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Ready? Fight! A summary of 6 fierce Japanese startup rivalries

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See the original Japanese version of this article If you’re a web startup, chances are you probably have a competitor or two. Maybe more. Here in Japan we are seeing rivals emerge in a number of service categories. Thankfully, with each struggling to stand out from the other, it means that users are most likely to benefit, at least in the short term. I will talk about the major players across six startup categories that have been getting attention here in Japan. Round 1: Stores.jp vs BASE (E-commerce platforms) ¶ I almost wanted to write about just this competition by itself, since both services have experienced rapid growth and the quality of their services is increasing by the day. This is a great example of how intense competition brings better quality product. See STORES.jp in our database See BASE in our database Base: The Japanese freemium e-commerce platform that’s following Shopify’s lead How Stores.jp is helping small businesses in Japan come online Round 2: iQON vs Origami vs MONOCO vs Fril (Smartphone x Fashion) ¶ iQON is media, Origami is commerce, Monoco is a concierge service, and Fril is C2C. Those startups all differ slightly but they share two common…

See the original Japanese version of this article

If you’re a web startup, chances are you probably have a competitor or two. Maybe more. Here in Japan we are seeing rivals emerge in a number of service categories. Thankfully, with each struggling to stand out from the other, it means that users are most likely to benefit, at least in the short term.

I will talk about the major players across six startup categories that have been getting attention here in Japan.

Round 1: Stores.jp vs BASE (E-commerce platforms)

I almost wanted to write about just this competition by itself, since both services have experienced rapid growth and the quality of their services is increasing by the day. This is a great example of how intense competition brings better quality product.

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Round 2: iQON vs Origami vs MONOCO vs Fril (Smartphone x Fashion)

iQON is media, Origami is commerce, Monoco is a concierge service, and Fril is C2C. Those startups all differ slightly but they share two common threads: ‘fashion’ and ‘smartphones’. All have maintained high levels of investor interest. And it is said that this field is about to face a host of new entrants, resulting in even more hype around this space.

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Round 3: CrowdWorks vs Lancers (Crowdsourcing)

The platform concept of these two services differs slightly. However, I feel both have the potential to change the concept of the way people work here in Japan, and that’s what differentiates them from other worker-client matching services.

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Round 4: Coiney vs Rakuten Smartpay vs Paypal

Competition this category is a little more fierce as the players are not all startups. But when I interviewed Coiney I felt that their strategy is not to compete head on with these other payment giants. Check out interview (in Japanese) for more details.

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Round 5: Campfire vs Readyfor vs Countdown (Crowdfunding)

Campfire has gotten a lot of attention so far, but it hasn’t yet resulted in the same kind of impact that we have seen with big overseas players. The first out of the gate in this crowdfunding space was Readyfor, which has differentiated by focusing on social contributions, donations, and NPOs. A critical success factor will be its ability to generate news media exposure.

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Round 6: SmartNews vs Gunosy vs Vingow (News technology)

This field is pretty interesting because the competition depends on technology much more so than in the previously mentioned categories. SmartNews shows its users almost all the same news information, which is different from the other two players. The concept of personalized news is common to Gunosy and Vingow. But Vingow offers users updated information in real-time, different from Gunosy which updates information in batches. Many users might use both services, depending on the occasion.

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I confess, I also wanted to include C2C platforms in this article (such as ticket selling, for example), but I’ll come back to that another time.

Besides those listed above, Japan also has an abundance of camera applications and casual games, but many lack monetization plans and solid business models – so they are less news-worthy in my book. Most of the services listed above have established business models and firm financials, and of course that is a big attraction for investors.

If you’d like to suggest some other hot startup categories or rivalry, please let me know in the comments.

