Job offers for 2022 university graduates improve as COVID-19 fears subside in Japan

Job offers to students set to graduate from universities and graduate schools in Japan next March marked a significant improvement from a year earlier as concerns about the impact of the coronavirus pandemic subsided, according to a recent survey.

Such offers dropped 1.0% to an estimated 676,400, compared to the 15.1% tumble in 2021 when firms grew cautious about hiring new graduates due to the COVID-19 pandemic, Recruit Works Institute said.

Hiroyuki Motegi, an analyst at the Tokyo-based research institute, pointed out companies are increasingly willing to hire new graduates, saying they “are prepared to some degree to cope with the third state of emergency” the government declared over the COVID-19 pandemic.

“Going forward, job offers are expected to remain flat or show a gradual recovery,” Motegi said.

The academic and business year begins in April for most educational institutions and corporations in Japan.

For students graduating next March, the ratio of job offers to an applicant eased 0.03 point to 1.50, according to the survey.

By size, job offers fell 6.0% at companies with 300 to 1,000 employees, and the offers were down 0.2% at companies with less than 300 workers.

The number of offers, however, rebounded at companies with more than 1,000 employees.

The number of students applying for firms that employ 5,000 people or more stood at 109,300, up 51.0%, which is a sign that students attach importance to large companies seen as more stable.

The number of those applying for firms with less than 1,000 employees showed a decline.

The survey drew responses from 1,674 job-seeking university and graduate students and 4,459 companies with five or more employees in a three-month period through March.

source: https://www.japantimes.co.jp/

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

Japan’s exports reveal largest monthly gain since late 2017

Japan’s exports posted their strongest growth in more than three years in March, led by a surge in China-bound shipments, in a sign the economy continued to recover from last year’s deep coronavirus slump.

Even though the world’s third – largest economy has made headway upon recovery after the enormous global hit of Covid-19 pandemic in the first quarter of 2020. Trade data suggests Japan’s economy is unlikely to completely ease concerns about the fragile recovery that is currently being made.

“The rebound in exports slowed significantly across Q1 and external demand is unlikely to provide much of a tailwind to growth this year,” said Tom Learmouth, Japan economist at Capital Economics.

“The impressive annual figure was down to base effects from the weakness in exports in March 2020.”

Ministry of Finance data showed on Monday exports surged 16.1% in March from a year earlier, marking the steepest rise since a 16.2% gain in November 2017.

That was better than an 11.6% jump expected by economists in a Reuters poll, and followed a 4.5% contraction in February.

Looking at regions, shipments to China (one of the largest Japan’s trading partners) has soared 37.2% in the current year to March. Led by nonferrous metals and plastic materials, it has seen their biggest gain since January. This boosted stronger Japan’s exports of semiconductor machinery.

Exports to world’s top economy, the United States, rose by 4.9% due to the current strong demand for cars and construction machinery such as offset lower shipments of aircrafts and bulldozers.

Furthermore, Export shipments to Asia has gained 22.4%, while those in the EU increased 12.8% in March.

Imports rose 5.7% in March compared with the same month a year earlier, versus the median estimate for a 4.7% increase, bringing a trade surplus of 663.7 billion yen ($6.11 billion) versus the median estimate for a 490.0 billion yen surplus.

Want to enter Japanese Market?

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://japantoday.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#

JAPANESE BUSINESS ECONOMY REBOUNDS DESPITE COVID-19

Japanese business and big manufacturers’ sentiment rebounded to pre-pandemic levels in the first quarter of 2021 despite a renewed Covid-19 state of emergency, companies stepped up capital spending plans, suggesting Asia’s largest advanced economy will stage a quick recovery from the pandemic.

The bank of Japan’s Tankan Index for large manufacturers rose 15 points to a reading of plus 5, well ahead of analyst expectations that it would remain in negative territory at minus 2.

“The results underline the Bank of Japan’s view the economy continues to recover moderately,” said Yoshiki Shinke, chief economist at Dai-ichi Life Research Institute.

The data offers some relief for policymakers striving to revitalize the pandemic-hit economy as the fourth wave of infections raises uncertainty about the outlook.

However, the optimistic sentiment at Japan’s industrial companies suggested that the global vaccine rollout, robust growth in China, and the prospect of a large US stimulus were improving the business environment for exporters.

“It turns out that renewed state of emergency curbs have had limited impact on business sentiment thanks to solid exports and goods demand,” said Yoshiki Shinke.

Backed by prospects of recovery, big firms expect to boost capital expenditure by 3.0% in the year that began in April, more than market forecasts for a 1.4% gain. That would follow a 3.8% cut in spending plans for the year that ended in March.

Today is the best time to expand in 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.


Resources:
https://www.ft.com/content/8dc75fbe-faf4-4bdc-b96f-20417ea2f0a7
https://www.reuters.com/article/us-japan-economy-tankan-idUSKBN2BO3PF

REASONS WHY YOU SHOULD EXPORT YOUR PRODUCTS GLOBALLY AS A BUSINESS

By the business book, it states that a successful business, regardless of size or specialty, must remain proactive and growth orientated. If there is too much time spent on a stagnant plateau could cause a result failure to grasp the reigns on a healthy business path of improvements and increased profits.

