As an associate at YJ Capital, I meet many entrepreneurs on a daily basis. I have had discussions with people working in other regions with various backgrounds as I am currently dedicating a lot of my time to seeking investment opportunities in the Asian market. I really enjoy learning their businesses and knowing the market that they are in. But sometimes I feel that I’m not on the same page with local entrepreneurs because the internet environments in Japan (where I’m based) is significantly different than those in Indonesia, for example.
Even the players out there are different. When I first searched for the numbers of big internet players in Indonesia, I had a hard time getting information online. I heavily relied on Google Translate and eventually asked for help from local investors and friends working in the region. This was the fastest and most effective way. (By the way, there are some rankings like Startup Ranking, but I’m not sure of the algorithm behind the scores.)
Experiencing this process, I came to wonder how much information about Japanese internet companies is actually out there. I believe some news are translated into English, but I couldn’t find a lot of updated information on top Japanese internet companies in Google search so I guess not all are well known. Moreover, I’m sure that stories behind some successful companies are not even recognized.
When I talk with people in SEA, I am sometimes asked this question: “Yahoo Japan is the same as Yahoo (in US) right? Why did you change the color of your logo from purple to red?”
Well, it is actually a different company. It is a joint venture between Yahoo and Softbank, which is the major shareholder, and is listed on the Tokyo Stock Exchange. I won’t explain in detail about Yahoo Japan here but it runs a very different business domain from Yahoo.
When discussing future growth strategies with our portfolio companies, I introduce the business models and key success factors of Japanese companies to help them grasp how others have succeeded. It doesn’t contribute to giving them “answers,” but at least we can share the reason why some companies succeeded. So I hope to dig into some key companies in my later posts.
Top listed internet companies in Japan by market cap
I won’t say all listed companies are successful but at least they are successful enough to meet the IPO criteria. As you may see, there are a lot of B2C businesses at the top. I guess the US has more B2B software and server hosting businesses listed.
Breakdown of top listed internet companies by category
Source: TOP Listed Internet Company in Japan by Kanako Honda.
Source: TOP Listed Internet Company in Japan by Kanako Honda.
Many companies are operating several businesses, so it is hard to classify each company to a specific category. I tried to focus on its main business, the one that’s generating the most revenue.
Media businesses are pretty large, but let me note that there aren’t many pure media companies. Since media businesses are easier to build than other types, many started out by operating a website and then developing other businesses as they proceeded. Hence, for some companies, their media business only contributes 30 to 40 percent of their revenue.
Ranking of top companies by profitability
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