The Japanese Food Market - Consumer market characteristics, and the foreign entry situation from a Swedish perspective

Abstract

Japan is dependent on overseas supplies of agricultural and food products, and is therefore an interesting market for foreign food producers/suppliers. However, from a Swedish viewpoint, this market is located far away from the home market. With the purpose to have general background information for understanding of the Japanese food market situation, this thesis explored the consumer market generating the final demand, and studied aspects of foreign entry. The objective was to describe relevant market conditions from a Swedish food supply perspective. The research was carried out mainly in the form of a desktop study method, with a descriptive objective and a wide study approach. Data were collected primarily from secondary sources, such as statistical publications, market reports, and articles. In the case of Swedish food exports, primary data were also retrieved through questioning of company representatives with experience of exporting foodstuffs to Japan.

With respect to the Japanese food consumer market, the results described general demographics, social and psychological factors, and the food consumption behaviour. The situation of foreign entry into the Japanese food market, especially from a Swedish standpoint, was described regarding modes of entry, imports, regulations, and the risk of facing possible entry barriers.

Based on the results, the conclusions were that the Japanese food market is of considerable size in its large number of consumers and the large quantity of food imports they are generating. Food and eating is an important priority among Japanese people, and the consumer behaviour is fairly uniform and sensitive. Food consumers specify a high level of product standard. Foreign producers, including Swedish suppliers, normally have their products available by exporting via Japanese middlemen. Most food products for sale are processed inside Japan by domestic manufacturers. Customer and legal requirements are strict, but not necessarily hindering market entry. Furthermore, the results reached the conclusion that the Japanese food market is of limited priority to Swedish food exporters. The distance is great to the Japanese marketplace, both physically and psychologically, which may increase the risk of facing possible barriers to entry. The Japanese food market is powerful but demanding. The implications are that Swedish food producers can find a substantial demand in Japan for their products, if they pay adequate attention to this market, and show persistence and carefully design their market entry.