often lacking any sort of cohesion, will find it difficult to succeed in Japan due to the competitive nature of the market. The thing to realize here is that if you aren’t consistent with your marketing then your competitors will be. As such, successful brands in Japan never stop marketing.

FOCUS ON BRAND BUILDING IN JAPAN

Lastly, establishing a brand is critical to the long-term success in Japan. Not only do brands enjoy more success than generic offerings in the long run, but in the short-term as well, without consumers knowing who you are and what your business is about it’s nearly impossible to gain any sort of traction in the Japanese market that would set you up for future success.

Promoting your product or service and building awareness through digital marketing and advertising are often the most appropriate first steps for non-Japanese brands, especially for those who lack a substantial physical presence in the market.

That being said, once you do have a solid foundation for your brand in Japan you will often find other opportunities open up and your options for marketing and growing your business to be greatly expanded.

CONCLUDING

Japanese consumer continues to demand new products and services, regardless of place of origin. Ultimately what makes a brand successful in Japan is a combination of factors, that include having a unique value proposition and a marketing strategy specifically designed and implemented for the Japan market.

Rather than attempting to go it alone in Japan, enlisting the help of local experts or partners is often the best choice for non-Japanese brands in order to avoid wasted time, money, and energy.

Want to Export your Products to Japan?

Let COVUE’s regulatory experts help you to speed up the market entry process so can that you can focus on your business. We’re here to help! It’s what we do best.

At COVUE IOR, we seek to make the import process simple, compliant, and accessible to all sellers of all sizes. COVUE is not an ACP. COVUE is the direct IOR: we own our license, and our compliance support is in-house. We trusted by 000’s of Sellers and Shipping providers.

Source: https://plusalphadigital.com/

Japan eCommerce Market Summarised

Nothing can compare to the personalized and attentive customer service the Japanese high street shopping experience provides for each shopper. However, replicating this online is a little tricky, but the Japanese eCommerce opportunities are not far behind the high street.

Japan is the 3rd largest eCommerce market in the world, with over 74% of the population or in other words 88 million paying online consumers in 2020, gives you a reason to re-evaluate the decision of entering the Japanese market if you haven’t before.

As discussed by current reports, Japan’s eCommerce market is expected to exceed $112 billion in 2021 and $325 billion by 2026 as the country makes the digital journey of moving from high street retail stores to online shopfronts.

The shifting culture has valid reasoning behind such a move as the dense urban landscape and easy and convenient advanced online foundations built into consumers’ everyday lives. Additionally, Japan’s distribution channels are highly developed, and the country’s small size makes shipping and product delivery efficient for all.

CURRENT POPULAR ECOMMERCE MARKETPLACES RANKED

  1. Amazon Japan
  2. Rakuten
  3. Yahoo! Auctions Japan
  4. Yahoo! Shopping Japan
  5. Mercari
  6. DMM
  7. Zozo Town
  8. Wowma
  9. Rakuma
  10. Qoo10 Japan

Amazon Japan, Yahoo Japan, and Rakuten are the top leading three eCommerce marketplaces used in Japan. These platforms account for 50% of all eCommerce revenues. However, uniquely compared to other eCommerce platforms and even high streets, Amazon is driving the market due to their same-day delivery offerings that other eCommerce markets are only now catching up upon.

TOP ON DEMAND PRODUCTS TO SELL IN JAPAN

The current Japanese largest segment is food and personal care with a projected market value of $28 billion. Second in demand is clothing alongside books and cosmetics.

Services are a big demand in Japan aside from the physical side of the products. This includes travel tours, hotel bookings, insurance, and entertainment tickets. These are the online services that include Japan as a region but are using online platforms as a lucrative market.

THINGS TO BE AWARE OF BEFORE SELLING ONLINE IN JAPAN

  • Japanese populous has shown behaviour in only shopping in the Japanese language read sites. This has been a noticeable emerging global behaviour for a while now. With consumers from different countries showing favour of trust to online platforms that they can be read with their own language.
  • Japanese consumers value transparency and want to know what product they are thinking of buying fully before paying. They enjoy seeing detailed photos of products, as such the way the business presents its products is a critical turning point for the consumer to buy the product.
  • As any consumer a cheaper price is always a temptation as such Japanese consumers use price comparison sites to make sure they get the best value.
  • Japan’s consumers have started to favour mobile purchasing, with the busy work to life culture that the Japanese employ an on-the-go shopping is becoming rapidly popular.
  • Through research, statistics have found that the most popular spending season is summertime in Japan. This is the time when majority of Japanese workers gain bonuses. Other major holidays include White Day (March 14th) and the standard international holidays of Christmas and New Year.

Selling on Amazon? Why Wouldn’t you?