How one Japanese woman created an earring clasp that can never be lost

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Way before the Maker movement, a Japanese woman named Eri Kikunaga created a product that answered a very problem for many women. The product is called Hazurenikui Pierce Catch, roughly translated as ‘hard-to-come-off earring clasp.’ This was back in 2007 when she was only 26 years old. Eri is now the founder of Chrysmela, whose earring clasp has been used by over 100,000 women. The idea for the product came out of Eri’s own personal experience when she lost her earring by accident, and her boyfriend got angry at her as a result. That’s when she drew up the very first design of what the earring clasp would look like. No women is immune to losing earrings, and every time is as sad and dissapointing as the first time. In fact, according to the company’s own survey, 89% of women they questioned have lost earrings in the past. The ear-pierce holders are allergy-proof, using surgical stainless steel, the same sort of material used in tooth fillings. The product requires precision crafting, and other materials such as silver or gold do not work. Within the 5mm diameter device, there are nine different parts. They are each manufactured at dedicated factories and…

chrysmela-holder

Way before the Maker movement, a Japanese woman named Eri Kikunaga created a product that answered a very problem for many women. The product is called Hazurenikui Pierce Catch, roughly translated as ‘hard-to-come-off earring clasp.’ This was back in 2007 when she was only 26 years old. Eri is now the founder of Chrysmela, whose earring clasp has been used by over 100,000 women.

The idea for the product came out of Eri’s own personal experience when she lost her earring by accident, and her boyfriend got angry at her as a result. That’s when she drew up the very first design of what the earring clasp would look like. No women is immune to losing earrings, and every time is as sad and dissapointing as the first time. In fact, according to the company’s own survey, 89% of women they questioned have lost earrings in the past.

chrysmela-makingofThe ear-pierce holders are allergy-proof, using surgical stainless steel, the same sort of material used in tooth fillings. The product requires precision crafting, and other materials such as silver or gold do not work. Within the 5mm diameter device, there are nine different parts. They are each manufactured at dedicated factories and put together by hand in the final process.

The very first version of the product was released back in July of 2008 and after five years, there are over 700 stores and 100 online shops that sell it. Eri explained about how her invention gained among the public:

The [positive] sales results on the online shops helped convince offline stores to coopeprate. There was an online jewerly shop on Rakuten and they believed in our product and began selling it. The conversion rate was as high as 10%. Our product began to appear in the general rankings and jewerly rankings on Rakuten and this helped us gain exposure to other potential partners. 94% of users who have bought our ear-pierce holder were satisfied with the product, and that helped to bring our product offline.

Chrysmela’s ear-pierce holder was able to hold up to 8 kg in a performance test. The pin portion of an earring can vary from 0.7 to 0.9 mm, but the holder supports 0.6 to 1.1 mm. So one pair would support most earrings that you might have. The product is great, but the price is a little steep at 4,980 yen (about $49), in some cases just as much as the earring it’s holding. The pricing was the biggest problem when the company was trying to find sales partners. Eri explains:

In the jewerly industry, the executives are mostly men. They don’t have a clue about how often ear-pierces fall off. I was really surprised when they said, “If women do not lose their earrings they will not buy another.” Even if women lost their earrings it doesn’t guarantee that they will buy the same one, and because they fall off women do not spend much money on ear-pierce. They would rather buy something cheap because there is always risks of losing them, and this had to be changed.

And she did indeed bring about a change. Chrysmela’s product changed the conception of an earring from an expendable that you’re likely to lose, to a precious item that you will wear for a long time, without the anxiety that you might lose it. The clasp is still being enhanced, with the latest iteration being 0.5mm or 10% smaller than the previous version.

In Japan, we have another word similar to ‘Makers’ called Mono-Zukuri. Mono-zukuri is the output of many impressive technologies in this country, and to see the Eri create an everyday product of such value is really amazing. Chrysmela’s earring clasp is available for purchase on Chrysme.la for overseas readers.

