K-Startups Lead Japan's Retail Innovation

Innovation is born when familiar elements around us are combined in unfamiliar ways, or when fundamental questions that were taken for granted are re-examined from their roots. On the 10th, the ‘D.CAMP Startup OI Tokyo: Retail DX’ event, where nine Korean startups met with Japanese retail giants KDDI and Lawson at KDDI's Shibuya office in Japan, served as a platform demonstrating the reality of such innovative potential. Since the pandemic, the Japanese retail market has shown a rapid recovery, fueled by a surge in tourists and the weak yen effect. In particular, the convenience store market has recorded positive growth for three consecutive years, reaching a robust size of approximately 11.7 trillion yen as of 2023. While the number of stores has stagnated, the average transaction value per customer has steadily risen, indicating a focus on qualitative growth. However, labor shortages due to low birth rates and an aging population, coupled with inflation, have presented structural challenges to the Japanese retail industry, making digital transformation (DX) no longer an option but a necessity. This is the backdrop against which the adoption of advanced technologies such as electronic shelf labels (ESL), AI-powered unmanned solutions, and retail analytics is accelerating. It is precisely at this point that innovative technologies from Korean startups shine. A KDDI representative commented, "Korean startups' advanced technologies have high affinity with the Japanese market," while Lawson also expressed anticipation, stating, "We gained new insights in retail DX areas such as energy saving and automation." This suggests that Korean startup technology could become a crucial catalyst in the future of Japanese retail, where convenience stores are evolving beyond simple points of sale into core platforms for urban infrastructure. This meeting went beyond simple networking, leading to discussions about concrete business collaborations. Proposals for service modules required by Lawson and possibilities for retail data-linked marketing collaborations with KDDI were explored, foreshadowing tangible outcomes. D.CAMP plans to continue supporting Korean startups' entry into the Japanese market by organizing additional programs in the entertainment and fintech sectors in September and November. Within Japan's active CVC (Corporate Venture Capital) market, a complementary relationship is forming where Korean startups seek concrete business opportunities, and Japanese large corporations gain innovative technologies and ideas to solve their pressing challenges. Now that retail DX has become an irreversible trend, it remains to be seen what new momentum will be injected into the retail industries of both countries as the technological prowess of Korean startups meets the market dominance of Japanese large corporations.