Japan e commerce: The statistics, trends and best ecommerce platforms
When coming to the Japanese ecommerce industry, there’s more to think about than Amazon. While the widely used online selling platform is the first choice for foreign merchants who want to sell products for the Japanese market. This will provide opportunities for high conversions and good returns. Therefore, in case you’re trying to develop a one-platform business model or a broad multi-channel ecommerce. So all information you need to consider is collected in this blog. ArrowTheme explored the best Japan e commerce and what you should consider when choosing on the best platforms for your aims. For that reason, you should read this article carefully. Let’s get started
Overview of the Japan e commerce
Japan is a crucial consideration for any firm wanting to expand its international consumer base. Because Japan is the third-largest ecommerce market in the world. This market has great logistics infrastructure and a domestic population with enormous spending power.
Fashion, electronics, travel-related products, and domestic items account for a big share of sales. However Japanese customers have shown a strong desire for a wide range of products. Moreover, brands that flourish in Japan also have a strong chance of succeeding in the wider Asian area, with Japan trends often extending to other nations in Asia-Pacific.
So now let’s look at some critical facts on the Japan e commerce
Key market data
- Annual online purchases (including travel): $166 billion
- Per capita annual online sales: $400
- People have access to the internet: 93.5%
- Annual ecommerce growth: 6.2%
- Annual growth in mobile commerce: 14%
The scale of the ecommerce market
Japan’s ecommerce business is expected to be valued at $135.5 billion by 2024, yet growth will be slow. Moreover, you have to note that online travel accounts for almost half of all online purchases in Japan, which is not included in this graph.
Spending on the ecommerce by product category
According to Statista, the most popular online product category for Japanese customers is travel, with $53.5 billion spent in 2019.
Preferred payment options for online transactions
In Japan, the most common online payment option is credit or debit card, followed by bank transfer and cash. Digital wallets are still in their infancy, accounting for only 2% of all payments last year.
Japan’s most popular social media platforms
In Japan, the most popular social media site is LINE. This is a messaging program with its own payment system. Besides that, Twitter and Instagram are the next.
The dominance of LINE is reflected in PayPal statistics that indicate purchases made through social media networks.
Forecasted Japan Ecommerce Market
C2C systems have recently been a popular addition to the ecommerce industry. This allows users to effortlessly sell used products for a reasonable price. While some merchants are concerned about the impact on sales, these channels also make customers less afraid of making the wrong purchasing decisions.
What do people purchase?
Regarding J.P. Morgan’s 2019 Payment Trends – Global Insights Report, the most common retail sectors online are travel, electronics, furniture, and household items. Furthermore, fashion is also one of the most popular goods categories in Japan. In addition, food, health, and beauty products, as well as toys, hobbies, and DIY items, all sell well. Besides that, Japan’s society ages and birth rates decline. Therefore, some of the best ecommerce prospects in Japan are businesses selling items to older populations.
Where do people sell online?
In Japan, the mobile commerce market, which includes shopping, services, and transactions, has developed significantly in recent years. Its overall size nearly doubled between 2013 and 2019, reaching roughly 4.55 trillion Japanese yen
Japanese individuals spend a lot of time on trains using their phones, with the typical working person in Japan moving for work for 1 hour 19 minutes every day, or 39.5 minutes each way. This opens up a large opportunity for marketers to connect with people who use online stores and social media platforms during their travels.
Top ecommerce platforms in Japan
The majority of international vendors start their journey into Japan on Amazon. It has roughly 12 distribution centers and four Amazon Prime centers in the country after investing extensively in infrastructure over the last decade. Therefore, you can distribute your products to clients quickly and easily via the Amazon FBA service.
Amazon sells everything in this market. However, with such a diverse range of items on offer and lots of local and foreign competitors, the competition is high. Therefore, this can make it more difficult for you to stand out with your product listings and photographs in a market where shoppers can see multiple similar products right next to yours.
In case you don’t have a successful reputation to support a higher price. Therefore, you have to make sure your pricing plan still allows you to make a profit after local transportation and storage costs are factored in.
- Amazon Sponsored Products is one of a number of advertising solutions that allows you to highlight your products (ASP).
