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2017.01.27

Japan’s Supersize App Market – Demographics

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Japan’s Supersize App Market – Demographics

Editor: Bjol R. Frenkenberger

Foreign Japan

The Japanese Mobile App Market is one of the most attractive app markets in the world in terms of gross revenue. However, international App providers
hesitate to enter the Japanese Mobile App Market due to a perceived cultural
difference and the dominance of local competitors. This text aims to explore
some of the market’s unique demographic characteristics to make what
seems foreign accessible.

Strength and Difficulties

When talking about business expansions, Japan might not be the first country to be mentioned. The economic stagnation of the last twenty years has been ominously characterised as Japan’s lost decades. Such concern may be
increasingly irrelevant. Japan’s economy is stimulated by ‘Abenomics’,
economic policies aiming to accelerate economic growth. Economic incentives
aside, the country is still one of the biggest economies of the world with a
GDP of more than 4 trillion USD.

World leader in Revenue

The willingness to pay for mobile apps is exceptionally high in Japan. As
reported by The Wall Street Journal, Japan has become the biggest mobile
app market in the world in terms of revenue. The top revenue apps in Japan
are games and the vast majority of these games comes from domestic
companies. 86 of the top 100 apps in terms of revenue are by Japanese
developers.

Screen Shot 2016-09-02 at 00.01.16

Note

  • Japanese App revenue rankings are dominated by games. (Ranking from May/2016)

Japan can pride itself on a long history of successful games. Super Mario,
Pokémon, Street-Fighter, The Legend of Zelda, Sonic the Hedgehog, Donkey
Kong are just some of countless “classics”. The generation who played such
classic titles is now the majority of smartphone users in Japan.
It is familiarity in design and gameplay which might contribute to this
preference for “domestic” games until today.

Smartphone Demographics

Japan has 126.9 Million inhabitants as of 1 July 2016 according to a national survey. About 24 Million people fall into the age group of 70 years and older and 16 Million are 14 years or younger. The majority is between 15 and 69
years old. 15- to 19-year-old males are the group with the highest
smartphone penetration rate and the 15-to 39-year-olds make up more than
half of the smartphone users in Japan. The penetration rate for those over 60 is low.

Screen Shot 2016-09-02 at 00.25.23

Note

  • Japanese Smartphone Penetration (Ministry of Justice 2016, Hakuhodou)

The biggest absolute number of smartphone users is the group of
30-39-year-old males with about 7.2 million people.

New Opportunities

The current popularity of domestic developers can be linked to demographic development and will continue to change because of it. The particular needs
of elderly people will play an important role in the years to come. The current gap in penetration ratio between 50-59-year-old females and 60-69-year old
females is astounding. Due to Japan’s exceptionally high life expectancy (80.79 years for men and 87.05 years for women) 7 million 60-69 years old
females can be expected to live in Japan in 18-28 years.
 If these groups
continue to use smartphones actively as they do now then smartphone
demand will change and it is up to creative developers to address new needs.

For this article, we used App Ape Analytics.

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