In Japan, mobile lookbooks help take the stress out of shopping

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Photo via iQon Japanese women are known for being fashion enthusiasts who love all things Kawaii. Fashion ‘lookbooks’ or coordination services are becoming an essential part of enjoying fashion in the digital age, especially in this corner of the world. One popular service in this space is fashion coordinating site iQon, which has over one million monthly users. Another popular fashion e-commerce service Zozotown has published its own original lookbook content, created by store staff and covering a variety of brands. And long before that, fashionistas have expressed themselves through their styles, uploading photos of daily look on their blogs. I recently came across another fashion coordinating site called Dre’Che, a service operated by Kakaku.com. Kakaku Group runs a range of websites including Japan’s Yelp equivalent, Tabelog, and price comparison site Kakaku.com. Its Dre’che service was launched in August of 2010, four months after iQon was released.   The concept of the site is very similar to that of iQon, with the goal of making it easier for users to discover cool fashion items. On Dre’che, users first answer questions about their age, height, favorite magazine, and what kind of clothes they wear. After answering these initial questions, they can…

iQon-looksPhoto via iQon

Japanese women are known for being fashion enthusiasts who love all things Kawaii. Fashion ‘lookbooks’ or coordination services are becoming an essential part of enjoying fashion in the digital age, especially in this corner of the world.

One popular service in this space is fashion coordinating site iQon, which has over one million monthly users. Another popular fashion e-commerce service Zozotown has published its own original lookbook content, created by store staff and covering a variety of brands. And long before that, fashionistas have expressed themselves through their styles, uploading photos of daily look on their blogs.

I recently came across another fashion coordinating site called Dre’Che, a service operated by Kakaku.com. Kakaku Group runs a range of websites including Japan’s Yelp equivalent, Tabelog, and price comparison site Kakaku.com. Its Dre’che service was launched in August of 2010, four months after iQon was released.

Dreche-app-closet Dreche-app-coordinate

The concept of the site is very similar to that of iQon, with the goal of making it easier for users to discover cool fashion items. On Dre’che, users first answer questions about their age, height, favorite magazine, and what kind of clothes they wear. After answering these initial questions, they can browse looks that other users have created and then like or comment on them, or bookmark them for later reference.

Dre’Che released its iPhone app back in June of 2012, allowing users to easily take photos of items they own, and then use them to create their own looks. The app had over 7,000 items registered at its initial launch, thus offering a lot of value to first-time users who have not yet added/uploaded pictures of clothes from their own closet. Interestingly, this feature of creating looks is only available on smartphone. And as far as I can tell, there is not much interactions between users.

Bemool

Another service, Bemool, takes a different approach. The site, which launched in July of 2012, has registered female stylists who pick out clothes for users. Users can answer questions about fashion tastes, including size, occasion, and budget. Subsequently they receive fashion coordination ideas from a stylist via email. This proposal process costs 3,000 yen, and then an additional 2,000 yen for each proposal. Bemool also provides a service to have the items shipped to home, and that’s available for about 30,000 yen.

With the spread of mobile phones, online shopping has become an everyday activity for many Japanese users. However, many e-commerce websites remain just a gigantic collection of products, leaving many consumers with the challenge of finding something they like. Fashion lookbooks remove this hassle, helping users discover great clothes.

In the mobile market, there are no real borders. And other global players fighting for user mindshare in Japan and abroad include Pose and ZooLook. It will be interesting to see who will win out in this cut-throat war.

 

Japanese fashion startup Muse & Co raises $3.4 million

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See the original story in Japanese. Here’s more news from Japan’s fashion commerce space. Apparel-focused, flash marketing startup Muse & Co has announced that it has raised series B funding worth 350 million yen, or about $3.4 million. Investors include Itochu Technology Ventures, Mitsubishi UFJ Capital, and Infinity Ventures Partners (IVP). According to IVP’s managing partner Masashi Kobayashi, this round brings the total money raised by the startup to a sum of approximately 500 million yen ($5 million). Previously, IVP invested in the startup back in May of 2012. Consumers love fashion startups To see a seed-stage startup fundraise such a huge amount, it reminds us that there’s a real trend emerging at the intersection of fashion, e-commerce, and smartphones. Some of our readers will remember, for example, mobile commerce startup Origami also raised about the same amount last month. Muse & Co is a members-only flash sale site that gives users a substantial discount off the market price for a limited time. In Japan, there are some similar sites in this space. Gilt Groupe has been operating a joint venture with Softbank since 2008. Other competitors include Glamour Sales, Brands for Friends, and Monoco. According to startup’s CEO Hirotake…

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See the original story in Japanese.

