Korean Startup Establishes Corporation and Expands Sales Network in Japan
Targeting Large Enterprise SaaS Market... Increasing Demand for Digital Transformation
Domestic artificial intelligence (AI) startups have begun targeting the Japanese market. They have established local subsidiaries and expanded their sales networks, using Japan as a global business outpost. With a large service-as-software (SaaS) market centered around major corporations and government support for corporate digital transformation, Japan is attracting attention as a land of opportunity.
According to the IT industry on the 11th, Pion Corporation, the developer of the AI video production solution 'V-Cat,' recently established a subsidiary in Tokyo, Japan. This is their second overseas subsidiary after San Jose, USA. They are currently discussing solution supply with three Japanese marketing platform companies. They plan to appoint a local subsidiary head and build a sales network in the second half of this year. Jeong Beom-jin, CEO of Pion Corporation, said, "Even conservative Japan is quickly adopting AI, which has a clear effect on productivity improvement, in digital transformation," adding, "Unlike overseas markets where it is difficult to target large corporations, Japan has an open enterprise market."
Legal AI solution company BHSN also plans to enter the Japanese market. After establishing a local subsidiary at the end of last year, they are meeting potential clients such as law firms and formulating market strategies. They also support the Japanese language service of 'Alibi,' which organizes contracts or legal documents consisting of dozens of pages in seconds. Wadle, which recommends products using AI in online shopping malls, recently conducted market research in Japan. Given the large Japanese retail market, they plan to enter locally by the end of this year or early next year.
Companies that entered Japan early are showing visible results. AI company Allganize generates about half of its total sales from Japan. Their clients include major corporations such as Mitsui Sumitomo Bank, one of Japan's three major banks, KDDI, the second-largest telecommunications company in Japan, and Nomura Securities. They provide 'Ali,' a solution that can create AI-based customized apps such as report summarization and data analysis. After confirming market potential, the company moved its headquarters from Houston, USA, to Tokyo, Japan, in 2022. They plan to pursue a Japanese stock listing next year.
Superb AI, which established a Japanese subsidiary last year, has also secured significant clients. After supplying an AI data management platform to Nippon Steel, they partnered with Toyota in May. They signed a supply contract for the 'Superb Platform,' which supports everything from data labeling to post-processing. Data labeling involves tagging data so that it can be used for AI training. Channel Corporation, which operates the AI messenger 'Channel Talk,' generates 25% of its sales from Japan. They have secured more than 17,000 clients, including famous Japanese fashion brands such as Baycrew's and Beams.
AI startups are targeting Japan because the market is large. Unlike domestic conglomerates that internalize IT technology, the use of AI technology in SaaS form is widespread. The Japanese SaaS market was worth 1.4 trillion yen (approximately 12 trillion won) last year, six times larger than Korea's. Although Japan has a document-based work culture, it is characterized by a high desire for productivity improvement due to labor shortages caused by aging. Furthermore, government promotion of digital transformation (DX) has increased opportunities. The Japanese government provides IT-related tax benefits such as DX investment promotion tax incentives to companies. Market research firm Fujikimura General Research Institute forecasts that Japan's digital transformation investment will increase from 2.7277 trillion yen (approximately 23 trillion won) in 2022 to 6.5195 trillion yen (approximately 56 trillion won) by 2030.
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