Governments require a vast array of goods and services, to perform their duties, which makes it difficult to give a specific indication for specific products.  Foreign companies are currently primarily active in the following sectors (value-based), but still have relatively small shares:

  • Medical, dental, surgical and veterinary equipment
  • Scientific apparatus and equipment
  • Computer and related services
  • Medicinal and pharmaceutical products

Foreign companies have thus far been almost completely absent in sectors such as public works and infrastructure.

Source: Japan's Government Procurement: Policy and Achievements Annual Report (FY 2013 version) - Toward Government Procurement Open to the World – (2014) See Chapter 2

While the PP market currently is almost completely dominated by Japanese companies, in fact only a very small percentage of Japanese companies is currently engaged in providing goods and services to Japanese government.  In 2013, only 1.2% of registered firms in Japan had obtained eligibility as a supplier to the government. 

Also 40% of the government tenders are issued in the Kantou-Koushinetsu region, which consists of Tokyo and the surrounding areas. This is followed by the Kinki-region (Osaka) and Tokai-Hokuriku region with each 12% of all tenders.

Forty per cent of all tenders issued are open tenders, which offer a level playing field. 16% are so-called ‘Open Counter’ tenders, for small-lot goods and services, together with limited tenders (zuii-keiyaku).  This offers opportunities a plenty to compete at a level playing field.

Another indication of the opportunities present is the fact that in many cases, there are only one or two bidders reacting to an invitation to tender. According to analysts, many companies tend to focus on the largest government entities and are primarily active in the busiest season (February) or only in the Tokyo-area.  By taking the appropriate approach, this might allow new entrants to gain new business opportunities.

Source: NJSS public procurement information & analysis service


Entering the Japanese public procurement market is not without its challenges, which in part explains the low percentage of foreign companies active in the sector.  Peculiarities of doing business in Japan in general, in combination with the characteristics of a public procurement system that is not accustomed to dealing with foreign entities will require tenaciousness and patience.  Similar to entry of any foreign market, it is vital to get to know your market and your prospective customers, it is therefore important to invest in your local network.  

Although not exclusively related to the public procurement market, you can expect to have to deal with the following challenges:

  • Language and access to market information

    • Public procurement market information is almost exclusively available in the Japanese language; a short summary of the invitation to tender is usually the only information in English available.  Detailed information about the tender specifications and the tendering process are only available in Japanese.  Without attracting Japanese language expertise, it can be difficult to develop your business case.
    • Your counterparts (procurement officers) will in most cases not be accustomed to communicate in a foreign language, in particular if you deal with regional and local government entities. 
  • Standards and Licenses

    • Although many of the standards used in Japan have already been paired to international standards, it will be necessary to obtain expertise on the Japanese Industrial Standards (JIS) system, as these are often used in the drafting of tender specifications.
    • In order to be able to supply products and services, such as medical services or being involved in construction works, additional licenses are necessary.  Mainly due to the language barrier, It will require some effort to obtain these licenses.
  • Supplier qualification and organisational diversity

    • Although the public procurement systems and procedures in Japan share the same basic characteristics, there is substantial organisational diversity, which makes it challenging to cover an entire sector.  Japan’s government institutions require their supplier to qualify before taking part in actual tendering and no unified system exists.  Although the application is usually rather straightforward it will be necessary to ascertain with each entity what the conditions to qualify are.  
    • While at the central government level there is a fair degree of standardisation of procedures, and tender invitations are published at joint portal sites, for regional and local entities the picture is much more diverse. In practice, your Japanese competitors will continuously monitor the public procurement sites of individual government entities that are likely to procure their products or services.
  • Local orientation

    • With the public procurement sector being an almost exclusively Japanese affair, in practice a large part of the contracts is awarded to locally based companies, who have developed an established presence as a supplier.  In fact, public procurement plays an important role in cultivating local economic activities.  In particular for tenders at the local and regional level, which fall outside of the scope of the WTO General Procurement Agreement, a local establishment is often added as a pre-condition.
    • Procuring entities often include (after) service guarantees as one of the conditions in the tender invitation, which can in certain cases act as a obstacle for foreign-based supplier and favour companies with local service networks.
Source:  Lyckle Griek, Government Procurement in Japan. Obstacles and opportunities for European SMEs (EU-Japan Centre for Industrial Cooperation, March 2014)

JTPP Helpdesk can help you with dealing with a number of these challenges, by lessening language barriers and enabling to get a better grasp of the procedures and market circumstances.


Although numerous challenges exist, the very diversity and magnitude of the Japanese public procurement sector creates plenty of opportunities.  European companies, including SMEs, have already been performing well in the field of advanced scientific and medical equipment. In particular for SMES with innovative technologies, good opportunities exist to secure contracts with government entities exists, if the right approach is taken.

What is key here is that you can extent to a large create opportunities yourself.  European SMEs who have been successful as suppliers to government entities in Japan have made efforts to develop knowledge of the market for their product and conduct persistent lobby activities with prospective customers.

Source: Lyckle Griek, Government Procurement in Japan. Obstacles and opportunities for European SMEs (EU-Japan Centre for Industrial Cooperation, March 2014)

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