Feel like sharing? Japan might not be your place.
Once home to the world’s biggest technology drivers in the 1980s, Japan has missed the boat when it comes to expanding its sharing-economy sector. Miles behind the U.S. and dwarfed by China by more than 2,000 to 1, Japan’s sharing economy is also smaller than those of other developed economies, including the U.K. and France.
The companies it does have in this fast-growing area are like Davids to the Goliaths of San Francisco-based Uber Technologies Inc. and Didi Chuxing, the Chinese ride-sharing company with users in more than 400 cities across the country.
Space Market Inc. and Sharingtechnology.Inc are among the more modest success stories produced by Japan.
Space Market, which helps people share room in everything from offices to wedding venues and temples, secured an additional ¥400 million ($3.5 million) in financing last year from investors, including Mizuho Capital Co., and has expanded its listings 10-fold to more than 8,000 since being founded in 2014.
Sharingtechnology.Inc matches people seeking and providing household services, including cleaning, and was listed on the Tokyo and Nagoya stock exchanges in August. A preliminary estimate of operating profit for the 12 months that ended in September showed a sixfold jump from the previous year.
But don’t expect Japan’s sharing economy to start replicating the kind of scale or success that the nation’s big manufacturing exporters have shown in recent years.
Key constraints cited by analysts, entrepreneurs and government officials include a lack of venture capital to support share-economy startups, legal obstacles and worries about security and accidents.
Japanese are more likely to express concern over the safety of sharing services than people in the U.S., U.K., Germany, China, Australia and India, according to a survey by the Ministry of Internal Affairs.
Yusuke Takada, one of just two officials in the government’s Sharing Economy Promotion Office, said many Japanese are still unaware of the sharing economy. A survey in May by PwC of almost 10,000 Japanese found that only 31 percent could recognize a sharing economy service.
While there are no official figures, Yano Research Institute Ltd. estimated the size of Japan’s sharing economy at ¥29 billion last fiscal year, or less than 0.005 percent of gross domestic product.
With a history of sharing through communal living and a more active startup culture, China’s sharing economy was $530 billion in 2016, or 4.6 percent of GDP. The Chinese government forecasts the sector to grow to 10 percent of GDP by 2020.
The Sharing Economy Promotion Office is introducing fledgling firms to legal experts in cases where the service falls into a gray area in the law, and working with regional governments to help sharing-economy services cooperate with their communities.
In a positive for the accommodations market, the Cabinet Office earlier this month approved a new home-sharing law that should help the sector grow further when it takes effect next June.
Yet rather than local startups, so far it’s U.S.-based Airbnb Inc. that has been most aggressive in expanding in home sharing in Japan.
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