Insights and advice on how international corporations can enter the Japanese market and capitalize on its business opportunities.

1. WHITE PAPER: KVH Global Services
3 Steps to Successful Business
Expansion to Japan
Insights and advice on how international
corporations can enter the Japanese market and
capitalize on its business opportunities
Table of Contents
2 Introduction
3 Establish Local Business Partners
4 Understand the Spoken and Unspoken Languages
5 Secure Connectivity
7 Conclusion
8 Contact Us
8 About KVH
Copyright© 2012 by KVH Co. LTD
All Rights Reserved. Not to be copied or reproduced without express permission of KVH Co LTD
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2. 3 Steps to Successful Business Expansion to Japan
Introduction different consumer markets. One example is
a leading Japanese mobile phone service
More and more, enterprises across the provider recently unveiling their new smart
Asia-Pacific region and globally are assessing phone that targets seniors2, featuring large
how they can succeed in Japan’s unique screens and fonts for easy viewing, as well as
market. With the evolving HFT and financial simplified application usage. In doing so,
markets, rapidly growing e-commerce and they have demonstrated a way to reach a
online gaming markets, high mobile and seemingly small audience that actually
internet penetration, and the booming represents a large, and so far untargeted,
development and adoption of social media, part of the population that can generate high
Japan offers boundless opportunities and sales figures.
clearly earns its reputation as the gateway to
Asia for foreign businesses and investors. In short, the Japanese market is booming
across several industries, and is expected to
Particularly, although Japan was considered continue growing. Many Japanese
a relatively slow adopter of smart phones companies have identified the key changes
among developed and technologically in consumer and enterprise behavior, and are
advanced nations, it has the highest rate of quickly adapting their strategies to generate
“Smart Phone Heavy Users” according to a new business and sales opportunities.
recent Wall Street Journal article1, with smart Various foreign companies are also making a
phone users tripling in numbers since 2011 and strong reputation for themselves in Japan,
the highest average number of applications though these are not as common.
installed in smart phone devices in the world. Salesforce.com, for example, has been
To capitalize on this rapidly growing and broadly implemented and praised across the
technologically evolving market, the mobile Japanese market with 5,000 Japanese
industry’s major players are not only releasing companies already using their service. Such
new smart phone and tablet models in record companies have entered Japan with a clear
numbers, but are also becoming more and unique strategy in mind, which includes
creative and savvy in how they penetrate leveraging local business partners and
2 Agence France-Presse 2012, Japan's DoCoMo to
1 Koh, Yoree 2012, Japanese Smartphone Users: Fewer, launch smart phones for elderly, Hurriyet Daily News,
But More Savvy, The Wall Street Journal – Japan viewed 22 May 2012,
Realtime, viewed 22 May 2012, < <http://www.hurriyetdailynews.com/japans-docomo-to
http://blogs.wsj.com/japanrealtime/2012/05/16/japane -launch-smart-phones-for-elderly.aspx?pageID=238&nID
se-smartphone-users-fewer-but-more-savvy/>. =20869&NewsCatID=374>.
Copyright© 2011 by KVH Co., Ltd. All Rights Reserved
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3. 3 Steps to Successful Business Expansion to Japan
vendors, enabling bilingual use of their Establish Local Business Partners
product, and gaining a thorough
understanding of how Japanese Having a strong and reliable local business
organizations conduct business. These network is key to tapping into the Japanese
strategies, however, should not be market. There is a common understanding
underestimated. that 20% of a business’ most influential
customers in Japan will lead to 80-90% of their
What is often misunderstood or overlooked by
business profits as word-of-mouth is not only
foreign companies, is that expansion into
highly valued, but genuinely trusted in this
Japan involves the challenges of language
and cultural barriers, legal and regulation remarkably extensive though closely
differences, lack of market understanding, connected society.
and breaking into a new business network,
Thus, it is critical to strongly consider who your
which differ in complexity and style from other
business partners will be in this endeavor and
major financial and business hubs in the
how you can best leverage their capabilities.
Asia-Pacific like Hong Kong and Singapore.
