What Industries Are Entering and Growing in Japan
Last updated : November 1, 2024

What Industries Are Entering and Growing in Japan (Ultimate Guide)

Table of Contents

This article is brought to you by KOMOJU
We help businesses accept payments online.

As the fourth-largest economy in the world, Japan holds significant business opportunities, especially with its focus on digital and technological transformation. The eCommerce sector alone is projected to grow by 18.6% this year. Other key markets with promising growth potential include healthcare, travel and tourism, technology, and gaming.

This article serves as a comprehensive guide for businesses considering expanding in Japan by providing insights into these thriving industries, emerging trends, and market opportunities.

It also outlines practical strategies on how to navigate local regulations, adapt to cultural nuances and position your business for long-term success in this dynamic and competitive market.

Key Sectors Growing in Japan

Japan is experiencing significant growth across various industries, making it an attractive market for international businesses. Here are some of the emerging and growing industries:

eCommerce & Online Retail

Industry Highlights

In 2021, Japan’s eCommerce market was valued at $188.1 billion, making it the fourth-largest globally. With an annual growth rate of over 18%, it is now also the fastest-growing industry. This growth was partially driven by the pandemic, as retail shopping shifted to online platforms and B2C sales grew. Additionally, the demand for global brands increased with purchases from U.S. retailers reaching $3.1 billion.

The scale, influence, and potential of Japan’s eCommerce market are reflected by platforms like Amazon Japan, Apple, and Yodobashi. They can support both local and international brands, making Japan an attractive destination for eCommerce expansion.

Current Market Landscape

Known for their vast product selections and fast delivery, platforms like Rakuten, Amazon Japan, and ZOZOTOWN dominate this market.

Japanese consumers prioritize secure, localized payment options like Konbini (convenience store) payments. Businesses entering Japan must be able to adapt to consumer preferences, by offering tailored payment solutions to build trust and meet local expectations by using a payments platform like KOMOJU.

Tactics for Success

To capitalize on these opportunities, here are some strategies businesses can implement:

1.     Leverage Local Payment Methods: Partner with payment gateway providers like KOMOJU to integrate popular solutions that build trust and enhance convenience. This enables eCommerce store owners to accept a wider range of payment methods and drive business growth.

2.     Focus on Mobile Optimization: Ensure your website is fully optimized for mobile to capture most transactions.

3.     Utilize Social Media: Engage consumers on platforms like LINE for effective brand interaction.

Travel & Tourism

Japan’s travel and tourism market is projected to generate $42.38 billion in 2024, with an expected annual growth rate of 3.34%, reaching $49.94 billion by 2029. The market will be dominated by the hotel sector, generating $25.78 billion in 2024. By 2029 85% of the market’s revenue will come from online channels.

This further highlights the shift to digital booking and online travel services. There is also a rising market for authentic cultural experiences, with a focus on sustainable and eco-friendly tourism. Due to government initiatives to boost tourism and the weakening yen, Japan is attracting more international visitors as a travel destination.

Current Market Landscape

The landscape is shifting as travelers seek deeper cultural connections and engagement rather than sightseeing. The government has also made significant strides in enhancing visitor experience through digital transformation, multilingual support, and initiatives aimed at sustainable tourism.

Trends and Future Opportunities

These trends highlight the evolving landscape of Japan’s travel and tourism industry. They also provide promising avenues for businesses looking to enter or expand within the market.

1.  Shift Toward Sustainable Tourism

Travelers are increasingly prioritizing eco-friendly options, which opens up opportunities for businesses promoting sustainable practices, such as carbon-neutral tours, eco-lodges, and locally sourced food. This focus on responsible travel and conservation has the potential to attract environmentally conscious tourists.

2.  Digital and Online Travel Services

There is a growing preference for digitalization when it comes to planning and booking travel, creating opportunities for companies with advanced online platforms. Enhancements like AI-driven recommendations, virtual reality experiences, and personalized itineraries can improve customer experience and streamline the booking process.

3.  Cultural and Experiential Tourism

More tourists are seeking authentic cultural experiences that go beyond traditional sightseeing. Businesses offering immersive activities, culinary tours, and local workshops that enable meaningful engagement with Japanese culture can capitalize on this growing demand.

