Japan Market Access

Import regulations and customs duties

Regulations
Despite the liberalisation of the import system in Japan, it is still difficult to penetrate the Japanese market because of its structure. As a rule, most of the goods are freely authorised to be imported. However, some products are subject to a license, especially products restricted by quotas (rice, wheat, flour, leather, fish breeding sector). A certain number of agricultural products are also subject to a license (animals, plants, perishable foodstuffs). This system is supervised by the Ministry of Economy, Trade and Industry. Some ministries may also be involved (notably the Ministry of Agriculture).

All products affecting the consumers' health have to go through the preliminary request of a license to be launched on the market, and have to do so before they are able to be imported into Japan. The Ministry of Health is in charge of assessing the goods included in this category. It is very difficult, even today, to import, for example, cosmetics in Japan, and pharmaceutical products are very much regulated. The procedure of adaptation of the products to the Japanese standards are made difficult because of Japan's specific standards, often different from the internationally admitted standards. Finally, there are quarantine measures for the import of living animals on the Japanese territory.

However, under international pressure (especially from the European Union and the USA), Japan has set up a certain number of structures in order to help companies who are eager to sell in Japan, such as JETRO (JAPAN EXTERNAL TRADE ORGANISATION) .

Distribution

The retail market in Japan is the second largest in the world. It has undergone many changes and permutations since facing an economic crisis. The principal economic regions of Japan are Hokkaido, Tokoku, Kanto, Chubu, Kinki, Shikoku, Kyushu and Chugoku.

The Japanese distribution market is divided into three types of stores:

- Departmental stores (Depâto), which sell luxury products and are frequented by well-to-do clients. The total sales area of these stores can sometimes exceed 50,000 sq. meters. The major departmental stores are Takashimaya and Mitsukoshi.
- There are also large chain stores whose size generally varies between 3,000 to 6,000 sq. meters. This is the sector which is currently going through a hard time as they face competition from neighborhood stores: for example Ito Yokado and Aeon (the number 1 store in the Japanese retail market). Foreign companies are concentrating on this particular market segment, example: Wall-Mart took over Seiyu and Metro acquired Marubeni.
- Combinis are neighborhood stores open round-the-clock which are owned by the large chains, example: (Ito Yokado owns Seven Eleven, Seiyu owns Family Mart). This is the fastest growing sector of the market with a growth rate of 2.7% in 2004.

The distribution system in Japan is very complex due to the large number of intermediaries. Wholesale dealers fix the price of products that are put on the market. The dominant role played by big Japanese trading companies (sogo soshas) is decreasing; in fact an increasing number of large retail chains have started importing directly without going through trading companies. Departmental stores like Itochu and Family Mart also play a very important role in the Japanese distribution market.

The Business to Business (B to B) market

Japan's transformation in the past few years into a model based on the mechanisms of the market has drastically altered their economy. Problems notwithstanding, Japan's market importance of 127.8 million consumers has always attracted exporters as it facilitates the entry of goods and services into the entire south-east Asia market. In order to penetrate the Japanese market one must be willing and able to make product changes, have an in-depth knowledge of local customs, and be prepared to make a substantial investment in human as well as material resources. It is also recommended to use the services of an interpreter/consultant if you are approaching this market for the first time. Having a local presence is recommended even for the short term. This could be in the form of a small representative office that will keep a check on the day-to-day activities of agents and monitor activities involving product promotion. Japan offers promising growth prospects in the value-added sectors, but is weak in the sector of non-processed products. Cultural changes over the last decade (more and more workers spending time outside of their work-environment) has created a strong demand for travel, entertainment, and leisure activities. JETRO ( Japanese office for foreign trade) is the country's export promotion agency which assists exporters to gather information regarding opportunities in the Japanese market.

Transportation of goods

By road
The road network consists of 1,156,300 km, of which 6,400 km are toll motorways and 32,147 km are main roads. The road network is regularly overcrowded. The Japanese Ministry of transport has been planning a renovation plan over 5 years in order to improve the road infrastructure and the safety of the motorists.

By rail
The rail network consists of 23,700 km of lines with only 2,893 km of electrified tracks. 24,000 million t.km of goods were transported in 1995. The dominant companies on the Japanese railway freight market are the Central Japan Rail Company (Central JR) and the East Japan Railway Company Foundation (EJRCF).

By sea
Japan holds the third merchant fleet in the world. Japan has 133 ports of important size of which 21 are of international standards, plus 969 regional ports, totalling 1,102 ports. The biggest port is Kobe, then Chiba, Fushiki-Toyama, Hachinoche, Hamakanaya, Hitachinaba, Kitakuyshu, Ishikari Bay and Tokyo (Dorinzawa).

By air
Japan had 199 airports in 1999. The two main airports are Narita (Tokyo) and Kansai (Osaka, Kobe and Tokyo). In 1999 , 1,840,000 tons of freight were transported through the Tokyo airport; that is an increase of 12,5% as compared to 1998. The main Japanese airliners are All Nippon Airways (ANA) and Japan AirLines (JAL) and Japan Air System.

Standards

The compulsory approval of a number of products (electric and electrodomestic devices) has to be obtained according to Japanese standards, in Japanese or foreign laboratories recognised by the Ministry of Economy, Trade and Industry (MITI) for which some fees is payable. The main organisation in charge of the voluntary normalisation are: the Japanese Industrial Standards Committee (JISC) and the Japanese Agricultural Standards Committee (JASC), who are respectively under MITI and the Ministry of Agriculture. A number of professional associations dictate their own laws. For any information, please contact the Japan External Trade Organization (JETRO).

Patents and brands

The organisation in charge of protecting intellectual Property is the Japan Patent Organisation (JPO).
You can obtain information from Japan Patent Information Organization (JAPIO)
Japan signed the Agreement of Paris for the Protection of Industrial Property, as well as the Agreement establishing the World Intellectual property Organization (WIPO). They signed the Treaty of Co-operation on Patents and the Agreement of Strasbourg for the International classification of Patents. Regarding trademarks, Japan ratified the agreement of Madrid on the International Classification of Products and Services for the register of trademarks.