In-depth analysis: Why do Chinese companies have to learn from Japan?

In the wave of globalization, Japan, with its unique business wisdom and cultural heritage, has nurtured many world-class corporate giants, such as Toyota, Sony, and Uniqlo. They not only work hard in the local market, but also lead the trend globally. In the pursuit of innovation and excellence, Chinese companies may wish to use Japan as a mirror to absorb its essence in management, service, quality, etc. Just as Japanese culture was deeply influenced by the Tang Dynasty, Chinese companies can also find wisdom that transcends the times in modern business practices. Let us explore together how the essence of Japanese business can be used by Chinese companies and jointly meet the challenges of the future.

If I say that China should learn from Japan, you may scold me, asking what is so good about Japan and why we should learn from it. In fact, Japan has produced many world-leading companies in various fields. There are more than 20,000 century-old companies, making it the country with the most century-old companies in the world. Its business environment and business model are 20 years ahead of China.

For example: Toyota, the world's largest automobile manufacturer; Sony, one of the world's largest electronics manufacturers; Uniqlo, one of the world's four largest clothing retailers; 711, the world's largest convenience store brand.

Companies like Canon, Shiseido, Suntory, Kirin, and Yamaha are all ranked among the top in the world.

However, if we want to interpret Japanese business, we must first understand Japanese culture, because any decision is made based on judgments based on values, and the core of determining values ​​is culture.

Every country does not have a single culture. When multiple cultures encounter conflicts, the culture that is easier to popularize and reach consensus among the group will be more likely to become the basis for decision-making.

Each business form is determined by different business decisions.

To understand the basis for Japanese business decision-making, we must understand their values, and most importantly, understand their culture.

This article interprets Japanese business for you through 8 dimensions!

1. Japan is China's Tang Dynasty

Why is Japan called China's Tang Dynasty?

In Japanese history, there were two events that determined their national destiny, the Taika Reform and the Meiji Restoration. The Taika Reform in 645 AD accepted the Confucian culture of the Tang Dynasty on the basis of Shintoism, and transformed Japan from a slave society to a feudal society. The Meiji Restoration in 1868, the spark of industrial civilization, transformed Japan from a feudal society to a capitalist society.

I can't help but complain here: capital is like a tumor, it proliferates infinitely. When the resources of an island country are not enough to meet the needs of proliferation, in order to meet their needs for rapid expansion, the centralization and expansion of the emperor made Japan after the Meiji Restoration show full aggression. I won't go into details here, we will open a separate article to talk about the development of this period of history.

In Japan, you can see the shadow of the Tang Dynasty in every aspect. Whether it is writing, language, philosophy, religion, clothing, architecture, customs, etc., you can see the strong imprint of the Tang Dynasty. Japan is an admirer and inheritor of Tang culture. Japan's Zen Buddhism, tea ceremony, calligraphy, kimono, writing, Go, and temples all originated in the Tang Dynasty. Japanese culture is based on the Tang Dynasty, so Japan has retained many original samples of Tang culture.

In terms of time, Tang culture is the second most powerful culture in Japan after Shinto culture, because it has influenced Japan for 1,400 years. Therefore, Japan is suitable for business research because of the similar culture, so it is easier for us to understand their values ​​and decision-making basis.

2. Small Island Economy

Japan is an island country. This geographical environment has led to the fact that the proportion of agriculture in their national economic output is much lower than that of mainland countries, while the proportion of commerce is larger. Before the Meiji Restoration, the proportion of commerce in Japan's national economic output reached as much as 50%, and now it accounts for more than 70%. A country with this economic structure must be very different from our self-sufficient agricultural country. Therefore, learning from their advanced business is of great significance to us.

3. There are traces to follow

Mr. Lu Xun once said: "There is no road in the world, but when more people walk on it, a road will appear." The first person who walks on this road must have encountered more thorns and obstacles than the second person, and must have spent more time, physical strength and energy than the second person.

Taking 2022 as an example, US consumption accounts for 68.8% of the total GDP, Japan accounts for 55.6%, and China accounts for 37%. The US consumer retail industry is the world leader. Japan's consumer retail industry is inspired by the US. For example, one of its formats, convenience stores, was transplanted from the US to Japan in the 1970s. But now Japan has made 7-Eleven the world's number one convenience store.

Japan has already practiced how to transform American advanced technology and business models into its own unique Japanese model.

As a latecomer, China should learn from Japan's successful transformation of advanced technologies and business models . Because Japan has helped us to find a successful path, learning from Japan and following its example has great research value for China's consumption and retail industries. Compared with the American model, the Japanese model is a precedent for Chinese companies and has a clear path to follow.

