Doing Business with Japan

I chose to export nutritional supplements to Japan.

There is a definite need for this product as Japan is the second largest market in the world for nutritional supplements. The current size of the market in Japan for nutritional supplements is over 10 billion annually. Per capita consumption of dietary supplements by Japanese consumers is still only about one-sixth the level in the United States so the potential for continued growth in this market is enormous, especially as Japan's aging population turns increasingly to preventive nutritional and health care. In addition, the Japanese government recently implemented a healthcare system reform.

In terms of financial and economic forces, Japan is a prosperous country with the world's second largest economy. Japan's consumers are rich and sophisticated in their tastes and interests. The GDP is 4.6 trillion and GDP per capita is 36,500 (USD)The average Japanese household has in excess of 100,000 in savings and a disposable income of $4100 per month. The inflation rate is 0% and the BOP surplus is in excess 80 billion dollars.

Politically, Japan is a prosperous and stable democracy which makes it a favorable choice for export. The U.S. is one of the top exporters to Japan.

The are few formal barriers on imported goods in Japan and the tariff rates are among the lowest in the world. There are some non tariff barriers such as:

Companies may have to demonstrate prior experience in Japan

Regulations that favor domestically produced products and discriminate against foreign products

Licensing powers in the hands of industry associations

Interconnected business interest among Japanese companies that create disadvantages to suppliers outside the business group

Formal and informal cartels

The cultural importance of personal relationships in Japan

Many of Japans trading partners have complained that Japan discourages the consumption of foreign products. As a result, the Japanese government launched programs that would help foreign companies to do business in Japan. Companies can now receive assistance with low interest loans,