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Doing Business in Japan
2010 Road Show Presentation
Presented by Sumio Shibata
State of North Carolina Japan Office
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GDP in 2009
Japan $ 5,095 billion
China $ 4,909 billion
(Source: Nikkei 1/21/10)
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3.7
6.
3.8
.6 6.4 .7
.
5.6
- 5.
- .
-5.
.
5.
.
U A
.4
5 .
.
.7
.
.9 ..4
.7
.4
.4..73 .
-6
-5
-4
-3
-
-
3
4
U A
Re l GDP Growth Overview
Source: Cabinet Office, Government of Japan / USDOC Bureau of Economic Analysis
Ja-Mar pr-Jun Jul-Sep Oct-Dec
2009
2005 2006 2007 2008 2009 2010(*) 2011(*)
(*) IMF world Economic Outlook Update Forecast1/26/10
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BOJ chief sees signs of sustainableeconomic recovery
The Governor told reporterseconomy has been pickingup on 4/7/10
(vs March statement :Economy is picking up)He will raise current economicprojection
FY2010 FY2011GDP +1 3% +2 1%CPI -0 5% -0 2%
(Source : Nikkei Newspaper pril 8, 2010)
Bank of JapanGovernorMasaaki
Shirakawa
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New Hatoyama Cabinet
Growth Strategy for Economy
For a Shining Japan
2% yearly GDP growth through2020
Economic growth driven demand
expansion (No more heavyreliance on public workprojects)
DPJ (Democratic
Party of Japan)
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New Hatoyama Cabinet
(contd) Reinforcement of the environment &energy-related industries
Enhancement of the health care sectorincluding medical and nursing services
Promotion of science and technology(platform for backing up the envisioned
growth) Government to finalize new growth
strategy by around June
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Approval Rating in Japan
(Source: Nikkei Newspaper March 29, 2010)
1
30
0
0
0
70
80
Approval Rating of Hatoyama Cabinet
non-approval ( 7)
approval (3 )
%
10
20
30
0
0
0
PartiesApproval Ratings
DPJ (33)
LDP (23)
%
DPJ: Democratic Party of Japan
LDP: Liberal Democratic Party
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Population & Land size
Population of
127 million
41% of SA
(307 million)
Land Size of
146,000 sq miles
4% of SA
(3,787,000 sq miles)
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Population
Japan 127 million
Tokyo MetropolitanArea : 33 million
Osaka MetropolitanArea : 21 million
Greater Nagoya :15 million
Fukuoka : 5 million
Hokkaido : 5 million
KANSAI
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Ties to the S Japan is the nited
States 4th largest ExportMarket, after Canada,Mexico and China
Second largest foreign
investor in the S , withmore than $230 billioninvested, second only to
K
The S -Japan alliance
is a cornerstone of Ssecurity interests inAsiaand is fundamental toregional stability andprosperity
(Source: U.S. Commercial Service / 2010 Country Commercial Guide)
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Ties to the S (contd )
The Foreign Ministryof Japan releasedThe Diplomatic BlueBook 2010
Japan pledges todeepen security
alliance with S toserve as a basicframework to securethe stability ofAsia-
Pacific region
(Source : Kyodo News,April 7, 2010)
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Japanese Subsidiaries in the Piedmont TriadRegion (Manufacturers only)
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Investment in NC
ToshibaAmerica
Nuclear EngineeringCorporation
Opened engineeringcenter in Charlotte inAugust, 2009
# of personnel : 200(by 2013)
Mori Seiki, one of
leading machine toolcompanies in Japan
Opened CharlotteTechnical Center inJanuary, 2009
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in
TokyoNC Investment in Japan
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1,
1, 1
1,91
2,
2,2 9
, 9,1
, 9
, 2
,
1, 2, , , , , ,
Plast s
Oil s/G ain/ , it
Inorganic C icals
Meat
PharmaceuticalProducts
ElectricMachineryCereals
IndustrialMachinery,incl. Computers
ircraft, pacecraft, ndParts
Optical,Medical Instruments
*Total Export : $ 51 billion (2008 : 65 billion) Unit : $ 1 million
Source : WISERTrade
Top 10 .S. Exports to Japan
(2009)
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NC Exports to Japan (2010)
NC is 10th among allUS states for exportsto Japan
$1.5 billion in NCexports to Japan
Japan is 4th largest
market for NCexports
(HondaJet at GSO)(Source : SMARTrade)
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Emerging Sectors for NC Export
1) Biotechnology
2) Nanotechnology
3) RenewableGreen) Energy
4) SeniorMarket
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1) Biotechnology/Pharmaceuticalsin Japan
Market size of Biotechindustry : $24.3 billion in2008 (+27.9% over 2007)
Leading sub-sector :medical biotech $6.85
billion (Source : Fuji Keizai)
Therapeutic antibodies
Molecularly targeted
cancer therapies
