Over the summer, we kicked off a new Connecting to Japan Series with an article providing a general Japanese market overview. In this second installment, we receive tips from Talia Baruch, an international product executive, who presented on the importance of thinking global from the get-go when creating products and services.
Talia’s talk on “Product Strategy for New Market Entry” at the GlobalSaké event, Connecting To Japan, provided a fresh perspective and interesting insights for those looking to go global. Talia previously led international product and global growth strategy at Linkedin & SurveyMonkey. Before that, she led product localization at Google, VMware, OpenTable and helped drive Starbucks adoption in the Middle East & North Africa.
She is the founder of Yewser, helping companies accelerate growth in new target markets, and is a cofounder of GlobalSaké, a community that connects industry leads across cultures, borders, and functions for knowledge share on international expansion. In her talk, Talia shared a lot of great insight for companies that are looking to expand internationally. Here are some of the highlights of the talk:
Have a Local Product Strategy on a Global Scale
Know your local customers by doing due diligence and user research studies, both qualitative and quantitative. To better understand regional and cultural factors, conduct A/B testing and identify who you are optimizing for. There will be different test results in different geographies because of local relevance and expected customer behavior.
Those companies who have been able to stay relevant on a global scale in the long-run are those who innovate ahead of the curve, and stay tuned in to their customers. They identify not only current local gaps, but are also able to gauge future local needs and trends.
Getting international customers to understand your product is good, but also make sure your product/service understands your international customers within the context of their geo-environment, since that will be key to achieving sustainable growth. When creating your product/service right off the bat, you need to define your global strategy for where, for whom, and for what you want to prioritize optimization for, as well as how you define success in each of your target markets.
User First Vs. US First
When expanding into a new market, make sure to keep your users in mind and understand your global value proposition. How should you reposition for your target markets? How do you define success? Orient to your local user perspective as opposed to a US-centric perspective. Can your local users in a new market discover your product? Is it relevant for their problem solving? Is it fully functional in their language/country? Do they care about your brand?
In Japan, for instance, most big multinational companies are discovered through local resellers or vendors as opposed to a direct connection to your brand. Understanding end user discoverability and how you will create a bond with them may not be as straightforward as you are used to in your home market.
Guanxi largely originates from the Chinese social philosophy of Confucianism, which stresses the importance of associating oneself with others in a hierarchical, interconnected way, in order to maintain social and economic order. Now that you know what Guanxi is, let’s dive deeper into why it is key when looking at Asian markets.
When considering going after markets such as Japan, it is key to apply the Guanxi philosophy which incorporates the regional and cultural context in your product/business strategy. By now you realize how important it is to understand context and that, for many markets, connections + relationships = the invisible glue that binds people together. With Guanxi, there is an emphasis on implicit mutual obligations, reciprocity, and trust.
Connecting to Japan
Now that you have more insight about the importance of having a local product strategy, understanding your users, and the need to build local connections and relationships, let’s talk specifically about Japan. If you are thinking about Japan expansion, make sure to do your homework. For instance, did you know that:
- Japan is the world’s oldest demographic nation with 40% of its total population expected to be over 65 by 2050.
Most online purchases are being made by women in the 40-49 age range but the highest online expenditure value are consumers who are 50 to 69 years of age.
- Japan is the world’s top country in number of mobile app downloads with the typical Japanese user having ~100 apps downloaded on their individual smartphones.
- Japanese User Experience (UX) with websites and applications is a text heavy guided experience. Content may look cluttered to you but for Japanese people it is normal and expected. Text is commonly structured in text boxes for easy digest, so you might need to adjust your UI/UX page layout in the Japanese experience.
- Marketing is different in Japan. Many small and medium sized businesses are not exposed to digital marketing compared to other countries. Face-to-face, hands-on meetings are necessary for doing business and brand trust takes time.
- Local growth means reseller relationships and community face-to-face events.
- The level of expected customer experience is very high in Japan in a way that’s completely different from that in Western countries. Therefore, customer support is key for success in the Japanese market.
As you consider doing business in the Japanese market, don’t try to change the way Japanese people do things. Instead, take into account that product adaptation can be very slow and customer trust is key. This will help set you up for success as you consider offering your product/services in a market that is well worth the time and effort it may take to get there.
If you are interested in expanding your business to Japan, btrax offers Japan market entry and localization services among others to help set you up for success. See some of the companies we’ve worked with in the past and get in touch today!