Japanese Distributors: The Wrong Ones & The Right Ones To Approach

Approaching Japanese distributors that represent your Japanese competitors

We’re often asked by clients to contact the distributors in Japan that their Japanese competitors use.

We’re always happy to oblige, but we’ve found that this approach rarely works.

This is because one of the characteristics of the Japanese distribution system is that there are two types of distributors in Japan: “domestic” distributors and “international” distributors.

Let me explain what I mean.

Domestic Japanese distributors are distribution companies that typically function in a very traditional way. They distribute products primarily from Japanese manufacturers but may also work with the local Japanese subsidiaries of foreign companies if these subsidiaries have Japanese staff and are set up to operate in accordance with Japanese business practices.

International Japanese distributors, on the other hand, speak English, understand international business, and deal primarily with foreign suppliers. Because they represent mainly companies based outside Japan, they provide more services than their counterparts who only handle products from Japanese manufacturers.

We have found very little overlap between these two types of distributors.

In other words, domestic Japanese distributors are rarely interested in doing business with non-Japanese companies, and international Japanese distributors typically only work with non-Japanese companies.

We have seen this to be true for both consumer (B2C) and B2B products across dozens of different product categories.

The lesson here is simple.

If you are a non-Japanese company, the distributors in Japan who will be most interested in selling your products will be those who are already selling products from other non-Japanese companies… not the ones your Japanese competitors use.

Approaching Japanese distributors that represent your non-Japanese competitors

We have found that approaching the distributors in Japan who represent a client’s non-Japanese competitors is equally unlikely to be successful.

There are two main reasons why this strategy rarely pays off.

First, Japanese distributors are typically very loyal to the companies they represent.

Second, distribution arrangements in Japan are usually exclusive, and in return for this exclusivity, most suppliers include a clause in the distribution agreement that prohibits the distributor from selling competing products.

We find that the best strategy in Japan is to identify and approach distributors who are already representing complementary suppliers rather than suppliers who compete directly.

More here: How To Find Distributors, Importers & Agents In Japan