Sodastream, the Japanese version
With a GDP of approximately 5 trillion dollars in 2023, a population of over 125 million people and characterized by a high level of income and exceptional brand awareness, Japan is one of the most interesting and significant markets for any company that wants to expand globally.
According to the data of the Export Institute, which assists Israeli entrepreneurs and companies in global marketing and opening markets around the world, during the year 2023 the volume of goods exported by Israeli entrepreneurs and exporters to Japan, the fourth largest economy in the world, amounted to approximately one billion dollars - an increase of approximately 5% compared to the previous year, when the export of High-tech companies from Israel to Japan are expanding, and as of 2023 constitute about half of the total Israeli exports to the country.
In addition, during the last decade the volume of trade between the countries has increased significantly by about 40%, and today Japan is one of Israel's main trading partners.
Along with the huge potential, also comes a huge challenge for businesses looking to operate in Japan, as it is known to be one of the most competitive markets in the world with high entry barriers such as language and culture.
The penetration of new companies into the Japanese market requires a significant investment of time and resources.
Companies that manage to adapt their marketing strategy to the Japanese market and build strong relationships with local partners can enjoy great success in the market, which can be a significant anchor for their activity.
As evidence, more and more Israeli companies, technological and other, discovered the potential and began significant activity in Japan.
We gathered some experts and managers in Israeli companies who gained practical experience and share their insights and lessons.
So what is important to know about the Japanese?
"Japan combines progress and technology together with a long-standing tradition for the 'Japanese way'. Many international companies have failed in their attempts to penetrate the Japanese market because they were unable to bridge the cultural gaps," says
David Katz, CEO of Sodastream's Asia Pacific, Africa, Middle East and Latin America operations.
, who has been working in Japan for 13 years, including about 8 years as CEO of Soda Stream Japan.
David lists some notable differences between Israelis and Japanese:
David Katz, Director of SodaStream Asia Pacific, Africa, the Middle East and Latin America./Photo: Efrat Kuperstein.
Japanese people will never reflect their thoughts on the way of conduct to the Western businessman and therefore, quite often Western businessmen do not correctly translate the responses of the Japanese.
The Japanese are not late.
Being even a minute late for a meeting shows disrespect.
In meetings, the Japanese will put their cell phones aside and even leave them in their bag and certainly will not fiddle with their cell phones during the meeting as Israelis are used to doing.
The Japanese are curious about innovations and new brands that come from other countries, but there are many examples of brands or companies that entered the market with great noise and disappeared in a short time.
In Japan there is zero tolerance for quality problems.
Companies that do not have uncompromising quality control will not succeed in Japan.
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What moves did you make to penetrate the Japanese market?
"When we started SodaStream's operations in Japan, it was one of our smallest markets in the company and for good reason, the Japanese do not drink soda. We had to come and develop a strategy on how to penetrate the Japanese market. Regardless of the lack of demand, due to the difference in culture we could not make use of existing marketing materials for other markets and therefore we developed local materials with a unique strategy for the market. The penetration process was not easy at all and required business courage and the promotion of extraordinary moves that were very different from the company's conduct in other markets," says David.
He emphasizes the critical importance of connecting to the local culture: "When communicating with the end customer, the consumers, you must speak Japanese. Our advertising campaigns are adapted and speak the Japanese culture and language. Using local presenters, well-known Japanese chefs and even the shopping channel to promote the products brought and still bring excellent results.
Also, at the beginning, it was clear quite quickly that a local team needed to be established to implement and operate the penetration and growth strategy. In every meeting and conversation with the local team, I made sure to delve deeper into the various layers of the culture in order for us to understand what is the right way to continue operating. The
Japanese employees are very dedicated, disciplined and hardworking. They are also very introverted and do not show emotions, so I made sure to implement appropriate formation activities in order to assimilate and preserve the new qualities that I wanted to have in the team, such as thinking outside the box and taking risks. In 8 years, with hard and consistent work, from a market that did not drink soda at all, we reached phenomenal sales that constitute a significant growth engine for the whole The company," says David proudly.
How do you find the right formula between the brand identity and the need to adapt it to the local culture?
Tenkuri Kawaharada_marketing manager for the Japan region in Manday./PR
A little over a year ago, monday.com launched its system for teams and organizations in Japan.
"It was the first market they entered in East Asia - a market different in almost every aspect from the markets we were active in until then."
Says
Teknori Kawaharda, marketing manager for the Japan region at Monday
, today one of the largest Israeli hi-tech companies in the world.
Kawaharda immigrated to Israel about a decade ago, worked in high-tech localization, and about a year and a half ago joined Manday as part of the company's preparations for entering Japan: "Entering the Japanese market requires a lot of patience and patience, starting with the research and learning phase that is really critical in entering such a unique market, to readiness for long business cycles. The research needs to include an in-depth study of the local marketing channels, current trends, culture and habits. In addition, it is recommended to wisely choose a local partner who has experience with international companies who can provide you with the right guidance and recommendations and be your eyes and ears all the time."
