Korean tech firms seek Japanese premium

South Korea’s popular navigation app Kimgisa last month started its pilot service in Japan, but for most Korean mobile users, there may be no way to check out the Japanese version.

In a market, widely called a “tomb” for Korean companies, especially IT firms, the app has decided to conceal its nationality and take a new Japanese name instead of Kimgisa ― which means “Driver Kim” in Korean. Kimgisa, launched in 2011, has become one of the top-selling navigation apps in Korea. Daum Kakao recently acquired its developer Loc & All for 62.6 billion won ($56.2 million).

“Citing the anti-Korea sentiment among Japanese consumers, local partners advised us to promote the app as a Japanese service,” said Loc & All CEO Park Jong-hwan.

“We won’t reveal even the Japanese name to the Korean media.”

Kimgisa is mimicking the way Naver’s mobile messenger LINE has made inroads into the Japanese market where even big companies like Samsung and LG have yet to gain a firm footing.

After the app’s dismal failure on its home turf dominated by KakaoTalk, Naver set up Line Corporation headquartered in Japan in 2013 to appeal to Japanese and global users.

Now the service is the most popular mobile messenger in Japan and other key Asian nations, making up more than 30 percent of Naver’s total revenue. But still it is rarely known outside Korea that LINE is 100 percent owned by the Korean search giant.

“The Japanese premium would help smaller firms gain a footing not just in Japan but also in other countries. More Korean starts-ups are likely to follow suit,” said a local start-up owner on condition of anonymity.

Industry watchers, however, point out that ditching nationality would not be very helpful for big well-known companies.

Samsung Electronics in April launched its new flagship smartphone Galaxy S6 and its Edge variant in Japan after removing its corporate logo on the phones. But the unprecedented experiment was not enough to appeal to picky Japanese customers, considering the lukewarm sales.

“Removing the logo cannot be a solution. Big companies need to come up with software features that can appeal to different tastes in different markets,” said another source.

By Lee Ji-yoon (jylee@heraldcorp.com)