Your Real Competitor Is Wherever the Customer's Budget Goes

In Japanese B2B, the competitor you lose to is often missing from your competitor list. It's the customer deciding to keep things as they are, or Excel, or the tax accountant, or the systems integrator who built the current system. A competitor list built from companies that look like you will miss all of them.

Who is missing from the competitor list?

Everyone who doesn't look like you.

Competitor lists are usually built by resemblance: same kind of product, same features, same price range. When a customer decides, though, the comparison is between uses of the same budget, the same person's time and the same approval. Ask it that way and there are at least five kinds of competitor.

Other products like yours, which are already on the list. Substitutes, such as a spreadsheet or a paper ledger. Handing the job to a person, such as an outsourcer or a tax accountant's office. Building it in-house, or having the existing systems integrator fold it into the next phase of its contract. And doing nothing.

On most competitor lists, the last four rows are blank.

I wrote about which companies belong on a competitor list in Picking the wrong competitors is worse than having none. One test there is business threat: is it taking your customers now, or could it? This piece is only about that test, and about the fact that the thing taking your customers often isn't a company.

A category with numbers: accounting software

Accounting software in Japan competes mostly with spreadsheets and notebooks, and there's data to show it.

MM Research Institute, a Tokyo research firm, runs a web survey of sole proprietors every year after the tax filing season. The edition published in April 2026 covered filings for 2025 and had 15,845 sole proprietors. 40.9% used accounting software and 49.5% didn't. Those who didn't were asked what they used instead: spreadsheets such as Excel, 37.5%; handwritten ledgers or notebooks, 36.5%; outsourcing to a tax accountant or accounting firm, 21.5%.

I converted those into shares of all sole proprietors. Spreadsheets come to about 18.6%, handwriting about 18.1%, tax accountants about 10.6%. Spreadsheets and handwriting together make 36.6%. All accounting software combined is 40.9%.

Japan's sole proprietors keep books in spreadsheets and notebooks almost as often as in accounting software

Web survey of 15,845 sole proprietors who filed for 2025 (MM Research Institute, April 2026). The 49.5% non-users split into shares of all respondents by the author; about 9.6% fall into neither group

How all sole proprietors keep their books

• Accounting softwarecloud and installed
  40.9%
• Spreadsheets37.5% of non-users
  18.6%
• Handwritten ledgers36.5% of non-users
  18.1%
• Tax accountant21.5% of non-users
  10.6%

Share among cloud accounting users

• Yayoi
  54.0%
• freee
  25.1%
• Money Forward
  15.7%

The vendors fight over the smaller block below. The biggest competitor is the spreadsheet and the notebook.

The trade press covers every point of share that moves between the three cloud vendors. If you're entering this category, the growth is in the two vermilion bars. More than a third of sole proprietors still keep books in a spreadsheet or by hand.

Discount the numbers a little. This is a web survey, so respondents already lean online. I'd guess the real share of handwritten books is higher.

The same series shows how sticky the status quo is. MM Research's cloud usage rate (the 2026 release defines it as the share of accounting software users on cloud products) rose from 33.7% to 38.3% in its 2025 survey, and the firm credited tax incentives since 2021 and the invoice system that began in October 2023. In 2026 it was 38.4%, up 0.1 points. The firm calls that a temporary payback after the big jump. My reading is gloomier. When policy pushes, people move. When the push is over, inertia comes back.

Is the tax accountant a competitor or a channel?

Both.

The 10.6% who hand their books to a tax accountant are spending that money on a person instead of software. Japan's National Tax Agency counted 82,513 registered tax accountants and 5,287 tax accountant corporations at the end of March 2026. That's a network covering the whole country.

The same people also have a strong say in which software their clients use. So software companies court them. In August 2026, freee announced AI tools for tax accounting offices that handle everything from collecting documents to the year-end filing. In Japan's small-business market it's common for your competitor and your channel to be the same person.

Small businesses buy through people they already trust: banks, local chambers of commerce, tax accountants. I put that under channels in Product, sales, organization: why this order. On a market map, it means writing the same name twice, once as a competitor and once as a channel.

The strongest competitor in Japanese B2B

With mid-sized and large customers, the competitor changes shape again.

One version is the incumbent systems integrator. It built the current system, holds the maintenance contract, and is already quoting the next upgrade. Before your software can come in, the customer has to work out how to explain the change to a vendor it has worked with for a decade or more. In Japan most IT people work for vendors, and user companies have few people who understand their own systems, which I broke down in Three in Four IT Engineers in Japan Work for a Vendor. When the people who understand the system sit at the integrator, the integrator's voice carries in the decision to switch.

The other version is doing nothing. Matt Dixon and Ted McKenna analyzed about 2.5 million recorded sales calls for their 2022 book The JOLT Effect. In an interview, Dixon said 40% to 60% of deals are lost to the customer doing nothing. The interesting part is what follows. Customers who stay put because they think the current way is good enough account for less than half of those losses. The bigger share is customers who are afraid of choosing wrong, so they don't choose.

That's US data, and I haven't seen research of that scale in Japan. My guess is that fear of a wrong choice weighs even more here. A ringi approval collects stamps from several people, and each of them owns the decision. You can win the comparison and still stall at "let's revisit next fiscal year" if nothing you offered lowers the risk for the people stamping.

Putting these competitors on the market map

Add one column to the competitor list: where this customer segment's budget for this problem goes today.

For each answer, ask what it costs the customer to switch to you, in money, time or someone's face. Ask who will object: the integrator, the veteran who maintains the spreadsheet, the tax accountant. And ask what would break the status quo: a regulation, a system reaching end of life, a new president.

Once those cells are filled in, the plan for many deals changes. If the competitor is a spreadsheet, show how easy migration is. If it's the integrator, partnering with them first may be faster than going around them. If it's doing nothing, what you're really selling is lower risk for the approver: a small pilot, a contract they can exit, a case study from a peer.

This column belongs on the market side of the two maps. I'd put "the status quo" in the first row of every competitor list.

Then pull up the last deal you lost to "no decision" and fill in the column for it. Of the five kinds of competitor, which one were you really up against?

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