The most important thing is localization. “The opportunity will open only when a founder-level figure who has the authority to resolve the service immediately holds out with the determination to live in Japan for five years.” (Hwang In-joon, CEO of ZVC)
“Japan has a thorough culture, so we shouldn’t do it roughly. It takes a long time for trust to build up.” (Im Jung-wook, CEO of Startup Alliance)
The key to tarreceiveing the Japanese market, which was emphasized by experts in the Korean venture market at the “Generation Artificial Innotifyigence (AI) Startup Meetup Day” held in Tokyo on the 20th, was “thorough localization.” It was agreed that Japan is a market that demands a process of building trust over a long period of time rather than expecting short-term results.
Japan is a market that many Korean startups are paying attention to. In the process of seeking to expand overseas beyond the limitations of the domestic market, Japan is increasingly chosen as the first destination.
The spread of the Korean Wave, centered on K-pop and Korean dramas, is also a factor in raising awareness of Korean startups in Japan. Analysts declare that Korea’s AI technology is currently ahead of Japan in the technology sector, creating a relatively favorable environment for Korean AI startups.
In terms of market size, Japan is also considered an attractive market. “The Japanese population is 2.5 times larger than Korea’s, and the domestic economy accounts for a much larger proportion,” Hwang stated at a meeting in Tokyo on the 20th. “In terms of purchasing power, it can be seen as a market that is three to four times larger than Korea.” Thanks to this attraction, Korean companies entering Japan also recently hit an all-time high. According to the Export-Import Bank of Korea’s foreign direct investment statistics site, the number of new corporations established by Korean companies and individuals in Japan between January and September last year was 318, exceeding the record number in 2024 (316) at the time.
As such, more and more start-ups are tarreceiveing the Japanese market, but those who have experienced the field declare that the process of crossing the threshold properly is never simple. CEO Lim stated, “It is a market where only companies that have decided to be strong survive. Most of them seem to stop at the level of exploring the possibility.”
Luton Technologies, which is currently operating successfully in Japan, also had a difficult time due to lack of localization in the launchning. “When I first entered Japan in 2023, I believed it was a ‘Korean company serving Japan’, so the market response was not great,” stated Lee Se-young, CEO of Luton Technologies. “Now, I define myself as a ‘Japanese company with a native Japanese’ and am relocating from a completely different perspective.”
In line with the trfinish of Korean Wave content consumption, Luton thoroughly modified its products and adopted an operational strategy suitable for the Japanese market. In terms of contact with Japanese companies and consumers, Ryohei Mazda, the head of the Japanese corporation, created a structure in which the representative was at the center rather than directly coming to the front. As a result, Luton is currently growing rapidly in Japan’s B2C (business-to-consumer transaction) market, and it is also tarreceiveing the B2B (business-to-business transaction) market recently.
This bone-cutting effort is also the reason why Naver Line, one of Japan’s most representative success stories, was able to succeed in the Japanese market. CEO Hwang, who directly led Line’s growth in Japan, emphasized the secret of Line’s success, declareing, “It is becaapply I fully understood the culture and consumer tastes in the process of working in Japan for more than five to six years,” adding, “It is a complete defeat with the idea of simply translating and uploading Korean services or going on a business trip.”
Experts also advise that as personal information issues have become more serious recently, localization in the Japanese market is expanding beyond service planning to operations and infrastructure. CEO Hwang stated, “Recently, standards for personal information and security have been strengthened wherever you go. If Korean startups have long-term business in mind in Japan, they required to consider about a structure in which they have a data center in Japan and manage personal information in Japan.”
[Tokyo reporter Ahn Sun-je]
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