Crowdfunding has many advantages that it makes it difficult to list them all. So this article focuses on why this is an excellent opportunity to do, why it is gaining in popularity, and what kinds of products are successful in 2020.
What Is the Crowdfunding?
Crowdfunding is the idea of the “crowd” participating to raise “funds” for a project. Investopedia defined it as “the use of small amounts of capital from a large number of individuals (called backers) to finance a new business venture”. Through social media and a specialized website, an individual can raise funds and launch their product(s) at a low cost.
There are three types of crowdfunding: donation, purchase, and investment; with subcategories called equity-, loan- and association-based crowdfunding.
This concept started in Japan with the READY FOR? platform, launched in 2012. Even if the number of campaigns grows at a slower pace than in the United States, it becomes more and more popular, with many successful campaigns.
Why Is Crowdfunding a Good Opportunity?
1 An occasion to launch a product without asking for regular lender support
2 A huge and growing marketplace, not only in Japan
3 Supported by a community and can build your network faster
4 Improve a product thanks to feedback
Can contribute to the project they like, to new, exciting and innovative products
Can be creative and reach the customer directly, have feedback
Pre-order the product before the majority knows about it
Have customers before selling the product, generate publicity
Product at a lower price, low investment, low risk
Launch the product at a lower price, with less risk (charged only if the target is reached)
To understand better the characteristics of crowdfunding in Japan, here are some 2019 statistics collected by Statista.
Three Top Platforms in Japan
There are big international platforms such Indiegogo, Kickstarter, Gofundme, etc., but it is better to choose a Japanese one.
The three main platforms below are a good bet when targeting the Japanese market.
The Green Funding team has patience when investing in projects and has the power to attract determined entrepreneurs who are willing to be creative and disrupt a field or an industry. Investors can choose to invest in the seed stage, they take risks but they also take the campaign’s success very seriously. Not just hosting financing projects, they also provide marketing support for a great variety of products (gadgets, food, CDs and DVDs, books, sports, or social contributions).
The average amount of support is 3.4 million yen, the highest level in the industry. However, they are less concerned by the amount of funding, which is one of the reasons why they became the number one in success rate, and an excellent platform for crowdfunding.
Be aware that Makuake is made specifically for a Japanese company and that it is not a good choice to start with (you have to list your products and concepts in the campaign).
This platform is ready to support creative entrepreneurs to enter the Japanese market Their concept is to raise the funds necessary for 10,000 yen only via the Internet, for creative projects such as music, books, art, movies, or products.
Check our article about the top three crowdfunding platforms in Japan for more details about each platform.