Japanese Media: "Korean Companies Expand Globally... Japanese Companies Rarely Attempt Overseas Expansion"

[Image source=Yonhap News]

[Asia Economy Reporter Kwon Jae-hee] Japanese media have focused on the initial public offering (IPO) of Korean game company Krafton and the global market expansion of Korean companies. While Korean companies are not confined to the domestic market but are expanding their businesses worldwide and attracting huge amounts of capital, Japanese companies rarely attempt overseas expansion, drawing comparisons.

On the 17th, Nihon Keizai Shimbun predicted that Krafton will raise 500 billion yen (approximately 5.1 trillion KRW) through its listing next month, with a market capitalization reaching 2 trillion yen (about 20.38 trillion KRW), reporting that "Korean companies, which do not remain in the narrow domestic market but look to the world and expand their businesses, are attracting massive funds."

The newspaper forecasted that the funds raised by Krafton's listing could surpass the previous record set by Samsung Life Insurance (approximately 4.8881 trillion KRW).

Besides Krafton, Nihon Keizai explained that other companies, including HYBE (formerly Big Hit Entertainment), the agency of idol group BTS, are also expanding into the global market rather than sticking only to the Korean market.

The newspaper, citing U.S. market research firm CB Insights, reported that Korea has 10 so-called "unicorn companies"?competitive startups valued at over 1 billion USD (about 1.13 trillion KRW)?surpassing Japan's 6.

Korea's unicorn companies introduced include Krafton, Yellow Mobile, Toss, Musinsa, Socar, and Yanolja.

Nihon Keizai pointed out that "one reason for the fewer large IPOs in Japan compared to countries like Korea is the delayed nurturing of startups that grow significantly before going public," adding, "one cause is the lack of globally oriented entrepreneurs."

The newspaper analyzed that in Japan, since a certain market scale can be secured through domestic business alone and entry into the Tokyo Stock Exchange Mothers market for emerging companies is relatively easy, fewer startups attempt overseas expansion.

Nihon Keizai also evaluated that the shortage of so-called "risk money," investment funds that take risks aiming for high returns, has affected the sluggishness of IPOs among Japanese companies.

Compared to gross domestic product (GDP), the proportion of funds invested in emerging companies is about 0.1%, which is only half of Korea's level, the newspaper added.