'Minister Also Does Sales' The Korean Startup Boom Entering Japan

Recent Korean Startups Head to Japan One After Another
Market Size Larger Than Korea and Similar Culture
Global Company Ratio 7%... Still a Long Way to Go

Lee Young, Minister of the Ministry of SMEs and Startups, visited Japan for one night and two days starting from the 11th. The trip was aimed at supporting the entry of domestic startups into the Japanese market. He met with startups active in Japan and local venture capital (VC) firms, and also held a meeting with Shigeyuki Goto, Japan’s Minister in charge of startups. Minister Lee said, “Now is the optimal time for K-startups to enter Japan, as the improvement in Korea-Japan relations combines with Japan’s startup promotion policies.”

NewJeans attending the pre-event of the Musinsa Tokyo pop-up store held in Japan (Photo by Musinsa)

The enthusiasm for domestic startups entering the Japanese market is so strong that the minister himself has taken action. Robotis, a company specializing in autonomous driving robots, entered the Japanese market on the 2nd. They officially started operating the indoor autonomous robot “Jipgaemi” at The Rise Osaka Kitashinchi hotel. This is the first time a Korean robot company has entered the Japanese hotel market. Lytten Technologies, a generative artificial intelligence (AI) startup, recently launched the Japanese version of Lytten and officially announced its entry into Japan. Lytten is an AI content creation platform.

“Unicorn companies” (unlisted startups valued at over 1 trillion won) are also targeting the Japanese market. The largest domestic fashion platform company, Musinsa, is a representative example. Musinsa Japan was established two years ago and started local operations. Last month, they promoted a pop-up store in Tokyo using their ambassador, the girl group “NewJeans.” Results are gradually emerging. The Musinsa-listed brand “Mardi Mercredi” recorded sales of 3 billion won in Japan last year.

In the past, the Japanese market was almost a barren land for Korean startups. It has gradually opened up thanks to the efforts of pioneers. A representative example is the software company Jiranjigyo Soft. They established a Japanese subsidiary in 2004. Currently, their annual sales in Japan reach around 10 billion won. Ahn Dae-geun, CEO of Jiranjigyo Partners, said, “Compared to other countries, building trust with clients is very important in Japan,” adding, “The period of building trust can act as a barrier, but once recognized, it is an attractive market where business can be conducted stably.” The large market size is also an advantage. The Japanese software market is worth $92.5 billion, six times larger than Korea’s $15.1 billion.

Robotis Expands into Japanese Hotel Industry (Photo by Robotis)

NHK visited Korea directly to find the reasons behind the “Japan boom.” They interviewed Jin Ok-dong, Chairman of Shinhan Financial Group. In the NHK interview, Chairman Jin said, “The lifestyles and laws of Korea and Japan are very similar,” and “Japan is the most desirable country to enter once technological capabilities are recognized.” The relatively small cultural differences also act as an attraction.

However, there is still a long way to go. According to data from the Ministry of SMEs and Startups (2021), only 7% of domestic startups have overseas sales accounting for 25% or more, classified as “global companies.” This is less than half the level of Japan (17.2%). It is also lower than Germany (18%), France (19.9%), Italy (18.9%), and even the United States (9.5%). The Ministry has set a goal to nurture 10 global unicorn companies with overseas sales of 25% or more and to achieve 50,000 K-startups entering overseas markets by 2027. To this end, they plan to establish a global fund worth 8 trillion won to support startups in attracting investment and expanding overseas.

This content was produced with the assistance of AI translation services.