Case Study: Arkamys - a French SME

ARKAMYS - FROM FR

French-based company Arkamys is a world-leader in the field of audio enhancement and sound spatialisation technologies. Founded in 1998, first targeting the professional entertainment industry, the company has grown to provide audio solutions that are present in our everyday lives. Arkamys is embedded in millions of new devices every year, including mobile phones and cars from major international brands. The company has a growing global presence and is planning to open an office in Japan in the beginning of 2015. In 2012, Arkamys participated in the Human Resources Training Programme – Japan Industry Insight (HRTP) organised by the EU-Japan Centre.

Business: Audio Engineering

History in Japan: since 2010

Size in Japan: 1 Japanese-based employee (45 employees worldwide)

Target market: manufacturers of the automotive, mobile devices and television

ABOUT ARKAMYS

A recognised leader in 3D sound audio effects, voice processing and sound rendering, Arkamys provides digital audio software and services for the automotive, mobile phones and connected home entertainment sectors. Arkamys’ sound experts are able to develop innovative solutions to optimise the audio quality of consumer electronics. Over the last 15 years, Arkamys has set up a worldwide presence in Europe, Japan, Korea, USA and China.

WHY JAPAN

Japan is a key market for Arkamys due to the strength and market share of Japanese Automotive, Mobile and Home Entertainment OEMs.

STEPS TAKEN

Arkamys already had experience in the Japanese market before participating in the 2012 HRPT programme. Arkamys first started developing its business in Japan in 2010, and has had a contract with a major Japanese automotive manufacturer for several years. Arkamys’s relations with its Japanese clients have been coordinated from its headquarters in Paris and from its offices in South Korea.

CHALLENGES

When looking for new business partners, it takes some effort to convince large Japanese companies to work with a European SME. Though Arkamys has direct competitors (Japanese and foreign), the biggest competition can sometimes be their clients themselves if this particular customer has similar sound solutions developed in-house. The key to success is to prove to future customers that they could improve the overall audio quality of their devices while saving cost and/or effort by externalising this component or by changing its current supplier’s ecosystem.

Another challenge Arkamys faced was the tech-centred mentality of its potential Japanese partners. Whereas European companies want to know the price of a product from the start, and may never question how the system works as long as it does, for Japanese companies this is of secondary concern. Before discussing the price, they want to understand exactly how the product operates and if it matches their process, standards and expectations. Arkamys had to adapt its pre-sales strategy accordingly.

CURRENT STATUS - NEXT STEPS

The relations with Arkamys’ existing automotive client are going very well and have provided the company with a great base to invest in Japan. Over the past few years Arkamys has encountered many new potential customers and discussions are at an advanced stage with several Japanese Automotive and Mobile manufacturers.

The different markets work very differently: while the development process in the television and mobile phone industry is quite short, it takes about four years if you want to get your product in a new car. The upside is that this makes it easier to foresee the next few years, and thanks to its existing contracts Arkamys currently has healthy projections of constantly growing revenue over the coming years.

The company worked together with an external business developer throughout 2013, but has since hired its first Japan-based employee. If all goes well, which it looks like it will, Arkamys plans to open an office in Japan in the beginning of 2015.

RECOMMENDATIONS

Depending on the business, do not expect results in a short term, especially compared to other countries.

Be persistent. Know that, what may only take one meeting in China or Korea, may take ten meetings to arrange in Japan. The upside is that once you get a deal, it is much more solid and viable through time. It can be a bigger investment but, over time, the return on investment might be higher. 

Interview made with Jean-François Claude