More Japanese Retailers Are Buying Direct. Foreign SME Brands Have an Opening.
More and more retailers are importing directly from overseas; here’s what it means for small and medium foreign manufacturers
For decades, getting on shelves in Japan has kind of been like making a phone call the old-fashioned way… by using a human switchboard operator. You don’t dial directly. You’ve got to speak to someone first. And in that case, you needed to maintain a good relationship with the switchboard operator over a long period of time.
But the future is arriving! Instead of always needing to speak to your switchboard operator, you increasingly have the option to dial direct! Go straight to the retailer. Not all retailers, but many are metaphorically getting their own phone numbers. They are willing (and sometimes want to!) talk directly to you.
The economics behind that shift are familiar, but worth restating at the level where they actually bite. Because now, a retailer’s own procurement team is doing the math on its margins. The yen’s depreciation has amplified the cost of nearly everything that had previously been routed through the wholesaler’s added margin. An aging consumer base has been especially sensitive to food price increases and is also affected by broader economic and supply imbalances. And discounter pressure has made the question impossible to ignore: is the wholesaler’s cut still worth it?
A handful of retailers (AEON, Don Quijote, OK Stores among them) have long had the scale to build direct-sourcing capability of their own. They are the classic exceptions, and they predate this current wave. What is notable now, however, is that a broader tier of retailers, well below that historic top rank, is attempting the same thing. They are building direct-import teams, sourcing select categories internally, and bypassing the distributor intermediary for at least part of their assortment. For retailers at this level, it is genuinely new territory. Especially for a country that finds comfort in consistency, it’s an unprecedented step. Until recently, these companies would have considered it entirely outside their capability. Dare I say, unfathomable.
And yet, even as they take that step, most are proceeding carefully. They cannot sever wholesaler relationships outright. The ties between these chains and their wholesalers often run deep, often across decades, and the wholesaler typically still provides the logistics, distribution, and service infrastructure that a retailer cannot easily replace on its own. Few retailers, in fact, are able to unwind that dependency, even if they wanted to. Much of this activity is happening quietly, without public announcement, rather than as a declared strategic pivot. You could say one thing that holds constant, in this case, is still enacting business moves with caution and discretion.
The Three Immediate Friction Points in Direct Importing
Even a retailer that is genuinely willing to import directly runs into real friction quickly. There are three points that have quickly come to the surface.
First is order quantities. Retailers want to test new products in small volumes, while manufacturers need volume sufficient to justify a production run and the logistics behind it. Retailers will hesitate to order enough to fill a full 40 ft. container.
Second is packaging. Portion sizes, on-pack communications, and supporting materials can lose their luster with basic translation. They require real localization work to adapt imagery, themes, and value propositions that will resonate with a highly specialized market.
And the third is simply inexperience. Many of the teams standing up these new direct-import desks are doing so for the first time, with limited language capability, cross-cultural communication skills, or import experience to manage a new supplier relationship smoothly. None of these are insurmountable, but all of them take longer to resolve than either side initially expects.
New Pathways. Same Hurdles.
For foreign manufacturers, particularly small and medium-sized ones without Japan experience, this is new territory. It’s worth being precise about what the opportunity actually requires. The rigor required to access the Japanese market has not moved; quality has to meet a standard that remains among the highest in the world, pack sizes have to suit Japanese preferences, pricing has to reflect the real cost of doing business in a depreciated-yen environment, and supply chain reliability is non-negotiable. A partner who cannot deliver consistently will get delisted quickly, and food safety remains the one line that does not move, regardless of price.
What is new is that meeting that bar is now, by itself, enough to open a conversation that simply was not available five years ago. A well-priced, quality-consistent manufacturer with no prior Japan track record can now initiate discussions with buyers. Previously, this would have been difficult to access through the conventional wholesaler-led route. But it requires a huge amount of patience, investment in face-to-face local relationships, language capability, and a willingness to help a retailer work through its own inexperience with importing. The manufacturers who benefit will be the ones prepared to do that work themselves, not the ones waiting for it to get easier.
Dial Direct, but Don’t Expect to Hit the Ground Running
Even without a middleman, your target retail partners are still Japanese. This market requires trust-building, cross-cultural savvy, patience, and a commitment to adapt. Your options may feel more accessible, and case-by-case, some of them may be.
The economy of Greater Tokyo alone is roughly equal to Canada or Mexico; it’s a market with serious opportunity for those who are export-ready. When it comes to managing the nuances of doing business in Japan, we’re happy to take the reins.
I’ve spent over 18 years navigating Japan's market on the ground - first inside global CPG, then on my own. I led packaged goods for Starbucks in Japan, held a senior role at Nestlé, and drove HARIBO from a fringe player to the #1 gummy brand in Japan. Now with JapanIQ, we are putting that experience to work for other companies, advising clients that range from global food brands to small challengers, government delegations to full in-market representation. The common thread: Japan rewards preparation and local fluency, not improvisation. Companies running into friction here, feel free to reach out.
Paul J. Kraft
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