However, studying Japan cannot be done by rote, because the cultures of Japan and China are different yet harmonious.

4. Harmony but Diversity

Although Chinese and Japanese cultures are similar, they are different yet harmonious.

I once heard a joke: "If an officer commands a troop straight towards a cliff, the Americans will start protesting when they reach the edge of the cliff, the Chinese will stand still when they reach the edge of the cliff, and the Japanese will all fall off the cliff." Although it is a joke, think about it: different cultures and different values ​​create different national characters, different codes of conduct, and different consumption choices.

For example, Japan advocates the spirit of Bushido, which is based on the spiritual belief of virtues such as justice, courage, benevolence, courtesy, sincerity, honor, loyalty, and self-denial. Only by practicing these virtues can a samurai maintain his honor, and a samurai who loses his honor has to commit suicide by seppuku.

For a samurai, the most important thing is to shoulder and fulfill responsibility. Death is only a means to fulfill responsibility and is secondary. If the tasks stipulated by responsibility are not completed, it is even more terrible than death.

Many Japanese work for a company throughout their lives, just like the loyalty of ancient samurai to their lords. They do things from the perspective of a sense of mission and responsibility, so Japan's management costs are much lower than those in the United States and China.

For example, the Japanese discount giant Don Quijote, in addition to 70% of distribution from the headquarters, gives each store the right to freely purchase 30% of the goods. This personalized system design not only brings surprises to consumers when they enter each store, but also deepens Don Quijote's corporate culture, allowing consumers to have the surprise of treasure hunting every time they enter the store, and also makes each store more competitive in its business district, and can carry out customized and precise strikes against other retail businesses in the same business district.

I have talked to many bosses. This system is very difficult to implement in China. Even if KPI assessment is added, it is still difficult to implement. It has to do with talent reserves, competitive environment, corporate mechanism, etc. The main reason is related to Japanese culture.

Therefore, how to make Chinese-style transformation based on the template of Japan's consumer retail industry is an issue that Chinese companies need to focus on now.

5. Mono no aware and infinite subdivision

There are 8 million gods in Japan, and I heard that the number is still increasing. Some people have calculated that the number has exceeded 15 million.

Why does Japan have so many gods?

The origin of Shintoism is nature worship. The book Kojidenki explains: "Starting with the gods seen in the classics, including birds, beasts, plants, mountains, seas, etc., all those who are extraordinary are called Kamei. Not only the excellent, kind, and meritorious ones. All the vicious, strange, and extremely terrifying ones are also called gods." In other words, as long as one is extraordinary, he is a god in Japan.

For example, the Raiden-gu Shrine in Japan, besides worshipping the Bodhisattva Kūkuzo, also has two foreign gods, Edison is the god of strong electricity, and Hertz is the god of weak electricity. For example, the Mikasa Shrine, which blesses you not to be bald, and the god of exams, which bless you to pass the exam. Even at a certain moment, you can become a god.

There is a man in Japan named Motoori Norinaga, who is the originator of the concept of mono no aware. He believes in Shinto and even said: Anyone who can make people feel mono no aware is a god.

For example: It is autumn, and I see a leaf turning yellow and falling. When I see the fallen leaf, I am reminded of the past, and I empathize with the leaf. This is mono no aware. There is a god in this moment. If a tree has 1,000 leaves, there may be a thousand gods, because every moment a leaf falls, my thoughts are different, and there are different gods in charge.

The infinitely subdivided god culture allows each god to fill every moment of Japanese life! Among the 8 million gods, there must be one with overlapping functions! But as long as there is a slight difference, it is a god in Japan!

The Japanese, who have been influenced by Shintoism, have long been accustomed to this infinite subdivision. Subdivision has become their culture and habit, and they pay attention to the feelings of every moment.

This also explains why Japanese people like to work hard on details. The same product can be divided into countless products according to the user groups, scenarios and needs. For example, the same pen with writing function, the pink one is suitable for women, and the cartoon one is suitable for children. The children's version is divided into Pikachu version and Crayon Shin-chan version. The two different animations are aimed at different groups of people. Even Pikachu can be divided into people who like Pikachu and the character Xiaozhi. Pikachu also has the difference between male and female. Male Pikachu can also be divided into Pikachu with a hat and Pikachu without a hat... It's just a pen, but it can be divided infinitely according to the theme, because each theme is a separate demand.

Why does Japan have the spirit of craftsmanship? To pursue excellent quality? If ordinary things are done extraordinary, they can become gods.

