As a country where the economy never sleeps, Japan keeps offering exciting new opportunities for small to medium enterprise investment. With more than 165,000 successful SMEs all over the country, the distinguished businesses and organizations from this league are slowly becoming the new Keiretsu.
This is a notable change in the business landscape, given the fact that until recently the prevailing force in the Japanese economy were companies like Connected Robotics, Linough, and SmartHR, all born on the prolific startup ground. As of late, they are being replaced by small companies like Hosoo.
Equipped with powerful technology, Japanese SMEs are currently leading the ranks when it comes to smart business investments. Western titans, and all those who follow in their footsteps are now taking interest in both small and mid-sized firms from Japan; Apple has already recruited 139 of them.
Because Japan is now more or less a decade away from once again becoming the world’s biggest economic force, and because it already serves as a globally recognized trend-setting market, we offer you an overview of the best SME opportunities to invest in. Hopefully, it will bring you quick returns.
1. The Unstoppable IT
Catering not only to the local market which is huge, but also to the international one, the Japanese information technology industry may just be the country’s most attractive export product. As such, IT boosts the internal economy, simultaneously positioning Japan as the world’s second largest IT hub.
For savvy investors, this is an opportunity that simply screams to be explored. Those with a solid background in IT-oriented research and development have the best chance for succeeding, though Japan generously rewards SMEs that sell IT solutions as well. Either way, you cannot make a mistake.
On the contrary, SME businesses are becoming the most powerful propeller of the country’s economy, offering a whole land of opportunities to keen investors.
2. Lush Manufacturing
Lush is a good word to describe manufacturing in Japan with, especially when we take into account the lucky match of great manpower and accessible materials. The aforementioned 139 Japanese SMEs that Apple has recently approached all belong to this sector, and there’s more from where they came.
Starting a manufacturing business on a small to mid-size scale is not difficult at all, and maintaining one requires just the same amount of effort. The competition may be fierce, by Japan is a large country that’s opulent in both manpower and raw materials. The only thing you need is an innovative idea.
3. Business Consulting
Thanks to all these circumstances that make Japan a great place to invest in, SMEs that offer business consulting services are sprouting on every corner as well. They greet and advice foreigners like you, but that still doesn’t mean that they are helmed exclusively by local entrepreneurs. On the contrary.
Once settled on the Japanese market, these businessmen briskly branch or pivot to consulting, offering first-hand tips on how to adapt to the local climate and appeal to the Asian consumer. With decent experience and thorough research, consulting services can be provided fresh off the boat too.
4. The Ubiquitous Retail
With 127 million people inhabiting the country, Japan boasts one of the largest customer pools in the world. If to that you add the unwavering consumerism that is still alive and well, you get yourself one of the best SME opportunities you can think of. Simply put, this market is large enough for everyone.
Amazon is a great example of a global retailer that monetizes basically everything that Japan has to offer in terms of manufacturing. The same business model works just as fine at the SME scale, where savvy retailers buy products from local manufacturers to sell them all across the country and beyond.
5. Opulent Agriculture
Though starting a traditional manufacturing business in Japan doesn’t require huge investments either, agricultural opportunities in this country may be even more affordable. Just like retailers, these SMEs accommodate a massive population. An important difference is – they provide bare necessities.
Moreover, they can be started with little capital and no formal certifications or qualifications. With a high demand for livestock products, fruits and vegetables on one side, and negligible business requirements on the other, agriculture in Japan makes one of the best small to midsize opportunities.
6. Booming Real Estate
Where there is a growing economy, there is a growing real estate market too. This is also true for Japan, where the house prices continue to grow at the steady pace – according to the Ministry of Land, Infrastructure, Transport and Tourism, the total resident property index has increased 3.1% in 2017.
If you’re interested in starting a real estate business here, bear in mind that the Japanese government requires a formal license called Takken. You don’t need any work experience or particular degrees in order to acquire one, but you must be fluent in Japanese. If you are, real estate is a solid SME choice.
7. The Electric Power
As the world approaches one of the greatest ecological crises, the electric power market in Japan is becoming more lucrative than ever before. Since April 2016 and liberalization of the retail electricity industry, any company is allowed to enter the market in any region, and in response to any demand.
As a result, both solar and wind sectors are struggling with poor sales. The power in Japan will certainly remain electric for quite some time in the future, which gives this industry a strong sense of security but also increases the competition. With a solid USP, standing out from the crowd is not so difficult.
8. The Pharma Industry
With a total market value of over $60 billion, Japan nurtures the second strongest pharma industry in the world. For a vast part of the Japanese population, drugs fall under the category of bare necessities too, which means that the demand for prescription medication is fixedly high throughout the country.
Needless to say, pharma is no retail or agriculture. Even though SME opportunities in this industry are certainly much more lucrative, success on this field requires both formal degrees and in-depth practical knowledge. For businessmen with both expertise and experience, pharma is a great option.
Across these eight industries, the phrase small in Japan is no longer used to describe unknown, unsuccessful, and forgotten entrepreneurs. On the contrary, SME businesses are becoming the most powerful propeller of the country’s economy, offering a whole land of opportunities to keen investors.