The challenges and opportunities for foreign startups entering Japan
Singapore-based smart mobility solutions firm SWAT Mobility also saw a market opportunity in the country, particularly in the areas outside of the main cities such as Tokyo and Osaka.
“Japan is facing issues in transportation due to a declining birth rate and an aging population,” says Masashi Suehiro, country head of Swat’s Japan operations. “Local bus companies face operational losses due to low ridership, which eventually led to many of them halting operations altogether.”
The mobility company offers high-precision route optimization technology that enables the efficient pooling of multiple passengers in high-capacity vehicles. It is running ongoing trials of urban on-demand buses in Niigata city, as well as collaborating with Jupiter Telecommunications, a leading media company in Japan, to offer ride-sharing services for sales employees to get to and from business appointments.
Opportunity for problems
For foreign firms, making the move to Japan is not without its challenges. Much of the information on regulatory guidelines and administrative processes are only available in Japanese. Unless the firm already has employees who speak the local language, this will likely be the company’s first hurdle.
As for SWAT Mobility, its solutions require detailed infrastructural information on Japan’s roads, which means that getting in contact and cooperating with local, prefectural, and city government offices was a necessity.
“Maps and roads in Japan are quite unique, and there are a number of complex traffic regulations,” explains Suehiro. “JETRO helped a lot by introducing us to municipalities, such as helping to organize a meeting with various cities’ governments, to present our on-demand bus technology and its benefits.”
Conviction and patience
Within a year of establishing its Japan entity, SWAT Mobility has been able to onboard four clients and conduct several trials across the country. It has also successfully raised funds in a round led by Global Brain, one of the largest Japanese VC firms.