The Secret to Making E-Payments Work in Japan

Whenever you hear someone claim that the Japanese will never do something for unspecified "cultural reasons", you know there is a fortune to be made. Lu Dong is the co-founder and CEO of Japan Foodie, a cashless payment system currently masquerading as a restaurant discovery application. Lu and I talk about the boom in inbound Chinese tourism that led to the creation of Japan Foodie, and how he and his team quickly managed to identify and dominate this massive and underserved market. We talk about how tourism is changing Japan, the best way to build a two-sided marketplace, the only way forward for most e-commerce platforms, the future of e-payments in Japan and the history of women's lingerie in China. It's a great conversation, and I think you'll enjoy it. Show Notes The real problems with Japan being a cash-based society What people really care about in a restaurant app How to build a two-sided marketplace Why e-commerce platforms are really advertising companies What happens in Japan after the Olympics Launching China's first major sexy lingerie brand How too much success can kill a startup When you should turn down VC money Why its harder to be an entrepreneur when you get older  The importance of corproate accelerators in Japan Links from the Founder Check out Japan Foodie Connect with Lu on LinkedIn Friend him on Facebook Leave a comment Transcript Welcome to Disrupting Japan, straight talk from Japan’s most successful entrepreneurs. I’m Tim Romero, and thanks for joining me. One thing I have learned starting startups in Japan for 20 years is that every time you hear people claiming that Japanese people won’t do something because of unspecified cultural reasons, there’s a lot of money to be made. In the 90s, people claimed that e-commerce would never catch on because Japanese preferred the high touch, expensive department stores, but today, those department stores are struggling as every year, more and more commerce moves online. 10 years later, people were saying that online auctions would never work because Japanese people would simply not by used goods for cultural reasons. They were wrong, of course, and today, Yahoo! Auctions and Mercari, and dozens of others are thriving. When a behavior is widely described as a result of cultural reasons, it usually means that the behavior doesn’t really make sense, and we cannot explain it, and man, that is the perfect area to start looking for business opportunities. If you can discover the real reason for this behavior, and it’s usually a rational economic reason, if you can discover the real reason for this behavior and fix it, you can make a fortune. You might have heard that Japan is a cash-based society for cultural reasons, but we are already starting to see the cracks in that falsehood forming. Today, I’d like to introduce you to Lu Dong, the founder and CEO of Japan Foodie, a restaurant discovery app and yeah, there are a lot of those, but this one is special. Well, not so much the app, but the business model, and the perfectly rational way in which Japan’s cash-based culture will migrate to electronic payments, and it’s already working. In our conversation, Lu also provides some great advice for building multi-sited marketplaces, and he tells some pretty interesting stories about tourism, fundraising, and women’s lingerie. But you know, Lu tells that story much better than I can, so let us get right into the interview. [pro_ad_display_adzone id="1404"  info_text="Sponsored by"  font_color="grey" ] [Interview] Tim: So, I’m sitting here with Lu Dong, the founder of Japan Foodie and several other companies, so thanks for joining us. Lu: Thank you. Tim: You know, actually, recently, we’ve been focusing on sort of serial entrepreneurs in Japan, but before we talk about your other companies, let us talk about Japan Foodie. Lu: So,