Here’s more news from Japan’s fashion commerce space. Apparel-focused, flash marketing startup Muse & Co has announced that it has raised series B funding worth 350 million yen, or about $3.4 million. Investors include Itochu Technology Ventures, Mitsubishi UFJ Capital, and Infinity Ventures Partners (IVP).

According to IVP’s managing partner Masashi Kobayashi, this round brings the total money raised by the startup to a sum of approximately 500 million yen ($5 million). Previously, IVP invested in the startup back in May of 2012.

Consumers love fashion startups

To see a seed-stage startup fundraise such a huge amount, it reminds us that there’s a real trend emerging at the intersection of fashion, e-commerce, and smartphones. Some of our readers will remember, for example, mobile commerce startup Origami also raised about the same amount last month.

Muse & Co is a members-only flash sale site that gives users a substantial discount off the market price for a limited time. In Japan, there are some similar sites in this space. Gilt Groupe has been operating a joint venture with Softbank since 2008. Other competitors include Glamour Sales, Brands for Friends, and Monoco.

According to startup’s CEO Hirotake Kubo, Muse & Co targets the so-called ‘F1 layer’ in Japan (female users in their 20s and early 30s), thus differentiating from conventional competitors. In terms of differentiation from similar smartphones services, they expect to showcase items in the casual fashion category, which may be not so sophisticated but better suited to wearing on a day-to-day basis.

Over $500,000 in monthly sales, 70% traffic from mobile

Muse & Co sells merchandise on commission and has no inventory stocked at all. They showcase clothes from three brands every day, and in total about 30 new items are sold every day. The duration of the flash sale is usually about seven days, but most items sell out on the first day. Their flash marketing starts at 8pm every day, the peak time for user traffic.

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Kubo explains that the site’s monthly revenue has reached around 50 million yen, with 50% coming from mobile, and 20% from the smartphone app. They’ve never made any promotion efforts for smartphone users, so it’s not unlikely that these access metrics (in terms of mobile/desktop ratio) are common for most e-commerce sites in Japan.

A good start

Muse & Co was established back in February of 2012. The startup’s founder, Hirotake Kubo, previously worked at global consulting firm AT Kearney, where he has been conducting due diligence on the apparel industry for five years.

From my experience seeing the apparel industry, I wanted to help domestic fashion brands solve the problems they’re facing. Beyond that, I also want to contribute to the strengthening of our economy.

Currently Muse & Co is 20-person team including 5 merchandising staffers. They have acquired approximately 200,000 users since launch, and are hoping to surpass 1 million users in the near future.

See how one Japanese fashion company has mastered digital marketing

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As far as digital efforts in the fashion industry goes, there is an unfortunate lack of innovation in Japan. Even the more enthusiastic brands have only gone as far as releasing dedicated mobile apps for customer loyalty. But I recently stumbled upon a Tokyo-based company called Ceno which might be an exception to the digitally challenged status quo in the fashion industry. Ceno operates seven different lines of clothing, with one of the most famous brand being Vanquish. Its main customers are men in their early twenties, but the brand has managed to even attract teenagers and men in their forties. Vanquish received a lot of attention recently for an in-store collaborative project called Vanquish Venus, created in cooperation with Team Lab, a local organization famous for their digital creativity. Vanquish installed something called ‘TeamLabHanger’ at their stores, and when an item on a hanger is removed from the rack, it triggers video and audio on a screen overhead. The idea here was to bring in customers who would normally just walk past the Vanquish store, and for those already inside it would show them different ways to coordinating clothes. The project recruited famous female artists and celebrities to model…

Vanquish: in-store manga camera
Vanquish: in-store manga camera

As far as digital efforts in the fashion industry goes, there is an unfortunate lack of innovation in Japan. Even the more enthusiastic brands have only gone as far as releasing dedicated mobile apps for customer loyalty. But I recently stumbled upon a Tokyo-based company called Ceno which might be an exception to the digitally challenged status quo in the fashion industry.

