Japan’s Top Ten Powerhouse Brands (and How They Got There)

If you want to be big in Japan, an essential step in your market research should be learning from the most successful Japanese brands. There are all sorts of bright lenses for examining the worth and status of companies out there.

Several lists reveal the dominance of Japanese car giant Toyota, which ranked tenth on Fortune’s 2019 Global 500 based on reach, economic wellbeing, and sheer brand clout. Fortune also named Toyota one of the world’s most admired brands at #30, and in January 2020 as the globe’s top automaker for the sixth year running.

Meanwhile, a newly minted BrandZ report on Japan—from the world’s leading data, insights and consulting company Kantar, part of WPP—pegs Toyota as the country’s premier brand. So does branding behemoth Interbrand in its global ranking.

Interbrand’s global list, by the way, is heavy on the traditional manufacturing side—four carmakers, three product-focused conglomerates with a heavy accent on electronics and a clothing manufacturer, along with a game company and a bank. Japanese brands clearly maintain their powerful appeal abroad as fabricators.

Several lists reveal the dominance of Japanese car giant Toyota, which ranked tenth on Fortune’s 2019 Global 500 based on reach, economic wellbeing, and sheer brand clout. Fortune also named Toyota one of the world’s most admired brands at #30, and in January 2020 as the globe’s top automaker for the sixth year running.

Meanwhile, a newly minted BrandZ report on Japan—from the world’s leading data, insights and consulting company Kantar, part of WPP—pegs Toyota as the country’s premier brand. So does branding behemoth Interbrand in its global ranking.

Interbrand’s global list, by the way, is heavy on the traditional manufacturing side—four carmakers, three product-focused conglomerates with a heavy accent on electronics and a clothing manufacturer, along with a game company and a bank. Japanese brands clearly maintain their powerful appeal abroad as fabricators.

Japanese consumers are demanding, sophisticated and risk-averse as we have found during our over 20 years of working with them. If they don’t trust you, they won’t buy from you. According to the 2019 Edelman Trust Barometer, only 44 percent of Japanese trust in business in the overall sense, but 69 percent trust local brands—and that’s up 9 percent from 2018. They also like brands that are established, respectable and popular—in short, with a solid pedigree.  Our best advice on how you can become such a trusted brand in Japan is in this piece.

That said, they don’t mind a bit of market disruption, which both Apple and Starbucks did in upending the table in the consumer electronics and coffee industries, respectively. If rule 1 of market entry in Japan is gain trust, rule 2 of the book is use your differences to your advantage and re-set the agenda in your industry, like Apple, Starbucks and some other players did in Japan. Again, take a look at our rule book on market entry in Japan.

The successful players have done it in ways that continue to intrigue local consumers—with powerful, novel features and functions on iPhones and other gadgets, for example, and redefining the idea of what a coffee shop should be and incorporating local flavors into their drinks.

So what else do you have to do to establish yourself in the Japanese market? Here are a few clues based on some of the above brands.

The BrandZ report says that consumers love Toyota for having a clear sense of purpose, being innovative, and the brand experience it offers. In addition to exhibiting old school continuous improvement and manufacturing excellence, the carmaker has an obsession with reducing waste and inefficiency, as this story reveals. Toyota’s long history and stability are also much admired, which is part of rule 1, build trust.

Then there are the future-oriented investments Toyota is making in hybrid vehicles like the Prius and its recent $500 million bet on Uber. The latter includes adding self-driving Toyota Sienna ridesharing vehicles to Uber’s ridesharing network, which will shore up sales in a weakening domestic market. Toyota is also collaborating with Honda and SoftBank on autonomous driving research. Collaboration is a promising avenue, and it’s significant that large players like these are linking up.

According to the BrandZ report, Nintendo earned respect for its perseverance and resilience, introducing the massively popular Switch console despite pressure from the surge in mobile gaming and after a less than stellar Wii U launch. The inventive, immersive worlds the company creates have earned it generations of dedicated fans. Japanese consumers also view Nintendo as a brand that shakes things up. While most people probably assume the company is rather new because of its focus on game entertainment, it’s been around since 1889. A long history, real or fake, lets Japanese consumers make the leap to giving you a try.

SoftBank and founder Masayoshi Son are admired for being bold, resilient and resolutely future-oriented. The company lost tens of billions in the dot.com debacle in 2000 but soared back up with a prescient investment in China’s e-commerce firm Alibaba, and continues to back various startups through its Vision Fund, including Uber, Slack, and DoorDash. The latest venture is a billion-dollar tie-up with Toyota and DENSO on Uber to push the development and deployment of automated ridesharing services. SoftBank’s avowed universal mission: “Use the information revolution to make people happy.”

Holistic brand building that goes beyond specs and facts and gets into storytelling is rather new to Japan, but these firms had the advantage of larger-than-life personalities at the helm. Panasonic’s origin story, for example, includes founder Konosuke Matsushita making and selling light bulb sockets from a rented house. His many down-to-earth books on business philosophy endeared this business icon to generations of working people and executives alike. That affection still resonates.

Founded in a bombed-out Tokyo department store after World War II, Sony and its cofounders, Akio Morita and Masaru Ibuka, turned “Made in Japan” from a term of derision to praise internationally. The company is still admired for the sheer power of its innovation and marketing.

Honda and found Soichiro Honda bolstered their story of two- and four-wheeled glory by supporting Indy and Formula 1 racing. Now the company has turned a sharp corner by getting into robotics, mobility, aircraft and renewable energy. Like Panasonic and Sony, Honda has reinvented itself on the fly, which earns the company great respect.

In the 2020 list, however, Suntory had slipped to twelfth, and seven of the top ten firms were foreign, included Google, Prudential Life, the Boston Consulting Group and Cisco Systems. They’re valued for traits such as respecting individuality and ideas, a cooperative environment, and ease of working for women. That’s promising news for non-Japanese companies and the workplace is increasingly important according to our latest research in 2019.

So lay the proper groundwork. Pay attention to local sentiment. Offer products, services, and experiences that are different yet still geared for Japanese tastes. And if you can find a local partner with a stellar reputation—like Disney did with Oriental Land when creating Tokyo Disneyland—consider a strategic alliance.