The Most Important Factor for Success in Japan Market Entry
Recently, a major food delivery service announced its decision to exit the Japan market. These services experienced rapid growth during the COVID-19 pandemic, when people went out less frequently and demand for delivery surged. However, as life has returned to normal, demand has declined sharply, leading to consolidation, cost-cutting, and in some cases, market withdrawal.
On the other hand, one of the biggest recent topics in Japan has been the WBC (World Baseball Classic), which, for the first time, was streamed on Netflix rather than broadcast on public television. The move was controversial, and I will not go into whether the strategy was right or wrong. Unsurprisingly, it triggered backlash. Some argued that it would hurt sports culture, damage sports bars, and exclude elderly viewers who may struggle with the technical steps required to sign up for Netflix.
Yet one thing seems clear: the controversy did not have a major negative impact on Netflix’s subscriber base. Some people may have subscribed just to watch the WBC and may leave afterward. Even so, the overall gain is likely positive for a service that already has around 10 million household subscribers in Japan.
Japan has many streaming competitors, including U-NEXT, Hulu, Disney+, and Amazon Prime Video. In pure membership terms, Amazon Prime Video may have a larger number, but that is largely because it comes bundled with Amazon Prime. In terms of cultural presence and public attention, however, Netflix is by far the strongest player in Japan. Titles such as The Swindlers, One Piece, and Badly in Love have become part of the national conversation. Aside from Shogun on Disney+, few productions from other streaming services have created the same level of buzz in Japan as Netflix content has.
Analyzing all the reasons behind Netflix’s success is not the purpose of this article. What I want to focus on is how Netflix became so successful in Japan—a country where domestic dramas still dominate popular entertainment. You can see this clearly by looking at Japanese TV listings in newspapers: foreign dramas are rare, with only a few Korean titles standing out.
There are many factors behind Netflix’s success in Japan, and they are all interconnected. But if I had to choose just one, it would be this:
Hiring the right talent.
That may sound obvious. So let me put it more precisely:
They prioritized capability over English proficiency.
Netflix itself did not always operate this way. In fact, in its early years in Japan, the company put much greater emphasis on English ability. But that approach changed. Kazutaka Sakamoto, Vice President of Content at Netflix Japan, explained this in an interview*1:
“Actually, eight years ago, when Netflix entered Japan, it was a very English-first company. But I told then-CEO Reed Hastings directly, ‘If we keep doing that, we’ll end up draining our talent pool, so I want to change it.’ And he said, ‘Interesting—well then, give it a try.’
As a result, we’re now able to hire based on talent rather than English proficiency. Even today, if a top executive comes to Japan, we don’t conduct meetings in English; instead, the executive listens to the discussion in Japanese through an interpreter.”
This is, in my view, one of the most important lessons for foreign companies entering Japan.
Unless your product is so unique that it sells itself with no competition and no sales effort, human resources will be one of the biggest determinants of success or failure in Japan. And among all hiring decisions, none is more important than your top local executive—especially your country manager.
There are two key points to keep in mind when hiring in Japan.
Prioritize talent over English proficiency
Overemphasizing English ability is one of the most common mistakes foreign companies make when hiring in Japan.
During interviews, candidates with weaker English may struggle to fully express their ideas, their experience, or their value. As a result, companies often end up favoring candidates who are easier to communicate with internally. But that is the wrong benchmark.
Who will be selling your product in Japan?
Who are your clients?
Who are your partners?
In most cases, the answer is: Japanese people, speaking Japanese.
English is often needed mainly for internal communication with headquarters. But in reality, much of that communication can be handled asynchronously through email or Slack, especially given time zone differences. Written communication can also be supported today by tools such as ChatGPT or Gemini.
For top leadership roles such as country manager, the most important capability is often not English—it is the ability to drive sales, build relationships, and expand the business in Japan.
Look at whom companies like OpenAI and Anthropic have appointed to lead their Japan operations. They selected Japanese executives with strong track records in management, sales, and business expansion in the local market. They understand what is required to succeed here.
The key hiring criteria should be:
- proven track record
- commercial capability
- local market understanding
- native-level Japanese, where the role requires it
English proficiency is certainly a plus. But it should not outweigh the skills that actually matter for winning in Japan.
Hire people who will challenge headquarters
Another important quality in a strong Japan leader is the ability to challenge HQ when necessary.
If a local executive simply says “yes” to every instruction from headquarters, that is a red flag. A strong management member should understand the Japan market more deeply than HQ does and should be able to explain when a global strategy does not fit local realities.
That is exactly what Sakamoto did at Netflix. He challenged the company’s global hiring logic and changed it.
A good country manager in Japan should be willing to do the same.
That said, one area where local opinions need careful evaluation is pricing. Japanese managers may sometimes argue that “the price is too high” and that lowering it will increase sales. Sometimes that may be true. But price is always tied to brand equity. Once a brand is damaged by poor pricing decisions, it is extremely difficult to recover.
So while local market input is essential, pricing should be considered very carefully. There are often better ways to address price resistance than simply lowering the price. I may write more about that in a future post.
Great management is not optional
A great local manager is not a “nice to have.” It is a must-have.
This is true not only from a sales perspective, but also from the standpoint of team building and retention.
You may be able to hire strong talent, but whether that talent stays will depend heavily on the top manager. In many cases, people do not leave because of the workload or even because of salary. They leave because they do not want to work for their boss.
That is not unique to Japan, of course. But it matters greatly here, especially when you are trying to build a local team in a highly competitive talent market.
To be clear, I am not saying that you should only hire Japanese people. What I am saying is this: if a role requires sales ability and native-level Japanese, those requirements should be prioritized accordingly.
Of course, finding someone who has both excellent commercial skills and strong English ability would be ideal. But during interviews, it is easy to be swayed by a candidate who speaks fluent English and feels easy for headquarters to work with.
That is a trap.
You should not optimize for how easy it is for you to communicate with the candidate. You should optimize for how easy it is for your customers in Japan to communicate with them.
Final thought
In short, the most important factor for success in Japan market entry is this:
Hire the right country manager.
A great product is absolutely important. But if you have competitors in Japan—and most companies do—then success depends on whether you have the right local team to compete effectively.
And building that team starts with putting the right leader in place. The most important factor for success in Japan is a Country Manager who knows the market better than they know English grammar.
That said, hiring a full-time country manager is often easier said than done. Finding the right person can take time, and attracting high-caliber talent usually requires a meaningful compensation package.
For companies that want to start building traction in Japan without committing to a full-time hire too early, a fractional country manager can be a highly practical option. It provides local leadership and hands-on support while giving you more flexibility in the early stage. If this is something you are considering, feel free to reach out anytime.
Written by Shin, Founder of Product Strategy
