Thursday, August 6, 2009

Japanese customers v.s. English-speaking customers

I have been thinking of this question for many years: which customers should I focus on, Japanese customers or English speaking customers?

Japanese customers and English-speaking customers are in sharp contrast to each other. Pros of dealing with Japanese customers are at the same time cons of dealing with English-speaking customers. Contrarily, cons of dealing with Japanese customers are at the same time pros of dealing with English-speaking customers. I will summarize pros and cons of dealing with Japanese customers and English-speaking customers below.

*When dealing with Japanese customers:

**Pros
- If you are a native Japanese speaker born in Japan, you have a huge advantage over other nationals because you are supposed to know very well what Japanese customers expect and how they behave.
- Market competition is mitigated thanks to the lingual and cultural barriers. It is often difficult for non-Japanese to enter the Japanese market without understanding the details of Japanese business practices.
- Japanese customers are more loyal than English-speaking customers. Once a good relationship is established, they tend to stick to that relationship.

**Cons
- Japanese customers are unable to express their needs effectively. They are unable to document their requests. Suppliers must infer what they want from the conversation with them. It is often very ambiguous.
- They are reluctant to make a written contract with suppliers. Even after entering into a contract, they often try to change the terms of agreement.
- Decision making is often too slow. This is due to their complicated internal decision making processes.
- They often look down on suppliers and don't look at them as partners on equal footing. As a result, they often make unreasonable requests to suppliers in terms of prices, quality and date of delivery.

*When dealing with English speaking customers:

**Pros
- Before starting any business, English speaking customers make a clearly described contract with suppliers. All the terms of conditions are well-written in the contract. There's no ambiguity.
- English-speaking customers are less likely to ask for an unreasonable request which is not described in the contract.
- The English-speaking market is huge and spreads across the entire world.

**Cons
- The market competition is fierce. There are so many competitors throughout the world.
- English-speaking customers are less loyal. Once they find more favorable trading conditions in your competitors, they don't hesitate switch suppliers.
- If you are not a native English speaker, you will be disadvantaged in terms of communication. Communication can be more difficult and costly.

In summary, Japanese customers tend to stick to a long-term relationship. It's very difficult for outsiders to get into a relationship with a Japanese customer. But once a relationship has been established, they rarely switch suppliers. Contracts are often written incompletely or even non-existent, and human relationships are more emphasized. In contrast, English speaking companies conduct business strictly based on contracts. No contract, no business. They don't stick to a certain supplier and are always in search for better trading conditions.

To my personal preference, I like the way English speaking customers do more. It's more strict but also more transparent than that of Japanese customers. When we work with diverse suppliers (unlike homogeneous suppliers found in Japan), we have no choice but to do business based on contracts. A contract symbolizes human rationality and it is the only common element among heterogeneous people.

1 comment:

Addam said...

Nice Blog that tells us the English Speaking ways of Japanese customers and English speaking customers. Thanks for this Great Blog.