1. In Japan, a drug can be punished for being too successful
Japan has a little-discussed rule called market expansion repricing. If a drug sells far better than forecast, the government can cut its price mid-cycle—sometimes by 30–50%, outside the normal biennial price revision.
What surprises many outsiders:
Strong physician uptake can trigger repricing
Forecast accuracy becomes a regulatory issue
Some companies deliberately manage the pace of demand to avoid triggering it
Japan is one of the only major markets where commercial success itself is a pricing risk—a reality that quietly shapes launch strategy behind the scenes.
2. Japan can be fast—sometimes faster than the US or EU—if you plan correctly
Japan’s reputation for slowness is outdated. Under pathways like SAKIGAKE, approval timelines can rival—or even beat—Western regulators.
The catch most companies miss:
Japan prioritizes local clinical relevance, not sheer patient numbers
A small but well-designed Japan cohort, planned early, can outweigh massive global data added late
PMDA expects real scientific dialogue, not passive review
Companies that design Japan in early often move quickly. Those that bolt it on at the end usually don’t.
3. Japanese doctors are conservative—until they suddenly aren’t
Physicians in Japan are often labeled “slow adopters,” but the reality is more nuanced:
Once clinical confidence is established, switching can be rapid and decisive
KOL consensus matters more than promotional intensity
When guidelines or society opinion shifts, uptake can spike suddenly
This creates a market where early traction looks quiet—right up until it isn’t, catching global teams off guard.
Why this matters
Japan isn’t mysterious—but it is unforgiving if you misread the signals.
Invision Japan helps foreign pharma and biotech companies navigate these hidden complexities—from pricing and launch strategy to physician behavior and regulatory planning—by combining deep on-the-ground experience with a practical, execution-first approach.
If Japan matters to your pipeline, understanding how it really works is the difference between progress and frustration.
A Data-Based Assessment of Japan’s Flagship Innovation Policy
When Japan introduced the Sakigake designation system in 2015, the ambition was clear and bold: to position Japan as a global leader in the early development and approval of innovative medical products. Led by the Ministry of Health, Labour and Welfare (MHLW) and the Pharmaceuticals and Medical Devices Agency (PMDA), Sakigake was designed to address Japan’s long-standing challenges of drug lag and declining global relevance in pharmaceutical innovation.
A decade later, Sakigake is frequently cited as evidence of regulatory progress. But has it delivered on its stated goals — not anecdotally, but measurably?
This article examines Sakigake’s objectives, outputs, and real-world impact using publicly available data and comparisons with similar accelerated programs in the U.S. and Europe.
What Sakigake Was Designed to Achieve
Sakigake was launched in 2015 as a pilot under the government’s Strategy of Sakigake and made permanent in 2020. According to official MHLW and PMDA documentation, its objectives were not modest regulatory refinements, but structural change.
At its core, Sakigake aimed to:
1. Promote innovative R&D in Japan
The system was intended to encourage development of breakthrough therapies for serious diseases and unmet medical needs, with a strong preference for products developed first or concurrently in Japan. This Japan-first orientation was meant to strengthen domestic innovation capability and global competitiveness.
2. Enable early or first-in-world approvals
Eligibility requires that development and regulatory submission in Japan occur before or at the same time as the U.S. or EU, explicitly targeting first-in-world or simultaneous global launches.
3. Accelerate regulatory interaction and review
Sakigake provides priority PMDA consultations, assigned review teams (“concierge” support), and shortened review timelines — targeting roughly six months versus twelve months for standard reviews.
4. Provide post-approval incentives
Sakigake designation can make a product eligible for a limited Sakigake-specific pricing add-on at launch. In practice, these premiums are modest, time-limited, and do not materially alter long-term pricing dynamics or global development incentives.
Taken together, these measures were designed to reverse Japan’s historical drug lag and reposition the country as a hub for cutting-edge therapeutic development — not merely faster approvals of externally developed products.
What Has Sakigake Actually Delivered?
Designations and Approvals: The Hard Numbers
During the pilot phase (2015–2020):
37 products received Sakigake designation
10 products were approved in Japan
7 approvals were first-in-world
Therapeutic focus areas included oncology, neurology, and rare diseases
After Sakigake became permanent, public reporting became less consolidated. Based on PMDA disclosures, academic reviews, and industry analyses:
By 2021, approximately 10 Sakigake products had been approved
By 2023, peer-reviewed analyses cited ~13 approvals
By mid-2025, conservative estimates suggest ~15–20 total approvals, with ~50–60 total designations, including medical devices and regenerative medicine
First-in-world approvals remain limited, estimated at 7–10 in total
While Sakigake has undeniably enabled some early approvals, the absolute volume remains small, and only one quarter to one third of designations result in approval.