Although it is easy to assume that the Organizations that are based in Japan with
extensive Westernization of Japan and the everything from Sales to Operations to
globalization of some of Japan’s most Product Development conducted locally, are
renowned corporations, such as Toyota and far more likely to ensure reliable and
Mitsubishi, would make the Japanese market high-quality local services that are molded to
relatively open to adopting foreign products
suit the market in comparison to organizations
and embracing foreign business, lack of
that operate their services overseas, though
experience and understanding of this unique
merely use Japan as a base for their office
market can often lead to failed business
ventures by foreign organizations. headquarters.
For example, for businesses requiring local
This whitepaper aims to outline some of the
hosting or colocation services, companies
key considerations and steps foreign
with their own data centers in Japan will be
businesses should take in order to succeed in
able to provide a significantly more valuable
Japan’s unique and constantly evolving
market. service than providers that operate from data
centers based overseas. Local computing
resources will ensure the latency required for
web applications, as an example, is met, and
Copyright© 2011 by KVH Co., Ltd. All Rights Reserved
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4. 3 Steps to Successful Business Expansion to Japan
enable faster and smoother use of these Operations, and Management teams, are
applications among Japanese users able to communicate with you in your
accessing from within Japan. Furthermore, language as needed. In cases where an
service providers that can combine these issue needs to be escalated to another team
or level of management, bottlenecks caused
services with security solutions, network
by communication barriers can be extremely
connectivity, managed services, and
time and resource-consuming. Moreover, if
bilingual technical support 24 x 7, will offer a
this issue is related to your data or network
complete and cost-efficient IT solution. connectivity, these delays could lead to data
Seamless communication in a common leakages and contamination, security threats
language will also allow your business to save and hacker breakthroughs, or other forms of
time and focus resources and efforts on your malware issues that could severely damage
core business areas. the reputation of your company.
Understand the Spoken and Also, it is important to understand that basic
conversational Japanese skills and a surface
Unspoken Languages understanding of Japanese business culture
will not necessarily meet the standards
Although Japan is becoming more and more
required to communicate with local
international, without internal Japanese
businesses effectively. Some common
writing and speaking capabilities locally, it will
courtesies that are often missed include being
be difficult to conduct business at all. Some
organized and punctual at all times by
Japanese companies may have a handful of
ensuring meetings are planned several weeks
staff who can communicate competently in
in advance with the time and location
English, though these skills are often utilized
planned appropriately (e.g. When choosing a
across the company to deal with all of their
restaurant for a meeting, consider the
foreign-business related work, rather than
restaurant’s atmosphere, menu and
providing overseas-based customers with the
ingredients of the meal, location in relation to
consistent bilingual communication and
their office and convenient train stations, and
support they require.
note that seating a customer at the edge of a
long table will be considered rude),
When working with business partners and
understanding the correct way to exchange
vendors, ensure that not only your contact at
business cards, perfecting the art of bowing
the company, but also their direct team, as
at the right time and angles, and learning the
well as the relevant Sales, Service Desk,
hidden meanings behind certain phrases
Copyright© 2011 by KVH Co., Ltd. All Rights Reserved
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5. 3 Steps to Successful Business Expansion to Japan
such as “Daijoubu”, which directly translated 250 million views of NHK, Japan’s leading
means “I’m fine”, though in a business context mainstream media sources3.
often eludes to “No”.
To survive and thrive in this technological
Understanding the complexities of Japanese environment, businesses need to ensure they
language and culture is not to be have reliable and secure ways of storing their
underestimated and misunderstandings in data, flexible and scalable IT resources to
certain scenarios can easily lead to a account for fluctuations in their product
customer losing trust or interest in your usage, access to the lowest latency networks
business. As such, when leveraging a local for latency-sensitive processes, and the
business partner that you believe will act as means to enable their staff to work from
your gateway to more Japan-based business anywhere and at any time while remaining
opportunities, ensure they not only speak your connected to their team and data wherever
language, but also have capabilities they may be located.
throughout their organization in Japanese to
fill the gaps in skills or knowledge that you To start, consider the following:
require.
