Tokyo, June 14, 2011—Japanese businesses have struggled to leverage social media during the past year, in contrast to their global peers, according to a new global survey of over 17,000 senior managers and business owners by the workplace solutions provider Regus. In 2010, which has come to be known as ‘Social Media Year One’ in Japan, Regus found that 30% of Japanese firms were successfully winning new customers through business social networking activity. A year later, despite rapid growth in social media such as Twitter and Facebook in Japan accelerated by the proliferation of smartphones and tablet devices, the proportion of businesses using social media successfully for marketing purposes has declined seven percentage points to 23%.

Key findings of the report:

• In this year’s survey, Japan (23%) replaced Belgium (34%) as the country with the lowest proportion of businesses responding that they successfully use social networks to find new customers
• Only 37% of companies in Japan use social media websites such as Twitter to engage and inform existing customers, compared with 52% of businesses globally
• Japanese businesses (21%) are the least optimistic worldwide about the power of social media to attract unsolicited customer inquiries, far behind emerging economies such as China (65%) and India (58%) and a global average of 44%
• Only 27% of businesses in Japan devote up to 20% of their marketing budget to business social networking activity, compared with two fifths (39%) of companies globally
• Of Japanese companies that used social media to acquire new business, 36% recorded increased revenue in the past year, compared with 21% in the case of those not using social media
• Of Japanese companies that used social media to acquire new business, 30% recorded increased profits in the past year, compared with 21% in the case of those not using social media

Despite having the lowest proportion of companies reporting successes in social media-based marketing, Japan also had the smallest proportion (39%) of companies who felt that marketing based solely on SNS and online campaigns (to the exclusion of more established strategies) could not succeed, compared with a global average of 69%. Some 67% of Japanese companies surveyed agreed that social networking sites have become an essential aspect of marketing, just below the global average of 74%.

Noriyuki Ikeda, CEO of Tribal Media House, Inc., a provider of social media-based marketing services, comments: “Japanese companies are behind for several reasons. First, Japan’s social media user base is itself limited in scale compared to the U.S. or Europe; second, the user base here is not limited to Facebook, but is diversified over a range of internet services such as Mixi, Glee, Mobage and Twitter; and third, Japanese businesses are highly sensitive to the risk management implications of social media. But it is becoming increasingly common for major Japanese corporations to set up official Twitter accounts and use them for marketing campaigns. There has also been a rush of new Japanese users to Facebook so far this year, and Mixi is scheduled to open its account setup process during the summer. All of these factors can be expected to accelerate the social media-based marketing activities of Japanese businesses.”

Jessy Takashi Kure, Chairman for North Asia at Regus said: "Companies go through a natural period of trial and error when they experiment with any new technology, and the data shows that social media is no different. The fact that social media has become prominent at a time when management resources are already stretched by the effects of the recession has presented a unique challenge for Japanese businesses. What we are seeing here in Japan is that companies are beginning to recognise that social media will be an indispensable tool for business going forward, and I'm optimistic that businesses will learn to tap its potential."