News & Updates

Results of JETRO’s 2020 Survey on the International Operations of Japanese Firms

Feb 17, 2021

From October to December 2020, the Japan External Trade Organization (JETRO) conducted a survey of Japanese firms that have used JETRO’s services to gauge their interest in business overseas. Valid replies were received from about 2,700 firms. This followed a survey conducted in September 2020 on approximately 9,000 overseas bases of Japanese companies (released in December 2020).

Key points from results:

  • More than 60% of Japanese companies have suffered serious harm to their overseas business due to the COVID-19 pandemic. In FY2020, sales in overseas markets for each company decreased on average by 40%.
  • It was noted that export control restrictions introduced by China and the US due to their bilateral friction has become the biggest concern regarding trade policies. As for the trade policies that have had the most effect on their business, "export control and strengthening regulations by China" and "export control and strengthening regulations on investment by the US" ranked first, replacing “additional tariff measures between the US and China" seen in the previous year. US-China friction has had an impact not only in the area of tariff measures, but also seems to have spread endlessly into the national security field.
  • While the motivation to expand operations at existing overseas bases of Japanese companies was the lowest ever, the motivation for making new inroads overseas remains unchanged. In addition, in response to rising overseas business risks, an increasing number of companies showed motivation to diversify their overseas business development destinations. A trend has become clear of diversifying overseas business destinations such as the US, Vietnam and Taiwan, while focusing on China, the largest target market. In particular, the percentage of companies that "intend to engage in operations in the US market" increased by nearly 10 percentage points from the previous year. This shows a glimpse of growing awareness of sales expansion and diversification of value chains with a view to the huge domestic market in the US.
  • Increasing global risk is pressuring Japanese companies to shift to new business formats. About 70% of companies are currently reviewing their overseas business strategies and organizational structures. In particular, with the desire to develop sales channels using digital technology, the use of cross-border EC is advancing as a new means of overseas sales. The utilization rate of cross-border EC has increased by about 15 percentage points in the past four years. SMEs in particular have shown strong motivation to expand overseas sales channels using EC.

About this survey:

This survey was launched in 2002 for Japanese companies who are highly interested in overseas business, and this is our 19th survey to date. It was conducted on a website, and received valid replies from 2,722 companies (a 20.2% response rate). (Survey period: October 30 to December 6, 2020).

This year, the survey mainly asked about the impact of the COVID-19 pandemic, efforts in international trade and overseas expansion, and review of overseas business. Other survey items included EC usage, global risks and initiatives regarding business in China and the utilization and challenges of digital-related technologies.

Summary of survey:

1. Increased global risks and their impact on business

  • Regarding the impact on sales in FY2020 under the COVID-19 pandemic, 64.8% of companies conducting business overseas answered that there was a "negative impact" on overseas sales.
  • Regarding the impact on overseas sales in FY2020, by industry, a high percentage of companies were negatively affected by the slump in the markets of major countries in the area of “cars/car parts/other transportation machinery.” A relatively high percentage of companies (13.9%) answered that they saw a positive impact on “food and beverages,” which have been in steady demand even during the pandemic.
  • The decrease in overseas sales in FY2020 due to COVID-19 reached an unexpected low of 38.4% (on average). This is more than 10 percentage points higher than the decrease in domestic sales (26.1%). This seems to be due to the strong impact of overseas lockdowns and travel restrictions stricter than those in Japan.
  • For FY2021, the percentage of companies that expected a “negative impact” on overseas sales was 27.3%, a decrease from FY2020. Meanwhile, regarding the degree of impact, the response rate of "unknown" accounts for nearly half (48.4%), indicating strong uncertainty in the overseas sales outlook.
  • Regarding the impact of trade protectionism, including in terms of US-China friction, the response rate for "unknown" increased significantly from the previous year's survey to 40%. There were comments pointing out the uncertainty of future US-China relations.
  • At the time of the survey, "export control and strengthening regulations by China” had the highest response rate (29.3%) as a trade policy affecting respondants. This was followed by "unknown" (28.1%) and "export control and strengthening regulations on investment by the US" (25.9%). In the outlook for the next 2-3 years, the response rate for "export control and strengthening regulations by China" (36.4%) also ranked highest.

