Functional Beverage Industry in Japan

Japan’s Functional Beverage Industry

पर तैनात | कोवुएडमिन द्वारा

Imagine a dynamic landscape in the beverage industry where exciting changes are taking place. It welcomes both beverage enthusiasts and adventurous entrepreneurs to explore new possibilities and reimagine how we enjoy our drinks.

If you’re looking for such a captivating landscape in the beverage industry, look no further than Japan’s booming functional drink market with a projected CAGR of 11.8% over the next 5 years. 

What are Functional Beverages? 

They are a category of drinks enriched with nutrients like vitamins, minerals, fiber, and probiotics. Functional beverages, such as sports drinks, energy drinks, carbonated drinks, and fruit/vegetable drinks, offer a wide range of health benefits. They can boost energy levels, support gut health, aid in metabolism, reduce inflammation, help with muscle recovery, and more.

In Japan, these beverages are primarily available in supermarkets, convenience stores, and online platforms, and are typically packaged in PET and glass bottles.

1- Growing health awareness and recognition of nutritional value

The escalating health consciousness among consumers and their understanding of functional drinks’ health benefits are fueling market expansion. Individuals on keto, low-carb, or lactose-free diets often turn to functional drinks as substitutes for products that conflict with their dietary restrictions. Low sugar and natural ingredients are two of the key reasons for choosing functional beverages over others.

2- The popularity of Ready-to-Drink (RTD) beverages

With busy schedules and hectic lifestyles, consumers are choosing RTD drinks as they provide convenience for on-the-go consumption.

3- Impact of social media and celebrities

The influence of social media trends and promotions on functional drinks is contributing to market growth. Influencers of sport and wellness on social media are directly targeting the desired consumer base.

4- Flavors inspired by traditional Japanese drinks

Many domestic and global key players are using unique flavors such as Aojiru, Sakura tea, and Mugicha to increase their consumer base.

Read more on the opportunities and trends of the beverage market in Japan.

Titans of Taste in Japan’s Functional Beverage Industry 

Prominent players in the market right now are:

  • Archer Daniels Midland Co.
  • Asahi Soft Drinks Co. Ltd.
  • Danone
  • ITO EN
  • Monster Beverage Corporation
  • Nestlé
  • PepsiCo Inc.
  • Red Bull
  • Rockstar Inc. (PepsiCo Inc.)
  • Coca-Cola Bottlers Japan Inc. (The Coca-Cola Company)
  • Suntory Beverage & Food Ltd. (Suntory Group)
  • Taisho Pharmaceutical Co. Ltd.

Some Industry Leaders and Their Products 

Kirin

As a response to the growing demand for nutritional beverages, Kirin launched its first Function Claims (FFC) nutrition sports drink in April 2023. Their new product, Kirin Plasma Sports, is enhanced with LC-Plasma to boost immune system activity. It is available in a 555 ml PET bottle.

Coca-Cola

Coke Plus is the health-conscious version of their famous drink in Japan. Coke Plus has zero calories and contains 5 grams of “indigestible dextrin,” a water-soluble dietary fiber that reduces neutral fats in the blood after consumption. This sugar-free beverage, like Coca-Cola Zero, allows guilt-free enjoyment to the consumers.

ITO EN

ITO EN, one of Japan’s leading green tea brands, has introduced several innovative green tea products since the 1960s. These include the world’s first canned Sencha beverage, the first green tea in a plastic PET bottle, and the first heatable green tea in a PET bottle. They are available in vending machines throughout Japan. ITO EN green tea is less bitter than other ones as the leaves are steamed up to five times longer than regular green tea during production. Their green tea products claim to reduce body fat.

Transforming Market Challenges into Business Opportunities

The ever-evolving tastes and health awareness of Japanese consumers are causing dramatic shifts in the beverage industry. The following strategies can help you turn these shifts into business opportunities:

1- Ongoing innovation among the competition: You can stay competitive in this aggressive market if you focus on current customer preferences, natural and health-beneficial ingredients, and local flavors in product development.

2- High pricing of functional drinks: Instead of targeting the limited base of high-income consumers like your competitors, you could offer reasonably priced products. However, these should be developed without comprising on quality.

3- Lack of public discussion: You can promote the health benefits and raise more awareness of functional drinks to become the leading thought leader of this industry.

4- Strict labeling and advertising restrictions: While FCC claims on beverages in Japan are heavily restricted, you can keep up with the competition by getting a local expert on board.

5- Seasonality of certain drinks: Some flavors are more suitable for a specific season, e.g., Sakura flavor in spring. You have to adjust your offerings constantly to stay relevant throughout the year.

Save the Date

Mark your calendars for an exclusive opportunity to delve deeper into the world of beverages at Drink Japan 2023. Taking place from December 6th to 8th at Tokyo Big Sight, this event promises to showcase the latest trends in beverage and liquid food development and manufacturing.

Conclusion

There’s no better time to dive into Japan’s functional drinks market than now. In light of the market’s growth potential, coupled with rising consumer health consciousness and preference for nutritional beverages, it represents a promising opportunity for businesses. To succeed in this market, companies must understand consumer preferences, innovate continuously, and ensure their products are healthy and of high quality.

Are you Ready to Make a Splash in Japan’s Beverage Industry?

COVUE helps you to penetrate the Japanese market successfully. Our team will guide you through the entire process, from import compliance to final launch, with legal and market advice. 

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Sources: Drink Japan, Nutraingredients, Substack, Markwideresearch, Imarcgroup

top-logistics-companies-in-japan

Top Logistics Companies in Japan

पर तैनात | कोवुएडमिन द्वारा

Whether you sell through eCommerce or retail, you will need a reliable freight and logistics partner who can handle your shipments globally – and locally in Japan.

With many international and domestic companies offering a wide range of services, Japan’s logistics market might seem confusing at first glance. However, Japan’s eCommerce market and technological advancements like drones and tracking systems push this industry forward.