- Amazon’s Fulfillment by Amazon (FBA) offers minimal customer support in Japanese.
- Gift wrapping alternatives for your products can be made available, which is a big benefit when selling products around important Japanese festivals and events.
- The Amazon Points system allows buyers to pay for items with their earned points.
HB Pro Tip:
The Amazon Algorithm (A9) can be unpredictable. Furthermore, organic search results can take a long time to appear. A long-term strategy focused on specialized keyword targeting and growing sales velocity is required for success. Meanwhile, Amazon Ads and Deals are a perfect way. It allows to quickly reach your audience on the platform by targeting branded, non-branded, and competitor-related keywords
Rakuten is a Japan e commerce giant. With roughly 49,000 shops and a quarter of Japan’s overall ecommerce market share, this is the second largest platform in the country. This may be enough to persuade you. However, many foreign merchants are hesitant to begin selling in Japan. Because the platform takes a greater time commitment and work to build up and manage your storefront for the Japanese market.
If you’re unfamiliar with Rakuten, the most crucial two points to remember. Firstly, it’s marketplace looks and performs differently than Amazon’s. Unlike Amazon, Rakuten allows firms to construct their own digital stores and change layouts, images, design, and messaging. This will engage with customers in a less “basic” way. Thus, if you can use strong brand credibility to boost conversions, this is a good place to start.
Secondly, Rakuten uses a partnership model. This allows merchants to manage their own inventory and customer support concerns without depending on the ecommerce platform. As a result, this allows you to provide more individualized care to your Japanese customers. However, it also puts an extra burden on your localization and customer service capabilities.
- Brands have complete control over how they show themselves to potential customers via the virtual shop, with the ability to customize the design and visuals. This will help you increase impact and conversion.
- In Japan, Rakuten’s Super Points loyalty-based rewards program is very popular, with members earning cashback and discounts.
- In-country warehousing models, like the Rakuten Super Logistics solution, are available to international merchants.
- It provides cross-border shipping management, omnichannel order fulfillment, and return management for online orders, similar to Amazon’s FBA.
HB Pro Tip:
Companies willing to make a significant investment in their online Rakuten appearance and branding via their storefront and listings can gain from up-selling their products based on its presentation and quality guarantee. Besides that, the foreign merchants can establish brand presence and manage how they are presented to their customers
Yahoo! Shopping is Japan’s third-largest ecommerce platform, with an estimated 28 million monthly visits. It sells everything from electronics to toiletries, both domestically and internationally, from thousands of sellers.
This platform integrates with other SoftBank and Yahoo-owned channels. For example, searchers are referred to the ecommerce platform via Yahoo! search engine results, service pages, and Yahoo-owned apps
Additionally, the older generations grew up when Yahoo was the most popular web platform, with many corporate computers using it as their default browser. Because older people know and trust, Yahoo’s array of online services and channels may make it easier to reach out to them.
- With a handful of basic templates available for creating a store, Yahoo! Shopping allows brands to create a virtual storefront and customize the overall look of their page.
- PayPay Bonus, PayPay Bonus Lite, and T points, all of which have a big user base in Japan, are available on the platform.
- Merchants have access to an analytics package. Therefore, it provides information on traffic to their pages, keywords used to get to their pages, visitor demographics, and overall behavior history.
In today’s Japan, Au Pay, formerly Wowma, is highly popular. The au brand, which was founded by the mobile phone firm KDDI, benefits from its parent company’s significant number of mobile users in Japan. It has over 38 million registered customers and over 14 million users to its “smart pass” app, more than 2500 physical shops.
Users can also earn points by paying with PayPay for their purchases. Besides that, they can earn extra points if they have a Yahoo Premium Account. This helps the business to gain a larger revenue market share from buyers who are already invested in the SoftBank/Yahoo ecosystem, similar to Yahoo! Japan. PayPay works in the same way as any other simple cashless payment option. This is rapidly gaining acceptance in Japan, with 25 million users expected by 2020.
PayPay Mall is expected to develop further. Moreover, the mobile payments market is expected to rise to roughly 4.4 trillion yen by 2023 and the cashless payment trend continues.
