Doing business in Tokyo

The capital of Japan can act as a convenient stepping stone for entrepreneurs looking to the Far East and provides plenty of opportunity in its own right.

Though increasingly overshadowed by faster-growing Asian neighbours, Japan's capital remains a city in which entrepreneurs willing to put the work can reap huge benefits.

Japan has made a recovery from its ‘lost decade' in the 1990s, and though has seen years of slow growth, is one of the world's largest economies – standing at 50% larger than the UK's in 2008.


It's also a country of small businesses – small and medium sized firms make up 99.5% of all Japanese companies, according to the UKTI. Plenty of UK companies have established a presence in Tokyo, and no surprise, says Steve Crane, founder and CEO of consulting firm Business Link Japan. “Tokyo is a very exciting, vibrant and energetic city to work in. It's the hub of where it all happens – with a lot of networking and events. It's a city that's very motivational.” He praises Toyko's ultra-efficient, relatively cheap, public transport system, something perhaps understandable to anyone who suffers through London tubes in rush-hour. “It means you can do several meetings in different locations in one day,” he says. “Everything runs like clockwork; meetings have a start and end time that everyone sticks to, and the trains all run in time. It's a very efficient place to work.” Though the transport maybe cheap, however, most things aren't, and Tokyo was ranked the second most expensive city in the world for expatriates to live in according to the Mercer Cost of Living survey 2010.


Sebastien Eckersley-Maslin has set up a Tokyo presence for his eyewear business and says: “The best thing about doing business in Tokyo is working with Japanese people. I really enjoy the mutual respect and humbleness of business meetings and have great fondness for how these meetings are conducted.” Japanese etiquette can seem quite mysterious but a little research and respect, as well as a few words of Japanese if possible, will go a long way. “You can't charge in with a western mindset thinking you can do business as we do here,” cautions Crane. “You need to respect to how they do it in Japan and adapt to that.” Eckersley-Maslin adds: “Generally very little detail is discussed in the actual meeting – the meeting is a chance to get to know each other professionally. Don't attempt to fill long periods of silence with conversation, as these are reflective periods where your counterparts are considering what has been said. Know the etiquette of being a host, know if you should bring gifts or not and understand that the finer points will be thrashed out at a later date. Above all be humble and respectful.” Business cards are important and should be considered respectfully once received. Also important is socialising with business partners. The UKTI, which provides thorough advice on etiquette, recommends entering into the spirit of things if asked along to entertainment outside the office, as this is how a Japanese host may test a potential business relationship.

Building relationships

In fact, the secret to success in Tokyo might well lie in building relationships but this does take some time. The UKTI recommends working through a local partner only as a first step, as personal relationship need to be developed with a long term perspective. Quick returns are very difficult to achieve in this market, says Crane: “A lot of western companies just expect their service or product to sell itself if it's good, but that's not the case. You've got to be prepared to put the work in – do the networking, meet the right people, spend time on relationships. But if you do, those relationships are very strong and will stay with you.” Opportunities in Tokyo are manifold if your business targets and aging population or can take advantage of an highly educated market of early-adopters and technology enthusiasts (Japan has 2% of the world's population but 20% of global R&D spend). Says Crane: “The Japanese people are very enthusiastic about anything new and innovative. Despite the downturn, they're generally still quite affluent and prepared to spend money on quality products.” UK services business have also found significant success in Japan, as have businesses looking to use Toyko as a stepping stone for other Asian markets.


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