Taking advantage of modern technology, Zenrin is providing the next generation of maps.
Japan is the oldest country in the world, with its population decreasing every year. This creates a series of challenges, to hire new graduates and a smaller domestic market to sell to. On the other hand, it's also a big opportunity for companies to develop technologies that can assist this elderly population. What are some of the impacts, some of the challenges and opportunities that Japan’s unique demographic shift is creating for Zenrin?
Zenrin has been providing map data for car navigation as one of its core business segments. The impact would be on the car navigation business. This is because if the population declines and the number of people riding in cars decline, it will have a big impact on the number of navigation units to be shipped. In fact. there has not been any direct negative impact on the other business segments.
Thirty years ago, we were providing paper maps. If we continued to provide only paper maps, the decline in the population would have made a big impact, but now we are providing a database with a huge amount of information for various uses. Zenrin is not a company simply providing maps but is providing location information in the form of a database. Such an enormous database can create opportunities to explore new businesses. For such reasons, I believe that we still have more opportunities to deep dive into the Japanese market.
There have been a lot of free maps available to the public which anyone can access as a base map. Even so, what is important is the additional value on top of such a base map. That's what Zenrin is providing.
At the core of your business, there's the need to add value to these traditional maps that are available to all. Investment into mapping services has been very popular for tech giants like Google and Apple who have been mapping almost every street corner worldwide. How can a company of your scale compete in front of these industrial giants? What's your differentiator in a market that is so crowded with these big tech companies?
When it comes to maps, there are many usages. One of our competitive advantages is that we own databases with additional values for accommodating those usages. For example, one of our core products called Residential Map contains building names and residents’ names of every building and house nationwide. Such a detailed map is useful because of the complicated addressing system in Japan. Whereas, maps with such detailed information do not exist in a country like the USA because the addressing system in the USA is based upon street names so finding the location of each house is not that difficult. Depending on the uniqueness of each region and how maps are used, the necessary contents of maps would be different. Maintaining diverse and detailed information that can flexibly accommodate various usages is what makes Zenrin different from others.
Since the Abe administration of 2013, the government has been pushing really hard for regional revitalization, bringing economic activity back to Japan’s more rural areas. How can your company provide solutions for the revival of Japan’s beautiful rural areas?
As a map provider, we have alliances with a lot of local governments and private companies. To accelerate the revitalization of each region, we have to understand the characteristics of each region and adapt to those. Local governments are facing challenges regarding DX, so we are forming a partnership with those local governments and looking at how we can contribute using our map data.
We also started partnering with local governments in the field of tourism. One initiative we started is a service in Nagasaki for the pilot of a tourist-type MaaS (Mobility-as-a-Service) project. We are proceeding with this kind of project by signing a comprehensive agreement with each municipality. In Japan, MaaS activities are not led by the central government, but each of the local governments are taking the initiative and many companies are participating in each region. Zenrin is helping individual projects on how to revitalize the tourist industry of each region by taking a bottom-up approach.
Have you ever thought about exporting these systems to emerging countries?
We can, of course, export our technology overseas. On the other hand, each country has its own rules, and when a foreign company, like us, aims to get into a mapping business abroad, various regulations can apply. Therefore, it is critical to find local partners that fully understand such rules and our company philosophy.
Could you quickly run us through your business and the solutions that you provide for CASE technologies?
CASE is bringing drastic changes to the automobile industry. Zenrin is engaged in developing high-precision map data for autonomous driving and services for connected environments. While Zenrin has the largest market share in providing map data for car navigation in Japan, for electric vehicles, we are providing location information of EV charging stations and highly accurate elevation and curvature data for calculating eco-friendly routes.
Your company also caters to the retail sector in the sense of providing mapping services, or perhaps better said, databases, to certain retail stores and retail locations. How exactly do you drive retail sales through maps?
One example is area marketing. One of our targets is small shops which account for 80% of the GDP in Japan. These small shops do not have enough budget, so with a reasonable fee, we are providing a package service for their marketing activities as one of our DX tools.
It's a service that shop owners can use to make paper leaflets by themselves and analyze the target areas, using map data and demographic information, for posting their leaflets in. This service is based on subscription where the owners can access our latest map data by paying a monthly fee.
What is your point of view of your company on privacy issues
The private information protection law has been in place for years in Japan, and it's becoming stricter. Our Residential Map contains privacy information, but we are collecting information from the nameplate posted on the gate of each house, or address information which is also publicly available. Such information is provided based on opt-out policy. If we partner with a company that owns private information, we would use an opt-in for that.
There are a huge number of applications that mapping services and mapping data can cater to. As you diversify into more applications, you attract new clients in the automotive industries, clients in retail, small shops, global governments, etc. How do you ensure that you're knowledgeable to cater to each of these different segments, and what is the importance of creating partnerships, of creating alliances, in order to cater for these different segments?
We are shifting from being a mapping company to a location information provider. In order to satisfy customers with diverse needs, we are actively partnering with companies in different business segments to supplement our technologies and services.
Customers have different priorities such as data freshness or data accuracy. What is important for a mapping company is to have the capability to deliver fresh and accurate data at the right time. Even if it's a small retailer or a large company, we should be delivering map data that can accommodate all those needs.
We have a platform called “Zenrin Information Platform (ZIP),” a mechanism that enables us to develop a database using all collected information, and edit and deliver the database for each product and service. With ZIP, we are seeking to serve various customers’ needs while reducing cost.
Also, we are aiming to create a “library” to manage the data from the real world so that our data can be accessed and utilized anywhere, anytime, and by anyone.
We're differentiating ourselves from competitors by providing fresher and more accurate data. Our mission is to provide unparalleled map data; i.e. when people start using it, they won’t be able to live without it.
You have subsidiaries and related companies within Europe. You also have Abalta Technologies, which is in San Diego. Can you tell us about the role of these international subsidiaries within your business?
The reason why we started to do business in Germany and in the USA is because there had been requests from Japanese automotive companies. Currently, the roles of our overseas subsidiaries are mainly negotiating with local automotive companies or working as a software developer.
You mentioned that what could be interesting would be to help foreign makers into the Japanese market. Can you give us a case study of such a situation where you helped a foreign company penetrate the Japanese market, and how important is that within your model?
A good example is that we are providing map data to an US company providing map API and SDK as well as several European automotive companies. Those companies decided to use Zenrin data for the Japanese market because of the freshness and accuracy of our data.
Also, another example is one overseas distribution giant. Because of covid, people stayed at home, so there was a big demand for delivery. We are contributing to last-mile delivery service with our map data and app.
You have been the president for the past 15 years. Let's say we come back to interview you again on the last day of your presidency. What would you like to tell us about your goals and dreams for the company by that time, and what would you like to have achieved by then?
This is our corporate philosophy, but I’d like our employees to be inspired. Creating a business where employees can be impressed, and customers can be impressed. If I can achieve that, and the business is still profitable, that's the perfect situation. This is what I want to see.