More Vietnamese software firms target Japan as the biggest market after they obtained certain achievements and realized that it is not too difficult to get orders from the market.

The report released by the Japan information technology promotion agency at the Japan ICT Week held in Hanoi and Da Nang on October 23-26, said that Vietnam has surpassed India to become the second largest software outsourcing partner for Japan, implementing 23 percent of the Japanese orders (13.7 percent for India).

Since 2009, Vietnam has been maintaining as the most favorite partner for Japanese firms, 31.5 percent of which voted for Vietnam, 20.6 percent for Indian and 16.7 percent for Chinese.

With the great advantage of providing services at low fee, Vietnam has added its name into the list of the 10 biggest software export countries in the world.

Japan has been the most important market for FPT Software, the Vietnamese biggest software export firm. In 2010-2012, the turnover from the Japanese market has been increasing steadily by 27.5 percent per annum.

Just several days before the Japan ICT Week 2013 took place in the two big cities of Vietnam, FPT Japan, a subsidiary of FPT Software, inaugurated its third office in the country, in Nagoya. The other two are located in Tokyo and Osaka.

Nagoya is the fourth biggest city in Japan and one of the three big industrial centers, where many automobile manufacturers set up their production bases. The new branch is expected to make up 10-15 percent of FPT Japan’s turnover by 2017.

Pham Tan Cong, Deputy Chair of Vinasa--the Vietnamese software association, said the Japanese software market is the fourth largest in the world, which has the turnover of $130 billion a year, and it is seeking foreign partners.

According to the Japanese Ministry of Economy, the total value of the orders implemented by Vietnamese firms is just equal to 1/30 of Chinese firms. However, it is now a growing tendency that Japanese leave China for other markets.

This could be the reason why Vinasa has been running the program on developing Japan as a key market for Vietnam over the last 10 years. It has decided to organize the Japan ICT Week instead of Japan ICT Day. The 2013 event, aimed to bring more cooperation opportunities between Vietnamese and Japanese firms attracted 100 enterprises from Japan, 200 from Vietnam and many organizations.

It is understandable why Vietnamese firms have all been relying on the Japanese market, which brings 70 percent of total turnover to the software industry.

According to Chu Tien Dung, Chair of the HCM City Informatics Association, it is very difficult for Vietnamese firms to develop new markets like Europe or the US, because they don’t have much money for marketing and sale. Especially, they lack information to connect foreign partners.

Most Vietnamese companies find it difficult to access official credit sources. Since software firms don’t have valuable fixed assets such as machines or workshops, they have nothing to mortgage at the banks for loans.

Analysts, while forecasting the great potentials for Vietnam to conquer the Japanese market, warned that the qualifications of Vietnamese engineers could be a hindrance for them to approach the market.

Michio Hayashi, President of Oartech, complained that it has been looking for the engineers who can speak Japanese for two years, but it has not found enough.