Check out the top logistics companies in Japan and how to find the right one.

Do Consumers Impact Japan’s Logistics Industry? Yes!

Since eCommerce took off, the logistics industry has seen a massive shift in consumer demands. Therefore, to ensure a satisfying customer experience in Japan, your logistics partner’s services should align with these expectations:

  • Delivery Tracking
  • Exceptional customer service
  • Sustainable shipping and packaging
  • Flexible payment options
  • Reliable delivery options (Same-Day/Next-Day Delivery)

Dominant Players of the Logistics Industry in Japan

These are the most recognized logistics businesses in Japan. Among them are domestic and international players with significant market shares.

1- Sagawa

With its origins in Kyoto, Sagawa is one of the leading logistics powerhouses. They offer various services like goods transportation, fast shipping, postal delivery, last-mile delivery, and air cargo services. Sagawa also provides third-party logistics solutions, including storage, stock management, and packing assistance. Operating since the middle of the last century, they have collaborated with giants like Amazon and Softbank and deliver door-to-door across over 220 countries.

2- Yamato

Yamato, the direct competitor to Sagawa, processes about 1.8 billion parcels annually within Japan and globally. Their services include regular and express delivery, distribution, packaging, air freight, and transportation of artwork. Founded in Tokyo and expanded across Japan, they have the broadest network in the country. Thousands of fulfillment centers and a capable courier workforce complement the logistics giant’s network of 12 regional and 90 branch offices. Moreover, their stellar customer support is another key component of their competitive advantage in the market.

3- Schenker-Seino

Schenker-Seino is one of the world’s largest and most diverse shipping networks, spanning over 141 countries and more than 2,000 cities. Their broad range of services includes air, sea, and surface forwarding, order fulfillment, eCommerce logistics, warehousing, and customs clearance solutions.

4- FedEx

FedEx, one of the largest logistics companies worldwide, has been operational in Japan since 1984 and gained a strong reputation. They process about 12.5 million packages daily and specialize in domestic eCommerce shipments. Besides that, their scope of services encompasses domestic and international shipping, third-party logistics, express shipments, last-mile delivery, distribution, and reverse logistics. 

5- DHL

Under the Deutsche Post Group, DHL assists businesses in reaching clients in over 220 countries. They offer different services, such as air, sea, and surface freight, shipments of bulk materials, specialized shipping solutions for delicate items, as well as domestic and international shipping. DHL has greatly invested in automation and tracking systems, striving to ensure an excellent customer experience supported by data and technology.

6- Blue Dart

As a division of the Deutsche Post Group, Blue Dart provides domestic and international shipment solutions, express delivery, cross-border eCommerce services, customs clearance, and 3PL services like warehousing, packaging, and temperature-controlled transportation.

7- UPS

UPS is one of the largest logistics companies globally. They provide a wide range of services, including shipping, scheduled pickups, international transportation, freight, customs clearance, and reverse logistics.

8- Nippon Express

Founded in 1937, Nippon Express is a renowned logistics service provider in Japan and worldwide. They offer international shipping via surface, air, and sea, supply chain management, and specialized services like fine art transport, transport of heavy loads, storage solutions, and distribution. They have an expanding international footprint, reaching almost 50 countries across several continents.

9- Japan Post

This company was founded in 2007 in Japan and is known as Japan Post Group. Japan Post has become a leading player in the global shipping industry and is the third-largest postal operator in the world. They offer shipping solutions in addition to banking and insurance services that most Japanese use daily.

How to Find the Right Logistics Partner?

Given the number of options available in Japan, there are essential factors you should consider:

  • Specialization: Every logistics company has its area of expertise. While some companies handle only shipping, others also handle storage, distribution, and customs clearance. Make sure the company you choose meets your needs. 

  • Additional Services: Check if the logistics company offers special solutions, such as insurance, packing, or reverse logistics.

  • Technological Capabilities: Look for a logistics partner who uses the latest technology to ensure fast and hassle-free shipping.

  • English Proficiency: If you’re working with a Japanese domestic logistics company, it’s essential they have English-speaking staff.

  • Track Record: Analyzing past performance and customer feedback can tell you a lot about a logistics partner’s reliability.

  • Expense: Charges vary based on volume and regularity. Ask for quotes from different companies to get the best price.

  • Domestic and International Reach: Remember that some companies might have a broader distribution network either locally or worldwide.

  • Company Policy and Regulations: Understanding the company’s transportation policies is crucial to avoid misunderstandings and complications.

  • Customer Support: If there are problems, having a logistics firm that can assist is vital. Therefore, make sure your partner offers superior customer service and knows how to handle problems with shipments.

Conclusion

Flexible and punctual delivery options are the key to gaining customer loyalty in Japan. For that reason, it is crucial to understand the logistics environment to expand your business to Japan successfully. Intense research and analysis of the different competitors are necessary to choose the right logistics partner and meet the Japanese market’s and its customers’ preferences.  

Looking for a Logistics Partner in Japan?

With COVUE, you can access reliable and efficient logistics solutions such as COVUE JIL or other 3rd-party logistics partners in Japan. With our partners and team, we will ensure your cargo is delivered safely and on time to your customers. 

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Sources: Clickpost, Statista, HumbleBunny

how-starbucks-won-hearts-of-japanese-coffee-lovers

How Starbucks Won the Hearts of Japanese Coffee Lovers?

पर तैनात | कोवुएडमिन द्वारा

Why is Starbucks so popular and beloved in Japan? Was it a stroke of luck or a carefully crafted marketing strategy? And how did iconic Japanese elements like green tea and sakura cherry blossoms find their way onto their menu?

Let’s discover the story of its first international venture and unravel the secrets behind Starbucks’ success in Japan.

