Imagine an economy 20% larger than Australia’s in a city the size of Sydney.
This accurately describes Tokyo, Japan’s futuristic metropolis. A unique city blending Japanese tradition with high-tech design, Tokyo is a fascinating destination for a broad variety of Australian businesses, and its almost 38 million inhabitants in the greater city make for an attractive target market.
While consumption is estimated at 60% of the value of Japanese economy, Australian consumer product manufacturers and retailers must adapt to local requirements in order to enter a highly selective, quality-conscious market. One of their key advantages is Australia’s clean and green brand, well-known by Japanese consumers, along with the premium status acquired through more than 40 years of close bilateral trade.
Giving a further boost to trade in 2015, the Free-Trade-Agreement or Japan Australia Economic Partnership Agreement (JAEPA) paves the way for Australia’s mid-size businesses to either enter the Japanese market at a lower cost, or consolidate their presence onsite through higher-value investments.
Trade barriers and tariffs will be progressively lowered, and some will disappear over the next years for the resource, food and beverage sectors, as well as for service providers. This latter change is likely to mark a turn in the development of the financial and professional services market in Tokyo and other major Japanese cities, with foreign companies in sectors as diverse as architecture and international law better able to compete on local markets.
The long and successful partnership between Australia and Japan has translated into many brands becoming successful on both markets. It’s now time to compound the success through expansion on different markets, with the focus mainly directed at ASEAN’s growing economies.
One scenario that could appeal to Australian mid-size consumer goods manufacturers not keen on absorbing the risk of geographical expansion to ASEAN at this time would be a partnership with one of Japan’s many retailers, which are investing heavily in the region.
Many formulas for growth are available for Australian businesses keen on developing in Japan. For 90% of such companies, success stories will start in Tokyo.
Grant Thornton advises mid-size businesses in a variety of industries regarding their expansion to Asia. If you’d like to discover what opportunities Tokyo and Japan can bring to your growing business, contact us for a free Asia Fit workshop today.