How Sakigake Compares Globally (Pharmaceuticals Only)
To understand Sakigake’s impact, it must be viewed alongside similar accelerated pathways elsewhere.
Accelerated Regulatory Programs – Pharmaceuticals Only (approx. data as of 2022)
Program
Start Year
Total Pharma Designations
Pharma Products Approved
FDA Breakthrough Therapy (BTD)
2012
~500–600
~250–300
EMA PRIME
2016
~100–110
~20–25
PMDA Sakigake (Pharma only)
2015
~20–30
~10–15
Even allowing for differences in market size, Sakigake operates at an order of magnitude smaller scale than the FDA’s Breakthrough Therapy Designation. EMA’s PRIME has also designated far more pharmaceutical products.
This disparity reflects developer behavior, not review efficiency. Global pharmaceutical companies systematically integrate FDA BTD and EMA PRIME into development strategies, while Sakigake remains peripheral.
Measured Impact vs. Original Goals
Where Sakigake Has Worked
Review timelines for designated products have been significantly shortened
Several therapies achieved first-in-world approval in Japan
Japan’s average regulatory drug lag narrowed by approximately 2.5 years between 2016 and 2019
PMDA–sponsor interaction quality has improved for selected programs
Where Sakigake Falls Short
Scale The number of designated and approved products is too small to meaningfully shift Japan’s position in global pharmaceutical innovation.
Global R&D prioritization Industry surveys consistently show that U.S. and EU accelerated pathways dominate strategic planning. Sakigake rarely determines where early development occurs.
Drug loss remains unresolved An estimated ~70% of drugs developed globally are never developed in Japan at all. This “drug loss” is driven primarily by pricing policy, market incentives, and development strategy — none of which Sakigake directly addresses.
Utilization gaps in high-innovation fields In areas such as oncology, most global breakthrough programs use FDA BTD or EMA PRIME while bypassing Sakigake entirely.
What the Data Really Tells Us
Sakigake has succeeded as a regulatory acceleration tool, but it has not delivered the structural transformation envisioned in Japan’s innovation strategy.
It improves outcomes after a company has already decided to prioritize Japan, but it does little to influence that decision in the first place.
This distinction matters. Drug lag today is increasingly less about review speed and more about whether Japan is included in development at all. On that front, Sakigake has had limited impact.
Conclusion: A Useful Tool — But Failing Its Core Mission
Sakigake demonstrates that Japan’s regulators can move quickly and flexibly when conditions are right. As a regulatory mechanism, it works. As an innovation strategy, it falls short.
If Japan’s objective is to reclaim global leadership in pharmaceutical innovation and ensure timely patient access to breakthrough therapies, regulatory acceleration alone is insufficient. Sakigake must be paired with broader reforms — including pricing stability, incentives for early clinical development, integration into global trial strategies, and policies that materially change Japan’s attractiveness as a development anchor.
Until then, Sakigake remains exactly what the data shows it to be: a successful tactical policy — but one that has failed to deliver on its strategic promise to Japanese patients.
References (Indicative, Non-Exhaustive)
MHLW: Strategy of Sakigake policy documents
PMDA: Sakigake designation lists and review statistics
JPMA / EFPIA Japan: Drug lag and drug loss analyses
Academic reviews (2019–2024) on Japan regulatory reform and drug lag
Legal Disclaimer
This article is provided for informational and discussion purposes only. The views and interpretations expressed are those of the author alone and do not represent the official positions of any regulatory authority, government body, or organization. While the author has relied on publicly available sources believed to be reliable, no guarantee is made regarding the accuracy, completeness, or timeliness of the information presented. The author assumes no responsibility or liability for any decisions made based on this content.
For companies seeking sustainable growth, Japan represents one of the most attractive, stable, and integrity-driven markets in the world. Despite its reputation for being selective and culturally complex, Japan consistently rewards those who approach it strategically—with high customer loyalty, predictable profitability, and long-term brand value.
Below are key reasons why entering Japan should be part of every company’s international growth strategy.
1. A High-Value Market That Rewards Quality
Japan is the third-largest economy globally, with consumer spending power that rivals the United States and Europe. But what makes Japan truly distinctive is not its size—it’s the depth and durability of its demand. Japanese consumers value performance, craftsmanship, and service. Products that meet these expectations often enjoy premium pricing and remarkable brand longevity..