"Our penetration campaign was based on billboards on two main subway lines to reach relatively junior level managers, taxis to reach an audience of more senior managers, and of course video on local apps like Line. From the research phase we learned that we must choose a striking design, which connects to Japanese culture and characteristics and can to compete for attention on a street that is particularly colorful and visually "loud". We also realized that there is a very high language barrier, since only 3% of the population feels comfortable with the English language, so even the brand name has to be written in Japanese so that the local audience knows how to pronounce it correctly."
Kwaharda explains.
"Our strategic marketing challenge was to achieve a combination as accurate and effective as possible between maintaining Monday's brand identity and the critical need to adapt to the local market - to understand what is left with and what needs to be given up. Keep in mind that the adjustments you will have to make when entering Japan are greater than in other markets And you will be required to stretch your muscles, to dare and go outside the box as part of your marketing journey, which is unlike any other market in the world," according to Kvaharda.
Signage campaign of Monday in Japan./so matsuzawa
What is happening in the Japanese market that is not happening in other markets?
Neta Clemanson, Nikes Japanese market manager with a customer at an exhibition in Tokyo./PR
"Japan is a country full of contradictions: technological progress versus traditionalism and conservatism, teamwork and conformist thinking versus the ability to innovate and individual creativity. Japan is number 3 in the world registration of patents after the USA and China.
She has extreme politeness in the face of great aggressiveness and a unique and demanding business culture," says
Netta Clemson, the manager of the Japanese market at Nikes
, which specializes in payment and settlement solutions for vending machines and retailers.
Clemson, who joined Nikes about two years ago and lives in Japan, expands: "A company that wishes to enter the Japanese market must bring With it there is real technological news and an advantage over the local players, because without it the Japanese will always prefer a local player or manufacturer even at a higher price."
She also emphasizes the importance of excellent quality: "In Japan there is zero tolerance for mistakes or malfunctions and there are no shortcuts.
Therefore, it is important to arrive when the product is ripe, ready and of the highest quality.
In this context, remember that the Japanese customers are enshrined by the suppliers and manufacturers who will do everything to please them, understand them and, if necessary, travel to the other end of Japan to apologize for a malfunction. The market is difficult and challenging, but knows how to reward well for an innovative, high-quality product and maintains loyalty to the suppliers."
"As the leader of the Japanese market in the field of fintech, defined by the Export Institute as one of the most interesting for Japanese companies, Nikes operates in the growing field of CASHLESS solutions. It is interesting to note that while the Japanese market appears to many and rightly as developed, there is still much room for progress in this field. Japan is indeed a leader In a world with 5 million automatic machines and the world's highest ratio of people to machines, but in many of them cash is still used. Therefore, we see a great opportunity here and already today we support all popular payment methods in the country - from credit cards to local payment methods. Our payment solutions are installed in tens of thousands of machines Vending machines in Japan including at the largest retailer, at the largest ATM manufacturer in the market, at train stations (smart solutions for lockers), at massage chairs at airports and many other places."
Do we need a local partner or is it enough to have a technological advantage and high quality?
For the guys at Nikes, this is not a question at all: "Even if you have invested time in studying the market, you will take care of a strong local partner or alternatively a local subsidiary with a Japanese team as a condition for every negotiation and deal.
One of our key decisions was the establishment of a local office, backed by a support and development team designed exclusively for the Japanese market, for example support for the local means of payment - "Flica", which is critical to success," says Netta.
In terms of adapting the marketing language, Clemson explains: "Nikes as a company with a unique brand visibility Characterized by the color yellow, it is required to combine its brand book with adjustments to the local market, which is characterized by a poppy and colorful design.
There are places where we maintained the visibility of the brand in a more distinct way, such as on the Japanese site, and in contrast, in the Google campaigns and landing pages we inserted more local elements, to generate identification and familiarity, especially in a market where automatic machines occupy a central part."
Successes in other countries are irrelevant
Idomoo is an Israeli high-tech company that has developed a means of communication between companies and consumers based on personal video.
Idomo operates in many markets around the world, but entering Japan was a significant milestone for the company, which began working with Japanese giants such as the Japanese airline and the telecom giant Rakutan.
One of Idomo's significant customers in Japan is Japanese Airline.
Yotam Ben Ami, Idomo's VP of Marketing
shares that "only after we showed results and data from the campaign we did to promote the JAL lounge, we were able to illustrate the effectiveness of personal video to other Japanese customers.
The importance of local data and results is significant."
Another client that works with Idomo is the Japanese telecom giant Rakuten Mobile, which contacted the video company in order to reduce its technical support through personal video communication, and managed to reduce by 60% the physical arrival of customers in stores.
"We make sure to emphasize the local success in all channels. Such success is considered news in the Japanese market and we also make use of it," explains Yotam and concludes:
"The key to penetrating the Japanese market is building relationships with the locals. One of the successful strategies we implemented in Idomo is to use one local success As a test case and leverage. We realized that bringing Japanese businesses test cases from the other markets in which we work in the world would not help as it would in other countries. The approach in Japan must be local, in messages and in connection with the culture."
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