Japan is a fantastic opportunity for any brand that sells physical products.
There are some compliance hurdles for specific product types and some products sell better than others, just like in any other Amazon market. Let #COVUE be your local partner for #AmazonJapan, letting you concentrate on the core activities that will drive your business.

Blog source: https://payoneer.com

Japanese Consumer Culture

By unlocking the pattern of consumer culture as a business it has the advantage of predicting what might become a market boom.

Japanese consumers have gained a lot of the likeness to those of European and United States consumer culture. With strong willingness of paying for quality and convenience rather than consuming cheap low-quality products. It has also shown an increase of Japanese consumers flocking to discount and online retailers.

Furthermore, sales of relatively affordable private label foods have increased substantially, it also has shown certain behaviours of the consumers like despite their small living conditions they are still buying in bulk. As well as instead of eating out, people are entertaining cooking at home, with workmen packing their own lunch boxes. Due to the popularity of the new lifestyle, there are now terms used to describe it being “bento-danshi”, or “box-lunch man.”

This fundamental shift in the attitudes and behaviour of Japanese consumers seems likely to persist, irrespective of any economic recovery.

That’s because the change stems not just from the recent downturn but also from deep-seated factors ranging from the digital revolution to the emergence of a less materialistic younger generation.

An examination of the strategies of leading Japanese and multinational companies, along with interviews with more than two dozen executives of the most significant retail and consumer industry players, shows how consumers are changing and why It also suggests the kinds of moves—such as rethinking relationships with customers and becoming more flexible about sales channels—that businesses must take to seize the opportunities created by Japan’s new normal.

Japanese Consumers are both distinctive and predictable. They dismiss low priced goods for more high-end department stores and pricier regional supermarkets. They were willing to pay high prices for quality products, and their love of brands sparked the emergence of a mass-luxury market where owning expensive, exclusive products seemed essential rather than aspirational.

However, that does not put aside the hunting bargain consumers. Not everyone can own expensive things and look for good deals. From a study done 53 percent declared themselves more likely to “spend time to save money” rather than “spend money to save time.”

In apparel, high-end department stores concerned about the vanishing shopper have started leasing space within their stores to value-focused competitors such as casual-clothing chains Uniqlo and Forever 21, hoping that this will revive customer traffic. Japan’s leading skin care companies are more aggressively introducing lower-priced products. Luxury-goods companies are watching a decade of growth disappear, with year-on-year sales declines of 10 to 30 percent.

The Japanese used to spend little time at home, as a result of factors such as long work hours and small living quarters. Yet almost 50 percent of a representative sample of consumers across a range of age groups and geographies are now spending somewhat or significantly more time there.

Japan has always been perceived as one of the world’s healthiest societies, thanks to a combination of lifestyle, diet, and genetics, and Japanese consumers are increasingly conscious of their health.

One effect of the greater interest of the Japanese in directing their own health care has been the growing popularity of drugstores, which have been Japan’s fastest-growing retail channel.

Want to Export your Products to Japan?

Let COVUE’s regulatory experts help you to speed up the market entry process so can that you can focus on your business. We’re here to help! It’s what we do best.

At COVUE IOR, we seek to make the import process simple, compliant, and accessible to all sellers of all sizes. COVUE is not an ACP. COVUE is the direct IOR: we own our license, and our compliance support is in-house. We trusted by 000’s of Sellers and Shipping providers.

Source: https://www.mckinsey.com/industries/consumer-packaged-goods/our-insights/the-new-japanese-consumer#

UNDERSTANDING FOOD AND BEVERAGE MARKET IN JAPAN

The food and beverage industry has its very own ecosystem that can be challenging to apprehend. Understanding the nature of this landscape, and identifying the significant players are vital to succeeding in Japan!

The unique $424 billion (USD) is made up of business relationship dynamics and a multi-layered distribution system that was able to generate ¥46 trillion (JPY) in 2019 food and beverage sales in Japan.

Major players:

  • GMS, SM and DS channels (47%),
  • CVS (17%),
  • Other modern trade channels (12%).

Food and beverage sales are worthy on average 71% of GMS, SM, AND DS channels total sales with numbers going as high as 95% regional supermarkets. It is crucial to note that Japan’s retail landscape is on an evolutionary path of unfolding consumer culture and other external perspectives. As a result of inherent challenges and stiff competition between players in the industry, this has driven several players to form strategic partnerships across sectors to protect operating margins.

With 57k Japanese convenience stores, it has become a significant part of Japan’s infrastructure. Numerous stores or popularly know as “Konbini” are a vital catering in populations everyday life with both rural and urban areas of Japans store’s working 24/7 to serve a nation with headstrong working population and densely populated areas where people live in tight spaces with small, packaged food preferences.

Due to this consumption of small, packaged food throughout the week there are three large companies taking advantage of this culture.

  • 7 Eleven,
  • Family Mart,
  • Lawson.