Starbucks’ Joint Venture: A Strategic Expansion to Japan 

Starbucks, the famous coffee shop in Seattle, entered Japan in 1996. This was its first international experience, and the company didn’t embark on the adventure without a proper plan. Instead, they entered into a 50-50 joint venture with Sazaby League, an established retailer and restaurant chain in Japan. This partnership allowed Starbucks to lay a solid foundation in Japan. They leveraged Sazaby’s deep knowledge of the local market, opened stores in several locations, and ended the partnership in 2004.

Today, they own more than 1600 stores across the country.

Starbucks’ triumph in Japan is based on more than its strategic partnership. It’s about how the brand adapted its marketing strategy to create a compelling experience, inviting Japanese to try a new way of enjoying coffee.

They changed the following to adapt to the Japanese market:

  • Smaller serving sizes on the menu because Japanese people are used to smaller portion sizes
  • Lower sugar levels in drinks as consumers prefer them to be less sweet
  • Additional matcha-flavored items on the menu to cater to cultural taste
  • Premium products at a budget-friendly price to target a diverse audience
  • Call customers by a number instead of their name to pick up their order, which respects the privacy

Starbucks recognized early on how crucial research into local preferences and Japanese consumers would be to their success. That set the foundation for why Japanese customers adore the brand today, as Starbucks invested the time and resources to get to know its target audience.

Marketing Strategies That Set Starbucks Apart 

1- Creating a Cozy Living-Room Atmosphere  

Starbucks entered Japan at a time when the coffee scene was dominated by kissaten, small coffee shops reminiscent of tea houses with a simple menu that offered black coffee only. These minimalist but charming establishments were sprinkled throughout Tokyo.

Starbucks went beyond simply serving black coffee and instead aimed to create a completely reimagined café experience. The brand successfully transitioned from being a large coffee chain in America to a personalized, community-oriented coffee shop in Japan. They seamlessly integrated their stores with local culture, as evident in the architectural designs that reflect the beauty of their surroundings. For instance, you can discover the charm of a 100-year-old townhouse in Kyoto or an Edo-era building housing a Starbucks in Saitama. 

Moreover, they differentiated themselves from the kissaten culture by selling high-quality coffee beans from overseas. Also, they prohibited smoking in their stores, despite most Japanese cafes. That didn’t stop people from trying Starbucks. In fact, these strategies led to its popularity as they opened its doors to a more diverse audience. 

Today, Starbucks welcomes students cramming for exams, professionals discussing business, couples on dates, or tourists taking a break.

2- Cherishing Japan’s Seasons through Seasonal Marketing

Starbucks demonstrated an understanding of Japan’s love for seasonal items. For example, Starbucks launches its special and time-limited cherry blossom-themed menu each spring, featuring sakura-flavored drinks, foods, and pink merchandise. In summer, you can find melon- and strawberry-flavored items on the menu, while they serve Christmas-inspired drinks during winter.

3- Starbucks Collaboration with LINE

On the digital front, Starbucks collaborated with LINE, a popular Japanese messaging app. The launch of the digital LINE Starbucks card in 2019 was a game-changer, reaching over a million users in just 2.5 months. They implemented a rewards and order system that allowed customers to accumulate points for purchases and redeem them for free drinks and other rewards. This enabled the company to increase its customer loyalty, leading to more repeat purchases and higher sales. 

Conclusion

Starbucks’ success in Japan can be attributed to its local strategic partnership, understanding of the market, localization of its products and services, and smart use of digital platforms such as LINE. These examples show how powerful a localization and marketing strategy can be if planned and executed properly. With a tailored strategy, you can elevate your brand in Japan and increase brand awareness and loyal customers.

Looking to Enter the Japanese market? 

If your brand is looking to break into the Japanese market, we at COVUE enable you to grow your brand in Japan. Our comprehensive services encompass localization, marketing, and import compliance to ensure a seamless transition into this market.

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Sources: Starbucks, Digital Marketing for Asia, Voyapon, Japan Wonder Travel

fast-fashion-in-japan--blog-covue

Fast Fashion Market in Japan: Uncovering Competitive Dynamics

पर तैनात | कोवुएडमिन द्वारा

The fast fashion market in Japan is experiencing a skyrocketing popularity. The market size is projected to be over US$50.23bn in 2023. This offers a great business opportunity for foreign brands who wish to expand their business in the country.

However, navigating this industry can be challenging because of its ever-changing trends.

Competitive Dynamics of Japan’s Fast Fashion Market 

To succeed in the Japanese fast fashion market, it’s crucial to understand your target audience’s demographics and preferences. By staying attuned to the ever-shifting consumer demands, you can strategically position your brand to thrive in this dynamic market landscape. 

  • Consumers have become more conscious of sustainable products 
  • They prefer personalized experiences offline and online

Read more about the preferences of Japanese consumers. 

  1. Affordable Style: Renowned international brands like Zara and Shein are offering budget-friendly options.
  2. Trendiness: Brands offer the newest trends from the catwalk delivered to the home of the consumers.
  3. Quick Adaptation: Brands are staying relevant among their competition with special incentives and shopping experiences depending on the market developments.

Retail and eCommerce in Japan’s Fashion World

Japanese fashion markets are a blend of eCommerce and brick-and-mortar stores. While fashion owns 27.8% of Japan’s eCommerce market, physical stores continue to hold a special place in consumers’ hearts. In fact, Japan is known for its unique in-person shopping experiences. Virtual and augmented reality technologies offer fresh ways to engage with customers online and offline.

The Leading Players in the Market

Competition in the Japanese fast fashion market is fierce, with major domestic and international brands competing for attention. You’ll face several challenges as a foreign fashion brand entering the Japanese market. From cultural differences to the challenges of the competition, it’s crucial to have a good strategy.

Homegrown brands like Uniqlo and GU hold a significant market share, while international brands such as H&M and Zara compete alongside them. Other successful brands carve out their niches and offer innovative designs and incentives, like Forever 21 and Shein.

Forever 21 

Forever 21, a well-known fast fashion brand, exited the Japanese market in 2019. They attributed their departure to the intense competition and rapid growth of online shopping.

