I would like to write about the new perspective suggested by the article “Foreigners in Japan are the starting point for cross-border e-commerce! Overseas expansion starting with 40 million people” (2025-09-01 Overseas Courrier).
In recent years, “overseas expansion” has been regarded as an indispensable growth strategy for Japanese companies. With population decline and an aging society limiting the domestic market, relying solely on Japanese consumers is no longer sustainable. As a result, cross-border e-commerce (EC)—selling products and services online across national borders—has drawn increasing attention. However, traditional approaches to overseas markets have often been shaped by the question: How can we enter foreign countries directly? This mindset has led to heavy investments in advertising, logistics, and the establishment of local subsidiaries, with mixed results at best.
What deserves renewed attention is the perspective presented in the article: targeting foreigners already in Japan and inbound tourists before expanding abroad. Instead of treating “Japan” and “overseas” as two separate spheres—Japanese consumers on the one hand and foreign consumers on the other—this approach recognizes that the overseas market already exists within Japan. This is not a minor marketing tactic, but a paradigm shift in how businesses conceptualize globalization in practice.
1. The Strategic Value of Domestic Foreign Consumers
As of 2024, Japan hosts approximately 3.6 million foreign residents and welcomes around 37 million inbound tourists annually. Combined, more than 40 million foreigners are present in Japan—a scale too large to ignore in a shrinking domestic market. Importantly, these consumers are not just temporary buyers; they are potential bridges to global markets. Many have strong ties to their home countries and transnational networks, enabling them to act as conduits of information and demand.
The article proposes a customer prioritization model, beginning with foreign residents in Japan—both existing and new—before expanding outward. This makes sense: foreign residents have already adapted to Japanese society and are more likely to understand and appreciate local brands. At the same time, they can naturally extend the brand’s reach through their international networks. In one apparel case study, a company successfully turned foreign regular customers into brand ambassadors, which not only boosted domestic recognition but also led to significant overseas sales growth.
Thus, domestic foreign consumers should not be viewed solely as a niche market. They represent a low-cost, high-trust entry point into broader global expansion.
2. A Step-by-Step Model for International Growth
Another valuable insight from the article is the importance of a phased strategy. The suggested sequence is:
- Existing foreign customers residing in Japan
- New foreign customers residing in Japan
- Inbound tourists
- Existing overseas customers
- New overseas customers
Traditionally, companies have often attempted to jump directly to stages 4 or 5, establishing local subsidiaries or investing heavily in overseas advertising campaigns. This approach is costly and prone to cultural missteps, leading to failed ventures and eventual withdrawal.
By contrast, a phased model beginning with customers already in Japan offers three key advantages: (1) lower costs, (2) reduced risks, and (3) opportunities for experimental marketing. Companies can test products, refine strategies, and gather feedback domestically before scaling up internationally. In effect, firms can “go global” while staying within Japan’s borders, making expansion far more sustainable.
3. Foreign Regular Customers as Brand Ambassadors
Traditional marketing has relied on celebrity endorsements or influencer campaigns. Yet, the case of appointing foreign regular customers as brand ambassadors represents a fresh departure. Here, loyal consumers become advocates, naturally bridging the company and overseas markets.
This approach offers two strengths. First, it enhances credibility. When a satisfied foreign resident shares their genuine experience with friends, family, or networks abroad, the message carries authenticity that paid promotions cannot replicate. Second, long-term customers already possess deep brand loyalty, making them reliable partners for sustained collaboration. This transforms the relationship from a transactional contract into a co-creative partnership, generating greater long-term value.
4. Cross-Border EC and Inbound Consumption as a Synergistic Cycle
Another new perspective lies in reframing the relationship between inbound consumption and cross-border EC. Traditionally, these were treated as separate fields: tourism versus e-commerce. Yet in practice, they form a continuous cycle. Tourists experience a brand in Japan, then return home and repurchase via cross-border EC.
Understanding this dynamic allows companies to redefine inbound sales not as one-time transactions, but as the first touchpoint in a longer global relationship. A tourist’s initial purchase can be converted into sustained consumption abroad through EC platforms. By linking inbound marketing with cross-border EC, firms can create an integrated international strategy that maximizes lifetime customer value.
5. Moving Beyond “Overseas Expansion = Local Subsidiaries”
Ultimately, the article challenges a deeply entrenched belief: that overseas expansion necessarily requires establishing a physical presence abroad. In today’s digital age, this is no longer the case. Advances in global logistics and online platforms mean that companies can reach international markets without heavy upfront investment.
The key lies in redefining the overseas market. It is not a distant, unfamiliar entity—it already exists within Japan’s borders, embodied by millions of residents and visitors. The path forward is not to rush outward blindly but to leverage the diversity within Japan as the foundation for sustainable global growth.
This represents a fundamental shift: globalization is no longer about going out but about connecting outward from within. The article captures this turning point in business strategy.
Conclusion
In summary, the article highlights a paradigm shift in how Japanese companies should approach overseas expansion. Instead of immediately pursuing distant and costly foreign markets, they can begin with foreigners already in Japan and inbound visitors. This strategy provides a low-risk, cost-effective, and scalable model for global growth.
By treating domestic foreign consumers as ambassadors, leveraging inbound tourism as a gateway to cross-border EC, and adopting a phased expansion model, Japanese firms can move beyond the outdated belief that globalization requires physical overseas presence. In a shrinking domestic market, the “hidden overseas market within Japan” may well be the key to sustainable international success.