2. Business Culture Built on Trust and Integrity
Japan’s commercial environment is one of the most transparent and ethical in the world. Contracts are respected, invoices are paid on time, and business relationships are built on mutual trust rather than short-term opportunism. For global executives used to managing risk in volatile or opaque markets, Japan offers a predictable, rules-based ecosystem where ethical business still holds real competitive advantage.
3. Long-Term Partnerships Over Quick Transactions
Japanese distributors and corporate clients rarely switch suppliers without cause. Once trust is established, relationships tend to be long-lasting and mutually beneficial. This stability reduces churn, lowers business development costs over time, and allows companies to build steady recurring revenue from a mature and loyal customer base.
4. Strategic Gateway to Asia
A successful presence in Japan often becomes a springboard into broader Asia-Pacific expansion. Japanese partners, investors, and distributors carry global credibility, and a product that succeeds in Japan gains reputational leverage across Asia. Many companies have found that “validated in Japan” opens doors not only in Korea, Taiwan, and Singapore, but even in Western markets where Japanese endorsement signals reliability and quality.
5. Exceptional Infrastructure and Supply Chain Reliability
Japan’s infrastructure—from logistics to data networks—is world-class. Distribution networks operate with near-perfect reliability, and the country’s advanced e-commerce, healthcare, and manufacturing ecosystems make it an ideal environment for precision-driven products and services. For companies concerned with supply chain disruption or counterfeit risk, Japan offers a secure, transparent, and well-regulated platform for commercial operations.
6. A Market That Strengthens Your Global Brand
Doing well in Japan is more than a commercial success—it’s a statement of capability. Japanese consumers and corporate buyers are among the world’s most discerning. If your product meets their expectations, it can meet anyone’s. Global companies often find that success in Japan enhances brand reputation, investor confidence, and competitive positioning worldwide.
7. Strong Legal and IP Protection Framework
Japan’s intellectual property laws and enforcement mechanisms rank among the most robust globally. For companies in pharmaceuticals, medtech, software, and design, this makes Japan a safe market for technology transfer, innovation partnerships, and high-value intellectual assets.
Final Word: Japan Rewards Serious, Strategic Entrants
Japan is not a market for opportunistic or short-term players. It demands commitment, quality, and cultural understanding. But for companies that invest properly, Japan delivers steady profits, low business risk, and unmatched reputational value.
At Invision Japan, we specialize in helping companies enter, manage, and grow their business in Japan—bridging the cultural gap and aligning local partners for long-term success.
Stop wasting time and money on risk-averse partners— here’s how to identify the winners before you sign.
Entering Japan can feel like stepping into a fish tank full of predators. There are sharks circling, gatekeepers blocking access, and only a few true gems who can actually help you grow. Too many foreign companies dive in blindly, sign a distributor, and discover months later that their so-called “partner” is just a middleman with excuses, hidden priorities, and little interest in your success.
1. Access & Transparency
A gem lets you see the water clearly.
Will they allow direct customer access — joint visits, introductions, co-promotion — or do they keep you stuck behind the curtain?
Are they willing to share CRM data (real-time or at least monthly), or do they hide behind privacy excuses?
Do you get pipeline visibility, or only vague quarterly updates that leave you guessing?
If they’re not transparent from day one, you’ll discover later that the “opportunities” they promised don’t actually exist.
2. Strategic Fit
A true partner sees your product as part of their long-term mission.
Where does your product sit in their portfolio priority list — top 3, or lost among 100 SKUs?
Does your product align with their strategy, or is it just a short-term revenue patch?
Are they a market leader, challenger, or invisible player in your segment?
If your product is invisible inside their organization, it won’t matter how good it is.
3. Reputation & Positioning
Your partner’s reputation is your reputation in disguise.
What do customers, competitors, and other distributors really say about them?
Are they trusted by KOLs, or just “order takers”?
Are they innovators, or laggards clinging to old relationships?
Working with a partner who has a poor reputation will cost you credibility — and customers won’t forgive mistakes.
4. Growth Trajectory
You don’t want to hitch your wagon to a sinking ship.
Is the company growing, flat, or declining?
Are they betting on your product as a growth engine, or just as a lifeline to slow decline?
How do they invest in launches — dedicated resources, or by dumping it on an overextended sales force?
If they’re declining, your product may be the last thing on their mind.
5. Behavior in Transitions
How they act when relationships end is telling.
How have they handled past separations when principals took back products?
Were they professional, or confrontational and retaliatory?
Do they have a track record of long-term partnerships, or a revolving door of foreign principals?
A gem manages transitions gracefully — a shark fights dirty.
6. Management Engagement
If the top team isn’t involved, your product isn’t strategic.
Is senior management actively engaged, or is it left to BD staff after the contract is signed?
Will leadership show up at customer meetings, or hide behind middle managers?
