Now more than ever Japan has become a major market to operate in. While the preparation for the Olympic and Paralympic games are at their peak and despite the Covid-19’s crisis situation, Japanese corporates are becoming actively involved in strategic tie-ups and investments.
As Japan’s population ages quicker than any other developed country, the medical care market is expanding significantly in recent years and is expected to further grow thanks to the increased public awareness of health issues and the government’s implementation of supportive policies. As a result, there is a huge demand for elderly related diseases such as cardiovascular and neurosurgery, oncology and respiratory. In addition, technological solutions in the fields of early detection and disease prevention, as well as remote monitoring, AI and ICU related solutions are in high demand.
With a population of 127 million people, where about 30% are over 65 and a huge buying power, Japan is considered the 2nd largest global medical market. Yet, doing business in Japan requires a deep understanding of its unique decision making process and a lot of patients. Moreover, some of Japan’s global medical corporates such as Terumo, Canon and Olympus are starting to become actively involved in recent international M&A deals. This change is reflected in 2 manners. The first is the number of investment financial transactions Japanese corporates are involved in and the second is the growing interest in earlier stages of startups.
During the last 3-5 years the awareness of Japanese companies to Israel’s innovation power have significantly increased due to the increasing number of Japanese representative offices opened as well and the growing involvement of consulting firms who conduct ongoing scouting activities for large scale corporates. However, despite these positive developments, I still argue that Israeli Med-Tech firms are less aware of the huge business and investment opportunities that exist in Japan.
To put things in perspective, along the global Covid19 pandemic, there were 18 investment deals only in H1. 2020, yet the investment trend continues to rise with a total of 1.5 billion USD along the last decade, as reported by IVC.
Japanese companies are known for their slow decision-making process, however having a Japanese business partner is not only a token of excellence, but also a powerful financial backbone that can secure growing revenues stream, the possibility to enjoy Pan-Asian presents and even global penetration.
We do hope that the expected media attention to the Tokyo Olympic and Paralympic games should act as a reminder to Israeli companies and startups to develop their own pathway into this amazing market, while creating a significant differentiator to their competitors.
The majority of Japan business experts focus on the vast cultural gaps existing between Israel and Japan. However, I’d like to suggest here a different approach, which luckily worked well for me along the last 20 years of doing business with Japanese.
Working closely with Japan’s largest Enterprises granted my team and I a unique opportunity to know what technology they are looking for, in which development stage and what kind of business deal they are willing to get into and what the process looks like. We are grateful to gain their trust and we do hope to leverage these assets in creating more strategic opportunities for Israeli Med-Tech companies, as well as to set strategic alliances for VCs and accelerators in Japan.