Kiip, the US startup that provides mobile phone gamers with real-life rewards, is finally dipping its toes into the waters of Asia after it announced a partnership with Japanese tech specialist Digital Garage which will see the service launch in the country in early 2013.
Digital Garage includes LinkedIn CEO Reid Hoffman on its advisory board and it has guided a number of Western Web giants into Japan’s lucrative digital market, including Twitter, LinkedIn, Technorati and others.
The Kiip service, which is a platform that developers can introduce into games to give users physical rewards from well-known brands like Best Buy, Sears and Vitamin Water, seems ideally suited to Asia, where smartphone penetration is rapidly rising, consumers are digital savvy and mobile is a key Internet access point.
Indeed, Kiip CEO Brian Wong tells me that Asia has always been a priority for the firm but now, with the “right partner” aboard, the company is taking to Japan where he believes the market is well-aligned with Kiip’s model and ambitions.
“Social gaming, virtual goods and rewards within digital content are so so big in Japan,” Wong says. “That gives us a low hump to overcome with consumers and that should mean rapid traction.”
“NFC is also baked into Japanese mobile culture, unlike the US. There, consumers expect to pay and redeem items with phones,” he continues.
Digital Garage seems like the natural choice for Kiip and Wong says that whenever he mentioned his aspirations for Asia in conversations, its name was always put forward as a possible partner.
“It’s so obvious, the company is very established in Japan,” he says. “To join Twitter and Path as esteemed companies that have been backed by Digital Garage is a huge honor.”
Mobile services and content providers frequently partner with carriers on launch in Japan to help momentum, but Kiip is going solo, initially at least, with Wong explaining that carriers may come in as the service gains traction.
A number of Kiip’s big-name backers in the US are active in Japan’s market, and, while there isn’t a launch date set in stone, Wong says that Kiip will begin life in Japan with the backing of a local partner – though he declines to reveal the identity and whether the backer is already a partner in the US.
While smartphone ownership is still not yet as ubiquitous in Japan as in Western markets, Kiip will stick to iOS and Android in the country. That’s a safe bet as, though clamshell-style Web-enabled feature phones are still popular, Android is leading the smartphone charge; comScore suggests the Google-owned platform accounts for 68 percent of an estimated 24 million smartphones there.
Asia is becoming a real focus for tech companies, particularly those with apps and mobile content-led services. Wong admits that there are obvious synergies in markets across the region, although Kiip is focused on its Japan launch first and foremost.
The company ran trials in the country this year and, though the audience was a closed one of beta testers, Wong reveals that the company saw redemption rates that were ten times higher than those in the US.
I ask Wong if either of the two will be a focus for Kiip: “It’s not impossible, they’re hard to avoid,” he says, admitting also that messaging services like Line could fall into that category.
Kiip has also revealed that, in addition to becoming its strategic partner in Japan, Digital Garage participated in the US startup’s recent $11 million round. Financial details have not been disclosed, but Wong says the company accounted for “a strategic portion” of the funding.
“Our search for companies solving the mobile monetization problem prompted us to invest to in Kiip,” said Rocket Eda of Digital Garage. “The rewards program provides a solution for a very large market in Japan and similar markets throughout Asia.”
Kiip launched in the UK in August, in partnership with YO! Sushi, in what was its first international expansion. With this news, the company is shaping up to extend that push into Asia next year.
The Kiipsake mobile app, which the startup introduced in July, is not yet available in Europe and it won’t be coming to Japan until the service has gained traction.
Kiip is working with more than 40 brands in the US and there are in excess of 400 games and apps that use its network. As of June, the startup said that over 100 million “moments” are tracked via its system every month, which is the number of achievements that are reached in its network of games. Not every achievement gets fulfilled with a reward, but these moments are the units available to interested advertisers.
Image via Flick / Paul Mannix