Do they see your relationship as strategic, or just another line in their distribution portfolio?
Without engaged leadership, your product will be ignored when priorities collide.
The Bottom Line
Finding a Japanese distributor isn’t just about signing a contract — it’s about finding a partner who opens doors, invests in growth, and shares risk. Most companies settle for sharks or gatekeepers and wonder why their launch fizzles. A true gem will give you access, visibility, and alignment.Before you commit, test them against this checklist. Ask the hard questions, uncover the hidden risks, and don’t be afraid to walk away.
If you need help finding, evaluating, or managing a Japanese distributor in any industry,InvisionJapan.com brings decades of hands-on experience to ensure your partnership delivers results.
Choosing the right distributor is one of the most critical decisions for life sciences companies entering or expanding in a new market. Whether in pharmaceuticals, biopharmaceuticals, medical devices, or med-tech, the wrong partner can slow growth, damage your brand, or block market access entirely.
This guide offers practical tips for carrying out thorough due diligence when selecting a new distributor, as well as strategies for correcting course in existing partnerships when the initial diligence didn’t reveal key issues.
Part 1: Operational & Commercial Due Diligence for New Distributors
Effective due diligence goes far beyond reviewing financial statements. Assessing whether a distributor can actually sell your product requires a deep dive into operational, commercial, and strategic capabilities.
1. Sales Force Structure and Coverage
Number of reps covering your product category.
Geographic reach and account segmentation.
Experience with similar products or therapeutic areas.
2. Track Record of Product Launches
Historical success launching similar products.
Time-to-market performance for previous launches.
Ability to meet sales targets consistently.
3. Customer Access and Relationships
Depth and quality of relationships with hospitals, clinics, labs, or pharmacies.
Access to KOLs and decision-makers.
Ability to navigate procurement or hospital approval processes.
4. Sales Processes and Metrics
Pipeline management and CRM usage.
Lead follow-up speed and frequency.
Reporting cadence, accuracy, and transparency.
5. Marketing and Promotion Capabilities
Preparedness to run product demos, webinars, or scientific events.
Existing marketing collateral and ability to adapt it for your product.
Budget allocation for promotional campaigns.
6. Team Expertise and Commitment
Knowledge of your product’s therapeutic area.
Training programs for sales reps.
Incentive structures aligned with your growth objectives.
7. Operational Risk Assessment
Ability to handle regulatory reporting, cold chain logistics (if applicable), and customer service.
Past incidents of compliance failures, stock-outs, or logistical delays.
Tip: Conduct site visits and ride-alongs if possible. Observing the team in action often reveals insights that documents or interviews cannot.
Part 2: Fixing Existing Partnerships When Due Diligence Was Missed or Misleading
Even the most thorough diligence cannot guarantee perfect results. When actual performance falls short, companies can take several steps:
1. Audit and Assess Current Performance
Conduct a competency audit: sales, marketing, reporting, regulatory compliance.
Compare actual results with initial expectations and contractual KPIs.
2. Improve Visibility and Transparency
Require more frequent and structured reporting.
Request access to customer or sales data (where possible).
Introduce dashboard tracking of key metrics.
3. Reset Expectations and Roles
Define clear KPIs and responsibilities moving forward.
Conduct workshops or training to align the distributor with your product strategy.
4. Provide Support
Offer marketing, sales, or clinical support to help them succeed.
Facilitate introductions to KOLs or hospital networks.
5. Plan for Exit or Transition if Needed
Maintain the ability to replace or supplement the distributor if performance doesn’t improve.
Include contingency clauses in agreements for future transitions.
Key Insight: It is much easier and cheaper to prevent issues upfront than to correct them later, but structured audits and incremental intervention can salvage underperforming relationships.
Key Takeaways
Due diligence is multi-dimensional: Commercial, regulatory, financial, strategic, and operational aspects all matter.
Standardized scoring systems help compare potential distributors objectively.
Missed diligence isn’t a lost cause: Audit, support, reset expectations, and maintain exit options.
Long-term foresight is critical: Changing distributors later is expensive and disruptive — plan and structure your agreements accordingly.
At Invision Japan, we help life sciences companies thoroughly vet new distributors and rescue underperforming partnerships in Japan. Whether you’re entering the market or correcting course, structured assessment and proactive management are the keys to sustained success.
Many global executives are told the same story when sales in Japan disappoint: “Japan is a difficult market.” “Customers here are conservative.” “The regulations are too strict.”
While there is truth in each of these statements, they are often used as a shield. In reality, many good products fail in Japan not because of the market itself, but because of issues closer to home: the structure, incentives, and performance of the chosen distributor or partner.
