Focus on Japan - Part 2 of 3: Top Challenges for Brands Entering the Japanese Market in 2025

By: Yukino Yamamoto, Japan Market Specialist at Incite.

Japan presents a wealth of opportunities for food and beverage brands seeking to expand into new markets. However, entering the Japanese market is not without its challenges. Building brand credibility and gaining consumer trust requires significant time, effort and strategic planning. Despite these hurdles, Japan remains a highly attractive export market for brands that can navigate its complexities successfully.

Below are some of the key challenges food and beverage brands can expect to encounter when entering the Japanese market:

Intense Competition. Japan’s food and beverage sector is fiercely competitive with a multitude of well-established domestic and international brands already holding a strong presence. For newcomers, differentiation is crucial. Successfully entering the market often means overcoming the strong loyalty consumers have to existing brands. To thrive in such a competitive environment, businesses must conduct thorough market research, develop a compelling value proposition and implement clear strategies to communicate how their brand will stand apart from established competitors.

Cultural Preferences. Succeeding in Japan requires a deep understanding of the country's distinct cultural preferences. Global food and beverage products need to appeal to Japanese consumers who tend to favour smaller portion sizes and more delicate flavours. Products that are successful in Western markets may not automatically resonate with Japanese consumers unless they are adapted to reflect the country's specific tastes, dietary habits and cultural nuances. A thorough understanding of these preferences is crucial to securing market acceptance.

Exclusive Distributor Model. In Japan, many retailers and wholesalers operate under an exclusive distributor model, preferring to partner with a single distributor for each product category. This can pose a significant challenge for new entrants as distributors may be reluctant to represent untested or unfamiliar brands. Identifying and securing a reliable distribution partner is essential for brands looking to establish themselves in the market.

Building Brand Trust. Japanese consumers are notoriously risk-averse and place a high premium on trusted, established brands. For new entrants, establishing credibility is a time-consuming and resource-intensive process. To succeed, brands must invest in localised marketing strategies and focus on fostering meaningful relationships with consumers. Building brand trust is crucial to gaining traction and growing sales in the market.

Omnichannel Approach. Unlike many Western markets where e-commerce may dominate the landscape, Japanese consumers prefer a balanced, omnichannel shopping experience that blends both online and offline interactions. New brands must anticipate that Japanese consumers often research products online before making in-store purchases. Providing a seamless and integrated shopping experience across both digital and physical platforms is essential to meeting consumer expectations and driving sales.

Retailer Reluctance. Given the Japanese consumer’s strong loyalty towards established brands, retailers are often hesitant to list and stock new products that lack proven demand. For emerging brands, winning over both consumers and retail buyers is a significant challenge. To overcome this barrier, it’s essential to build strong relationships with retailers, ensuring they are motivated and committed to supporting the brand’s successful launch and sustained presence in the market.

Interested in opening the Japanese market in 2025? Email us at getincite@exportincite.com to set up a call to discuss your goals for entering the Japanese market and how we can support.

Read Part One of the Japan Series: Why Brands Should Consider Entering the Japanese Market in 2025.