STCLab, a Korean startup, specializes in providing web traffic management software to over 500 companies and organizations in Korea, including major entities such as Samsung Electronics, Hyundai Motor, Korea Disease Control and Prevention Agency, and Korail. The company has recently extended its business operations to Japan, forming a partnership with a Japanese information and communication company at the end of the previous year for a Proof of Concept (PoC). In the upcoming year, STCLab aims to bolster its presence in Japan by recruiting local sales personnel with the goal of acquiring 20 new customers. Lee Sang-yeob, the director of STCLab, said, “Given the impact of the COVID-19 pandemic, digital transformation is now underway in traditionally analog Japan, and we are eager to capitalize on this evolving landscape.”
Since last year, numerous Korean startups have entered Japan across diverse sectors, including software, generative AI, coding education, and self-driving charging robots. In October, Wanted Lab, a recruitment platform company with a Japanese branch, collaborated with the Banks Foundation for Young Entrepreneurs (D-Camp), a startup support organization. Together, they launched a program named “Moonshot” aimed at facilitating the entry of Korean startups into Japan. As of now, nine domestic startups are participating in the program. Kang Chul-ho, the CEO of Wanted Japan (the Japanese branch of Wanted Lab), said, “We extend assistance to companies entering Japan by aiding in the recruitment of crucial talent such as branch managers and facilitating the establishment of local subsidiaries.”
Korean startups entering or considering entry into Japan predominantly focus on meeting the digital transformation requirements of enterprises. Channel Corporation, the provider of the business-oriented online messenger Channel Talk, initiated its expansion into Japan in 2018 and currently derives 25% of its revenue from the Japanese market. With a customer base exceeding 14,000 in Japan, the company has established a significant presence in the region.
Last year, Team Sparta, an online coding education company, expanded its offerings to include courses tailored for Japanese companies. A representative from Team Sparta highlighted, “Japanese companies exhibit a preference for hiring college graduates and providing them with training for development roles, leading to a substantial demand for in-house digital transformation training. Our current emphasis is on providing B2B services.”
Generative AI companies, currently drawing significant attention, have set their sights on the Japanese market as well. Wrtn Technologies, an AI chatbot developer boasting over 2 million users domestically, initiated its foray into the Japanese market last year, marking its inaugural global service. Kim Ki-han, head of Wrtn’s Japan business, remarked, “Unlike Korea, where AI application in the workforce is gaining traction, Japan is still adopting a wait-and-see approach. Therefore, we entered swiftly to establish a foundation.” Other companies capitalizing on Japan’s digital transformation include Mediquitous, the operator of NUGU, Japan’s leading fashion e-commerce platform, and Timetree, a developer of a shared calendar app with over 50 million global users, with more than half hailing from Japan.
Japan, ranked as the world’s third-largest economy, is trailing in terms of digital transformation. A report from Japan’s Ministry of Internal Affairs and Communications reveals that the digitalization progress among Japanese companies in 2022 stood at only 48.4%. This figure is significantly less than half the rates observed in the United States (78.6%), Germany (80.6%), and China (88.3%). To compensate for their delayed commencement, Japanese companies have been actively investing in digital transformation in recent years.
