A restaurant I dined at in Kyoto was more than 300 years old. A 300 year-old business—apparently this is not that uncommon in Japan. According to a 2008 research by Bank of Korea, there were 5,586 businesses in 41 countries that were older than 200 years. Surprisingly, more than half of the oldest businesses in the world were in Japan. What are the oldest businesses in the world? And why is Japan home to most of the oldest businesses in the world?
Distribution of the Oldest Businesses in the World
The Bank of Korea report found 5,586 companies that have been running for more than 200 years in 41 countries. Breaking them down by country, 3,164 companies or 56.3% were in Japan. Germany followed Japan with 837 companies (15.0%). Netherlands had 222 companies (4.0%), and France 196 (3.5%). 186 companies were in Britain (3.3%) and 148 in Russia (2.7%).
With the majority of the oldest companies in Japan, naturally Asia including Oceania had the most old businesses in the world with 3,214 businesses running for more than 200 years (57.5%). Similarly, 2,345 old companies were in Europe (42.0%), with Germany being the leader. Now only a few are left—23 businesses in Americas (0.4%) and 4 in Africa (0.1%).
Why Does Japan Have the Majority of the Oldest Businesses in the World?
Japan has one of the longest longevities not only for people but also for businesses. The world’s oldest company is also in Japan—Kongo Gumi. Kongo Gumi is a construction company founded in 587 that built many historically important buildings including major Buddhist temples and castle in Japan. It was a family-owned company with over 100 employees until 2006 when it became a subsidiary of a conglomerate construction company.
The following section will focus on the oldest businesses in Japan to get the bottom of the Japanese business longevity. There are several characteristics of the long-lasting businesses in Japan.
Japanese Old Businesses Spread over 133 Fields
The list of old companies on Wikipedia has 529 Japanese companies that had been founded before 1699. The three prominent fields in the lists are: Sake (Japanese alcoholic beverages), Confectionary, and Hotel. Of the 529 companies in the list, 86 companies engage in Sake (16.3%), 71 in Confectionery (13.4%), and 64 in Hotel (12.1%).
Minor fields include: Pharmacy (3.2%), Restaurant (2.8%), Clothing (2.7%), Tea (2.3%), Construction (2.3%), Retailing (1.9%), Foods (1.9%), Soy Sauce (1.3%), Religious Goods (1.3%), and so on. These fields have been closely related to everyday life throughout the history.
Moreover, even though there are several major fields, old businesses in Japan cover 133 kinds of fields—from daily essentials such as foods and textile to artistic tools such as dolls and drums. This number is particularly high compared to the other countries. For example, the old companies in Germany in the list cover 31 fields, Netherlands 17 fields and France 19 fields. This means old businesses have been closely knitted into various aspects of the daily life of the ordinary Japanese people.
Most Japanese Old Businesses Are Small Businesses
While some of the old businesses in Japan have gone public, many of them remain family-owned small businesses. Those businesses have been inherited from generation to generation. Despite their long history, many of them continue to serve their original purpose today. In other words, they tend to remain simple, small, and locally attached without expanding to other domains.
For example, Nishiyama Onsen Keiunkan is the oldest hotel in the world according to the Guinness World Records. This traditional Japanese-style inn started its operation in 705, serving as a hot-spring healing inn where people used to come to heal their pain and fatigue. Today, the hotel still operates as a hot-spring healing inn just as it used to do.
Most Japanese Old Businesses Do Not Go out of Date
Another interesting characteristic is that these old businesses in Japan might not have needed modernization. In other words, they sell service or things that never go out of style.
For instance, Kongo Gumi and Nakamura Shaji (since 970) are both construction companies that specialize in building Buddhist temples and Shinto Shrines. The construction and repair of temples and shrines are in need of all ages. Moreover, it requires skills and craftmanship rather than innovation. The same is true to the oldest sake and confectionery businesses.
Old Businesses in Japan Have Won Trust from the Locals
All these elements play an important role in maintaining businesses for centuries. But there is one more important cultural aspect in Japan: people tend to trust long-standing businesses over new strangers.
Japanese people often call old businesses “Shinise (老舗).” Shinise literally means “old shop” in Japanese but people often use the term with respect. By serving the locals with honesty and hospitality and satisfying their needs, Shinise businesses have won trust in their long history. Many people in Japan respect the tradition and preserve local businesses in their community.
Is Shinise’s Future Bright?
Although old businesses often have long earned reputation, they could always go bankrupt. Kongo Gumi, the world’s oldest construction business, became a subsidiary in 2006 when it ran out of money. A seafood retailer with over 450-year history, Minoya Kichibei, went bankrupt in 2015. Many other Shinise businesses disappeared in recent years.
According to a 2020 report by Teikoku Data Bank, the number of bankruptcy of businesses older than 100 years has been increasing in recent years. The number of bankruptcy filed by old businesses had been swinging around 400 since 2016. However, in 2019, a record high of 579 old businesses went bankrupt.
The report suggested Japan’s declining population has made the competition in the consumers’ market more intense especially in rural areas. Particularly new shopping malls in the rural areas have disrupted the local businesses including Shinise.
Additionally, online shopping became more common in Japan in recent years, just like anywhere else in the world. Some Shinise decided to discontinue their businesses when the government increased consumption tax rate in October 2019.
Whether old businesses in Japan can survive or not depends on whether they can keep attracting the younger generation.