Japanese Workers’ “Quiet Quitting” is a Boon for Chinese Outsourcing Companies

Malu, a 1997-born millennial, spent three and a half years working for a publicly listed Japanese corporation while simultaneously dabbling in the world of new media as a side hustle. However, she found herself increasingly stifled by the rigid, traditional corporate structure prevalent in Japan.

“They adhere too strictly to the seniority system,” Malu explained.

This system, known as *nen功序列* (nenkō joretsu), prioritizes promotion based on an employee’s tenure with the company, regardless of actual performance or capabilities. Advancement comes with time served, not necessarily with demonstrated skill or innovation.

Japanese companies often prefer to keep employees in fixed roles, performing the same tasks for extended periods, discouraging them from taking on additional responsibilities or pursuing innovative solutions. This, in turn, limits individual growth opportunities. This tradition is slowly changing due to globalization, increased competition and a shrinking population of younger workers.

Ultimately, Malu decided to break free from what she described as a stagnant environment, transforming her side project into her primary focus and embarking on a bootstrapped entrepreneurial journey in the realm of new media advertising.

A Shift in New Media Marketing

According to Malu, the Japanese new media market currently lags behind China by approximately five to six years. While the number of new media companies in Japan is substantial, the barrier to entry remains relatively low. Securing a modest amount of initial resources and clients is often enough to launch and operate a new media enterprise.

Marketing strategies in Japan predominantly revolve around account management and influencer resource integration.

New media advertising firms in China offer clients detailed, comprehensive solutions, including meticulously planned annual strategies with clearly defined objectives for the initial, intermediate, and final stages. This also includes targeted influencer selection and strategic budget allocation.

In contrast, most Japanese companies in this sector have yet to reach this level of sophistication, with only major players like Dentsu and Hakuhodo possessing comparable capabilities. This puts Chinese new media marketing agencies at a distinct competitive advantage over their Japanese counterparts.

Furthermore, there is a scarcity of Japanese teams capable of executing effective outbound marketing campaigns and implementing creative initiatives in international markets.

Instead, large Japanese advertising agencies often outsource specific business segments they are unable to handle internally or for which they lack dedicated teams. Those familiar with both Chinese and Japanese marketing strategies, like the China-born Malu, have secured numerous outsourcing contracts from these major companies, thereby setting the stage for their own business ventures.

Acquiring Local Clients Through Trade Shows

Establishing a company in Japan requires adherence to certain prerequisites. The legal representative of the company must be a Japanese national or a foreign national holding a business management visa or a permanent residency visa. Obtaining a business management visa is particularly challenging, subject to strict regulations regarding the company’s size, office space, and staffing levels, presenting a significant obstacle. Those with permanent residency or Japanese citizenship find it considerably easier to start a company, requiring only the payment of applicable taxes.

Malu realized that to further expand her business, she couldn’t rely solely on outsourcing contracts and needed to develop her own client base.

Her biggest challenge was acquiring Japanese clients.

For a foreigner lacking resources, connections, and a deep understanding of the Japanese market and culture, integrating into the Japanese business community is a difficult prospect.

Malu revealed that unless a company has a proven track record both domestically and internationally, conservative Japanese businesses are generally reluctant to partner with purely foreign-owned entities. The perceived risk associated with entrusting their brand to an unknown quantity often outweighs potential gains.

In this context, hiring Japanese employees as sales or public relations representatives is essential. However, many Chinese owners are hesitant to do so, often citing communication issues and cultural differences.

Some Chinese owners, lacking Japanese language proficiency, rely on interpreters for business negotiations. Japanese clients, however, often perceive this as a barrier to genuine trust and effective communication. They believe that interpreters cannot fully convey the nuances and subtleties of both parties’ intentions, undermining the foundation for collaboration.

These challenges have contributed to a situation where many locally-based Chinese businesses primarily serve the Chinese community.

“Japanese companies prefer proactive methods such as telephone sales, email marketing, and active participation in trade shows to connect with potential clients,” Malu noted. While often overlooked, trade shows offer the invaluable opportunity to engage with potential customers face-to-face and create memorable experiences.

“The key is to ensure that potential clients remember your company’s services and the value you can provide. Only then can you hope to secure their business,” Malu emphasized.

The “Laid-Back” Japanese Employee

With the company’s continuous expansion, the number of employees has also increased significantly.

Malu observed that Japanese employment practices differ significantly from those in China, with overall labor costs being higher.

In Japan, university graduates entering the workforce receive relatively generous salaries. In Tokyo, for example, the starting salary typically ranges from ¥200,000 to ¥220,000 JPY per month or roughly $1,200 to $1,300 USD (depending on currency rate at the time of this article).

However, Japan’s salary structure is relatively flat, lacking the “pay-for-performance” incentive system. Salary increases are minimal, and wages barely rise within the first three to four years of employment. While performance bonuses exist, they dont typically make up for the lack of annual salary increases.

At the same time, many Japanese positions are akin to “iron rice bowls,” with a system of lifetime employment similar to China’s *t体制内* (tǐzhì nèi) system. It is difficult for companies to dismiss employees, even if they are underperforming. They cannot be fired based solely on “company reasons” and must typically wait for employees to resign voluntarily. Moreover, labor laws provide strong protection to employees, making dismissals a complex and costly process.

