Japan

Why Japan?

The world’s third largest economy, with per capita GDP still 10 times that of China.,In 2010 Japan was the UK’s 14th largest export market and the largest outside Europe, China and the US.

Cutting edge technology and R&D - Japan spends 3.7% of GDP on R&D, one of the highest among the OECD countries, and plans to increase this to 4% by 2020 – with an emphasis on technologies to deliver a low carbon future and to support the ageing population (nearly a quarter of the population is 65 or over).

Japan’s 128m consumers are highly educated, demand the highest standards and are early adopters.

Key sectors of opportunity

Advanced engineering - . As ever innovative products and technology are well received in Japan. This year the team have been working on new technology for the automotive sector, emergency housing, shelter systems, precision tooling, and work in the maritime and aerospace sectors. Japanese customers like new technologies and if you have a product with a proven track-record, Japan could be the market for you.

Biotech / Pharmaceuticals - Japan is the world’s 2nd largest pharmaceutical market in the world worth £65bn. At 11% of the global market, it is bigger than France and Germany combined. Japanese Biotech & Pharma companies have been proactively looking for R&D and in-licensing partners who can offer them promising drug candidates, novel DDS, formulations and also biomarkers. Opportunities also exist in services that enable pharmaceutical companies to reduce drug development times.

Design - One of the most attractive markets for British design services, Japan has a substantial manufacturing industry, much of which is export-oriented. These companies, in particular, prize UK product design – for both consumer and industrial goods and components - as well as strategic branding for their international operations . Interior design is another strong suit, particularly in the commercial sector. A number of UK companies have recently generated business through participation in the DesignUK mission and London Design Embassy projects.

Energy - The Japanese Government has an ambitious plan to reduce Japan's emissions by 25% (from 1990 baseline) by 2020. Japan is working to establish a domestic emissions trading scheme. The Government is also looking at increasing the size of its renewable energy programme and is looking at floating offshore wind, tidal, wave and biomass as alternative sources of energy (see also smart-grid technology below under ICT).

Fashion - Many British fashion companies who have developed a distinctive strategy for the Japanese market have been very successful. Japanese consumers rate UK fashion very highly and particularly seek out “authentic” products with a heritage story, edgy new urban designs, knitwear and accessories. The top 3 retail brands in Japan are Burberry, Daks and Paul Smith, who first made his name here and now has nearly 200 stores. Natural beauty products are also enjoying a boom at present.

Financial and legal services - UK law firms and financial institutions have been active in providing advice to the many Japanese manufacturers who have a global outreach. Mergers and acquisitions are currently very active and offer opportunities for both financial and legal advisers, s do Japanese companies’ investments in overseas energy operations. Tokyo is one of the major global financial centres and has a massive accumulation of personal wealth estimated at JPY1400 trillion.

Food and drink - Food and drink comprises about 5% of UK exports to Japan and a growing range of products is appearing in the market. Organic and natural products are particularly popular. This is an area where consumers can easily enjoy ‘petit luxury’ (recent trend of consumer market in Japan) with imported products. As an example, Firefly drinks priced at over 4 pounds sells well in the convenience stores in Tokyo’s business areas, where theyappeal to young female office workers.

ICT - Japan’s ICT industry is exciting, interesting and looking for innovative technology from all over the world. Smart cloud computing, Telecommunication technologies, Green ICT and Energy Management Systems, Smart Grid Technology and Smart Community, Surveillance technologies, Open Source Software, Mobile gaming and digital content, Social media and social games, Digital signage, E-Health and Robotics for healthcare are great interests to Japanese ICT businesses

Healthcare / Medical - Japan is the world’s 2nd largest healthcare market, where the market for imports of medical devices alone is worth around £8bn. Japanese Health & Medtech companies are urgently looking to acquire new research and product development pipelines from overseas. The Japanese government has reduced drug/device approval times. With the highest proportion of elderly people in the world, it is a long-term growth market.

Media Contents - Japan is the world’s second largest media and entertainment market, home to high-quality producers of content (film, TV, anime etc) and hardware. There is no censorship and no quota system for broadcasting in Japan. The completion of switchover to digital TV in early 2011 and the dynamic mobile internet market will provide more opportunities for UK contents providers in the following categories: entertainment, dramas, lifestyle, music videos, 3G etc.

Music - Japan has long been the world’s second largest music market, but in 2011 it has first become the largest, because of the world’s top sales of physical music (CDs). Also Japan is one of the limited countries who have advanced publishing business in Asian territories. Publishing deals for well established catalogue music are on demand, and foreign song writers who are capable for producing music which suit Japanese tastes are successful. Click here to view the Japan page on the UK Trade & Investment website