Selling into Japan · Three gates, 3 of 3
Why April moves
your deal by a year
Japan does not decide slowly.
It has one moment a year when it can buy, and you are either in it or not.
Selling into Japan · Three gates, 3 of 3
Japan does not decide slowly.
It has one moment a year when it can buy, and you are either in it or not.
A recurring complaint: the Japanese contact is enthusiastic, and then says implementation would be next year. This is not a negotiating position and it is not deprioritisation.
Japanese public bodies, and a large majority of listed Japanese companies, run a fiscal year from 1 April to 31 March. That single fact reorganises how an inbound proposal progresses.
The important part is not the April start date. It is when the budget is assembled.
Each department compiles what it wants to do next year and attaches figures. Anything not on that list cannot be executed next year. This is the period your proposal needs to arrive in.
Requests are cut down and approved. Inserting something new at this stage is, in normal circumstances, very difficult.
Orders can finally be placed. Only now does the buyer have the capacity to buy.
Which gives the result that surprises people: a conversation started in April is typically executed the following April. Adding a substantial unplanned expense mid-year is not generally possible. Supplementary budgets exist, but designing your commercial approach around the exception is not realistic.
If it is the second, the correct action is not pressure. It is to supply, now, what the contact needs in order to put you in next year's request. Concretely: an indicative annual figure and an initial figure, in a form that can be copied into an internal request form.
This is one of the few pieces of bad news that is better delivered by you. I have told an overseas manufacturer, in writing, more or less the following: Japanese public budgets run April to March; unplanned mid-year expenditure is normally not possible; through the proper route, execution will fall in the next fiscal year; if you need booked revenue this quarter, Japan is not the answer to that question.
That is not what anyone wants to hear. It is also the most valuable thing you can tell someone whose alternative is spending six months finding it out. In my experience it builds more credibility than it costs.
Japanese deals look slow because the decision is slow. More often it is because there is only one moment each year at which buying is possible. Knowing the calendar converts waiting into preparation. Not knowing it costs a year on a proposal that was never the problem.
If you want to time a proposal to the Japanese budget cycle
Tell me the counterparty's fiscal year end and where the conversation currently stands. I will set out whether to aim at the current year or at next year's request, and what has to be in their hands by when.