The Market Isn’t Always the Problem
Japan is the world’s third-largest economy. Customers here buy new medical devices, pharmaceuticals, technologies, and industrial products every day. Competitors launch and succeed. If your product has proven demand elsewhere, it’s unlikely that Japan is uniquely resistant.
What’s far more common is:
Distributor passivity – waiting for orders instead of creating demand.
Overreliance on existing relationships – your partner only pushes products that already sell.
Limited transparency – poor reporting hides weak performance until it’s too late.
Excuse-driven culture – “the market isn’t ready” becomes the default explanation for inaction.
Common Failure Patterns
Early enthusiasm, fast fade. A Japanese distributor initially invests in the relationship, then quietly shifts focus back to their core products once the “newness” wears off.
Big name, little effort. Companies often feel secure signing with a well-known trading house or distributor. But size doesn’t guarantee commitment — your product may never be more than a line item in a catalog.
Blaming culture instead of strategy. Politeness masks underperformance. You hear reassurance in meetings, but no sales momentum in the field.
What This Means for You
If your product is struggling in Japan, don’t assume the market is the problem. Instead, ask:
Is our distributor really investing in this product, or just holding the license?
Are they providing real sales and market feedback, or just excuses?
Do we have visibility into their pipeline, customer meetings, and promotional activity?
Have we defined performance expectations — and what happens if they’re not met?
Fixing the Problem
Improving distributor performance in Japan isn’t easy — but it is possible. Options include:
Resetting the relationship – with clearer expectations, KPIs, and accountability.
Providing tools and support – sales training, marketing materials, or market data.
Applying pressure – making it clear that underperformance will lead to change.
Exploring alternatives – sometimes the right answer is to replace, not repair.
Final Thought
Good products fail in Japan not because of some mysterious barrier in the market, but because of misaligned partnerships, lack of transparency, and unaddressed distributor underperformance.
The market is there. The demand is there. The question is whether your partner is really opening the door — or standing in the way.
At Invision, we specialize in helping companies diagnose and fix partner challenges in Japan. If your product isn’t performing, it may not be the market — it may be your partner. And that can be fixed.
When a company considers entering Japan, one of the first strategic choices is whether to establish a local office or work through a Japanese distributor. While both options have merit, the right distributor can be a remarkably effective way to launch, grow, and sustain your business in this unique market.
And yes—there are common stereotypes about Japanese distributors. Many of them are rooted in truth, and in the right context, they can be powerful advantages.
Positive Stereotypes (That Often Work in Your Favor)
Long-Standing Relationships Many Japanese distributors have cultivated deep ties with customers, partners, and regulators over decades. That “relationship capital” can open doors that would take years to access on your own.
Meticulous Quality and Attention to Detail From packaging to logistics to after-sales service, Japanese distributors often hold themselves to exacting standards that protect your brand’s reputation.
Reliability and Consistency Commitments are taken seriously—deadlines are met, rules are followed, and promises are kept. That consistency can dramatically reduce operational headaches.
Market Knowledge and Cultural Insight A seasoned distributor doesn’t just know the customer list—they understand how decisions are made, what customers value, and how to navigate competitive landscapes.
Administrative and Regulatory Expertise Japan’s import rules, product certifications, and tax systems can be complex. Many distributors manage these processes in-house, sparing you the learning curve and overhead of doing it yourself.
Benefits of using a Distributor
Whether you sell consumer goods, industrial equipment, technology, or healthcare products, a strong Japanese distributor can:
Accelerate uptake by tapping into established networks
Minimize fixed costs by avoiding the expense of building a subsidiary
Reduce cultural and operational risk by letting a local partner handle sensitive relationship management
But—No “Set and Forget”
Even the most capable distributor needs active engagement to stay aligned with your goals. Risks include:
Over-cautious sales approaches that slow market penetration
Focus on familiar segments at the expense of new opportunities
Limited transparency on pricing, market data, or customer feedback
Without regular, structured communication, momentum can fade.
The Key: Active, Ongoing Partnership
The best results come when companies treat their distributor as a strategic partner, not just a vendor. That means:
Setting clear expectations and KPIs from day one
Scheduling regular visits and performance reviews
Sharing marketing, product, and training resources
Maintaining open, two-way communication
Bottom line: A Japanese distributor can be one of your most valuable growth partners—if you choose carefully and manage the relationship proactively. Done right, it gets you to market faster, protects your brand, and saves you from the complexity of going it alone.
If you need help finding, evaluating, or managing a Japanese distributor in any industry,InvisionJapan.com brings decades of hands-on experience to ensure your partnership delivers results.