4.  Luxury Travel Segment Growth

Since the end of the pandemic, the luxury travel market has been rebounding. There is an increase in booking for high-end accommodations and exclusive experiences. Companies can meet this demand by offering bespoke travel packages, private tours, and premium services customized for affluent travelers who are looking for unique, personalized experiences.

5.  Health and Wellness Tourism

Attention to health and wellness has increased since the pandemic. This has created opportunities for businesses offering wellness retreats, spa services, and holistic health experiences. As travelers look to rejuvenate and relax, packages that integrate wellness can effectively attract this demographic.

Tactics for Success

The following strategies can help businesses stand out in Japan’s dynamic travel and tourism market.

1.  Partner with locals

To enhance the travel experience and provide a deeper cultural connection, businesses can partner with local providers to offer immersive cultural experiences and activities that engage tourists with authentic Japanese culture.

2.  Emphasize Exclusivity

Creating exclusive travel packages and private tours with unique customized experiences will attract this demographic.

3.  Integrate Wellness Offerings

To appeal to health-conscious travelers, businesses can combine wellness activities, like yoga and spa treatments, with cultural experiences.

4.  Promote Sustainability

By developing eco-friendly tours, establishing sustainable dining partnerships, and effectively communicating these efforts, businesses can resonate with environmentally conscious tourists.

5.  Leverage Technology

To enhance personalized itineraries and improve the booking experience, it is recommended that businesses use virtual reality and AI-driven recommendations.

Gaming & Entertainment

Japan’s gaming industry dates back to the 1960s, and has long been recognized globally for its innovation, storytelling, and design.

Titles such as Mario, Pac-Man, and Sonic the Hedgehog are considered iconic among gamers. Today, Japan has the third-largest gaming market, followed by the United States and China. Recognized as the “big 5” in the industry, the major players are Nintendo, Square Enix, Sega Sammy Holdings, Bandai Namco Holdings, and Konami.

In 2019, industry revenues reached $19 billion. Mobile games dominated the market, and the pandemic accelerated this growth.

In early 2020, mobile gaming engagement increased by over 50% as people sought entertainment on their devices. About 15% of top mobile games are based on popular intellectual properties, including Pokémon GO and Dragon Ball Z Dokkan Battle.

Trends & Future Opportunities

As it expands, opportunities for publishers to look out for in the Japanese gaming industry include:

1.  Mobile Games

With 107 million mobile internet users and the rollout of 5G in 2020, mobile gaming is expected to thrive. Titles like Pokémon GO and Dragon Quest Walk will benefit from enhanced connectivity and new augmented reality (AR) and virtual reality (VR) features.

2.  Augmented Reality (AR) and Virtual Reality

Faster and more accessible internet connections are also paving the way for more AR and VR games. This trend is led by popular titles, like Pokémon GO and Dragon Quest Walk.

3. Esports

Historically, Japan’s esports market has developed slower when compared to the USA and China. However, now, thanks to government initiatives, it is on the cusp of significant growth.

The Ministry of Economy, Trade, and Industry projects the market will reach ¥15.3 billion by 2023. This creates opportunities for larger tournaments and nurtures a vibrant esports community.

4.  Game streaming

New game streaming platforms, like Ubisoft’s Uplay and Google’s Stadia, are expected to attract casual gamers. They also have the potential to transform video game consumption by enhancing accessibility and introducing subscription models that appeal to a broader audience.

5.  Market Accessibility

Selling physical console games in Japan can be challenging due to strict regulations. However, mobile games allow foreign companies a more straightforward approach to promoting and monetizing their products. Digital marketing can give businesses entering the Japanese gaming market.

Tactics for Success

To thrive in Japan’s gaming market, publishers should consider adopting the following strategies:

1.  Leverage Mobile Gaming Growth

Focus on developing and marketing mobile games to leverage Japan’s strong mobile network and high smartphone usage.

2.  Localize Effectively

Make sure your games connect with local culture by incorporating elements of anime, otaku culture, and other things that resonate with Japanese gamers. Collaborate with native Japanese translators and localization experts to adapt game content and marketing materials effectively.

3.  Explore Streaming Services & Content

Engage with your audience by building a presence on Twitter and LINE. You can also run pay-per-click (PPC) ads on Google and Yahoo! JAPAN to target mobile gamers.

4.  Create a Strong Community

Foster a community around your games through forums, social media interactions, and in-game events. This can increase player engagement and feedback, and enhance game quality and user satisfaction.

