TOKYO -- The Swedish-founded startup Virtusize has relocated its headquarters to Tokyo with a view to expanding its virtual clothes-fitting service in the fast-growing Japanese, Chinese and South Korean online retail markets.
The fashion tech company brings with it 1.5 billion yen ($13.6 million) in fresh funding raised from a group of seven companies, including Japan's venture capital D4V and a fund set up by textile trader Toyoshima.
Virtusize's fitting system is used with online clothing retail storefronts. It superimposes images of shoppers' past purchases over prospective ones to compare size and fit. The technology is used by about 45 companies in Japan, including the major department store Marui Group and upscale chain United Arrows.
Virtusize says the average value of customers' purchases increases by 20% when they use the technology, while the rate of returns declines by 30%. Virtusize holds about 80% of the budding virtual fitting market in Japan.
Originally headquartered in Stockholm, the startup was focused on the European market. But with the move of its headquarters to Tokyo, it has pivoted toward Asia. Its Tokyo staff is set to double from about five currently, and investments are planned to develop new services. The recent infusion of fresh funds allowed management to buy out its Swedish investors.
"Countries like Japan and South Korea have a vast range of e-commerce customer data, so there's a lot of scope for our services," said Virtusize CEO Andreas Ueno-Olausson.
The value of the combined Japanese, Chinese and South Korean e-commerce fashion markets is estimated at more than $180 billion.
In the near term, Virtusize aims to double the number of companies in Japan that use its service to about 90. The company has already entered the South Korean market and plans to build up operations in China as well.