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by Yuga Koda
Posted on
Posted in Nihonium Blog

Importance of Localization for SaaS Products in Japan

Introduction

Entering a new country, region, or territory is one way to get new customers. New customers are great, as they provide immediate new revenue and potential expansion revenue. Entering a new market can be tough, as every country has its own nuances. Japan is especially particular in how things operate, but if a company successfully enters Japan, it is rewarded access to the second largest enterprise software market with loyal customers. The most successful global SaaS have a good chunk of their revenue coming from international markets. SaaS in Japan particular is opportunistic, as its adoption is expected to increase significantly.

Japan’s Preference of Local Products

Starting with some global stats, “Can’t Read, Won’t Buy – B2C,” a report published in 2020 by CSA researched, revealed the following:

1. 40% won’t flat out buy in other languages

2. 73% want product reviews in their mother tongue

3. 65% prefer content in their language

The results of a survey conducted by CSA Research also showed that 76% of the respondents (8,709 consumers in 29 countries) prefer purchasing products with information in their language if they were presented with two similar products. This number jumps to 90% for Japan. Even if the product is from a strong brand, Japanese people tend to purchase products with information in their own language. The global average for consumers choosing products from major brands over products with information in their own language is 69%, while this number is much lower for in Japan at 50%.

When looking at B2B, CSA revealed that 66% are willing to pay a premium for localized products. One reason that CSA cites is the necessity for further instructions, especially for high-tech products. It would make sense for an even larger premium for SaaS solutions, as there’s a need for ongoing localization and local support.

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Nihonium’s Localization Process

Japan is a highly nuanced market with a unique language and Japan-specific processes. One of the nuances that companies have to work through is that Japanese buyers prefer local solutions or locally optimized products. These locally optimized products help gain the trust of the local buyers.

Localization is a big project and an important part of Japan entry. The quality of the localization is key for success. Though AI and machine translations may seem like an appealing option, the quality is not quite sufficient. Our approach is to be strategic and align the localization with the goals and low-hanging fruit.

The first thing that the buyers and end-users are likely to see is the website. A localized website is important to make a strong first impression on Japanese buyers. Language is one key aspect of the website localization, but Japanese websites tend to have some uniqueness. Understanding the unique aspects will give the website a stronger local feel.

Even if the end-user uses the non-localized version, the purchasing process may be hindered, as the decision is usually made by a committee that includes non-users. The lack of a localized website gives the impression that the product doesn’t have a local presence, including local support (which is a big risk factor, especially if the product is business-critical). Kevin O’Donnell does an amazing job walking through Stripe’s website localization. It is also important to have localized sales collateral, which becomes highly relevant when navigating Japan’s unique sales process.

As for the product, localized documentation is imperative. If the documentation to get onboarded is not localized, the Japanese end user will either not be able to get set up or will likely drop off before trying. Other onboarding aspects besides the documentation should be localized. If a Japanese end-user sees that the in-app guides or onboarding flows are in English, they may be dissuaded from continuing or may not be able to complete the onboarding due to the language barrier.

Depending on the product UI localization is important is also extremely important. We’ve found that the more technical the product, the less the actual product needs to be localized. Developers are more familiar with English, as they write code in English. Simple English in the UI is usually accepted or even preferred. If the localization is awkward or poorly executed, the English version is preferred. On the other hand, technical products need to have robust localized documentation. As developers will spend a lot of time on the documentation, providing a Japanese version makes their lives easier. We’ve seen a similar trend for B2B products, as well.

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For less technical products (end-user has less exposure to English), product localization is necessary. The end user may not use or navigate the app entirely if a localized version of the product is not provided. The level of localization the product needs is analyzed on a case-by-case basis and based on feedback from Japanese users. Ultimately, the end users’ persona determines the level of localization required.

In addition to the initial localization, SaaS products are evolve as new features get added. Ongoing localization is necessary for the end user to maximize the usage the product. Website and product localization, including the documentation and onboarding flows, are the first step. Local marketing and support further increase the local presence. Local support becomes, especially important to add a sense of security that someone that speak Japanese will help with any troubleshooting.

Conclusion

Localization for SaaS products is essential for the end user to successfully use the product and to show the buying committee that the service provider has a local presence. Japan’s uniqueness manifests itself in different ways including a Japan-specific CTA and a high reliance on resellers and partners. Japanese buyers prefer a locally optimized product, which can be done without setting up an entity! If Japan entry or localization is something you’re considering, book a consultation here.

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