Of the companies involved nearly 50 per cent are small companies with staff fewer than 10 people.
A recent research result has been released by ITANDI Co., Ltd (Headquarters: Tokyo, Japan; Representative: Shinpei Noguchi “The Company”) about how real estate companies are reacting to the digital transformation movement that has been taking place in the real estate industry in Japan. ITANDI Co.,Ltd is a technology focus company. The Company is part of the GA technologies Co.,Ltd (Headquarters: Minato-Ku, Tokyo, Japan; CEO: Ryo Higuchi; Securities code: 3491) group providing services in the real estate industry with advanced technology applied. The research released this time was conducted among 766 real estate companies asking about how they feel about the digital transformation development in the industry.
Proptech (property technology) business companies
- ITANDI Co., Ltd (Headquarters: Minato-Ku, Tokyo, Japan; Representative: Shinpei Noguchi)
- WealthPark Co.,Ltd (Headquarters: Shibuya-Ku, Tokyo, Japan; Representative: Ryuta Kwada)
- Spacely Inc. (Headquarters: Shibuya-Ku, Tokyo, Japan; Representative: Hirokazu Morita)
- Sumasate Co., LTd (Headquarters: Shinagawa-Ku, Tokyo, Japan; Representative: Nobuyoshi Yamagishi)
Key Highlights
- 4 per cent of the companies believe that digital transformation must be done. 71 per cent have taken certain measures before or are planning on doing so.
- Companies those had been implemented with such measures in the past, 44.1 per cent only involved for less than one year while 70.7 per cent of the companies gave positive feedback about digital transformation and the measures they have been taken
- When it comes to the annual budget, small companies with fewer than 10 employees are willing to spend less than one million yen for implementing digital transformation. Companies with more than 501 staff are willing to spend more than 10,010,000 yen.
- 3 major obstacles for companies to proceed with digital transformation are as follows: budget, right people, know-how
- 2 per cent of the companies do know that online contract and online documentation are available along with the law revision in May 2022.
- The “online contract system” is the system (software) that has been discussed the most among companies currently
- More than 50 per cent of the companies answered that they are satisfied with the software they have been using, especially for the “online meeting software”, “appointment reservation software”, “price assessment software”, “software for important matters documentation” and the “online application software”.
- The software that has been installed the most by companies is the “online contract software” in 2022. Other software such as “online meeting software”, “software for important matters documentation” and “VR, online house tour software” are also popular among companies in 2021 to 2022.
A total of 98.4 per cent of the companies do support this digital transformation movement that has been taking place in the real estate industry either with strong agreement or somewhat positive reactions. When it comes to the question of how your company has been doing on the matter, 71 per cent of them have taken or are taking some actions to make the change. 93.4 per cent of the companies answered that the purpose for such action is to improve productivity and work efficiency. While to improve customer satisfaction and to attract more customers followed with 53.4 per cent and 35.1 per cent.
The companies that have been participating in the research this time, nearly 50 per cent are small companies with staff fewer than 10 people. Many small to medium size companies also believe that digital transformation is necessary and are planning on taking some strategy for that or had such experience before.
44.1 per cent of the companies replied that they had less than one year of actual experience working on digital transformation. Only 0.7 per cent of companies answered that they already have the related measures, or the DX system organized in the company. The companies that have started such actions have increased in the past one year. 70.6 per cent of the companies have the system/ know-how ready in less than two years. And 70.7 per cent of them gave positive feedback regarding such a change. When being asked about which part do you feel that has been improved the most, 93.2 per cent answered with better efficiency and productivity. 29 per cent answered with higher customer satisfaction while 25.6 per cent said that the percentage of deals made has gone up.
When being asked about how much budget you are willing to spend on making the digital transformation a year, companies’ answers vary from less than one million yen to more than 10,010,000 yen depending on the size of a company. 85.4 per cent of the companies with 5 to 10 employees are willing to spend no more than one million yen annually to make the DX change. This percentage jumps to 93.1 per cent for companies with only 1~4 people. On the other hand, companies with number of employees more than 501 people are willing to spend more than 10,010,000 yen per year to make the transformation. As we could see, the annual budget for companies to make the change increases along with the size of a company.
When it comes to the question “which department is responsible for the DX project?”21.3 per cent of the companies answered with “the executive board” followed by “the sales (planning) department” with 20.6 per cent. “Business strategy, the CEO office” comes in third with 16.7 per cent. Finally, 9.7 per cent of the companies being researched answered that there is a department specialized in such projects in their companies.
The Top 3 obstacles that prevent companies from making the digital transformation are: “budget”, “right people”, “know-how”.40 per cent answered that the lack of all three or either one of the resources makes the companies hesitate to make the change. All three factors are selected as the top 3 obstacles by companies which is almost the same as last year’s research result (※1). Companies that have no plan for making the shift also pointed out “budget”, “human resource”, and “know-how” are the major concerns for them as well.
98.2 per cent are aware of the law revisions about electronification of documentations
57.7 per cent of the companies are aware of the electronification of the documentation process along with the law revisions enacted on May 18th, 2022; 40.5 per cent are somewhat familiar with the News. Still 1.8 per cent of the companies replied that they do not know about such a change. In conclusion, almost most companies working in the real estate industry are aware of such information.
“Online contract software” is the most popular software among companies
70 per cent of the companies answered that they have the online meeting software installed or are planning to do so. The second most popular software is the rental & lease application management software with 52.3 per cent of the companies installed already or plan to do so. 39.1 per cent answered with “online application software”. Finally, 31.8 per cent answered with the “customer relationship management software”.
When it comes to the question of which software are you considering installing, 18.7 per cent choose the “online contract software”, 15.8 per cent choose the “important matters documentation software”, and 14 per cent choose the “online application software”. 11.5 per cent choose the “App. for property owner”. As we could see, the influence of the law revision has been pushing the process moves faster.
More than 50 per cent are satisfied with the changes DX brings
More than half of the companies researched say that they are satisfied with the strategies being taken to make the transformation. The satisfaction is especially high about the following software: “online meeting software”, “appointment reservation software”, “AI assessment software”, “important matters documentation software” and the “online application software”.
“Online contract software” is the most popular software installed among companies in 2022
When we look at the percentage of installation of individual software, both the “online meeting software” and the “important matters documentation software” receive more than 70 per cent popularity in 2020 ~ 2021. The installation rate is 61 per cent for the “VR / online tour software” because of the increasing needs during the pandemic. In 2022, the software those receive high popularity are “online contract software” (31.7 per cent), “AI price assessment software” (24.3 per cent), “appointment reservation software” (20.9 per cent), and the “online application software” (20.5 per cent). For the times before the pandemic broke out, the software those were popular among real estate companies are “rental & lease application management software”, “contract management software (for contract renewal & move-out)”, and “CRM (customer relationship management) software”.
Conclusion
The real estate industry is experiencing a huge change in the digital technology aspect and how the real estate transaction process is going to be along with the related law revisions enactment, and the change in lifestyle because of the pandemic. All these have a huge impact on the industry, and indeed about 70 per cent of the companies are starting or have been taking measures to ride on this digital transformation wave that is happening in the industry. No doubt, the so-called DX movement is certainly taking place in the real estate industry.