Japanese pharmaceuticalcompanies eagerly seeknew drug candidates andpipeline identified ordeveloped by S biotechcompanies to be furtherdeveloped into new drugs
(Source : .S. Commercial Service)
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Biotechnology/Pharmaceuticals(contd.)Key market segments for
Biotech
Medical Care
Food
Bio Tool & Information(Bioimaging analysis
equip., DNA Chips,Protein/GeneAnalysisEquip)
Environment & Energy
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1) Biotechnology/Pharmaceuticals
World second largest consumerof pharmaceuticals
American pharmaceutical firmshave a market share of almost
20%
Japans aging population isgenerating increased demand
for pharmaceutical treatmentsfor cardiovascular problems,metabolic, gastrointestinal,CNS. Generic drugs have
good potential
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The market scale
of medical
pharmaceuticals
566.1 billion
dollars
2005 Average rate
1 dollar = 109
.64 yen 1 euro = 136.97
yen
JapanBioindustry
Association
United States
252.2(44.6%)
Canada
13.5(2.4%)
Japan
60.3(10.7%)
Germany
31.8(5.6%)
France
30.3(5.4%)
Italy19.6(3.5%)
Britain
19.5(3.4%)
Spain
15(2.6%)
In Addition Europe
53.4(9.4%)
Latin America
24(4.2%)
Asia/Africa/Australia 46.5(8.2%)
World Medical Pharmaceuticals Market(unit : billion dollars, numbers on parenthesis : % )
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Bio Japan 2010 September 29-October 1,
2010 at YokohamaPacifico
Main themes forexhibition/seminar areHealth, Environment, andFood (Functional Food,GMO)
Please join us to exhibitat NC Commerces booth
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2) Nanotechnology
M
ETIs Strategic TechnologyRoadmap 2009 designated
Nanotech as one of mostimportant fields(*) in scienceand technology to promote R
& D investment in the public& private sectors.
(*) Life Science, Information& Communications,Environmental Sciences,Energy and etc.
(The Ministry of Economy, Trade, and Industry)
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Free of charges to display and distribute yourliteratures at NC Japan Offices booth
JapanAnalytical
InstrumentsManufacturers
Association EXPO
September 1-3, 2010
at Makuhari Messe
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3) RenewableGreen) Energy
Renewable energytechnologies suchas photovoltaic
solar panels,biomass-to-ethanol,lithium-ionbattery for
hybrid car &electric vehicleare promisingsectors in Japanese
market now.
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Greenhouse Gas EmissionReduction by 2020 (Pledges)
Japan : 25% from 1990levels
SA : 17% from 2005levels
E : 20-30% from 1990levels
China 40-50% from 2005levels (*)
India : 20-25% from 2005levels (*)
(*) amount of CO2 emitted perunit ofGDP, or
(Copenhagen Climate Summit, January, 2010)
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Seven-Eleven Eyes 20,000 GreenStores Worldwide In 5 Years
LED technology for signs andlighting, generate electricity fromsolarpower, and feature hot-watersystems utilizing waste heat from
air conditioners. Some will evenhave rechargers forelectricvehicles
.
Green technology is seen slashing
store energy consumption by asmuch as 30% and will also cutgreenhouse gas emissions
(Source : NikkeiApril 6, 2010)
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Exhibited at :
Japan GreenDevice Show,
October, 2009
Japan HomeShow,
November,
2009
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4) SeniorMarket
Average saving of households
of people aged 60-69 yearsold: $245,000 (after debt)
Average income : $59,000
Comparison of aged populationPercentage of age 65
and older Japan 19.7(%)USA
12.3Average Life Expectancy
Women MenJapan 86 79USA 79 76
2000
(Source : JETRO)
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Deflation Makes OlderPeopleKey Consumers
CPI in 2009 : -1.2%
Households ofpersons aged in 60s :
Net savings of$230,000.Consumption rose1.2% in 2009
Households of personsaged in 30s : Net debtof $19,700.Consumption dropped
1.1% in 2009
(Source : NikkeiApril 5, 2010)
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SeniorMarket(contd)
Promising marketfor,Medicalcare/welfare
& servicesLeisure products
Home remodeling
Travel
Pet products
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Opportunities for NC Exporters
Aerospace
Computer Software
ElectronicComponents
Medical Equipment
Safety & Security
Furniture
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Aerospace
, 44
,
,
,
,
4,
, 4, , , , , 4, ,
por s ro e
pors
Mar e e
(M ll ons o $)
( ource: M n s ry o F nance, M n s ry o Econo y, Trade and ndus ry, andoc e y o JapaneseAerospace Co pan es)
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Aerospace (contd)
Aerospace industry isshifting the focus fromDefence (56%) to Civil(44%) in 2008
Japanese makers suchas Mitstubishi HeavyIndustries, Kawasaki, Fujiare supplying 35% of
Dream Liner, or787content to Boeing(Fuselage, and etc.)
