Japan is a big fish in the economic world, with the world's third-largest GDP and fourth-largest eCommerce market. That being said, Japan is a tough country to break into, with high expectations for sales and marketing. In this article, we discuss our top 10 tips on how to be successful selling in the Japanese marketplace.
Japan's GDP is about four times that of the rest of the world, and the Japanese eCommerce market is valued at more than USD 160 billion and has expanded at an annual rate of nearly 9%. According to research, 70% of Japanese customers shop online, making it a lucrative market for online retailers.
So, Why Is It That Merchants Usually Neglect the Japanese Market?
While Japan has a large economy it also has relatively moderate growth rates and low inflation, as do many economies. Historically, many myths and pessimism from western countries also surround the Japanese market as well.
The online market in Japan is distinct, with different entrance obstacles and rules than those that most sellers are accustomed to. While there are certain limitations, retailers can also make use of several opportunities.
Ten Tips For the Japanese eCommerce Market
1. Rakuten, Amazon, and Yahoo! Shopping account for more than a third of all online retail transactions in Japan
In Japan, these three sites are used by about 100 million people to make their online shopping purchases. This is beneficial to US retailers because these sites are simple to use and provide a low-risk entry into the Japanese market.
Rakuten has over 100 million users and is particularly successful in the fashion and culinary industries. Sellers may create a storefront, display product listings, and sell things using coupons, just like they can on Amazon.
2. In Japan, the clothing category is the most popular
3. During the summer, Japanese consumers spend more on luxury products, leisure, and travel
Summer bonuses are common in Japanese companies, and the average incentive is $3,000 each year. As a result, the country's expenditure on leisure, travel, and other luxury products increases.
4. Japan has one of the most affordable cross-border shopping prices in the world
Only 10% of Japanese customers shop abroad, compared to 54% in America. As a result, the Japanese market is difficult to enter into, yet it is also the market with relatively little competition and hence plenty of opportunities.
5. Consumers in Japan value transparency and loyalty
Consumers in Japan are cautious about purchasing things about which they have little information. That means the presentation of your website and listings is critical.
One issue to be aware of in Japan is that consumers are extremely loyal to the platform on which they make their most frequent purchases. That may make it difficult to establish your brand in the market at first, but with the appropriate plan, it will pay off in the long run.
6. The Japanese eCommerce market is skewed in favor of American businesses
If you're a US-based retailer, setting up an account on Rakuten and Yahoo! Shopping will be significantly easier than if you're based elsewhere. Use that to your company’s advantage when setting up an account there!
7. In 2019, Japan's sales tax raised from 8% to 10%, posing certain issues for retailers
According to the most recent figures, Japan's GDP has been rapidly declining as a result of the increased sales tax; it has shrunk by 6%. Concerns about the coronavirus have also made it tough to sell there in recent months.
8. Automation is one of the easier ways to get your products into Japan
Because you must set up your store on a Japanese domain with a local payment gateway, setting up an eCommerce site can be difficult and time-consuming. Returns and shipping are also more difficult to manage directly.
Connecting your store to Amazon's FBA streamlines and automates the fulfillment process. Brands can reduce the time and cost of shipping to Japan by using Amazon's FBA service.
If you ship through Amazon, keep in mind that you'll need a Japanese importer of record (IoR) to manage customs and give customer service in Japanese.
9. In the Japanese market, localized keywords are extremely important
The Japanese language contains three alternative writing systems in addition to the Roman alphabet. That means that firms selling to Japanese consumers on eCommerce platforms can utilize a range of different keywords.
To succeed in the Japanese market, you must work with native speakers who have a thorough command of both your language and Japanese. This ensures that the keywords you use are proper and correct and that you are able to build trust and confidence in your brand.
10. Japan is a terrific environment to do business, despite its obstacles
On the World Bank's Ease of Doing Firm Index, Japan ranks higher than nations such as France, China, Spain, and Switzerland, and it performs well in categories specifically in starting a new business.
While there is a learning curve and certain challenges to operating in the Japanese market, it offers exactly the type of customers you want for your eCommerce business.
Are You Looking to Reach Japanese Consumers Online?
As Japan's eCommerce powerhouse, Rakuten Ichiba boasts a whopping customer base of 100+ million shoppers. What better place to roll out your store and promote your brand than a popular marketplace frequented by 87% of the Japanese population?
Our team of bilingual eCommerce Consultants is here to answer any questions and guide your store through the process. It’s important that you know what sets our platform apart from other marketplaces like Amazon, eBay, or even Etsy.
Benefits include a unique Lens On Brand experience where merchants can fully control their storefront—from product pages to customer experiences—to give off an authentic feel for their products without having to worry about how it will affect SEO performance or brand image in search results pages.
We also offer full support throughout the merchant’s journey with concierge-level service and cross-border reach as well! If this sounds intriguing, get in touch with us to learn more about the exciting opportunities for eCommerce merchants in Japan!