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why do business in japan?
Japan is the third-largest economy in the world after the United States and China, and the fourth-largest importer of U.S. products after Canada, Mexico, and China. In 2020, Japan was the sixth-largest importer of U.S. building products, with imports of $1.8 billion. Japan is a key member of the international trade system with a market that respects the rule of law and provides strong protections for intellectual and real property rights. 

expand your customer base

There are several reasons for American firms to participate in the Japanese market. In addition to its size and wealth, Japanese business partners expose American companies to new technology, rigorous competition, and—in some cases—the opportunity to partner with Japanese firms in third markets.

Japan’s consumer economy is large, broad-based, and sophisticated.  A per capita income of $40,247 underpins its strength as a consumer market. In fact, Japan is highly dependent upon the import of natural resources, including wood products. 

The U.S. and Japan have a history as strategic alliance partners, and Japan is deeply integrated into the United States economy.  In October 2019, our countries signed the U.S.-Japan Trade Agreement and the U.S.-Japan Digital Trade Agreement, which entered into effect on January  1, 2020.

Demographics
Japan’s population is declining as it ages rapidly.  The population may decrease by as much as one third by 2060, from 127 million to 87 million.  The proportion of the population older than 65 will rise from 27% today to 40% by 2060.  The Japanese Government and business community seek to offset its effects on economic growth and government budget resources.  The aging population shapes demand and opportunities in various segments, including healthcare facilities and infrastructure.

U.s. building products
annual u.s. exports to japan

Wood Products 
2018: $620 million
2019: $205 million
2020: $161 million
​Rank 5th in 2020
​​Plumbing Products 
2018: $11.1 million
2019: $9.16 million
2020: $9.51 million
​Rank 10th in 2020
​Asphalt 
2018: $16.1 million
2019: $14.5 million
2020: $13.3 million
​Rank 4th in 2020
HVAC Equipment
2018: $493 million
2019: $456 million
2020: $455 million
​Rank 7th in 2020
Plaster & Gypsum 
2018: $209 thousand
2019: $120 thousand
2020: $921 thousand
​Rank 14th in 2020
Cement & Concrete
2018: $5.10 million
2019: $4.45 million
2020: $3.44 million
​Rank 9th in 2020
​Metal Products 
2018: $480 million
2019: $456 million
2020: $424 million
​Rank 5th in 2020
Insulation
2018: $23 million
2019: $23.8 million
2020: $22.5 million
​Rank 7th in 2020
Masonry & Stone
​2018: $5 million
2019: 6.8 million
2020: $3.9 million
​Rank 6th in 2020
Electric & Lighting 
​2018: $480 million
2019: $456 million
2020: $424 million
​Rank 8th in 2020
Appliances
2018: $28.5 million
2019: $28.3 million
2020: $27.5 million
​Rank 9th in 2020
Glass 
2018: $13.4 million
2019: $18.7 million
2020: $10.5 million
​Rank 4th in 2020
Paints & Adhesives
2018: $101 million 
2019: $100 million
2020: $83.5 million
​Rank 4th in 2020
Doors & Windows
2018: $14.6 million
2019: $13.7 million
2020: $12.3 million
​Rank 5th in 2020
Miscellaneous 
2018: $45.8 million
2019: $38.2 million
2020: $37.9 million
​Rank 6th in 2020

market entry strategy & opportunities
U.S. exporters will need to establish and maintain a strong business relationship with local partners to succeed in Japan. Companies hoping to enter the Japanese market should visit the country frequently to cultivate contacts and to better anticipate business conditions. While Japan has implemented strict entry restrictions due to the ongoing Covid-19 pandemic, new “travel bubble” arrangements are being developed with several countries in the region, which may make a visit from those countries feasible.

Most U.S. exporters entering Japan begin by finding a local partner to serve as an agent, distributor, and/or representative.  Agents and distributors are the most common partnerships used by foreign firms to gain their initial foothold in Japan. U.S. firms may also consider establishing a branch sales office.
EBPA can assist U.S. companies to make meaningful business connections through our network, trade activities, and trade data. Become a member—or simple join us at an upcoming event! 
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