ZOZOTOWN is Japan’s largest specialty fashion ecommerce retailer, with both local and foreign brands. Its design and featured products follow current trends in Tokyo. This helped it gain a substantial following when it first started in 2004.
This is the top ecommerce platform in Japan for customers looking for new-to-market items from desirable brands such as United Arrow, Issey Miyake, and APC. It provides a more premium experience to users. Besides the ZOZOTOWN website, the company also publishes the “WEAR” stoppable magazine and just debuted a new app with the same name. Thanks to it, users can get fashion inspiration and user-generated material.
It’s a fantastic choice for western designers looking to create a brand in Japan and reach out to a younger audience.
ZOZOTOWN may be your best option if you want to attract a fashion-forward audience. However, you should be aware of its higher royalty fees compared to other platforms, and the qualifications required to sell on the platform. It will increase the sales potential and brand reputation.
Apparel, cosmetics, sports, technology, mobile, home life, living, food, entertainment, and books are selling on Qoo10. This platform welcomes all types of vendors, whether they are Japanese merchants or international brands.
Furthermore, user-generated reviews is one of the most effective techniques. As a result, this is helpful in persuading consumers of your reliability and trustworthiness. Besides that, This platform also includes the cost of different discount coupons. Therefore, it helps businesses attract clients from other platforms with lower prices. And then you can remove the burden of financing the cost of the discount.
Lohaco has a limited market share compared to Amazon Japan and Rakuten. However, it is very good for catering to younger female demographics by researching buying habits and reacting to market trends. To promote lifestyle content connected to its products, this platform uses an awesome design, functionality, and an appealing brand image. This site also manages the Style Lohaco blog, which publishes reviews, rankings, inspiration, profiles, and more. It also collaborates with manufacturers to make exclusive goods based on the concept of lifestyle-oriented design. Finally, engaging multichannel campaigns to attract customers.
The C2C Platform
In recent years, the consumer-to-consumer (C2C) marketplace industry has been growing, with buyers using applications and online platforms to sell goods to other consumers. Moreover, consumer trends in the C2C market and platforms like Mercari are now one of Japan’s greatest ecommerce sites.
What is the best ecommerce platform for your business in Japan?
When making a decision, we recommend the following questions:
- Do you require logistical assistance from your platform, like Amazon (FBA) service?
- Is it possible to generate more money by collaborating with someone who can handle sales on one or more Japanese ecommerce platforms?
- Are you prepared to handle each platform’s numerous localization processes, such as product listings and virtual shop setup?
- Do you have enough Japanese language skills to manage your customers’ customer service requests?
- Is there any platform that gives you a better possibility of increasing your ROI by increasing your capacity to sell to your precise target market?
- What is the level of competition on the platforms you’re considering?
How can foreign brands boost their Japan e commerce?
Cross-border shopping is more common in most developed countries than in Japan because of the Japanese consumer psyche. It may include a distrust of organizations, a high level of uncertainty avoidance, and extremely selective brand purchasing behavior.
PPC AND SEO MARKETING ON JAPANESE ECOMMERCE
Spending attention on ecommerce SEO is particularly important. Because each platform has excellent search capabilities and its own advertising options. However, in the early stages of ecommerce growth into Japan, PPC is probably the most powerful strategy for new merchants to develop sales. This is due to the cheap barrier to entry, quick scalability possibilities. Besides that, almost any company can create and execute a digital PPC campaign on platforms such As facebook or Google with less local language skills.
Building a Japan e commerce strategy
After you’re set up and running on Japan e commerce platforms, you’ll need to do a lot of maintenance and ecommerce marketing. Therefore, you can ensure your products sell successfully.
Furthermore, there is no absolute perfect solution for Japan e commerce to meet your needs. However, knowing your ability and willingness to handle the various localization, customer service, and logistic support obligations and requirements for each platform will help you figure out what you’re comfortable trying.
In case you want to discuss your choices, whether you have already run Japan e commerce or plan to do so soon. So you can contact us. ArrowTheme is very glad to discuss how to start your Japan e commerce. We are ready to support you all the time.