Ceno operates seven different lines of clothing, with one of the most famous brand being Vanquish. Its main customers are men in their early twenties, but the brand has managed to even attract teenagers and men in their forties. Vanquish received a lot of attention recently for an in-store collaborative project called Vanquish Venus, created in cooperation with Team Lab, a local organization famous for their digital creativity. Vanquish installed something called ‘TeamLabHanger’ at their stores, and when an item on a hanger is removed from the rack, it triggers video and audio on a screen overhead.

The idea here was to bring in customers who would normally just walk past the Vanquish store, and for those already inside it would show them different ways to coordinating clothes. The project recruited famous female artists and celebrities to model in the videos, and it currently features Chiaki Ito from the popular pop group AAA. To keep things fresh, videos are renewed every two months with different models.

But perhaps the most notable model of all was virtual star Hatsune Miku (see video below), who attracted not-so-fashion-savvy netizens to the Vanquish brand, thus expanding its fan base a little beyond who the audience they normally sell to. Ceno even ended up creating an orginal Vanquish song by Hatsune Miku under the supervision of music label Karent.

There are also manga camera machines installed at three Vanquish stores (pictured above), including the Shibuya and Ikebukuro locations. These original purikura machines convert photos into unique manga-like images, which are then uploaded to the Vanquish Facebook page. The customers are then brought to the Facebook page where the company hopes they will click the ‘Like’ button [1].
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Ceno has already expanded to Hong Kong, Singapore, Taiwan, China, and even Australia. Its next project is the launch of a Vanquish ecommerce site for BangKok, scheduled for this April. The brand is pretty well received by consumers around Asia, as the pricing is not too expensive. After going through different vendors to reach overseas markets, many Japanese brands end up being high-priced luxury brands (whether they want to or not). Ceno has partnered directly with different vendors in locals market to ensure this doesn’t happen.

The company has also started another brand called Gonoturn which sells unique hats and facial masks that mimic cute animals. It looks like a fun company too, as you can see below. Here the employees are pulling off another Harlem Shake video while wearing their own products.


  1. In case you were wondering, Ceno began this manga camera project before the popular Manga Camera app appeared on the app store.  ↩

The slick new iPhone app that brings Japanese fashion trends to Asia

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See original story in Japanese Tokyo-based app developer YoutFit recently released an application called Japan Style, with the aim of bringing Japan’s latest fashion trends to the world in a magazine style. Its content will be updated every month, and its target readership will be the Asian region. So far it’s available in English and traditional Chinese. In its first edition it features products from Zozotown.com, the global version of Japan’s largest fashion e-commerce site. The app will show you fashionable shops, beautiful scenery, highly-rated restaurants, and other spots where you can experience Japanese youth culture. New content every month is not very frequent, but they might pick things up a bit in the future as they step up their marketing. Japan Style thinks that users can even use this application as a mobile travel guidebook. They want the app to be an information hub that introduces Japanese fashion spots to foreign visitors in Japan. The app is available for free over on Apple’s App Store.

See original story in Japanese

japanstyle

Tokyo-based app developer YoutFit recently released an application called Japan Style, with the aim of bringing Japan’s latest fashion trends to the world in a magazine style. Its content will be updated every month, and its target readership will be the Asian region. So far it’s available in English and traditional Chinese.

In its first edition it features products from Zozotown.com, the global version of Japan’s largest fashion e-commerce site. The app will show you fashionable shops, beautiful scenery, highly-rated restaurants, and other spots where you can experience Japanese youth culture.

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New content every month is not very frequent, but they might pick things up a bit in the future as they step up their marketing. Japan Style thinks that users can even use this application as a mobile travel guidebook. They want the app to be an information hub that introduces Japanese fashion spots to foreign visitors in Japan.

The app is available for free over on Apple’s App Store.

