Currently, Reazon HD has business entities in Singapore and Malaysia in Southeast Asia. The Singapore entity was established in May 2022 as a regional headquarters for overseas investment activities, and the management of invested companies and subsidiaries.

At the end of June 2023, the Malaysia entity was established as a 100% subsidiary of Reazon HD. As of December that year, it had nearly 30 employees and functioned as a development base for the Reazon Group, and as a development center as well as a business operation hub to serve the Southeast Asian market. Additionally, Reazon HD is expanding its investment activities in Vietnam and plans to establish a subsidiary there shortly.

Why focus on Southeast Asia now?

There are two main reasons for Reazon HD's emphasis on Southeast Asia

The first reason is to "capture the market growth in Southeast Asia." Although the growth rates differ from country to country, all Southeast Asian countries are experiencing substantial economic growth, larger than Japan's, and the economies are expected to continue expanding. As such, Reazon HD is putting increased effort into investment activities in Southeast Asia, particularly in Vietnam, where the market growth rate is high.

The second reason is the "low cost." Although the cost gap between Japan and Southeast Asia has been decreasing, lower personnel costs and other expenses can still provide business advantages. In particular, Malaysia is highly attractive to Reazon HD as it can hire English-speaking engineers at significantly lower costs than in Japan. Although Vietnam and Indonesia were previously considered the primary offshore development centers for Japanese companies, Reazon HD believes that Malaysia is currently more attractive based on the balance of engineering quality, language ability, cost, and business environment.

Can Reazon HD's existing services be utilized for expansion into Southeast Asia?

Certainly, Reazon HD is considering launching services globally, including games, and using local marketing and promotional activities in Malaysia, Vietnam and Singapore to target Southeast Asian markets.

What are Reazon HD's thoughts on countries within Southeast Asia or other regions besides Southeast Asia?

At present, there are no active plans for aggressive expansion into other Southeast Asian regions. However, it is possible to set up operational bases in Indonesia, the Philippines and elsewhere if there are business and investment opportunities for Reazon HD in the future.

As an investment destination, there is a greater interest in Africa than other Southeast Asian countries at present. Reazon HD is a company that can take on challenges, and while there are certainly large growth opportunities, entering Africa early, where other companies have not yet actively taken risks, may accelerate Reazon's long-term growth. Although market research is still being conducted, if there are individuals in the team who are committed to Africa, we plan to initiate comprehensive review and preparations to enter the market.

It seems that the expansion is happening at a very fast pace?

Yes. Reazon HD has not raised funds from external investors nor has it gone public. Consequently, Reazon HD has less accountability regarding its overseas business expansion, which allows the company to make decisions very quickly. As a result, starting from 2023, Reazon HD has been expanding to Southeast Asia, executing several M&A transactions and minority investments in several countries. We are proud that this is a rather rapid pace for a Japanese company. The premise is appropriate decision-making, but we consider decision-making speed to be a very important factor in a changing and uncertain economic environment, and so we would like to continue to keep up the momentum of business expansion overseas.

Are there any challenges that come with investing or operating businesses overseas?

I believe that the current challenge for our team members is to understand local laws and customs whilst managing overseas subsidiaries.

In the future, a potential challenge could be in securing the necessary members in the local team. Fortunately, in past deployment areas, we have been able to work with members and partners who understand the local markets. However, locally acquiring potential members for a new area where we have not previously entered may prove to be a challenge. Therefore, we will promote hiring and development efforts and pursue measures to address this issue.

How does Reazon HD search for business opportunities and investment targets in newly expanded overseas markets?

There are two approaches to this question. First, Reazon HD maximizes the use of its existing network. Currently, business partners, investors, and acquaintances are the primary sources for identifying opportunities in business and investment.

However, we also research industries and companies in detail to identify investment and business opportunities. Though the research is mainly carried out by human exploration, we are also exploring ways to leverage technology. In collaboration with our R&D department, we are developing a research system using Generative AI, with the ideal outcome being that our team members focus solely on areas where only humans excel, while AI takes over other parts of our investment activity.

Reazon Holdings is considering and implementing aggressive investments in multiple regions, including Southeast Asia. They will appropriately communicate the situation regarding future developments as they occur.