CRM Software Asia

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Asia CRM Software Market Research

The Asia CRM Software Industry


Customer Relationship Management business strategies and supporting CRM software systems are increasingly becoming cornerstone building blocks for Asian companies of all sizes. Early adoption by the banking and telecommunications industries was followed with successful CRM programs in many other sectors such as government, health care, professional services, retail and transportation. Important drivers which continue to fuel CRM application growth include the needs for increased customer share, market share growth, longer customer retention and cost efficiencies. Asian executive leaders view their CRM spending as a strategic investment to promote customer loyalty and retention.


According to analyst firm Gartner, CRM software revenue in the Asia Pacific region increased 13% in 2006 reaching about $336 million and representing a 5.2% share of the global CRM software market.


Frost & Sullivan also performs CRM research in the Asia Pacific market and projects that by 2009 CRM software spending in the Asian region will climb to $408 million representing an 8% growth rate. The research firm goes on to say that Japan will incur the majority of CRM software investment while China and Korea will be close behind. They also point out that CRM analytics capabilities (primarily information analysis tools) will be a key driver for CRM software adoption in the region for the next several years.


While China's CRM software growth rates exceeds 30 percent by most analyst measures, almost all other countries in the Asia Pacific region range from 4% to 9% annual growth. Many research firms suggest that India, China and Malaysia are the Asian markets with the greatest CRM growth potential. India’s market is dominated by call center technologies, the Malaysian market is small but steadily growing and there is no other country that invokes as much growth potential as China. Other more established regions such as Japan, Singapore and Australia continue to show steady and consistent growth, and more importantly, their CRM software maturity is demonstrating some of the highest payback and return on investment in the region.


The three smallest regions of Indonesia, the Philippines and Thailand continue to show CRM activity but in a fluctuating and somewhat inconsistent pattern. The Malaysian market is small, but some analysts have cited a disproportionate growth potential due to a good infrastructure, high levels of advanced education and increased investment.


Unfortunately for Customer Relationship Management software vendors, Asia is not a neatly concentrated geographical location universally served from a single location and with a single product. Asia must instead be recognized as a set of diverse markets with different cultural, business, economic and political environments.


The Asian SMB (small and midsized business) industry is the single market not dominated by western software suppliers but instead by local and inexpensive CRM vendor solutions. However, as CRM software adoption growth rates increase, there is also a corresponding increase in the percentage of western software as a service (SaaS), middle market and enterprise software products in the Asian market place.


A high number of Western CRM software manufacturers have been disappointed by the poor financial returns from their Asian investments. A Datamonitor report recommended strong caution to CRM vendors considering entering the Asian software market and suggested that any entry should focus limited resources in achieving customer acquisitions and market share growth in the one or two locations where the product and pricing appear to be the best fit. Several analysts suggest that local vendors will prevail over the large Western software companies from the United States and Europe for a period of time due to both software localization requirements and government interference, however, in the end, customers will demand and receive the best performing CRM software products irrespective of vendor location.


  Asia CRM Software Market

The most mature Asian CRM software markets include Japan, Australia, New Zealand and Hong Kong. While the Asia Pacific region is often cited as the highest growth market in the world, it is important to recognize that within Asia, the market growth rate forecasts vary quite significantly by country. China represents the largest Asian CRM software market growth opportunity and forecasts generally range from 30% to 60% annual growth. Compared to China and most of the Asian CRM application industry, Japan is a much more mature software market and is projected to grow at approximately 6.6% annually.


Asia Pacific CRM Software Industry


Research firm IDC indicates that the Asian business software and CRM software market is known for its volatility and projects that Singapore will show unusually high CRM adoption and post implementation successes. As stated b Alan Tong, Senior Analyst of enterprise applications at IDC Asia, "The intensity of competition in some industries has led to the need for CRM as a means of obtaining a competitive edge."