In Japan, loyalty is a cornerstone of business relationships. Long-term distributor partnerships are often built on years—sometimes decades—of shared success, mutual trust, and personal rapport. But what happens when loyalty begins to slide into dependency?
Too often, foreign companies confuse distributor loyalty with long-term security. They may hesitate to challenge underperformance or fail to explore additional partners, fearing damage to the relationship. But when a distributor becomes your only viable route to market—or holds disproportionate influence over your local success—you’ve moved from healthy loyalty into risky dependency.
This article explores how to identify the warning signs of distributor overreliance in Japan and how to proactively manage, diversify, or restructure relationships while maintaining trust and respect.
Understanding Loyalty in the Japanese Context
Loyalty in Japan is not transactional. It’s built on shared values, aligned expectations, and the unwritten rules of giri (obligation) and ninjo (human empathy). This cultural fabric is part of what makes Japanese distributors such valuable long-term partners.
But these same cultural norms can make it difficult to initiate hard conversations—especially if you suspect your distributor is underperforming, underinvesting, or not fully aligned with your strategy.
Recognizing the Risks of Overdependence
Even the most loyal distributor can become a single point of failure if:
They control all access to customers (and you have no direct visibility)
They resist adding new resources or capabilities despite changing market needs
You delay entering new channels or geographies because they aren’t interested
You tolerate underperformance out of fear of damaging the relationship
You lack basic contractual leverage, and the commercial relationship is governed by informal trust alone
In Japan, this situation may feel “safe” because the distributor is not actively hostile. But it creates risk: risk to growth, agility, compliance, and long-term market presence.
How to Maintain Loyalty Without Dependency
The goal is not to reduce loyalty—it’s to avoid entrapment. Here are a few strategies:
1. Conduct Regular Business Reviews
Make reviews a joint process focused on mutual growth. Use data (not emotion) to evaluate performance, gaps, and opportunities. This normalizes feedback and prevents surprises.
2. Diversify Within Reason
In some industries, exclusivity is expected. But even within that, you can diversify by region, customer segment, or service scope. Consider:
Non-competing parallel channels
Tiered service providers (e.g., marketing vs. distribution)
Pilot programs with a second partner in a niche segment
3. Clarify Expectations in Writing
Culturally, Japanese partners may avoid renegotiating contracts—but this doesn’t mean they’re unwilling to evolve. Revisit scope and expectations as the market changes.
4. Build Internal Japan Expertise
A local team—even a small one—gives you leverage, insight, and the ability to validate what’s really happening on the ground.
5. Use External Advisors to Calibrate the Relationship
Independent local advisors can assess whether your distributor is operating at or below market potential, and help you address concerns without triggering confrontation.
What If You’re Already Dependent?
If you’ve realized that your company is too reliant on one Japanese distributor, don’t panic—but don’t delay either. Consider:
A phased diversification plan that protects the relationship while giving you strategic options
Negotiating performance-based incentives tied to growth or investment milestones
Initiating open dialogue framed around long-term success, not dissatisfaction
Preparing a contingency plan in case the distributor resists all forms of adaptation
These steps take time, and may initially feel awkward in the Japanese context. But done respectfully, they show that your company takes the relationship—and the market—seriously.
Final Thoughts: Loyalty Is Earned—But So Is Independence
In Japan, distributor loyalty is a competitive asset. But overreliance can limit your options, hinder your strategy, and expose your business to unnecessary risk.
Striking the right balance means respecting the past, but preparing for the future. You can—and should—build loyal, lasting partnerships in Japan. Just make sure they’re built on shared goals, not silent dependency.
Need help evaluating or restructuring your Japan distributor relationships? Invision Japan specializes in helping foreign companies strengthen performance while preserving trust. Contact us for a confidential conversation.
A Practical Guide to Assessing Effectiveness, Compliance, and Trustworthiness
In Japan, your distributor can make—or quietly break—your success. Many foreign companies depend heavily on their Japanese partners to manage customer relationships, regulatory requirements, and frontline sales execution. But when was the last time you audited your distributor’s actual performance?
In this guide, we’ll walk you through a practical framework for conducting a distributor audit in Japan, with insights tailored to the cultural and operational realities of the Japanese market. This process applies across industries—from medical devices to manufacturing, tech, and B2B services.
Why Audit? Why Now?
Distributors in Japan often enjoy long-term relationships and limited scrutiny. But without structured oversight, companies can fall into the trap of:
Accepting poor performance as “just how Japan is”
Overlooking signs of market underinvestment or strategic drift
Misjudging regulatory or reputational risk
Confusing polite communication for genuine transparency
Regular, independent audits are not about confrontation—they’re about protecting your brand, maximizing market potential, and building a healthier, more aligned partnership.
