The 5th edition of the JAPAN TO GLOBAL Pangyo Bootcamp was a truly meaningful gathering, bringing together individuals and companies who are genuinely dedicated to global business. This time, a new session titled “Three Perspectives on Entering Japan” was introduced, featuring three representatives with distinct backgrounds: a Japan-based executive from a Japanese conglomerate, a Japan-based executive from a Korean conglomerate, and a Korea-based entrepreneur. Each shared their unique perspective on the Japanese market.
Let’s explore the exchanges and stories from the 5th JAPAN TO GLOBAL Pangyo Bootcamp.
Im Sang-wook’s Story on Entering Japan
Japan-Based / Former Japanese Conglomerate Executive / Nihonium
Im Sang-wook transitioned from a 18-year career managing global markets at Fujitsu to the startup world. He has recently founded a new company to assist B2B SaaS enterprises in their expansion into Korea and Japan.
He emphasized that there is no single solution to entering the Japanese market. The Japanese market differs from Korea in that each region has its own characteristics, necessitating a variety of approaches. It is crucial to hire locals who understand the market well to ensure smooth communication with customers. While Korean employees who are proficient in Japanese can be beneficial, hiring locals is generally more advantageous.
Regarding company establishment, Im advised caution. Establishing a company takes considerable time and withdrawing from it is challenging. Thus, it’s important to evaluate whether setting up a company is necessary initially. In some cases, operations can be managed without a legal entity, as demonstrated by teams achieving results without formal incorporation.
He also highlighted the significance of partner businesses. In Japan, reseller businesses are complex, so finding suitable resellers is critical. For B2B products, collaborating with local resellers is often essential, and high-priced products are more effectively sold through resellers.
Im concluded with the importance of localization. The quality of translation and localization is crucial. For developer tools, maintaining English might be sufficient, but for products aimed at general users, thorough localization is necessary. Providing marketing materials and documentation in Japanese is also essential.
Heo Seong-wook’s Story on Entering Japan
Japan-Based / Former Korean Conglomerate Executive / Lionice
Heo Seong-wook worked for 15 years at Naver Korea and LINE WORKS Japan. He spent the last 5 years managing LINE WORKS’ entry into Japan, achieving a 1st place market share in Japan’s business chat market within 3 years before venturing into entrepreneurship.
Heo shared the initial challenges LINE WORKS faced in entering the Japanese market. LINE WORKS, spun off from Naver’s service division, competed against Google’s GSuite and Microsoft’s Office365. The process of overcoming these challenges provided valuable insights for attendees of JAPAN TO GLOBAL.
Understanding Japan’s market characteristics and cultural differences is vital. A key difference is Japan’s preference for stability over change. There is significant resistance to adopting new solutions if it means creating new responsibilities.
For example, rather than replacing existing email services with LINE WORKS, Heo’s strategy was to use LINE, a popular chat service in Japan, as the primary offering while allowing users to continue using their existing email services. The pricing policy was adjusted to lower chat service costs and gradually integrate email services, which was a crucial factor in LINE WORKS’ success in Japan. Today, more than 90% of LINE WORKS’ light product share is in Japan, a testament to the effectiveness of these strategic adjustments.
Heo emphasized the importance of being flexible with strategies for entering the Japanese market and having top decision-makers directly involved in decision-making.
Oh Chi-young’s Bold Discussion (Feat. Im Sang-wook, Heo Seong-wook)
Korea-Based / Entrepreneur / Jiran Japan
Oh Chi-young, after founding Jiran Jikyo Soft, entered the Japanese market in 2004. His company has since grown, trading with over 15,000 Japanese firms and continues to share his expertise on entering the Japanese market.
In the bold discussion, the differences between Japanese and Korean business cultures and interpersonal relationships were examined. Despite similarities, there are subtle distinctions between people in Korea and Japan, corporate cultures, and business practices.
Firstly, the dynamics of interpersonal relationships were discussed. In Korea, people often become quickly close, frequently hugging or drinking together. In contrast, Japanese interactions are more reserved and take longer to build familiarity. The structural differences in homes—Korean homes have rooms around a central living area, while Japanese homes have the living room at the end of a hallway—also reflect these cultural nuances.
Secondly, the differences in organizational and hierarchical structures between Korea and Japan were explained. Japanese corporate levels are typically higher, and the process to advance to higher ranks is more stringent. For example, a Japanese section chief is comparable to a Korean department head, and a Japanese department head is equivalent to a Korean director. Japanese large corporations have fewer senior executives, and the number of executive officers is highly restricted.
Thirdly, the discussion addressed the need to be aware of subtle cues in Japanese business interactions. Japanese people often avoid directly saying “no,” making it challenging to discern rejection during meetings or partnerships. The term “good” may simply be polite, not necessarily indicating genuine interest.
Lastly, the discussion covered differences in credit systems between Japan and Korea. Personal credit is crucial in Japan; without it, conducting business can be difficult. The credibility of a partner often reflects on the maker’s credibility. Building trust in Japan requires time and consistently keeping promises to maintain credibility.
The session concluded with the usual networking time, where all participating companies had the opportunity to introduce themselves and foster connections.
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