In recent years, Japanese startups have been increasingly expanding to South East Asia, looking to tap into the huge potential of the region’s markets. With a population of over 685 million, the region is highly attractive to ambitious startups, providing them with sizeable markets and access to rapidly growing economies.
In addition, the region’s diversity allows startups to easily adapt their business models to suit different markets. The Regional Comprehensive Economic Partnership (RCEP) has played an important role in creating the world’s largest free-trade area covering 30 per cent of the world’s population, reducing trade barriers within the region and across the globe.
This has made it easier for Japanese startups to enter South East Asian markets and take advantage of the region’s growth potential.
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Japanese startups have turned their attention to the South East Asia region to take advantage of these opportunities. The Rainmaking Expand: South East Asia programme has provided Japanese startups with the necessary expertise and networks to explore and target commercial opportunities in multiple locations. Companies such as IDDK and HACARUS have used the programme to gain access to a broader network of contacts, helping them to refine their approach to target markets and increase their success.
IDDK, a Japanese space tech company, is an example of a startup exploring the niche market of space technology in South East Asia. IDDK is leveraging its patented Micro Imaging Device technology, which replaces conventional microscopes, to target pharmaceutical, agriculture and beauty companies’ R&D divisions. While building up their solution within the Japanese market, they wanted to explore potential research partners, potential clients, and investors within South East Asia.
“We thought that the demand for our technology would be more prominent in countries that had not experienced the benefits of the International Space Station. Therefore, we thought it was important to expand into South East Asia,” shared Hiroaki Shibata from IDDK Co., Ltd.
By leveraging the expertise and network from the Rainmaking Expand programme, IDDK has identified Singapore as an important market for them to focus on, especially in relation to the opportunities in the healthtech sector. Through the learnings gained in the programme, the team at IDDK was able to negotiate and sign an MOU with Singapore Space & Technology Ltd (SSTL) for a strategic partnership to promote the use of space environments for biological experiments.
South East Asia has a growing middle class of consumers with increasingly high purchasing power driving up demand in multiple sectors. This provides a great opportunity for Japanese startups to establish a foothold in the region and tap into the potential of the markets by plugging their services into multiple industries.
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One startup leveraging these opportunities is HACARUS, a provider of AI-based solutions in sparse modelling to automate tedious and difficult inspection tasks. With a diverse workforce and ethos focused on a global perspective, the company has seen success in the region, particularly when working with partners who understand the ups and downs of implementing AI into a business line.
HARACUS identified South East Asia as an important and natural fit for their expansion, with similarities in complex manufacturing and quality focus, while experiencing high growth and plenty of need for their solutions to automate tedious and difficult inspection tasks.
HACARUS gained access to a broader network of connectors, consulting companies, logistics, and manufacturing companies after joining the Rainmaking Expand: South East Asia programme and leveraged this to evolve and refine their approach to their various target markets for higher success.
“We recognised that different parts of our value proposition resonate in different markets — in Singapore, we emphasise the energy and physical space-saving aspects, and in Malaysia, we focus on the time and quality throughput increases that our solutions bring,” stated Adrian Sossna, Head of Global Sales Group from HACARUS INC.
After connecting with a variety of key players, HACARUS is moving into the negotiation stage for multiple projects with customers in Singapore, Thailand, and Malaysia with the hopes of many more to come in 2023.
South East Asia offers a great opportunity for Japanese startups to expand. With a large population, supportive governments, and low costs of entry, the region is an attractive proposition for ambitious startups looking to tap into the potential of its markets. Japanese startups are increasingly taking advantage of the region’s opportunities, propelling the growth of their businesses and strengthening Japan’s regional influence.
Japanese Startups interested in entering South East Asia can now register for JETRO’s X-Hub Tokyo Singapore Course, run by Rainmaking Expand. Applications close July 24, 2023.
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