Best Prospects :
Aircraft parts and
supplies,Avionics
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4
6
4 6
U S
k S z
C u S w
n ngn l g cy
w
S S
(S w -as-a-S v c ) and cl udc u ng
(S u c : JE TA J SA and un c a lCS stim ate s.)
( illio ns o fU .S . $)
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Computer Software (contd)
Best Prospects :
Smartphoneapplications, security,SaaS(*), Smart Grid,Cloud Computing
(*)Software as a
Service
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Computer Software (contd)
Key Elements to launching in theJapanese market :
a) Localization : translation,
testing, customizationb) Support Capability : Japanese
language support is mandatory
c) Products Quality : High quality
control is a very importantconsideration for Japaneseusers
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Medical Equipment
In 2008, importstook 50% of themarket.
.S. producershold 60% share ofimport, viz.,accounted for30%
of Japan market.
2 ,688 est.)
0,282
6, 69 est.)
32, 2
9,530
, 8
0 5,000 0,000 5,000 20,000 25,000 30,000 35,000
Imports from
the .S.
Imports
Market Size
2008 2009estimate)
(Millions of .S. $)
(Source: Ministry of Health, Labor and Welfare. CS Japan)
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Medical Equipment (contd)
Best Prospects :
For chronic and life-
style diseases,medical devicesalleviate pain,complement lost
functions, improvequality of life.
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5
1
5
1
1 5
y cu y
T u b cc cH w v
N u v y w5% ubl c
c c b ucu y
P-b
u v ll cqu c ug w gly
ll $
u c : Fuj K
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Safety and Security (contd)
Biometric-related solutions
Drug/explosive detectionequipment & systems Personal/container screen
systems
Nuclear/biological/chemicalpreparedness equipmentand medicines
Best Prospects :
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Furniture
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Furniture (contd)
Japan is 3rd largestimporter of NCfurniture after Canada,and SaudiArabia.
Largest importer ofNC Mattress
2nd
largest importer ofNC Wood furniture
Best Prospects :
a) Compact and high-
end, medium-highfurniture
(Area of averageJapanese house :
900 sqft. Vs. .S.house : 2,300 sqft.)
b) Unique furniture
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Kennedy Rocker
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Bottom Line Worlds second
largest market Open business
climate withtransparency and
rule of law
Resources ready toassist your firm in
entering the market
The Japanese market is one of the most competitivein the world. But if you find success in Japan, you
can use Japan as gateway toAsia.
Tips for successful entry
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Prepare written company informationCompany profile including company history
Profile of president
Sales/Statistics (incl. paid-in Capital)
Your objective
Product/Service informationEmphasize positive aspects such as
niqueness, Originality
Domestic Market Successes (Track Record)
Tips for successful entry
Preparation On Paperbefore contacting potential partners
Tips
i
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Tips for successful entry (cont.d)
Attitude aimed at success
Communicate in simple English andquick follow-up
Stress uniqueness of Product
Have patience with Trial and Error
Be flexible
Keep schedules, promises,commitment is key
Tips
Ti
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Most Common MistakeMade
by Foreign Partners Cold calling prospective buyers in
Japan
The Japanese prefer to do businesswith someone only when they havebeen properly introduced
Rely on an introduction by a go-between, such as the North CarolinaDepartment of Commercerepresentative in Tokyo
Tips
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What can the NCDOC TokyoOffice do for you?
We work seamlessly with ITD BDMs(Business Development Managers) toprovide you with Market research Basic Translation services
Temporary office space in central downtownTokyo location
Trade show assistance
Logistics/lodging assistance
Fast Track partner search services
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How does Fast Track work?
Market research
Partner profiling and screening
Introduction to potential partners Scheduling of face-to-face meetings
in Japan
Basic translation of marketingcollateral for business meetings
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Where to start?
Contact International Trade Division, NCDepartment of CommerceBDMs ( Business Development Managers)
tel. 919-733-7193
http://www.nccommerce.com/en/BusinessServices/InternationalBusiness/InternationalTradeServices/
Contact Sumio Shibata, NC Trade
Representative in [email protected]
tel +81-3-3435-9301fax +81-3-3435-9303
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Thank you very much
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