Dalelorenzo's GDI Blog
20Jun/210

How Did IKEA and Starbucks Successfully Localize in Japan?

At btrax, we frequently talk to two types of people when talking about Japanese market opportunities.

Those who believe that a global policy will work in Japan Those who are knowledgeable about the landscape of the Japanese market and need to create a strategy specific to Japan.

Depending on your goals, aids, and budget, both types of people can succeed in Japan. However, from btrax’s 16 years of ordeal curing US firms expand to Japan, it can be an expensive task if you don’t take the time to understand the landscape.

Today, we will not go into the specifics of the Japanese market. Instead, we will look at a few illustrations where companies tailor-make their marketplace entering approach through localization. To learn about the basics of Japan, you are eligible to check out these articles 😛 TAGEND

Learning Japanese Business Etiquette Japan by the Numbers 67 Insightful Japan Facts

Here are two examples of success floors of foreign fellowships penetrating Japan by understanding the importance of localization.

Lesson 1: IKEA

As a well-known Swedish home-furniture company with 445 places in more than 30 countries, IKEA seems like a pro at international swelling. However, even IKEA formerly neglected at enroll the Japanese market.

When IKEA first had participated in the Japanese market in 1974, they were unaware of the differences in culture and buyer demeanors. The furniture was too big and didn’t go with the Japanese living style. After 12 times, IKEA decided to leave the market.

Learning from their first disappointment, IKEA exchanged themselves with ample purchaser action study. They attended observational investigate of the Japanese buyer life from those living in single-family houses to studios. In 2006, IKEA opened a megastore in Tokyo offering smaller furniture with simple intends, specifically designed to match the Japanese lifestyle.

They too learned that Japanese purchasers prioritize amenity and safety more than paying less. With that in knowledge, IKEA offered a delivery alternative with furniture assembly, curing winning Japanese customers’ hearts.

IKEA is now a well-known and respected brand in Japan like it is in other countries. Recently, IKEA opened its 11 th accumulate in the location that used to be the flagship store of Forever 21.

IKEA Shibuya Store

IKEA Shibuya Store

Example 2: Starbucks

Starbucks is well known for its superior label and business swelling policy. Founded in 1971, the chocolate firebrand now owns about 30,600 supermarkets in over 76 countries all over the world.

Starbucks opened its first collect in Japan in 1996. More than two decades later, it operates 1640 accumulations in Japan nationwide, as of May 2021. Japan is the 4th biggest grocery for Starbucks. How did they achieve this massive success?

Here are some key points of their localization strategy.

1. Starbucks first controlled Starbucks Japan K.K. with a well-established Japanese retail company announced Sazaby League through a 50 -5 0 partnership. This partnership supported Starbucks with an advantage in overwhelm cultural differences.

2. Starbucks attended sell/ user research in 1995 before actually penetrating the market. The market research provided interesting insights that led to targeting “women around the age of 30 ”, who were trendy and didn’t smoke.

Back then, Japan had a very high rate of smoking with around 60% of males inhaling. This draw the idea of a non-smoking cafe fairly high-risk from the standpoint of revenue since they were potentially eliminating male buyers. Starbucks initially positioned a non-smoking area in its 1st accumulation but soon all of the stores became non-smoking. This programme succeeded in attracting their main target. They did a very good job in successfully contacting loyal patrons from the beginning.

3. Starbucks changed its product lines to Japanese shopper tastes.

4. Serving sizes in Japan are different from the ones in the US. The biggest bowl immensity in Japan is Venti , not Trenta. There is an additional smaller sizing than Tall, called Short in Japan.( Technically Starbucks US sells abruptlies, but merely for espresso and hot chocolate.

Cup sizes

5. All concoctions are less sweet since Japanese purchasers tend to like less sugary cups than consumers in the US.

6. Starbucks curated its menu for the Japanese purchaser. Starbucks Japan offered tea-based components such as Matcha tea latte and Houji tea latte, which became some of their best-selling products.

Matcha at Starbucks

Furthermore, Starbucks strategized its adaptive retail building and media/ PR( including social media ). For lesson, it implements the traditional 2-floor room that was built over 100 years ago in Kyoto as its sales outlet. The accumulate is blended into the regional street very well.

Traditional 2 floor machiya house in Kyoto

Traditional 2 floor machiya house in Kyoto

In Japan, Twitter and Instagram are more commonly used. Starbucks has announced a lot of localized content on both social media. Now it has 5M adherents on Twitter and 2. 9M adherents on Instagram.

Starbucks Seasonal Item in Japan

Seasonal Item in Japan

All these strategies came from understanding the importance of localization. When it comes to international markets, the differences are more pronounced and misstep can be very costly.

Understanding the importance of localization goes hand in hand with understanding the importance of user research. Brand localization is key to user research as it provides the foundation for a successful grocery entry.

If you are serious about entering the Japanese market, let’s discuss how btrax can support you. Please contact us here.

References:

Statista- Number of IKEA’s accumulates Successful Foreign Companies in Japan- Shiodome.com Strategy for Market Entry and Expansion- UK Essays IKEA Stores- IKEA Official Website Starbuck Store- Starbucks Official Website How countless Starbucks stores Are There Worldwide?- Seattle Business Starbuck Japan Localization Case Study- medium The confidential of Starbucks Japan success- Watopi Amazon’s share- pull-net Comparison of Growth Strategy Amazon vs Rakuten- Keio University Repository Amazon’s Business Strategy in Japanese Market- > SMBC Consulting

Read more: blog.btrax.com

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