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Rakuten to take 32.5% stake of fashion commerce site Stylife for $5.37M

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Japanese e-commerce giant Rakuten (JSD:4755) announced today it would acquire Stylife (JDS:3037), one of Japan’s largest fashion e-commerce sites. Stylife is currently listed on the JASDAQ market, a stock exchange for emerging companies, but will be delisted because Rakuten will take 32.5% of the fashion site’s stakes. Two of Stylife’s largest shareholders Burnedest Japan (female clothing) and Parco (a fashion department store) have approved of the acquisition, and will give the shares over to Rakuten. Stylife was founded in May of 2000 as a subsidiary of Japan’s trading coporation Sojitsu [1]. It has been engaged in fierce competition against many rivals such as Zozotown, Fashion Walker, and Magaseek for some time now. Zozontown is leading the pack so far, although Fashion Walker was acquired by Japan’s largest clothing company World Co., Ltd in 2011. NTT DoCoMo recently announced it would subsidize Magaseek in order to expand the telco’s e-commerce revenue stream. It used to be Nichimen when Stylife was launched.  ↩

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Japanese e-commerce giant Rakuten (JSD:4755) announced today it would acquire Stylife (JDS:3037), one of Japan’s largest fashion e-commerce sites. Stylife is currently listed on the JASDAQ market, a stock exchange for emerging companies, but will be delisted because Rakuten will take 32.5% of the fashion site’s stakes. Two of Stylife’s largest shareholders Burnedest Japan (female clothing) and Parco (a fashion department store) have approved of the acquisition, and will give the shares over to Rakuten.

Stylife was founded in May of 2000 as a subsidiary of Japan’s trading coporation Sojitsu [1]. It has been engaged in fierce competition against many rivals such as Zozotown, Fashion Walker, and Magaseek for some time now.

stylife_screenshot

Zozontown is leading the pack so far, although Fashion Walker was acquired by Japan’s largest clothing company World Co., Ltd in 2011. NTT DoCoMo recently announced it would subsidize Magaseek in order to expand the telco’s e-commerce revenue stream.


  1. It used to be Nichimen when Stylife was launched.  ↩

Japanese fashion coordination site iQON raises $3.2M, will boost marketing efforts

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See original story in Japanese Vasily, a Tokyo-based startup which runs online fashion coordination service iQON, announced today that it has fundraised a total of 300 million yen (approximately $3.2 million) from Globis Capital Partners, Itochu Technologuy Ventures, and GMO Venture Partners. This is the second round of funds following the previous series A funding of 140 million yen ($1.5 million) in May of 2011. The iQON service allows you to combine clothing and accessories online and share fashion coordination ideas with other users. Each item has a direct link to fashion e-commerce sites where you can purchase it, and the startup will generate revenue from partner sites using an affiliate model. More than 300,000 coordinated outfits have been registered since the service launched in April of 2010, and users are bookmarking their favorites more than a million times a month. The startup introduced its iOS app last February (and an Android app is now also available) which really took off. It even helped some of their partnering e-commerce sites make more than 20 million yen monthly sales through the affiliate traffic. The company focused on service development in the series A phase, but will be intensifying branding and marketing…

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See original story in Japanese

Vasily, a Tokyo-based startup which runs online fashion coordination service iQON, announced today that it has fundraised a total of 300 million yen (approximately $3.2 million) from Globis Capital Partners, Itochu Technologuy Ventures, and GMO Venture Partners. This is the second round of funds following the previous series A funding of 140 million yen ($1.5 million) in May of 2011.

The iQON service allows you to combine clothing and accessories online and share fashion coordination ideas with other users. Each item has a direct link to fashion e-commerce sites where you can purchase it, and the startup will generate revenue from partner sites using an affiliate model. More than 300,000 coordinated outfits have been registered since the service launched in April of 2010, and users are bookmarking their favorites more than a million times a month.

The startup introduced its iOS app last February (and an Android app is now also available) which really took off. It even helped some of their partnering e-commerce sites make more than 20 million yen monthly sales through the affiliate traffic. The company focused on service development in the series A phase, but will be intensifying branding and marketing efforts from now on.

When discussing fashion e-commerce sites in Japan, we can’t help but mention Zozotown (listed on the Tokyo Mothers exchange since 2007). The site is a partner for Vasily rather than a competitor because the two companies have different business models and won’t compete and/or conflict. Vasily’s CEO, Yuki Kanayama, says they will keep working closely with their good partner Zozotown in the future.

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Vasily Inc.’s CEO: Yuki Kanayama