Yukio Kabumoto, Representative Director and President (Left) / Yuchun Tanaka, Director and Executive Vice President (Right)
It has been 14 years since we first entered the enterprise SMS market in Japan in 2011. SMS volume reportedly reached 4 billion messages annually in fiscal 2022, with the market growing to exceed 20 billion yen. Demand was particularly driven by use cases such as contacting and screening COVID-19 patients recovering at home during the pandemic. Furthermore, its effectiveness for authentication and high read rates make it stand out among various messaging channels. Moving forward, while steady delivery demand is expected to continue for "communication and notification" use cases across diverse sectors including finance, low barriers to entry are leading the entire industry into intense price competition. In the SMS messaging business, while delivery volume is projected to continue expanding, SMS operators face persistent unit price declines, leading to a shift toward lower-margin operations.
In 2019, our corporate client base stood at just over 800 companies, but it has now grown to exceed 5,000, with the group as a whole surpassing 10,000. While message delivery volumes remain in a fierce contest for top market share, narrowing profit margins have become an industry-wide challenge. Consequently, we have determined that operating solely as a telecommunications and SMS services business will face increasingly severe conditions moving forward. Although Accrete has led the market since the early days of SMS, we recognize that to secure our future as an enterprise, we must move beyond our traditional operations, establish new revenue foundations, and enhance corporate value through proactive business expansion, including new ventures.
Formulated in 2022, our medium-term management plan was built on the premise of Accrete operating specifically as an SMS business. However, considering the turning point reached by the SMS market, alongside chaotic sociopolitical and economic environments, we concluded that revising this medium-term plan was imperative. We have therefore initiated the formulation of a new strategy aimed at establishing Accrete as a next-generation enterprise.
Driven by the rapid evolution and adoption of industrial technologies such as generative AI and AGI, society stands at a major crossroads. Even as AI, AGI, and eventually ASI become ubiquitous across all fields, real human communication will remain indispensable. Furthermore, alongside initiatives to prevent the misuse of generative AI—such as countermeasures against misinformation and the development of "original profiles"—any engagement with information will invariably require some form of reliable authentication process. From the perspective of optimization and efficiency, enterprises will likely seek to leverage AI and AGI to reduce the ROI costs of communication.
Amid this industry evolution driven by AI adoption, Accrete is reassessing its positioning. Drawing on our extensive business experience and intelligence gathering, we are stepping beyond the confines of SMS alone to embark on a game-changing journey toward creating new corporate value.
While our vision for the "Telecommunication Service" Plus Alpha model is to create new corporate value, the core concept that Accrete consistently pursues is "secure human connections." Even within a digital society, our commitment remains unwavering: to continually pursue services that generate "real connections" leading to "security," "safety," "trust," and "convenience" precisely because it is a digital society. In the context of utilizing AI—the key to our current and future eras—in a practical and proactive manner, we have added the concept of "AI for Real" to our themes, and as a company, we remain committed to growing through the resolution of social issues.