So Japan has the God of Sushi, the Immortal of Rice Cooking... This also explains why Japan, with a population of only 100 million, can carry so many brands? The seemingly same brands are trying their best to meet different needs, and everyone has their own responsibilities, taking it as their responsibility to meet different needs.

Why do Japanese people prefer Made in Japan? Why can Japanese products be sold overseas? Because everyone wants to make ordinary things extraordinary and finally become a god.

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6. Giant Country Effect

Japan has a land area of ​​378,000 square kilometers and a population of 125 million.

China has a land area of ​​9.6 million square kilometers and a population of 1.41 billion, which is more than 10 times that of Japan. The narrow landform and involuted market force Japanese companies to constantly study consumer needs in order to survive.

If a niche product from Japan is brought to China and happens to meet the needs of the Chinese, relying on the demographic dividend, or the giant country effect, sales can be increased by 10, 20, or 30 times...

For example, Hey Tea has imitated and followed up on a large number of Japanese products. Among them, sparkling water was only a very small product segment in Japan, but at that time period, sparkling water just happened to cater to the demand in China. At its peak, the sales of a single product exceeded 4 billion yuan per year.

7. Time Machine

Masayoshi Son has a very famous "time machine" theory. He believes that the industry development stages of the United States, Japan, China, and India are different. He believes that he should first conduct business in developed countries and then return to developing countries such as China and India, just like riding on a "time machine."

In 1999, Masayoshi Son invested $35 million in China's Alibaba and became a major shareholder. After Alibaba went public, this stake was worth $75 billion.

Son's time machine theory is to make full use of the imbalance in development between different countries and industries. After gaining experience in developed regions, he will then develop relatively backward markets and use the time differences between different regions to do the project again.

For example, in the online ride-hailing industry, he invested in the industry based on his time machine theory.

Uber was founded in the United States in 2009. SoftBank invested $8 billion in it in 2018. It went public in May 2019 with a market value of $58.2 billion.

Founded in 2011, Ola is India's largest online ride-hailing company. SoftBank has invested $2 billion in it since 2014, with a valuation of $6 billion.

Didi was founded in 2012 and is China's largest online ride-hailing company. SoftBank has invested a total of US$10 billion in it, with a valuation of US$50 billion.

Southeast Asia's Grab was founded in 2012 with a total investment of US$3.5 billion from SoftBank, and its current valuation is US$11 billion.

Analogously to all industries, we can also sit in a time machine and see the future of the Chinese market based on the current situation of developed markets.

For example, in the tea beverage market, Zhong Shanshan of Nongfu said that when he was visiting Japan many years ago, he saw that more than 80% of the Japanese tea beverage market was sugar-free tea, mainly Ito En, and 20% was flavored tea.

But at that time, more than 80% of the Chinese tea beverage market was flavored tea, mainly from Master Kong, and 20% was sugar-free tea. He was very sure that although sugar-free tea was not popular now, it would definitely be the mainstream of the market in the future.

In 2013, Nongfu started making Oriental Leaf sugar-free tea. In the first few years after its launch, it was rated as one of the top ten most difficult beverages. Even though the market response was not good in the early stage, Nongfu still insisted on investing in Oriental Leaf. In 2022, Oriental Leaf's revenue was 6.9 billion, and in 2023, it had a revenue of 12.6 billion. It maintained a high growth rate year after year and became Nongfu's most important growth engine. The core is that through the Japanese market, we can see the future of the Chinese market in a time machine.

8. The Lost Thirty Years

In 1977, Japan's per capita income reached 8,000 US dollars. In 1983, Japan's real estate bubble occurred and consumption declined. Japan fell into a three-decade long economic stagnation, which is often referred to as the lost thirty years.

In 2017, China's per capita income reached 8,000 US dollars, and our real estate market began to cool in 2023. History is always surprisingly similar, and the same things are repeating.

However, during Japan's lost thirty years, a large number of excellent companies still emerged and achieved rapid growth. For example, the clothing brand Uniqlo, the grocery brand MUJI, the catering brand Yoshinoya, the discount brand Don Quijote, and the convenience brand 7-11 rose during the lost thirty years. We hope to bring some inspiration and reference to Chinese companies by disassembling and analyzing these cases of Japanese companies that have grown against the trend.

This series of videos, "Crossing the River by Feeling in Japan", is a special topic based on my field research in Japan, combined with my 20 years of experience in brand strategy consulting, and the current operating status of enterprises in various industries in China. I hope that this series of videos can inspire Chinese entrepreneurs, gain experience in crossing cycles, and find business opportunities for various categories in the era of low growth.

Author: Zhang Chao, planning director of Dayu

WeChat public account: Dayu Planning Zhang Chao (ID: 1099416)