However, the brand re-entered the market in 2023 with a fresh approach and emphasis on sustainability. Initially, they started with online sales and a showroom-type store in Tokyo. Later this year, they opened their first physical store in Osaka’s LaLaPort shopping mall.

Forever 21 intends to open 15 stores and achieve 10 billion yen in sales by 2028. To help achieve this goal, they collaborated with Adastria Co., a large Japanese apparel company. This collaboration focuses on strategic product planning and marks a shift from fast fashion to offering high-quality and environment-friendly products.

Shein 

Shein, managed by a Singapore-based Chinese company, is a rising star in the SPA market. To capture the attention of the Japanese market, the brand strategically engaged with Tokyo Girls Collection events and established pop-up shops across the country.

Embracing the Direct-to-Consumer (D2C) model, Shein requires customers to purchase products online via QR codes. As the brand shows its fast growth potential in the Japanese market, its success is evident.

Conclusion 

Japan’s fast fashion market presents brands with both opportunities and challenges. To successfully engage Japanese consumers, brands must understand and adapt to their unique preferences. You can create a strong brand presence by staying on top of the latest trends, pushing for innovation, and delivering personalized experiences.

Ready to Expand Your Business? 

Experience exponential brand growth in Japan’s vibrant fashion market with COVUE as your trusted partner. Our market knowledge and expertise guarantee a solid foundation for your brand’s expansion, fostering long-term success and recognition.

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Sources: Japan Times, Statista, Asahi, Fibre2Fashion, Global News Wire

Importing Electronics to Japan

Importing Electronics to Japan? Here’s All You Need to Know!

पर तैनात | कोवुएडमिन द्वारा

Japan is a technology-driven nation with a high demand for electronics. The country’s electronics market is one of the largest in the world, with an estimated value of over US36.99bn in 2023. In 2022, US120.09bn worth of imports was alone under the electronics category.

As a foreign business looking to import electronics to Japan, there are several challenges you may encounter. Here’s a guide for importing electronics in Japan!

Two types of regulation for importing electronics  into Japan

 There are two crucial categories for regulated electronics when importing to Japan:  Japan PSE and Japan Radio.

Japan PSE

 PSE is a safety standard for electronic products. PSE stands for Product Safety Electrical Appliance & Material and is enforced by the Japanese government through the Electrical Appliance and Material Safety Law (DENAN). The PSE Mark is a mandatory safety label for products that connect to main power (A/C – wall power) or have a user-accessible Lithium-Ion battery. 

Products must comply with this standard to be sold in Japan. The certification process involves testing for electrical safety, electromagnetic compatibility, and other safety requirements. The PSE mark is mandatory for importers who want to sell their electronic products in Japan.

Products subject to Japan PSE are divided into two categories:

Regulated Electronic Products (high-risk) and Non-regulated Electronic Products (low-risk).

Non-regulated products are subject to a self-declaration scheme and require the PSE Circle Mark, while regulated products require third-party assessment and display of the PSE Diamond Mark. Nearly all electronic consumer products sold in Japan need PSE marking.

 Non-Regulated Electrical Products (low-risk): 

  • Extension cords
  • Battery chargers for mobile phones or laptops
  • LED light bulbs
  • Computer keyboards or mice
  • USB cables
  • and more.

 Regulated Electrical Products (high-risk): 

  • Hair dryers or straighteners
  • Electric kettles or rice cookers
  • Microwave ovens
  • Electric shavers or toothbrushes
  • Lithium-ion batteries for electric vehicles
  • and more.

Japan Radio  

The Japan Radio Law covers all products that use the radio spectrum and operate under 3 THz, including those that are not radio communication devices. Any product that emits a radio wave (e.g., GPS, WiFi, Bluetooth) is subject to the law, while those that only receive a GPS signal are not. It’s imperative to note that even non-communication devices, such as discharge lamps and induction heating devices, might be subject to Japan Radio.

 Products under Japan Radio: 

  • Mobile phones with WiFi, Bluetooth, or GPS capabilities
  • Wireless earbuds
  • WiFi routers or modems
  • Bluetooth speakers
  • Smartwatches with cellular connectivity
  • and more.

Read more on Japan Radio Law.

So, what does the process of importing electronics in Japan look like?

Step 1: Choose an Importer of Record.   

It is crucial to find a reliable individual or company as an Importer of Record with experience in importing electronic products into Japan. Your local partner should thoroughly understand Japanese regulations to ensure a smooth and successful import process.

Step 2: Determine if your electrical products can be imported into Japan   

Familiarizing yourself with import requirements and documentation is important to avoid delays or additional costs. For electronic products, certain technical standards regarding performance, durability, and safety must be met to qualify for import into Japan. You can find them in the Electrical Appliance and Material Safety Law (DENAN).

Electronic products must undergo a safety assessment when subject to Japan Radio and/or Japan PSE to comply with the regulations. That includes testing and inspection of components. Japan PSE testing is usually carried out in testing and inspection facilities designated by the Ministry of Health, Labour, and Welfare (MHLW).

Step 3: Submit the necessary documentation for product registration. 

 Product import declarations include: 

  • Invoices
  • Bills of lading or airway bills
  • Certificates of origin
  • Packing lists

 Additional documents if your products fall under Japan Radio: 

  • Manufacturer Japan Radio Certification: The manufacturer must obtain Japan Radio certification for their manufacturing facility from an internationally recognized certification company (such as TÜV Rheinland). Note that this certification is not a license to import but is the first requirement in the application process. Be sure to request a certified copy of the certificate from the issuing company.

 Additional documents if your products fall under Japan PSE: 

  • Manufacturer PSE Certification: The manufacturer must obtain a Japan PSE certification for their manufacturing facility from an internationally recognized certification company (such as TUV Rheinland). Note that this certification is not a license to import but is the first requirement of the application process. Request a certified copy of the manufacturer’s PSE certification from the issuing company.
  • PSE testing results if conducted before shipping.