Cloud Computing: The cloud computing
Secure Connectivity industry in the Asia-Pacific region is booming,
and Japan is becoming a key player in this
The final and, arguably, most important shift with 70% of CIOs claiming 4 cloud
component of your business expansion to integration as a top priority in 2011.
Japan, will be how you technologically keep Leveraging an Infrastructure-as-a-Service
pace with this highly tech-savvy society and (IaaS) provider that offers a cloud
fast moving economy. Japan boasts not environment with connectivity via global L2
only high and increasing internet and mobile networks will enable your business to expand
penetration rates, but statistics also show a to Japan and beyond via low latency
rapid shift towards communication through
social media and away from traditional
information sources. For example, 3 Hepburn, Aden 2011, Infographic: Asia-Pacific Social
Media Statistics, Digital Buzz Blog, viewed 7 May 2012,
according to research conducted by
<http://www.digitalbuzzblog.com/infographic-asia-pac
Burson-Marsteller in 2011, Japan generated ific-social-media-statistics-stats-facts/>.
over five billion blog views, and almost six 4Subramanian, Krishnan 2011, IBM Survey: CIOs Expect
A Cloud Boom, CloudAve, viewed 7 May 2012,
billion video views via video sharing platforms, <http://www.cloudave.com/12290/ibm-survey-cios-exp
though only 310 million views of Yomiuri and ect-a-cloud-boom/>.
Copyright© 2011 by KVH Co., Ltd. All Rights Reserved
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6. 3 Steps to Successful Business Expansion to Japan
connectivity. These networks are also highly Online and Mobile Gaming: Asia’s online
secure as they create an environment within gaming industry is booming, with Japan as a
which the administrator can connect to their hub for the action. This stems from a long
local computing resources as if they have history of adopting mobile technology well in
been built within a closed corporate network. advance of many Western markets while
Cloud environments also offer the flexibility to competing with similarly technologically
scale your IT environment according to advanced markets like Korea and Hong Kong.
demand, which leads to higher cost Japan holds the world’s second largest video
efficiency and more reliable support during game industry (after the US) and hosts a
spikes in data traffic. multi-billion dollar social gaming market5 that
stems from the mobile social gaming giants
Financial Market: Renowned as the gateway Gree and DENA. Overall, this is a highly
to Asia for the global financial industry, Tokyo active gaming market of over 39 million users6,
offers businesses in the financial services offering boundless opportunities for foreign
sector opportunities to capitalize on a gaming companies to reach a new audience.
growing and successful HFT market and some To tap into Japan’s highly active gaming
of the most active exchanges in the world. community and capitalize on this market,
To best leverage these opportunities, seek a establish high-speed network connectivity
network and data services provider that not that allows for spikes in data traffic and can
only offers the best proximity services and handle them securely. Online gamers,
lowest latencies in the market, but can also particularly those who are used to high-speed
offer highly secure networks and hosting as internet, will easily and quickly dismiss games
well as a proven reputation in the industry. that are slow or regularly lag.
Furthermore, service providers with PoPs As such, to minimize the network latency you
(Points of Presence) in your region and key are providing to end-users, leverage an IaaS
target markets as well as strong partnerships
with other leading institutions in your key
markets will enable optimal results. For 5 Schutte, Wybe 2012, Japan’s Social Gaming Market
example, traders should be looking at [Infographic], GamesIndustry/Blog.com, viewed 7 May
2012,
providers that hold partnerships with HKEx for <http://www.gamesindustryblog.com/2012/04/japans-s
Hong Kong, TSE and OSE for Japan, KRX for ocial-gaming-market-infographic/>.
6
Korea, and more to ensure they are truly は口人 ザー ユム ー ゲ 2011,
トイエ リク ア ィデ メ社 会式 株
3,900
産ムーゲ「 書白るす瞰俯を年 の界業ムーゲ。人万
、 10
capitalizing on the opportunities in these Decade , ValuePress!, viewed 22 May 2012,
刊発」 業
markets via the best available resources. <http://www.value-press.com/pressrelease/88532>.
