Is Japan a free market economy?

 Japan is neither free market nor command economy (i.e. controlled by government).
There are basically three major factors controlling the economy:
Government, Big Companies and Individuals. It is possible to increase this list but they are not as major as these factors. If we want to add one more item to the list, it would be probably mass-media, which is an extremely important tool in guiding and controlling people in Japan who are very apt to be controlled by mass psychology. I am not including international factors here.

Especially big companies are very influencial on the economy. It would not be a mistake to call the Japanese economy as monopoly of top companies. The culture and traditions of Japan encourages big companies to strengthen their monopoly further and to literally crash venture companies if seen as a threat. The only possibility of success for real venture companies (pls refer to my other article) is to act very quickly so that large companies can not follow them. It is kind of death-race between an elephant and rabbit. If the rabbit is not fast or carefull enough, its death under the feet of elephant is inevitable.

Japanese market is literally shared by top Japanese companies which can be by region, product type, target customers etc. Although ordinary Japanese people believe that there is a tough competition between top companies, actually there is usually a friendly sharing among them. It is possible to find a lot of companies in Japan which are owned by so-called rival companies, but this type of information is usually known by only financial experts and kind of hidden from the public. Last year we made a contract with a relatively small IT company, and somehow had a chance to see the list of stock-owners. It was a big surprise for us.  
There were more than 20 owners and mostly big IT companies of Japan which were supposed to be rivals.

Another interesting experience was that, we were planning to sell a large software to certain institutions in Kansai (Osaka etc) region of Japan. Finally we learned that those institutions in that area are mostly controlled by one of the big IT companies and it is very risky to enter there for a venture company. This was a friendly advice of a veteran salesman.

NOTE: I am writing on Venture Busines in Japan in my following blog  (SNS in Japan)

http://english.youshare.jp/blogs.php?action=show_member_blog&ownerID=1&blogID=8

Are “venture companies” in Japan really VENTURE?

The meaning of “Venture Business” in Japan is quite different from its most common meaning in the rest of the world.

It is usually very misleading for a foreigner doing business in Japan, or for a foreign company who has business relations with Japanese companies. Most of the venture companies in Japan are actually supported or owned by some big companies. These relations are sometimes so complex that you can not understand “who has what” without getting some internal information and drawing large relation-graphs. Most of the time, you eventually understand that the company which is supposed to be a venture is not venture at all.

This is something very unique to Japan, and should be investigated very carefuly by foreign companies who want to be successful in Japan. The most important side-effect of such a misconception is that you under-estimate the real power of the company and don’t make enough effort to have a business relation. 

For example, we had such an experience a few weeks ago. One of the companies (name is confidential) wanted to have online shopping partnership with Youbuy, which is the company running Youshare. I just quickly checked the basic information of the company which is public on their web site. It seemed to be a small company running a small shopping portal which I hardly remembered the name, so I just prepared a short presentation quickly. However, the reality was totally different .  It was a company running the shopping portal of a major company in Japan as well as their own small one. Only the number of products in ther Books/DVD category was a few millions. It has been a good lesson for me , I hope you don’t experience similar problems after reading this post.

 

NOTE: I am writing on Venture Business in Japan in my following blog (in an SNS in Japan)

http://english.youshare.jp/blogs.php?action=show_member_blog&ownerID=1&blogID=8

An article about Youbuy Shopping Mall– from HiraganaTimes

The following article is from an english magazine in Japan called HiraganaTimes. I studied Japanese reading this magazine 14 years ago when I came to Japan. It is an excellent magazine for foreigners, it is possible to find almost all kind of information need by foreigners.

http://www.hiraganatimes.com

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Japan-Behind the Scenes – Business

Popular 10 Language Internet Shopping Mall

Youbuy Corporation

A new website has recently been launched that allows you to find food and daily use products – very possibly from your country – that are not readily available in Japan, as well as hot Japanese products and items that are suitable for souvenirs. Better still, information about the items is displayed in 10 languages: Japanese, English, German, Russian, Chinese, Italian, Korean, Spanish, Turkish and Portuguese. This site, called “Youbuy” and launched in September 2007, is Japan’s first multi-lingual online shopping mall. It has since been gaining a lot of attention.