2. International trade and overseas business expansion:

  • Regarding overseas business expansion policies (both new investments and further expansion of existing overseas bases) over the next three years or so, the percentage of companies answering that they “currently have overseas bases and will further expand them” was 19.1%, a decrease of more than 10 percentage points from the previous year (30.9%). Meanwhile, the percentage of companies that "intend to begin overseas business" has remainded almost the same level. This shows the willingness to make new investments overseas has not diminished even amidst the pandemic.
  • Regarding the countries and regions where companies aim to expand business overseas, the number of countries or regions cited per company came to 4.9 on average, an increase from the previous year (3.8). Due to heightened awareness of risk diversification, there has been a growing trend to increase the number of countries or regions to be considered. Among target countries or regions, China came out on top (48.1%), followed by Vietnam (40.9%) and the US (40.1%). In particular, the US rose 8.2 percentage points from the previous year, moving up from fourth to third.
  • Regarding export policies over the next three years or so, 76.7% of companies answered that they would expand exports, the first time in three years it has fallen below 80%. However, "considering downscaling or ceasing operations" remained unchanged (1.4%) and the percentage of companies that "intend to begin exports" increased for the first time in four years (10.8%). Overall, the willingness to expand exports has not diminished significantly.
  • China ranked the largest target country or region (56.7%) for companies that are "planning to expand exports." At the same time, the number of companies that are interested in the US as an export expansion destination has increased (50.3%). This shows that the decentralization of exports to countries or regions other than China was remarkable. As the export destinations most focused on, China, the US and Western Europe accounted for 60% of the total.
  • Companies that have used EC as a sales method accounted for one-third (33.3%) of  the total. In addition, the percentage of companies expanding the use of EC in the future has reached 43.9%. In contrast with the EC utilization rate of 28.5% for large companies, that for SMEs was 46.7%, clearly indicating strong motivation to utilize EC among SMEs.
  • Among companies that have used EC as a sales tool, 45.5% have used cross-border EC from Japan to overseas countries. In addition, a total of 65.0% of companies have used EC for overseas sales. Regarding the utilization rate of cross-border EC, that of SMEs (47.0%) was more than 12 percentage points higher than large companies (34.8%). China (47.6%) was the top ranking EC sales destination, while the US (36.6%) and Taiwan (28.8%) had higher response ratios than the previous survey.

3. Reviewing overseas business in response to risks:

  • Sixty-nine point six percent of companies have made some revisions to their overseas business such as business strategies and organizational structures. Looking at the review policy, the percentage of respondents who answered "review of sales strategy" was the highest at 42.5% (multipul answers possible). By company size, the percentage of SMEs was particularly large (44.3%).
  • Regarding the specific content of sales strategy reviews, "review of sales destinations" exceeded 60%. In addition, it became clear that a high percentage of companies are working to develop sales channels through digital utilization, such as "virtual exhibitions" (38.5%) and "cross-border EC" (30.0%).
  • While the motivation to utilize digital technology has been increasing, the majority (55.7%) of companies pointed out that a shortage of technical human resources in digital utilization has been a hindrance for their operation. Regarding securing technical personnel, a difference could be seen between the 44.3% of SMEs answering that they have “not secured enough human resources” and the more than 60% of large companies responding “securing and training of new graduates and mid-career recruitment”.
  • When asked about business collaboration or cooperation with domestic and overseas companies or organizations, 35.7% answered that they are doing so or considering doing so. In terms of content, "business collaboration and joint research with domestic companies" was the highest at 65.0%, while about 30% of companies are seeking collaboration overseas.
Survey on the International Operations of Japanese Firms
FY2020PDF file(1.9MB) Mar. 2021

Mr. Ito or Mr. Furukawa
International Economy Division, Overseas Research Department, JETRO
Tel: +81-3-3582-5177 E-mail: