Japanese CRM market to boom until 2006

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By: Wise Marketer Staff |

Posted on May 21, 2002

The Japanese CRM solution market is set to grow rapidly in the next 5 years, according to IDC Japan. Spending on CRM solutions saw a rapid increase in 2001 to reach 361.9 billion Yen (US$2.84 billion), and the market is expected to grow at a compound annual growth rate of 18.3%, reaching some 840 billion Yen (US$6.59 billion) in 2006.

Within the CRM solution market in Japan, investment in software (including packaged applications and infrastructure software) accounted for 14.7% of the total investment during 2001, and IT services (consulting, implementation, support, training, outsourcing and management) accounted for 54.5%. Investment in hardware, network devices, and communication services accounted for 30.8% of spending.

The investment in IT services is the most promising sector, with an expected compound annual growth rate of 18.9% expected until 2006. Of all the vertical industries in Japan, the financial sector took the largest market share of 133.8 billion Yen (US$1.05 billion), representing 37% of the total CRM solution spend in 2001.

Shifting market
The financial sector has so far represented the largest share of total CRM investment but the communication & utilities and distribution sectors are expected to demonstrate the highest growth from 2002 until 2006. Chen-Lin Hu, IDC Japan's IT service research analyst, believes that the demand for CRM solutions will further increase as companies in the distribution industry shift from product-oriented management to customer-oriented management, coupled with the intensifying competition to retain customers in the communications & utilities sector as deregulation progresses.

Market forecast
IDC Japan expects that the investment in CRM solutions in these sectors will increase at a compound annual growth rate of around 20% until 2006. Details of these findings are compiled in IDC Japan's latest report, Japan CRM Solution Market: 2001-2006, which details the current and future size of the CRM solution market in Japan - including software, IT services and hardware, industry trends, market opportunities and challenges. The forecast of the market size has been calculated by IDC's original 'demand-side methodology' which is based on the firm's CRM end-user survey, CRM software vendor survey and CRM service vendor survey.

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