Yahya AYDIN is the founder of this site. When Yahya came to Japan as a foreign student, he experienced many difficulties while shopping. He did not know where to buy various products. In addition, there was a very limited number of shops where he could buy Turkish goods, and he realized that many foreigners around him had the same problems. At that point, Yahya decided to start a business with Metehan OZCAN, a friend of his from his student days.

In the beginning, the shopping site was for Turks and was presented in three languages. However, before long they found that users did not only comprise Turks, but also many Japanese and foreigners. Therefore, they decided to restart the site in 10 languages. The shop owners are Japanese and foreigners living in Japan and include individuals as well as corporations. At present, 165 shops are participating and approximately 350,000 items are on sale.

Speaking of online shopping in Japan, Rakuten and Yahoo are well-known online shopping sites. However, Youbuy’s point of difference is that it is multi-lingual. Although it depends on the shops, it is possible to send many of the products overseas. “Since the market is the world, sales possibilities keep expanding,” says Yahya. Shop owners are sometimes surprised when they receiving unexpected orders from people in countries such as Ghana, Vietnam and Chile.

Famous brand name bags and watches, Turkish carpets, Tales of Genji calendars, as well as many other products are selling very well, and it is reported that Japanese kitchen knives, which are created using the same techniques as for Japanese swords, are selling unexpectedly well to non-Japanese around the world. Actually, there must be shop owners out there who want to sell overseas, but are not sure about the risks and merits. Youbuy provides a system in which you can open a shop without having professional knowledge.

However, Yahya wants to provide a better site. “In the near future, I’d like to create a community site that is related to Youbuy and where everyone can have an opportunity to deepen communication,” he says about his aspirations. Behind his remarks are his international staff.

Youbuy staff are not only from Turkey, but also from Bangladesh, Mexico, Britain, as well as German Turks and Russian Turks. In order to deepen their level of communication, the company sets a 30 minute chatting period over snacks from 18:00 every day. Yahya is planning to employ a Korean and a Chinese in the near future.

What is it like for Japanese to work with foreigners? “Since I can communicate, I don’t feel it is unusual,” CEO MATSUYAMA Kazuhisa says. “The difference of cultures and customs is rather fun. I am always impressed by their fresh ideas. But it is pity we can’t go drinking together, as Turks cannot have alcohol due to their religious beliefs,” he laughs.

“Foreigners doing business in Japan will probably find it twice as hard as Japanese in every respect,” Yahya says. “The situation has improved greatly compared with 14 years ago when I came to Japan, but there are still prejudices. I think I am here to change it and my love for Japan and Japanese overcomes the prejudice,” says Yahya with smile.

Yahya is developing his business with a positive attitude among Japan’s very different cultural environment. With his vitality and unique ideas, he has the chance to become a new hero in the Internet business world. Hiragana Times has tied up with Youbuy, since we have found many things in common and expect their success. We also look forward to their site becoming even more exciting and offering the opportunity for readers to purchase many great products from around the world.

Be very careful if you are planning to do business with Japanese people !

If you’re planning to do business with Japanese people, be very careful.

A Japanese who looks very honest, helpful and friendly in daily life might behave very differently in business. A person who always talks about honesty and straightness in his daily life can easily lie and decieve in business. Of course we can not generalize this to all people in Japan, but unfortunately this is a very common problem I have faced many times during my 15 years stay in Japan.

The biggest problem is that when they lie, they do it so professionally that it takes some time to understand it and most of the time it is too late to counteract. As a person who worked in many international companies and laboratories with many people from different countries, Japanese people have always been the most difficult to understand their behaviour. They don’t usually look as they actually are. When you are talking to a Japanese person you are actually talking with his public-face which usually smiles and uses very polite words. If you see the same person somewhere else with his real-face, an internal business meeting for example, you can’t believe that he is the same person. Polite words are replaced with short offensive words, smiling faces are replaced with strained and serious faces.

In my opinition, having two different faces is one of  the main reasons of high level of depression and high rate of suicides in Japan. I will not go into details in this post. You can ask the following question then: Why do they have two different faces?

It is the topic of another blog, or you can comment here if you have any ideas, or if you think that Japanese people are usually very straight and easy to understand.

You can see my other posts about Japan in http://english.youshare.jp  (English SNS in Japan)

My blog about Venture Business in Japan is HERE.