According to the World Population Review, Japan has the third-largest economy in the world with a GDP of $5.15 trillion. Japan is a lucrative market for companies seeking to do business in overseas markets.

However, as a global company, expanding the new oversea market is always not so easy. Understanding the value proposition to the local customers is the most important thing that should be defined before entering the new market.

Walmart enter the Japan market

Walmart, an American multinational retail corporation, is trying to step in Japan market. In 2002, Walmart first entered the Japanese market by buying a 6 percent stake in Seiyu. Seiyu is a chain of supermarkets and hypermarkets in Japan that sells mix consumable and general products in Japan.

However, Walmart is facing lots of challenges when getting into the Japanese market. Walmart launched its service with its company value “everyday low price” to the Japanese consumer. Unfortunately, this marketing strategy was not very appealing to the Japanese as they only appreciate low prices by seeing the gap between the “normal prices”.

Turn to Online Service

In 2014, Walmart even considered selling Seiyu after closed more than 100 Seiyu stores. Although the server competitive retail market in Japan, Walmart found a new way to expand their business by opening online service. Walmart and Rakuten announce an online delivery service in 2018. Using the Rakuten online platform and Seiyu’s merchandise, Walmart Japan record 30% grocery online growth in 2019.

In conclusion

Thinking about what kind of service your company can provide that local customers need and other competitors don’t provide is the way to determine the value proposition. Local customer behavior is also very important to analyze before entering the market. After the 2020 coronavirus pandemic, many companies start their online business and home delivery service which might be the future trend to change customer behavior.