Providing all necessary documentation and certifications ensures a successful and hassle-free import process into Japan.

Step 4: Product Label if it falls under Japan PSE or Japan Radio. 

 For Japan Radio: 

  1. The Japan Radio Label must be affixed to the product before shipping.
  2. The label must include the Importer of Record’s information, the Japan Radio Mark, and the license number.
  3. The label must be in Japanese.

 For Japan PSE: 

  1. Every product or part subject to Japan PSE requires a Japan PSE Label before shipping.
  2. The label must include the Importer of Record’s information and the PSE mark.
  3. If no label is affixed before shipping, the product or part will be held in customs until a label is applied.

By following these labeling requirements, you can ensure compliance with Japanese regulations and avoid customs issues.

STEP 5: Import Application.  

Your Importer of Record (IOR) company will handle the application process and forwards registration for your product to MHLW. Once the product has been approved for import, it can be sent to Japan, where the importer will handle customs clearance.

Conclusion 

You can streamline the import process by working with an experienced IOR company and ensuring your products meet all the requirements. That helps your electronic products to enter the Japanese market successfully without delays or hurdles at customs.

Ready to get started?

As your Importer of Record and local partner, COVUE helps you import your electronic products into Japan. Whether your products are unregulated, regulated, or subject to Japan Radio/Japan PSE, we know how to get the documentation and processes in order to expand your business.

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Sources: https://www.certification-japan.com ; https://www.jqa.jp ; https://www.certification-japan.com; https://tradingeconomics.com; https://www.statista.com

japan cashless payments

Japan Turns Digital: The Rising Trend in Cashless Payments 

पर तैनात | कोवुएडमिन द्वारा

Japan has long been known to rely heavily on cash for transactions.

However, as Japan progresses and embraces innovation, there has been a significant shift toward cashless payments. In this blog, we’ll explore the trends of contactless payments in Japan.

Types of Cashless Payments in Japan  

  1. IC Cards:

ICOCA, Suica, and Pasmo are some of the most popular IC cards and offer contactless transactions. The cards are rechargeable, and you can use them for public transportation and at different stores.

  1. Mobile Payment Apps:

Smartphone-based apps use QR codes or barcodes when buying. You can find apps like PayPay, LINE Pay, and Rakuten Pay in Japan. These applications offer rewards, cashback, or discounts.

  1. Digital Wallets:

Digital wallets provide secure payments via smartphones or smartwatches by using NFC technology. Widely used are Apple Pay and Google Pay.

  1. Credit Cards:

Japan’s most common cashless payment method is credit cards. JCB, Visa, and Mastercard are popular, and they come with rewards and incentives.

Does Japan become cashless? Yes! 

Japan’s transition to a cashless society was outlined in the “Cashless Vision”. The Ministry of Economic, Trade, and Industry (METI) developed it in 2018 and anticipates that 40% of transactions will be cashless by 2025. Due to the pandemic, cashless payment transactions have witnessed significant growth over the past year.

According to Shuji Kobayakawa, an economist at Meiji University in Tokyo, “more people avoid handling coins.” Moreover, the government encourages cashless shopping by giving reward points to anyone registering for My Number personal identity cards. 

Not just that!

Recently, Japan loosened its COVID-19 entry requirements, and expectations about the economic benefits of tourism have increased. Cashless options are beneficial to support tourism as travelers from other countries are used to contactless transactions. For these and other reasons, more and more Japanese customers use cashless methods, as you can see from the growth usage in 2022:

  • QR code payments increased by 50%
  • Credit card payments increased by 16%
  • e-money payments increased by 2%

Salary payments go cashless!

The Japanese government plans an online salary payment system without using bank accounts by spring 2023. This system aims to solve foreign workers’ payment issues, reduce bureaucracy, and support economic growth. Despite this, only 30 percent of businesses are considering digital salary payments right now, according to a survey conducted by Works Human Intelligence. That shows some sort of resistance to the changes. The government will have to create even more incentives in the future to promote cashless transactions.

With this rising trend, how can you use this as an opportunity to grow your brand?

 Here are some ideas:

  • Offer incentives like cashback and point awards for specific payment methods, as Japanese people love collecting points and receiving rewards.
  • Provide cashless payment options in your online store (e.g., credit cards, e-wallets, prepaid cards) that align with local preferences.
  • Ensure secure, reliable, and user-friendly payment systems that increase customer satisfaction and loyalty to drive sales.

Read more about the TOP 8 payment options in Japan.

Conclusion 

Japan’s move toward a cashless society changes consumer and business interactions. As a business selling in Japan, you must be aware of these ongoing trends to adjust and provide a variety of payment choices to meet consumer expectations.

Need help setting up your cashless payment methods?

COVUE’s payment solutions allow unrestricted access to most payment options in Japan. We help you to set these up so that you can capture more paying Japanese customers.

Book a Free Consultation

Sources: https://www.weforum.org ; https://www.nfcw.com ; https://asia.nikkei.com

Golden week business opportunities

Golden Week’s Hidden Gems: Exploring Business Opportunities in Japan 

पर तैनात | कोवुएडमिन द्वारा

Welcome to Japan’s Golden Week, a week-long holiday celebrated by an entire nation!  Let’s explore this event and its opportunities and how beneficial it can be for your business!

Golden Week in Japan  

Golden Week is an annual event in Japan, combining four national holidays in a single week. The name originates from the old Japanese radio slang “golden time,” referring to a time with the highest listener ratings. It is a week of entertainment and leisure time, with events hosted across Japan.

Japanese people anticipate the Golden Week, which provides a rare, extended vacation. Most of them enjoy time off, so the atmosphere becomes busy and lively. They participate in various activities, such as hiking and celebrations across the country. Some are held in amusement parks, zoos, museums, and shopping malls. As Japanese people enjoy this exciting period, businesses benefit.

Which Japan Holidays are Golden Week? 