Moreover, companies are generally reluctant to terminate employees due to labor shortages and limited market selection. Regardless of performance, companies prefer that employees remain on the payroll. This shortage of workforce talent drives Japanese businesses to be more lenient with the performance of their employees.

This creates a sense of security and encourages Japanese employees to adopt a “laid-back” approach to their work. During off-hours, they ignore urgent emails and may even adopt a “I’m just an employee, don’t bother me” attitude.

Malu also found that Japanese and Chinese clients have fundamentally different core requirements.

Chinese clients prioritize cost-effectiveness, seeking solutions that are both affordable and differentiated from those offered by other agencies.

Japanese clients, on the other hand, place a greater emphasis on service quality, even if Malu’s prices are slightly higher.

This is due to the fact that the project stakeholders are typically not the business owners. Additionally, Japanese companies often place less emphasis on individual performance metrics, which means that project managers usually do not prioritize finding cost-effective solutions. This reduces employee pressure to shop for bargain choices.

Instead, they are more concerned with being able to report regularly on work progress to senior leadership. As a result, they require regular meetings with external partners to obtain supporting materials and updates.

A service provider who cooperates proactively and provides information tailored to the project stakeholder’s reporting requirements is more likely to secure long-term partnerships.

When dealing with Japanese customers, many etiquette rules must be observed.

For example, it is crucial to maintain a smile during meetings. Business cards should be exchanged with both hands, and upon receiving a card, it should be positioned prominently on the left side during the meeting. During the first meeting, it is important to avoid rushing into business matters. Take the time to establish trust by discussing non-business-related topics before gradually transitioning toward the primary topic. Understanding *omotenashi* (Japanese hospitality) is key to successful interactions.

Communication should employ polite and respectful language, avoiding overly direct or blunt statements. Japanese people are more accustomed to indirect communication. Directness can be perceived as rude.

For example, if an influencer fails to submit tasks on time due to their own negligence, Malu cannot directly inform the Japanese company about the situation. She must instead concoct plausible excuses for the influencer and propose alternative solutions. Directly complaining about the influencer would reflect poorly on Malu’s company, suggesting that they are unable to select reliable partners.

Amazon and Rakuten Control the Market

To conduct a new media advertising business in Japan, you the service provider, must fully understand the market, users and platform rules of Japan’s mainstream advertising platforms.

Malu pointed out that Instagram, Facebook, Twitter, and TikTok are the primary social media platforms.

Instagram users are predominantly female, accounting for 70-80% of the user base, and are typically younger in age. Facebook is most popular by people in their 40s and 50s who have stable occupations as well as firm beliefs. Twitter users are largely hobbyists. TikTok users are also young, primarily aged 20-30 years old.

Amazon and Rakuten are the leading e-commerce platforms in Japan, collectively holding over 50% of the market share.

The positioning of the two platforms is markedly different.

Rakuten is similar to Tmall in China, offering a higher average order value and stricter quality control for listed products. Once a store is successfully established, it can expect to receive a consistent stream of traffic. Rakuten’s strict vetting process lends itself to a marketplace of quality.

Amazon is analogous to Taobao, with lower barriers to entry for products but more intense price competition. Rakuten is more popular among consumers with higher purchasing power, while Amazon’s customer base is broader. It is crucial to understand the nuances of both platforms, and to strategically leverage them for maximum brand exposure.

If the work involves promoting Japanese brands in the Chinese market, Malu prefers China’s Xiaohongshu platform, which offers the best conversion rates.

It’s important to note that Xiaohongshu does not permit overseas real estate companies to register on the platform. Publishing notes related to real estate investment will usually be subject to traffic restrictions or determination of violations. When these types of customers seek cooperation, Malu is usually unable to provide her services.

Capitalizing on TikTok Shop’s Launch in Japan

This year, since the news came of TikTok Shop’s launch in Japan, several companies have contacted Malu for cooperation.

In the process, Malu encountered some new challenges.

TikTok Shop is still in its infancy in Japan, similar to the early stages of live commerce on Douyin in China. While the Chinese model may be at version 5.0, Japan is likely only at version 1.0. Due to lag of development, Japan has lots to learn.

Many merchants have not realized that simply transplanting the Chinese model to the Japanese market is not viable.

Some Chinese merchants have requested to work with no commission with Japanese influencers, meaning no base pay, only commission paid out according to the percentage of sales. Due to the number of influencers in China and the fact that the market has matured, the model has a high rate of success. But the Japanese market isnt informed of this, which means Japanese influencers have a hard time agreeing to a no fixed fee.

Other clients have requested Malu to find 200 coopertive influencers a month for a year, in addition analyzing them based on follower count and their style and content.

“It’s basically impossible to find 200 influencers a month, meaning 2,400 a year in Japan,” Malu said.

Public data shows that Douyin in China has over 1 billion users, whereas TikTok in Japan has only 40+ million TikTok users, meaning that the service provider would be hard pressed to fulfill those requests.

In addition, several Chinese merchants have launched entering the Japanese market with low prices. This strategy fails due to Japanese merchants being strict about market prices, meaning that consumers will assume that the quality of the low priced product would be poor due to the low price.