Core Audit Dimensions
An effective distributor audit in Japan should focus on three pillars:
1. Effectiveness
Are they delivering the results and insights you need?
Sales Performance vs. Market Potential Compare actual results not only to last year’s numbers, but to the estimated market opportunity. Modest growth in a high-growth sector may indicate poor execution—not poor market conditions.
Customer Access Does your partner give you visibility into key accounts? Can you directly engage with opinion leaders or major buyers? Limited access is a warning sign.
Sales Capabilities Assess the professionalism of their field force. Are reps trained, well-resourced, and active in the field—or mostly transactional intermediaries?
Marketing and KOL Activity In many industries, particularly pharma and medtech, proactive KOL development, conference presence, and educational outreach are critical. How active are they?
2. Compliance
Are they protecting your brand, reputation, and legal standing?
Regulatory Adherence In regulated industries, you must verify that all promotional, labeling, and reporting activities meet local standards. Don’t assume; ask for documentation.
Fair Trade and Ethical Conduct Ensure distributor practices don’t expose you to risks under Japan’s Fair Trade Commission or, for US/EU firms, the FCPA and similar laws.
Data Integrity Are reports and forecasts reliable and consistent? If numbers often change after meetings, or are slow to arrive, investigate further.
3. Trustworthiness
Can you depend on them—and are they aligned with your goals?
Transparency Do they provide open and detailed reports, or just high-level summaries? A reluctance to share account-level data may signal deeper issues.
Strategic Alignment Are they aligned with your growth ambitions, or more focused on maintaining the status quo? Some distributors are risk-averse and reluctant to invest.
Cultural Fit and Communication Style Evaluate whether the distributor’s leadership understands your priorities—and whether they communicate proactively or only when asked.
Japan-Specific Considerations
Auditing in Japan requires cultural sensitivity. Here are some common traps to avoid:
Don’t mistake politeness for agreement. Japanese business culture often avoids direct confrontation, but passive resistance can derail initiatives.
Face-saving matters. A successful audit avoids public embarrassment or loss of face. Approach findings constructively, and frame criticism in terms of shared goals.
Beware of “tatemae.” This is the Japanese concept of presenting a polite front that may hide the real situation (honne). Private 1:1 interviews and off-the-record conversations are invaluable.
Avoid overreliance on English-speaking contacts. They may not reflect the day-to-day realities of field teams or the unspoken consensus within the distributor.
Who Should Conduct the Audit?
The audit should be independent—but also Japan-literate. Options include:
In-house HQ team with Japanese cultural expertise and language support
Third-party audit firms that specialize in compliance and governance
Local bilingual professionals with deep Japan business experience (like our team at Invision Japan)
The key is objectivity and cultural fluency.
What Happens After the Audit?
Audit findings should lead to one of three paths:
Renewed Partnership – If performance is strong, use the audit to reinforce shared goals and deepen trust.
Corrective Action Plan – For gaps in performance or compliance, agree on a clear timeline, metrics, and follow-up cadence.
Distributor Transition – If misalignment is fundamental, it may be time to consider other partners. The audit will provide the documentation and rationale.
Final Thoughts
In Japan, long-term relationships are valued—but so is kaizen or continuous improvement. An independent distributor audit is not just due diligence; it’s an opportunity to re-energize the partnership, reclaim market momentum, and reduce strategic risk.
At Invision Japan, we help foreign companies navigate this process with clarity, cultural insight, and hands-on local expertise. If you suspect your distributor isn’t reaching their full potential—or you simply want a second opinion—we’re here to help.
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Contact us for a confidential consultation about your distributor challenges in Japan.
Not every problem raised by your Japanese distributor is an excuse — but many are. The key is knowing how to distinguish legitimate market barriers from convenient deflections. Here’s a field-tested breakdown of the most common excuses, what they often mean, and how to verify the truth behind them.
Sales & Market Development Excuses
“The market in Japan is different.” ➡ Often used to justify poor sales or lack of effort. Check: Is your competitor growing? Are market trends contradicting their claim?
“Customers are conservative and don’t like change.” ➡ True in some cases, but also used to justify avoiding proactive selling. Check: Are any innovative products succeeding in your category?
“We’re waiting for customers to ask for it.” ➡ Reflects passive, order-taking behavior. Check: Are they doing outbound calls, demos, or follow-ups?
“It takes time to build trust in Japan.” ➡ Culturally true, but shouldn’t paralyze action. Check: Are they building relationships or using this as a stall?