Showa Day (the 29th of April)

Golden Week starts with Showa Day, which commemorates the birthday of the late Emperor Hirohito before the holiday transitioned to Greenery Day in 1989. This day honors the love of the emperor for plants. When Greenery Day changed to the 4th of May, the holiday changed back to its original name in 2007.

Constitution Memorial Day (the 3rd of May)

This day celebrates the Japanese constitution, giving citizens time to reflect on the idea of government and democracy.

Greenery Day (the 4th of May)

A day to celebrate nature, it encourages individuals to appreciate the environment and the human connection to it.

Children’s Day (the 5th of May)

Ending the Golden Week with Children’s Day! This day celebrates children’s health and happiness; it is flagged by colorful carp streamers and traditional food, such as Kashiwa mochi.

2023 Golden Week Dates 

Although the official dates of the Golden Week holidays are from April 29 to May 5 each year, celebrations and travel usually commence a day or two before the holidays and extend for a few days after, particularly during long weekends.

Does Golden Week present business opportunities? ABSOLUTELY!

It is one of the busiest holiday seasons in the country. With millions of Japanese people traveling domestically and internationally, the tourism and hospitality industries thrive during this time. Businesses related to transportation, accommodation, food, and entertainment can expect a higher demand and revenue.

Additionally, many people use this holiday season to go shopping. Shopping is one of the favorite activities during Golden Week, with locals and travelers taking advantage of promotions and sales. Due to people being off work, most visit stores online and offline during Golden Week more than at other times of the year. As a result, E-commerce sites such as Amazon Japan, Rakuten Japan, Uniqlo, Yahoo! Japan Auctions, and brick-and-mortar stores offer enticing discounts and exclusive items to sell more. You can see a spike in sales, especially online. Because of a staff shortage and a limited logistics capacity, many businesses plan to fulfill orders on time and inform their customers about possible delays. Read more about what an important role Japanese holidays play in business. 

Successful Campaigns from Brands during Golden Week

Brands can increase reach and sales by aligning marketing efforts with Golden Week themes and activities. Offering deals, special promotions, or products and services corresponding to holiday activities such as travel can help businesses capitalize on Golden Week. Therefore, Golden Week and other events throughout the year should be a part of your marketing plan for Japan.

Uber Eats Japan 

With the tagline “Every day is a day to commemorate,” in 2020, Uber Eats Japan offered customers an exclusive meal to enjoy at home. Each day, they provided a different type of dish or ingredient, with the themes switching daily (Matcha Day, Melon Day, and International No Diet Day). Furthermore, Uber Eats Japan also used wordplay in the campaign by naming the 8th of May “GO EAT” Day. To explain the linguistics behind it: In Japanese, the number 5 is called  “Go”, followed by the English for number 8, which sounds like “eat” to Japanese people. This example illustrates how powerful content localization in marketing campaigns can be.

 Sword Art Online and Battlecats 

In 2020, a Twitter campaign for the Sword Art Online game offered users rewards when they reached in-game targets and followed sharing and commenting guidelines. Moreover, the mobile game app named Battlecats, developed by PONOS Corp., celebrated its seventh anniversary. During Golden Week 2020, PONOS provided in-game extras and social media competitions featuring its mascot, Nyanko character to enhance brand visibility as more users spend time gaming during the holidays.

Conclusion

Golden Week presents an exceptional opportunity for businesses to engage with Japanese customers. Companies can create targeted marketing campaigns and promotions that resonate with the audience and offer discounts on products and services such as accommodation or travel.

Want to grow your business during the Japanese holidays?  

COVUE helps you streamline your marketing strategy and execution in Japan as part of our End-2-End Japan market entry services. Our goal is to position your brand in front of your target audience and connect with them.

Let’s Connect

 

Japan's Top Social Media Platforms in That Can Help You Grow Your Brand

Japan’s Top  Social Media Platforms That Can Help You Grow Your Brand

पर तैनात | कोवुएडमिन द्वारा

Social media has become essential to modern-day communication and information-sharing worldwide, and Japan is no exception. Did you know that by 2023 the number of social media users is expected to reach 102 million? That’s 81.1% of the population! Moreover, 50% of Japanese users own 3 or more social media accounts across different platforms.

Let’s take a look at the top social media platforms in Japan, their popularity among Japanese users, and how they can help you grow your business.  

Social Media in Japan

In Japan, social media has its unique history, with local platforms like Mixi, Gree, and Mobage dominating the market in the early 2000s. However, more popular and user-friendly social media platforms such as Line, Twitter, and Instagram replaced these platforms.

Mobile users reign social media in Japan, with around 98% of them accessing the platforms through their smartphones.

The gender distribution of social media users in Japan is relatively equal, with around 46,7% of users being male and 53.3% being female. More than 87.68 million users are 18 years old and above.

Japan Social media

 Top 6 Social Media Platforms in Japan in 2023 

  1.  LINE

LINE is a messaging app that has become one of the most popular social media platforms, with over 94.17 million monthly active users in Japan. You can find users of all ages, but most are teenagers and young adults. Furthermore, the app is known for its cute stickers and emojis that Japanese people love sending each other.

LINE is an all-in-one digital platform with numerous other features that make it worthy of its super app titles, such as Timeline, LINE Today, LINE Pay, LINE Games, LINE TV, LINE Mango, and LINE shopping. As Japan’s top social media platform, it is a go-to platform for businesses to reach their customers.

  1.  Twitter

Twitter is a social media platform in Japan with over 68.85 million monthly active users. All age groups are active on Twitter, especially young adults. Twitter is used for a wide range of purposes in Japan, including news, entertainment, and business. Interestingly, more than 70% of Japanese Twitter users use pseudonyms because of their high level of reservedness. Through their anonymous Twitter accounts, Japanese people can share their true opinions on news and trends and engage with Japanese celebrities and politicians who interact with their audience through social network.