So, the question everyone asks; “How can you jumpstart sales and revolutionize the way you do business?” The simplest answer would be exporting to foreign markets globally. Regardless of the size or what industry the business is set.

There is so much potential to find in foreign markets. If the business’s goal of risk management, generating new revenue streams, efficient production, competition elimination, or increase stability of your business. Exporting is a logical step to take towards meeting those goals.

Market Diversification.
If the business isn’t exporting that could be a disadvantage meaning, the business is putting all of its eggs in one basket. Many companies make the mistake of realizing how dependent they are on the health of a single market until it’s too late. To damper the effects of a localized economic downturn, diversify businesses’ client base, and finding new foreign markets you can export to can help you reduce those chances. Being proactive about diversification insures the company against poor economic conditions in one part of the globe. This is a great way to manage risk and become more profitable in the process.

Jumpstart growth.
With the products that the business already produces, why limit itself to working within the domestic markets? Through exportation, it can deliver results to your company through the chance of fast revenue that can then be reinvested into the business. Instead of waiting for the local market to exhaust stock, export to expand the range of your business and generate capital faster. This proactive strategy allows your company to be more competitive in its industry as you eclipse competitors at speedier rates.

New sources of revenue.
Through exportation of goods gives the company an advantage to create new streams of revenue. There are many untapped markets worldwide that are waiting to be found. There is only the small matter of locating them and creating business relationships. Once you’ve established reliable distributor contacts, your exports can lead to a tremendous increase in annual revenue without much additional work on your part.

Increased stability.
Seasons impact every company. If the company suffers a significant impact from the natural rhythms of the domestic market, exporting to countries with opposite trends can give the company much-needed stability. For example: If the business sells winter apparel, don’t accept dwindling sales during the spring and summer months at home. Instead, counteract these predictable downturns by finding cold-weather markets with a high demand for your products. This strategy is an easy way to maintain consistent production and profitability, year-round.

Take advantage of full production capacity.
As an industrial manufacturer looking to get the most out of existing resources, it’s important to take advantage of the full production capacity. If the business is recalling back production because they are tied to the demands of a local market, exporting can solve this problem and make more money. Find foreign markets that give the business a chance to increase production while reducing fixed costs. Higher production levels also mean more influence during price negotiations for raw materials.

Extend product lifespan.
After selling the business products to a domestic market for a long time period, sales can show a decline as demand swindles off. As soon as the business notices this trend, consider new markets before considering new products. Products that are considered “mature,” in one market have the chance of becoming a desirable new product when exported to a foreign market. Make sure the business has gotten the most out of its existing ideas before investing in new product development. Exporting is an effective way to achieve this.

Better feedback.
Businesses that cater to diverse markets find it easier to collect accurate feedback and product improvement suggestions. When working with a sole domestic market, customer response is not as well-rounded. This advantage makes it easier to be competitive in a domestic market.

Neutralize competition.
If the company’s rivals are exporting and the company isn’t, this can be labeled as giving away competitive advantage. There’s no way to compete with a business that works with diversified global markets if the company is unwilling to look beyond its borders. By sending the products abroad, the business can counteract the advantages of competition and level the playing field in the chosen industry. Exporting also helps to neutralize foreign competitors that are selling within the company’s domestic market. By shipping your products overseas to their home markets, the business can offset a key imbalance.

There is endless potential in the growing global economy and little reason to avoid the opportunities provided. While exporting may not have been a practical option in the past, it is now a widespread strategy that is increasing the cash flow, competitiveness, and stability of large and small businesses alike. Sending the business’s products abroad is the next logical step for companies that are limited by their domestic markets.

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.

SIP Global Partners $150 Million funds to bring U.S. start-ups into Japan

SIP Global Partners $150 Million fundsto bring U.S. start-ups into Japan

On March 10th of 2021, SIP Global Partners announced a new $150 million (USD) or ¥16 billion (JPY) to invest in early-stage U.S. start-ups that have the potential to expand to Japan.

Japan being centre of deliberations as a target of interest for U.S. start-up expansion. Over the last few years, it has become a top market for companies like Slack, Salesforce, Twitter with more recent addition of Clubhouse.

So far, the funds target of $150 million (¥16 billion) has acquired $75 million (¥8 billion) at a first close. It has already been used investing to five companies.

SIP Global Partners use of new fund will take a look at Series B-Stage companies that have products to offer or ones that are on the soonicorn list of new products to come to the market including those that are ready for international expansion.

The dream team will work closely with portfolio companies, creating a systematic helpline for helping them launch operations into Japan and other Asian markets.

As commented by managing partner Justin Turkat of SIP Global Partners:

“Japan is a promising market for foreign start-ups partly because an undercapitalized venture capital ecosystem means there is a smaller pool of entrepreneurs, with many of the country’s top tech talent opting to join conglomerates or the government instead.”

Japan’s start-up market even though with lots of promise and potential it is still nascent Mr. Turkat added. Although Japan is now the largest source of outward foreign direct investment in the world, and with approximately 125 million consumers and large corporations in need of scalable solutions, it’s a ready and overdue market for new tech.

