Japan is a country that has been on the forefront of technology and innovation for decades. With a population of 127 million, 90% of whom have access to the internet, it's no wonder why we're seeing such an increase in eCommerce within Japan.
However, what may be surprising is how drastically different Japan's culture and mindset are from our own when it comes to online shopping.
This article will explore some specific aspects about Japanese society that you should know before jumping into this new market as well as tips on how to effectively sell your products there!
With $122 billion in online sales in 2018, Japan is the world's fourth-largest eCommerce market. Rakuten, Amazon, and Yahoo! Shopping account for approximately 100 million users and account for over one-half of all online retail transactions in Japan.
With one of the lowest cross-border shopping rates in the world, Japan is a difficult market to break into for outsiders. Just over 10% of Japanese customers purchase on foreign websites, compared to 54% of Americans.
Before making a purchase, Japanese consumers need a lot of information, which is crucial for companies from other countries to understand because it has a direct impact on the look and feel of product listings and website design.
Because Japanese consumers are particularly loyal to their preferred shopping sites, foreign enterprises interested in entering the Japanese market should start with one of the big three: Rakuten being the most reliable and fastest-growing. Creating an account on one of the three most popular shopping platforms and utilizing automation are low-risk alternatives to launching a Japanese subsidiary website.
Japan's leading shopping marketplaces are Rakuten, Amazon and Yahoo! Shopping. Rakuten has over 100 million active users and dominates the fashion and food areas.
Rakuten's platform allows American brands to create their own storefronts and product listings. They can also use sponsored product listings and other Rakuten advertising options like coupons, newsletter ads, and banner ads to promote their products. Rakuten Super Logistics is the company's own fulfillment service which handles all aspects of delivery.
Businesses based outside of Japan are currently unable to participate in the markets directly. Non-American enterprises who want to make accounts with Rakuten and Yahoo! Shopping must either open a local company or cooperate with a local agency to set up the accounts on their behalf.
“As a non-American firm, you must either form a local corporation, deal with a Rakuten service provider, or work with a local agency that will set up the account on your behalf,” writes Sophola in their guide “Cracking the Japanese Market.”
Amazon, Japan's third-largest eCommerce platform, makes it reasonably simple for
foreign enterprises to offer their items to a Japanese audience. In this sense, it's rather simple for companies with an Amazon seller account to enter the Japanese market.
Understanding how keywords are handled is a vital part of working in Japan. In addition
to the Roman alphabet, the Japanese language features three other writing systems.
As a result, international organizations must deal with local speakers who understand
the proper use of keywords, word order, and writing systems.
Setting up your store on a Japanese domain with a local payment gateway, dealing with
order fulfillment, customer service, and returns — all of which require setup and
management — are some of the hurdles of having your own eCommerce presence in
It's also crucial to meet the demands of Japanese customers, who place high importance on transparency and precise information.
Foreign enterprises can speed up the process of opening a localized store outside of one of Japan's top three marketplace platforms by automating inventory processes.
Sophola's book adds context to the evolving Japanese eCommerce scene, including the importance of digital advertising in product promotion.
Yahoo! Japan is one of the most popular websites in the country, with approximately 63 million mobile users, with nearly 90% of all mobile users located in Japan.
The Japanese market is a lucrative one for commerce. Rakuten, Yahoo! Shopping and Amazon dominate the Google shopping results, but it has become increasingly difficult to break into this niche of advertising - which leaves more opportunity for newcomers to make an impact on their industry through other avenues such as search ads or display ads.
According to METI, Japan's eCommerce B2C expenditures are divided into three categories: (1) products; (2) general services; and (3) digital services.
Product sales make for 54.3% of overall eCommerce spending in Japan, with clothing sales leading the way. In comparison to the previous year, this market category increased by 7.7%.
By implementing internet technology into their growth strategy, companies like ZOZOTOWN, Amazon, and UNIQLO have been able to successfully meet the needs of their clients. MERCARI, a flea market-style mobile app provider, is also a major player in the clothing industry. Food and beverage revenues have been continuously increasing as well.
In Japan, services account for 37% of overall eCommerce spending, with travel leading the way. Online booking services, such as RAKUTEN travel, are examples of travel services. In comparison to 2018, eCommerce B2C travel services grew by 4.8%. Food and beverage services, including online reservations and review systems, offer a lot of promise.
Digital services account for 11.1% of overall eCommerce spending in Japan, with online gaming leading the way, followed by eBooks. Demand for online games, e-books, and other digital products is increasing as more people use their cell phones to shop online.
In the summer months, when Japanese companies are known to award yearly summer bonuses, online spending in Japan is consistently higher. The average worker bonus is approximately $3,000, with the majority of that money going toward luxury products, leisure, and travel. White Day (March 14) and foreign holidays such as Christmas and New Year’s are examples of additional spending holidays.
Take a deeper look at some of the most popular, profitable, and promising categories in Japanese eCommerce. Click on each category to read more:
Fashion & athleisure
Beauty & cosmetics
Sports & outdoor
eCommerce in Japan is regulated by several government entities, including METI and the Ministry of Internal Affairs and Communication (MIC). The internet marketplace is subject to consumer and personal information/data protection rules.
The Act on Improvement of Transparency and Fairness in Trading on Specified Digital Platforms, approved by Japan's Diet in May 2020, would force e-Commerce platforms to submit an annual report to METI on their business operations. METI will next gather merchant feedback, conduct reviews, and publish the results. Google, Amazon, Facebook, and Apple are among the companies affected, as are Rakuten and Yahoo-Japan in Japan.
The Japan Fair Trading Commission (JFTC), which will investigate antitrust issues in B2C e-commerce, performed and published an online trade practices survey in 2019, which includes input from manufacturers, distributors, retailers, online shopping malls, and other stakeholders.
If you’ve been thinking about expanding your business to Japan, or if you have a product that is already selling there but would like to grow the market share of sales in this territory, then this article was for you! We hope it gave you some insight into Japanese consumers and their shopping habits as well as how they shop online so that you can start exploring the many opportunities that exist in this ever-growing marketplace!
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!