Often you will find discussions on products on the platform because Japanese consumers find that reviews on websites aren´t truthful often. For that reason, they use Twitter as a search engine to see what real people are saying about specific items. Businesses can learn more about consumers’ preferences from these discussions and advertise products accordingly. 

  1.  Instagram: 

Instagram is a photo-sharing app that has become popular with over 56.43 million monthly active users in Japan. In addition to sharing photos of their daily lives, they use Instagram to share food, travel, and fashion content. There are people of all ages who use it, but the majority are women. They post visually appealing content such as reels, stories, or pictures.

Brands in Japan like to work with Japanese influencers as they have developed a following that actively interacts and engages with them. Moreover, these influencers know how to leverage the platform features to advertise products through their Instagram stories or reels. Besides that, building relationships with consumers and using Instagram ads, reels, and stories benefits businesses in the fashion, beauty, and travel industries and increases their revenue and brand awareness.

  1.  YouTube: 

YouTube is a video-sharing platform with over 102 million monthly active users. Japanese people use YouTube to watch music videos, comedy shows, dramas, and other content, stay updated on topics they’re interested in, and find new trends. People of all ages use the platform, mainly teenagers and young adults. They can share long-form and short-form videos to gain traction.

In Japan, called VTubers, or virtual YouTubers made with motion-capture technology, are a growing trend. In 2016, Kizuna Ai became one of the first virtual YouTubers to be called “VTuber”. Industries, including music, entertainment, food, fashion, and education, can engage users through anime content, Vtubers or branded characters. As a brand, you can make good use of these trends on YouTube in your content creation or collaboration with Youtubers to nurture and connect with your target audience and turn them into customers.

  1.  Facebook: 

Facebook is a social networking site that has been around for over a decade. It has over 48.27 million monthly active users in Japan. Japanese people, mostly middle-aged adults, connect privately and professionally on this platform. You can share long messages (posts) and short videos on Facebook.

Facebook is a more successful B2B marketing platform than LinkedIn in Japan. LinkedIn is viewed as an employment search engine, while Facebook is used as a business networking platform. Japanese business owners over 40 make up a larger portion of Facebook’s user base and are highly active there. For that reason, advertisements on Facebook can be a powerful tool for B2B businesses to reach potential customers and increase conversion rates of B2B products and services.

  1.  TikTok 

TikTok is a video-sharing platform in Japan with 17 million users and growing. It encourages engagement and viral sensations among users, making it popular among younger audiences who spend up to 45 minutes on the app. While it may be challenging to integrate TikTok into your digital marketing strategy, it offers a potential advertising channel for brands targeting the teen and young adult demographic.

To market your brand on TikTok, you have to create engaging content that resonates with its audience and collaborate with popular influencers. TikTok’s hashtag challenges, UGC (user-generated content), and in-feed ads are excellent formats for increasing brand visibility and connecting with younger audiences.

 Conclusion 

With a significant number and unique platforms that cater to the needs of Japanese users, social media in Japan presents an opportunity for businesses to reach out to potential customers and build relationships with them. You can create effective social media strategies by understanding how each platform works, who it attracts, and how Japanese people are active on social media. That will increase the impact of your brand on the market. Yet, you have to keep in mind that the localization of your content and strategy in Japanese is key to succeeding in your marketing efforts.

Read more about the importance of content localization in Japan.

Looking to establish a powerful brand presence on social media in Japan?  

As your local operating partner, COVUE provides End-2-End Japan Market Entry Services to help you achieve that goal. Our team of experts in marketing, branding, and localization can assist you in creating a robust brand presence on various Japanese social media platforms.

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The Rising CBD Market in Japan

An Overview of The Rising CBD Market in Japan 

पर तैनात | कोवुएडमिन द्वारा

The use of CBD (cannabidiol) has grown significantly in recent years, as more people have discovered its potential benefits for a variety of health conditions. While the use of CBD is legal in many countries, the regulatory landscape can be complex, and this is certainly true in Japan.

In this article, we’ll discuss the overview, opportunities, and challenges as a business when entering the rising market of CBD in Japan.

Overview of the CBD market in Japan 

The CBD market has been slower in enfolding its true potential, due to Japan´s strict regulations of cannabis and CBD. However, there has been some progress in recent years in the legalization of CBD products.

  • 2016: The Japanese government approved the use of CBD for medical purposes.
  • 2020: The government amended its regulations to allow the import and sale of CBD products.

According to a report by swissbiz, the growth of the market is expected to reach US$2.13 billion by 2024.

Currently, there are only a few companies in Japan that produce and sell CBD products. Most of these products available are imported from other countries, making it an opportunity for foreign sellers to enter the Japanese Market.  

CBD in Japan

Japan’s Laws and Regulations about CBD, marijuana, and hemp? 

The primary law governing cannabis in Japan is the Cannabis Control Act, enacted in 1948 during the US occupation. The CCL prohibits the possession, cultivation, sale, and importation of cannabis and its derivatives, including marijuana and hashish.

The Narcotics and Psychotropics Control Act is the second important law, that regulates the use and distribution of narcotics and psychotropic drugs, making it more challenging to import and sell CBD in some cases.

CBD, or cannabidiol, is a part of the cannabis plant that has gained popularity due to its potential health benefits. Unlike THC, another component of cannabis, CBD does not cause psychoactive effects that make you feel “high”. You can create CBD products like oils, capsules, and creams. In Japan, CBD products must be THC-free and can only be sourced from certain parts of the plant, such as the stem.

Marijuana is the more well-known type of cannabis and is illegal in Japan. Its possession, use, and sale can result in imprisonment and a fine. The MHLW formed an expert group in 2021 to evaluate the current Cannabis Control Act and plan to amend the law by 2023. That will probably permit the usage of medical marijuana in the pharmaceutical industry.

Hemp, on the other hand, is often used for industrial purposes and it usually does not contain THC, making it legal in Japan with some restrictions. However, it is crucial to ensure that the THC content in your hemp product is meager to import your products.