“KOLs are difficult to access unless you sponsor their society.” ➡ May be partly true, but not an excuse to do nothing. Check: Have they proposed a plan to engage KOLs creatively?
Marketing & Communication Excuses
“We don’t have budget to localize materials.” ➡ Often means they don’t value your product enough. Check: Are they localizing for other products or principals?
“Head office has to approve all marketing activities.” ➡ Possible, but used to delay or deflect responsibility. Check: Ask for the process and timeline. Are they even submitting requests?
“Japanese customers prefer face-to-face, not digital.” ➡ A dated mindset in post-COVID Japan. Check: Are competitors using digital marketing successfully?
“Your global materials are too technical or Western.” ➡ Often true — but it doesn’t excuse inaction. Check: Have they made any attempt to adapt or request support?
Transparency & Data Sharing Excuses
“Our company policy doesn’t allow sharing end-user data.” ➡ Common, but not always legitimate. Check: Can they give anonymized data or summaries? Other partners do.
“We don’t use CRM — Japan sales are relationship-based.” ➡ Culture clash excuse. Check: Are they using Excel, any kind of pipeline tracking? Or just hiding activity?
“We’ll share the report next quarter — we’re still compiling it.” ➡ Classic delay tactic. Check: Is this recurring? Are reports consistently vague or incomplete?
“Customer names are confidential.” ➡ Can be true under Japanese privacy norms, but shouldn’t block all visibility. Check: Ask for activity logs or meeting summaries instead.
Strategic Misalignment Excuses
“This product doesn’t fit the Japanese mindset.” ➡ Sometimes true — but often used to avoid effort. Check: Has a real market analysis been done? Or is it an opinion?
“It’s not profitable enough to focus on.” ➡ Signals low priority, possibly due to incentive mismatch. Check: Are commissions or margins competitive vs. their other lines?
“Let’s wait and see how it performs before committing.” ➡ Stalling tactic if said repeatedly. Check: Have they delayed similar products before? Are there launch plans?
Legal & Structural Excuses
“We can’t transfer registration — it’s not allowed in Japan.” ➡ Often overstated to maintain control. Check: Confirm with regulatory experts — most transfers are possible.
“We need exclusivity to justify investment.” ➡ Normal ask, but not if they perform poorly. Check: Are they delivering on prior commitments tied to exclusivity?
“We are the only ones who can navigate Japanese regulations.” ➡ Gatekeeping behavior. Check: Clarify what makes them uniquely qualified and double check the availability of alternatives
Cultural & Operational Disconnects Excuses
“Our president needs to review this personally.” ➡ Often used to delay or avoid decision-making. Check: How often does this happen? Is there always one more level of approval?
“That kind of direct feedback doesn’t work in Japan.” ➡ Can be true — but doesn’t mean no feedback. Check: Are they offering constructive alternatives or just avoiding discomfort?
“We said ‘yes’ but meant ‘we’ll try’ — not a commitment.” ➡ Classic high-context communication trap. Check: Document agreements in writing. Follow up clearly.
“We can’t use your systems — too different from Japanese norms.” ➡ May be partially valid, but not always. Check: Are they using digital tools for other partners or internally?
Support & Training Excuses
“The product is too complex — we need more training.” ➡ Fair ask, but sometimes used to stall. Check: Are they sending staff to training or requesting it at all?
“Technical staff are busy with other priorities.” ➡ Indicates your product is low-priority. Check: Have they proposed a staffing or scheduling solution?
“We can’t visit customers without you present.” ➡ Over-dependence or avoidance. Check: Are they capable of leading engagements independently?
Commercial Misalignment Excuses
“The price is too high for the Japanese market.” ➡ Often used without data. Check: Have they fully communicated the value-proposition to the customer? If yes, what are competitors priced at? Is this backed by customer feedback?
“Customers won’t pay unless there’s a discount.” ➡ Possibly true — but what’s the strategy? Check: Are they negotiating based on value added to customer or defaulting to discounting?
“We can’t hold stock — it’s too risky.” ➡ Signals lack of confidence. Check: Do they hold stock for other lines? Or are they pushing risk onto you?
“Reimbursement doesn’t cover it well.” ➡ Legitimate barrier, but not a deal-breaker. Check: Are they coming with proposals, lobbying regulatory bodies, or educating customers on the value?
At Invision Japan, we specialize in helping foreign companies make sense of these situations — separating real barriers from excuses, and turning underperformance into progress. Whether you’re facing stalled sales, vague reporting, or cultural disconnects, we provide the local insight and hands-on support needed to realign your distributor relationships and unlock Japan’s potential.
We’d love to hear other “excuses” that you’ve encountered.