Outlook on Future Industry Growth in Japan

Even though the aging population and declining birthrates challenge the Japanese population, industries continue to grow. As the country promotes innovation and embraces technology, businesses, and eCommerce merchants can take advantage of the following opportunities present in emerging markets.

Innovation & Technology

More businesses are using artificial intelligence (AI), automation, and data analytics. This sets the stage for growth in the eCommerce sector. Integrating these technologies will help companies improve customer experiences and streamline operations. This will give them a competitive edge in the market.

Changing Consumer Preferences

There is a noticeable shift in consumer behavior towards personalized and unique products. Businesses that offer customization options and limited-edition items can attract customers and leverage this trend for expansion. By aligning with consumer desires, merchants can uncover new opportunities for growth.

Expansion of Cross-Border E-Commerce Opportunities

Technological advancements are reducing barriers to global trade, allowing Japanese businesses to explore new markets. This expansion enables access to international customers, diversifies consumer bases, and unlocks new revenue streams, driving growth in the eCommerce sector.

Catering to the Aging Population

Japan’s aging demographic presents unique opportunities for businesses. By offering products and services tailored to older adults—such as health technologies and accessible designs—companies can meet this increasing demand and broaden their market reach.

By focusing on technological integration, responding to evolving consumer preferences, committing to sustainability, embracing cross-border trade, and addressing the needs of an aging population, businesses can thrive and shape the future landscape of the industry.

How KOMOJU Empowers Businesses to Thrive in Japan with Local Payment Solutions

Offering localized payment methods is critical to succeeding in Japan’s $188 billion eCommerce market. KOMOJU provides tailored payment solutions that enhance customer satisfaction, boost sales, and ensure sustainable growth.

The Importance of Localized Payment Methods

Japanese consumers prefer trusted payment options, including convenience store payments, digital wallets, and credit cards. By integrating these methods, businesses can significantly improve their checkout experience and conversion rates.

Flexibility for Global Customers

KOMOJU enables businesses to connect with international customers by offering familiar, trusted local payment methods. This flexibility expands your reach and fosters consumer trust.

Tailored Payment Solutions for Every Business

Whether you are an eCommerce leader or a startup, KOMOJU’s flexible payment solutions can be customized to fit your needs. Its seamless integration provides a checkout experience tailored to local preferences.

Ensuring Compliance and Building Trust

Navigating Japan’s regulatory landscape is essential for success. KOMOJU helps businesses comply with local regulations, including data protection and consumer rights laws, building trust with customers.

Join the Local Payment Revolution

Ready to enhance your business in Japan’s dynamic market? Contact KOMOJU today for a consultation and discover how our localized payment methods can drive your success.

Summary

Japan’s market, covering gaming, eCommerce, and technology, offers abundant opportunities for international businesses. To succeed, adopting localized payment solutions is crucial. Partnering with a payment gateway like KOMOJU enables businesses to provide familiar payment methods, enhancing customer satisfaction and driving sales.

Being up-to-date on insights from travel, healthcare, and entertainment sectors can help companies navigate Japan’s market. With strategic investments, local partnerships, and an understanding of cultural dynamics, positioning your business for success in Japan is achievable.

FAQs

International businesses are drawn to Japan for its status as the third-largest economy, with a per capita income of around $35,390. A supportive yen and government incentives have led to $721 billion in foreign direct investment, especially in manufacturing.

Japan’s reliance on imports, an aging population increasing demand for robotics and healthcare, and strong U.S. ties further enhance its appeal for expansion.

Foreign companies face several challenges, including:

  • Language Barriers and Cultural Nuances: Communication issues and unfamiliar customs complicate market entry.
  • Strict Regulations and Compliance: Navigating complex local regulations can be difficult.
  • High Competition and Market Entry Costs: Established players and significant marketing costs pose challenges.

KOMOJU offers localized payment solutions that aid businesses entering Japan by:

  • Providing Trusted Payment Options: Enhancing customer satisfaction and reducing cart abandonment.
  • Offering Compliance Support: Helping navigate local regulations and build customer trust.
  • Delivering Flexible Solutions: Tailoring payment options for businesses of all sizes.
  • Enabling Global Reach: Connecting businesses with international customers through familiar payment methods.
This article is brought to you by KOMOJU
We help businesses accept payments online.

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