These companies manage 90% of convenience those convenience stores. This has caused the sector to grow and consolidate, making it tough for new players to get in. However, CVS growth has started to fall in the past two years, as a result top chains have begun to accommodate new measures like; increased hiring of non-Japanese staff and investigating opportunities to reduce operating margins.

CVS has a large selection of food and beverage offers making up 60%of total sales. CVS leading food sales come from ultra-fresh products such as rice balls, salads, and other ready to eat meals.

National players have set course for refreshing business models; Innovations in technology propelled by artificial intelligence and IOT, alongside growing interests for delicatessen/ ready to eat and fresh baked goods. Furthermore, three significant actions have accelerated the consolidation recently observed in the industry; Seven & IHD and Izumi’s strategic alliance, New Japans’ Supermarket Alliance, and Pan Pacific International HD creation have spurred competition in this scene.

33% of total food sales in Japan account for regional retailers such as GMS and SM. They represent a third of the entire F&B market share, and 80% of all GMS/SM channel sales. By focusing on competitive advantages like product freshness supremacy alongside shopper experience GM and SM grew in size by paying close attention to local preferences and seasonality.

These regional players are responsible for driving innovations and growth as they compete with one another on product development through the establishment of private brands and the importation of direct value-added value products, which presents a unique opportunity to exporters.

These regional players are facing challenges in relation to Japan’s aging society and depopulation. However, this change within demographics has inspired a new retail revolution that will have to provide an elder-friendly environment, products, and services.

Join Japan’s F&B Market Today!

Import Products to Japan!

Let COVUE’s regulatory experts help you to speed up the market entry process so can that you can focus on your business. We’re here to help! It’s what we do best.

At COVUE IOR, we seek to make the import process simple, compliant, and accessible to all sellers of all sizes. COVUE is not an ACP. COVUE is the direct IOR: we own our license, and our compliance support is in-house. We trusted by 000’s of Sellers and Shipping providers.

Japan Import Restrictions and Prohibitions

Any person wishing to import goods must declare them to the Director-General of Customs and obtain an import permit after necessary examination of the goods concerned

Japan’s customs require foreign online sellers to comply with import declaration and product labeling rules. COVUE IOR ensures Foreign Online Sellers are fully compliant before shipping of the merchandise.

Importing non-regulated products require No Government agency approval. However, all non-regulated products require some compliance for importing.

Furthermore, certain items importing into Japan may be prohibited or restricted. It is your responsibility to confirm whether the items you plan on bringing with you to Japan are allowed or not. 

Plants without a certificate of inspection will be disposed of by the Plant Protection Act. For some quarantine pests which are technically difficult to detect at the point-of-entry inspection, the plants are required to undergo phytosanitary inspection in the field during the growing period in exporting countries. As soon as it has been confirmed that there are no pests, and then they can be brought into Japan.

Most meat products can’t be brought into Japan. There are however times when items attached with inspection certificates for Japan are permitted.  All animal products, including meat, organs, eggs, bone, fat, blood, skin, hair, feathers, horn, hooves, tendon, raw milk, semen, feces, and urine, must be subject to animal quarantine upon arrival at a Japanese port, even if the products are refrigerated, frozen, cooked or in vacuum-sealed packaging.

Make sure to contact the Animal Quarantine Station beforehand when bringing over domestic dogs and cats, as it is required to have import inspections for rabies and leptospirosis. Cats and dogs that have met import conditions can finish their inspection in a short duration.

If the conditions are not met, they will have to be inspected in the holding facility at the Animal Quarantine Station for a maximum of 180 days.

Japan imposes restrictions on the sale or use of certain products including those related to health such as medical products, pharmaceuticals, agricultural products, and chemicals.

For these products, Japanese Customs reviews and evaluates the product for import suitability before shipment to Japan. Licenses from relevant regulatory bodies may also be required for the importation and sale of those products.

Japan also prohibits fruits, vegetables from certain countries and regions. For those hoping to bring these goods, there’s a possibility that they may contain harmful vermin that don’t naturally exist in Japan and a high risk of generating great economic losses to our agricultural production if they invade Japan.

Furthermore, if you are importing items that infringe on intellectual property such as fake brands and counterfeit goods is prohibited. If you intentionally import a large quantity of these items, you may be arrested, your goods confiscated, or both.

Importing Products to Japan?

YOU’RE IN THE RIGHT PLACE!

Let COVUE’s regulatory experts help you to speed up the market entry process so can that you can focus on your business. We’re here to help! It’s what we do best.

At COVUE IOR, we seek to make the import process simple, compliant, and accessible to all sellers of all sizes. COVUE is not an ACP. COVUE is the direct IOR: we own our license and our compliance support is in-house. We trusted by 000’s of Sellers and Shipping providers.