Market Saturation Research Service: A Key to Entering the Japanese Market

For startups and SMEs planning market entry, especially in the Asia-Pacific region and Japan, budgeting for upfront investments can be challenging. Unlike multinational companies, smaller businesses often struggle to secure approval from upper management without concrete evidence of market potential

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When generating revenue from a new market, the initial phase is always problematic. You might have the willingness to introduce your services or products, but without sufficient evidence to convince upper management, your plans are likely to stall.

Many business development agencies and consultancies approach companies with offers of upfront investment for market entry. However, they can't guarantee sales revenue. This leaves you uncertain about the alignment of your value proposition with the new market. Even if you invest upfront, there’s a risk that the concept might fail, rendering the investment futile.

As someone overseeing the Asia-Pacific region, you understand the immense potential of the Japanese market. However, investing without clear revenue projections or potential partnerships is daunting. While research companies and major agencies can provide valuable market insights, research itself doesn’t generate cash flow. Moreover, SMEs and startups often lack the budget for extensive research.

Despite these challenges, the Japanese market remains a significant opportunity. With a unique business environment and a population of 120 million, Japan's GDP ranks among the highest globally. Japanese companies often emulate successful overseas business models, adapting them for the local market. Consequently, when overseas companies attempt to enter Japan, they find similar domestic businesses already established

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Given Japan's market size, local companies often focus solely on the domestic market, with little incentive to expand globally. Investors also prefer this approach due to the complexities and costs associated with adapting Japanese business models for overseas markets.

Understanding Japan’s business landscape, it is advisable to exercise caution with large upfront investments. Many directors in the APAC region face these challenges, especially when considering Japan as a new market.

To address these concerns, we offer a solution called Market Saturation Research. This service involves three simple steps:

1. Value Proposition and Competitiveness Analysis: Understand why your company thrives in your home country and identify the pain points your products or services address.
2. Market Execution: Engage directly with potential customers and partners in Japan to gather actual market feedback. This phase lasts one to three months, providing insights into pricing, market acceptance, regulatory requirements, and more. Based on this feedback, you can decide whether to proceed, adjust your strategy, or prioritize other markets.
3. Localization and Further Execution: Based on market feedback, localize your materials, services, or products and re-engage the market. Identify domestic competitors and refine your value proposition to align with the local landscape. This step helps determine if your offerings resonate with Japanese targets or require further adjustments.

While a three-month period may not provide comprehensive insights like larger research agencies, it offers sufficient data for SMEs and startups to make informed decisions. Additionally, the data collected often includes actual leads interested in your products or services, which can be used for internal discussions and decision-making regarding budget allocation to the Japanese market.

Building relationships and gaining traction in Japan requires patience due to longer sales cycles compared to other countries. However, knowing there is demand and market interest can justify perseverance.

If you're interested in our Market Saturation Research service, please contact us.