Copyright© 2011 by KVH Co., Ltd. All Rights Reserved
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7. 3 Steps to Successful Business Expansion to Japan
service provider based in Japan with a local IT you want to penetrate, and whether their
environment. Using an experienced cloud language capabilities go beyond Japanese
service provider that guarantees and English, and cater to the needs of your
performance with SLAs and can handle the business in other regions.
difficulties and expenses involved in
maintaining optimal connectivity speeds, will
Conclusion
free up even more time and resources to
focus on your core areas of business. Also, Japan is undoubtedly a market not to be
verify the efficiency of the servers by testing missed, particularly for businesses looking to
the environment beforehand. Testing the extend their capabilities across the
server environment will allow you to Asia-Pacific. However, to succeed in this
understand whether the provider and their market takes a thorough understanding of
services can actually meet your specific how your particular industry functions locally,
needs. Lastly, as the gaming industry and a strong network that can lead to the
becomes increasingly international, ensure right business partnerships for your
your network is extensive across and beyond organization.
the Asia-Pacific region to support your
business as it grows organically and as you One business partner that can meet several
continue to search for and execute growth of your needs will be significantly more
opportunities in other markets. Rather than cost-effective, productive, and easier to
leveraging the platforms of other gaming manage than several business partners that
companies in your target markets, assess the each provide a single service. Thus, choose
options of a neutral IaaS provider, as they will your business partners wisely and ensure they
offer more freedom in how you use the offer a range of flexible and scalable solutions
platform, and give you more flexible reach to to not only support your business as it starts up
your target audience. in Japan, but also enable it to grow as it
succeeds in this market and expands into
International Capabilities: Where are your other upcoming regions.
other offices and where do you plan to
expand beyond Japan? Assess whether
your service provider has PoPs in markets you
are currently and plan to operate in, whether
they can offer connectivity to the key markets
Copyright© 2011 by KVH Co., Ltd. All Rights Reserved
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8. 3 Steps to Successful Business Expansion to Japan
Contact Us
Tokyo (Headquarters) Singapore Korea
Tamachi Ekimae Building, Soho 2 @ The Central KVH Korea Ltd.
3-1-35 Shibaura, Minato-Ku, 12 Eu Tong Sen Street, #08-170 10Fl., Jaram building, 566
Tokyo 108-0023, Japan 059819 Singapore Dohwa-Dong, Mapo-Gu,
Seoul, South Korea
Phone: +81-(0)3-4560-4800 Phone: +65-6590-9008
Phone: +82-2-1661-4801
Yokohama Hong Kong
Chicago
12F Queens Tower A, Room 2604, 26/F.,
KVH Services LLC
2-3-1 Minatomirai, Nishi-ku, C.C. Wu Building,
141 W. Jackson Boulevard
Yokohama 220-6012, Japan 3020308 Hennessy Road,
Suite 3810
Phone: +81-(0)45-670-4411 Wanchai, Hong Kong
Chicago, Illinois 60604
Phone: +852 9220 0105
U.S.A.
Osaka Phone: +1 312-465-2485
Osaka 7F Epson Osaka Bldg.
China
KVH Information System (China) Co.,
3-5-1 Bakurou-machi, Chuo-ku
Ltd.
Osaka 541-0059, Japan
606, Bund Center,
Phone: 06-6258-7070
222 Yan An Road East,
Shanghai 200002, China
Phone: +86-21-63351212
About KVH
KVH was established in Tokyo in 1999 by Fidelity Investments as a Japan focused IT / communications service provider.
As an information delivery platform that allows enterprise customers to store, process, protect and deliver their vital
business information, KVH offers integrated cloud and network solutions that include infrastructure-as-a-service,
managed services, data center services, professional services, data networking, internet access, and voice services.
KVH operates the lowest latency network in Japan, and with over 450 financial services customers, is the leading
provider of ultra low-latency network and proximity hosting solutions to the high-frequency trading community in
Tokyo and Osaka. KVH also offers low-latency connectivity services between major financial markets in the
Asia/Pacific region and the US including Tokyo, Chicago, New York, Singapore, Hong Kong, Shanghai, and Sydney.
More information on KVH can be found at www.kvh.co.jp/en/
Copyright© 2011 by KVH Co., Ltd. All Rights Reserved
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