“If you look at what’s happened in the last couple of years, I think Japan is open for business with U.S. start-ups with an urgency that I’ve never seen before, and we think there is a lot of tailwinds around it. You look at investments and partnerships with U.S. start-ups, it’s at record levels over the last five years and deal counts are increasing every year,” Turkat said.

Four investors based in the U.S. and Japan has supplied the fund partnering with Mr. Turkat the founder and managing partner Shigeki Saitoh alongside former director of the Japan Venture Association, general partner Jeffrey Smith and Matthew Salloway.

All four partners who invested to the launch of the fund on average have around twenty years and more of experience in observing global expansion happening early in start-ups operations, to cross border as operators and investors across the U.S. and Asia.

“I think it used to be an axiom that if you’re a U.S. start-up and you’re venture-backed, you’re not thinking of expanding overseas until your Series D round,” but companies are now eyeing foreign markets as early as their seed rounds.

SIP’s is looking at three areas to invest funds into new start-up’s:

  1. Creativity (augmented and extended reality, synthetic media and web-based platforms).
  • Productivity (artificial intelligence and machine learning, edge computing, the Internet of Things and semiconductors).
  • Safety (digital health and information security).

Furthermore, Mr. Turkat is focusing upon companies that supply core infrastructure or the economic layer for emerging technology.

For example, “on the infrastructure layer, we’re looking at 5G being rolled out globally simultaneously, then the edge computing, semiconductors, security and AI and machine learning, all around this infrastructure layer,” he said. 

Current fund’s portfolio companies that fit into the criteria are OpenRAN, Parallel Wireless and Croquet.

“Then you have the economic layer with all of these advancements, the platforms and applications sitting on top of it,” Turkat added. These other investments include Fable, Tilt Five and Kinetic.

SIP Global Partners works closely with start-up’s whose goals are to expand into new countries. After Japan, SIP also helps start-up’s enter other Asian markets, especially in ASEAN, including Thailand, Vietnam and Indonesia.

Today is the right time to enter the Japanese market. COVUE can help you establish a legal entity in Japan. We deliver a strategic approach by enabling our clients the ability to retain the same quality of legal compliance as their own in-country subsidiaries. With many more services provided by COVUE we are here to help you. Contact us now!

Credit to – https://techcrunch.com/2021/03/10/sip-global-partners-announces-first-close-of-its-150m-fund-to-bring-u-s-startups-into-japan/

What is a FOREIGN ONLINE SELLER in Japan?

Foreign Online Sellers in Japan

A “Foreign Online Seller” is a person or company outside of Japan selling and shipping to online buyers in Japan.

Foreign Online Sellers cannot fully comply with Japan import and tax rules for importing and selling products in Japan. To resolve this, the government of Japan has implemented new rules for foreign online sellers to ensure sales and import tax compliance.

Declared Import Value:

Online sellers with no company established in Japan must declare the online sale value of their imported product to be the same as the import value on their shipping invoice. Japan Customs will apply Duty and Consumer Import Tax based on the online selling price. Japan Customs also requires supporting documentation in the form of a Foreign Online Seller Report (FOSR) to be part of the Shipping Invoice. This report displays your store name or website, inventory, and selling price of all products being imported to Japan.

To ensure Sellers do not undervalue their import, Japan Customs will conduct a selling price search to ensure your selling is within an acceptable margin of the same or similar products. If your Declared Value/Selling price is below the acceptable margin, Japan Customs will apply a Fair Market import value to your shipment. You will then be charged import and duty tax based on the revised value.

During the import process, Japan Customs will:

  1. Review your Store/website and Product selling price to confirm it is the same as the import value.
  2. Check your pricing history to ensure the pricing was not recently lowered to avoid import tax
  3. Monitor your selling price to ensure your pricing does not increase excessively after import.

Sales Tax: Foreign Online Sellers

Profit Tax in Japan: all companies must comply with Profit Tax laws. To claim wholesale, purchasing, import tax, or manufacturing costs on your commercial/shipping invoice, you must sell (transferring) the product to a distributor or subsidiary (another company who will resell the products or to your subsidiary) in Japan.

  • Online sellers with no company established in Japan, cannot comply with Japan profit tax laws. Therefore, Japan Customs and Tax have implemented import requirements for online sellers. Online sellers must declare the online sale value of their imported product and pay the Duty and Taxes based on that value.
  • Japan Customs has become very strict with online sellers. Imported products will be stopped. Japan Customs will review your online account to compare your sale price to your declared value. If they do not match, you will be charged additional taxes and possible penalty fees. Multiple infractions (failure to comply) can result in your company being restricted to import products into Japan.
  • Do not modify your online pricing during import. Japan Customs has access to online seller pricing history. If Japan Customs believes you have intentionally changed your online pricing to avoid taxes, you may be restricted from all future imports.
  • As a policy, COVUE IOR services are fully compliant with Japan Customs and Tax laws. COVUE does not accept shipments that do not comply with Japan import and Tax rules and regulations.

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.