What Software Buyers Want & Why Now is the Time to Enter Japan

Japan used to be the world's second-largest market for information technology (IT). Back in 2008.

While Japan remains a significant market today, it is because of the ongoing use of legacy systems and technologies. In general, Japan's industries lag behind in implementing the use of more advanced platforms and tools within their organizations.

What Japanese software buyers are saying

According to qualitative research, company managers who are in charge of selecting and implementing IT services have become more vocal about the need to find fresh approaches and keep up with the times.

A 2022 Gartner survey found that more than 25% of participants admitted that their companies were either using outdated software or had outgrown it.

Another 30% wanted to spend money on investments that would support the expansion of business locations or productivity improvements.

An important conclusion to draw from this research was that more than one in every two managers expressed the need to adapt to changing circumstances, demonstrating an openness to new ideas and change.

It is not surprising that price, which accounts for 21% of the decision-making process when evaluating vendor solutions on the market, was still a major consideration.

Accessibility—that is, ease of use, cloud accessibility, and availability in Japan—accounted for 46% of the decision to buy.

Despite our strong belief that this supports the case for newer and more innovative software developers to enter Japan, it should be noted that the business-to-business (B2B) industry in Japan is very relationship-based and relatively risk-averse.

The software industry is no different. Long-standing systemic biases can be challenging to overcome, even in more pressing situations where change is obviously required.

Nearly half of software buyers prefer working with well-known brands, and over a third prefer working with current or existing vendors.

Having said that, Japanese organizations tend to take longer to make a purchasing decision, where selection of the appropriate system and vendor takes up more than half of the time.

The opportunity for new market entrants in Japan

Nearly a third of those who make purchasing decisions also gather data directly from vendors via video calls and email, though 40% prefer to conduct their research using passive sources like social media, independent reviews, and vendor websites.

It is therefore crucial to have an engaging, accurate, and properly localized online presence. Building confidence is largely dependent on being aware of and respectful of the domestic market.

It is evident from our previous blog post on the development of the cloud market in Japan that services offering superior usability and accessibility are receiving more consideration than ever before.

A Japanese software buyer confident in the solution is likely to spend up to 3.6 times more on the transaction.

Like any change, it has its own set of difficulties that can be hard to manage alone, especially when it comes to new market entry.

Even though the opportunity may be clear, the task can be difficult if you don't have a solid team on the ground and a better understanding of the local environment.

Litmus offers its clients a focused set of capabilities and resources to support the strategy and execution of a Japan market entry, just as Japanese businesses require specialized solutions and tools to usher in an era of change.

Reach out to us today to learn more about the opportunities in Japan and what we here at Litmus can provide in terms of marketing, business consulting, and localization services.