Opportunities for CBD businesses looking to enter the Japanese market 

Despite Japan’s CBD market at its early stage, there is significant potential for growth.

One factor driving the growth of the CBD market is the increasing interest in natural remedies and alternative therapies. Japanese consumers are becoming more health-conscious. They are looking for products that can help them manage stress, anxiety, and other health conditions. Therefore, they might be getting more open to trying CBD products.

Food, beverages, supplements, and cosmetics are suitable entry products to introduce CBD to consumers, as they can try them in retail shops and buy them online. You can position these products as aids to better sleep and for pain relief, which can directly appeal to health-conscious consumers. Depending on the product category, you must be careful about which claims you can use in Japan.

Conclusion 

In conclusion, the CBD market presents opportunities for businesses looking to expand in the Japanese market. With the increasing public acceptance of CBD products, the market is becoming more accessible. However, navigating the legal and regulatory landscape can be challenging. Careful planning and compliance with laws are essential to importing and selling a CBD product in Japan.

Grow your Business in Japan! 

Selling CBD products in Japan is a challenging task due to strict regulations. To increase your chances of success, it’s important to have a reliable partner to guide you through the process. COVUE can assist you in growing your CBD business and achieving your goals in Japan.

Brewing Success How You Can Tap into Japan's Tea Market

Brewing Success: How You Can Tap into Japan’s Tea Market 

पर तैनात | कोवुएडमिन द्वारा

Japanese people hone their traditions, so they do it in tea ceremonies. The tea culture is centered around Matcha, a powdered green tea that has gained worldwide popularity for its unique taste and health benefits.

At the same time, you can see Japan’s herbal tea market booms with an expected CAGR of 8.5% from 2023 to 2029. Here’s how you can leverage the growing tea market in Japan.

Why is Matcha famous in Japan? 

Herbal teas, such as Matcha, have been enjoyed in Japan for centuries, not only because of their complex taste but also because of their numerous health benefits. It contains several nutrients and boosts metabolism, making it an excellent choice for health-conscious people. Nowadays, Matcha is still used in traditional Japanese tea ceremonies as well as in sweets and beauty products. With its rich history, unique flavor, and versatility, it has become one of the most beloved beverages in the world and laid the foundation for Japanese people’s interest in tea.

Some Japanese tea products contain abundant catechins, an antioxidant that is supposed to help people reduce body fat. Herbal teas are low-calorie, healthy drinks that you can enjoy without adding sugar or milk. It is clear from the growth of the herbal tea market in Japan that consumers are becoming more interested in healthy tea products.

 Japan’s booming tea market and its opportunities 

The herbal tea market in Japan is expected to grow vastly in the next few years. The country is known for its high-quality tea production, with some of the best green tea in the world coming from Japan. Most of its production happens in the prefectures of Kyoto, Aichi, and Shizuoka, and the export from Japan to other countries increased significantly within the last few years. The tea production in Japan has a high standard of quality control and is subject to strict regulations.

With the growing well-being consciousness among Japanese consumers, there has been an expansion in health-benefiting drinks, including decaffeinated and organic herbal tea. Premium and exclusive blends with wholesome ingredients are popular because they can improve your constitution actively.

Learn more about the trends in the food and beverage industry in Japan.

Mainly in premium supermarkets, you can find tea from foreign brands like Kusmi, Fauchon, and Dallmayr. Common herbal tea ingredients include cinnamon, dandelion, chamomile, ginger, turmeric, and blends. The tea industry in Japan is well established, with a history that dates back over 1,000 years.

For that reason, it is essential to know which opportunities you have in this market to leverage them.

  1.  Research the market: 

When tapping into Japan’s tea market, it is imperative to research the market thoroughly. Therefore, you should get a deep understanding of the different types of tea products available in Japan, the target audience, and the laws around importing tea products.

  1.  Partner with local suppliers: 

Working with local suppliers and partners can help you to enter Japan’s tea market successfully. Not only will you have access to valuable partnerships and high-quality resources, it can also help navigate the complex regulations and competition in Japan.

  1.  Identifying niche markets: 

A specialized or niche product that meets customers’ needs can help you differentiate yourself in the market. Organic, non-GMO, or low-calorie tea products ranging from drinks and foods to cosmetics can appeal to health-conscious consumers. Premium or luxury tea products are another options to target high-end customers. Additionally, you can offer flavored sweet or savory food products or tea blends that include special herbs and spices. Furthermore, you can sell products that are tailored to specific Japanese cultural events or holidays. With unique products, you can capture various market segments and increase sales.

  1.  Selling and marketing online: 

Selling your products online has become much easier in Japan thanks to e-commerce. You can reach a wider audience and expand your customer base by taking advantage of online platforms such as Rakuten, Amazon, and Yahoo! Shopping. You can also market your products and engage with customers through social media platforms such as Instagram, LINE, and Youtube. While doing that, it is crucial to focus on the quality and authenticity of your tea products as the consumers have high expectations.

  1.  Working with local farmers: 

You can source high-quality tea leaves from local tea farmers. Not only does that ensure the product’s authenticity, but it also supports the local economy. Working with local farmers can help you create new and innovative products that meet the market’s demands.

  1.  Selling to B2B: 

You can target the food service and hospitality industries by supplying restaurants, cafes, and hotels in Japan. To build relationships and trust with local businesses, you may need a local operating partner like COVUE to connect you with the market.

 Conclusion 

Japan’s tea market is an exciting industry that provides a lot of opportunities for businesses looking to expand their reach. Focusing on niche market segments, online sales, and marketing, collaborating with local farmers and partners, diversifying product lines, and branding and packaging can help you compete successfully in the Japanese market.

Grow your Business in Japan!

COVUE is committed to helping you enter the Japanese market as affordably and effectively as possible. With our End-2-End Japan Market Entry Services, we provide you with everything you might need, from compliance and logistics to product localization.