Describes how widely e-Commerce is used, the primary sectors that sell through e-commerce, and how much product/service in each sector is sold through e-commerce versus brick-and-mortar retail. Includes what a company needs to know to take advantage of e-commerce in the local market and , reputable, prominent B2B websites.
Last Published: 9/25/2017
Overview

Visit the U.S. Commercial Service’s E-Commerce Innovation Lab

Japan is the world’s third largest—and one of the fastest growing—e-commerce markets in the world. The growth rate has become stable over the past few years, with annual growth estimated at 8.7% in 2016. With Internet penetration estimated at 91% of the population, Japan represents a significant market opportunity. According to the Ecommerce Foundation’s Japan 2016 report, ecommerce accounted for 2.8% of the total GDP of $4.123.3 billion, with over 76.9 million people (70%) shopping online. Japan’s developed economy, highly urban population, and single language make the market attractive to online retailers. Highly developed distribution infrastructure and small country size make delivery easy and convenient. Market growth is expected to be steady for the foreseeable future.
 
Current Market Trends
Currently, the most popular ecommerce trend in Japan involves travel. 91% of leisure flights and 86% of hotel stays were booked online in 2015. Music and car insurance purchases were third and fourth, respectively, with 79% and 67% of sales in these categories being conducted online. Clothing is the most popular item purchased online. Fashion e-commerce is a growing sector, and niche specialty players dominate the space. Food and beverage sales also continue to grow. Overall, high quality items, including well known global name brands are in high demand.
 
One notable trend is that although a large percentage of purchases are conducted online, only 12% of Japanese shoppers purchased from abroad in 2015. This is one of the lowest levels of foreign buying activity in the Asia-Pacific region. This could be attributed to a lack of trust in foreign suppliers and a reluctance to wait for longer international shipping. Japanese shoppers are risk averse and seek brands they know they can trust. Return rates are low and excellent customer service in Japanese is expected.
 
Spending Holidays
Japan consistently has higher online spending in the summer months when Japanese firms are known to give yearly summer bonuses. Average worker bonuses are nearly $3,000 and the spending of that bonus primarily focused on luxury goods, leisure, and travel. Additional spending holidays include White’s Day (March 14) and international holidays such as Christmas and New Year’s.
 
Selling Considerations
U.S. companies using E-commerce channels to reach the Japanese consumers or businesses must consider
  •  E-commerce platforms
  • Payment methods
  • Shipping logistics
  • Customer service, Returns, After sales service
  • Companies looking to enter the market should be able to advertise, brand, and provide customer support in Japanese.
 
The U.S. Commercial Service’s E-Commerce Innovation Lab can help exporters develop a strategy.
 
E-commerce Platforms in Japan
The major e-commerce companies in Japan include:
 
Department Stores and Retail Outlets
 
Apparel e-commerce Sites
 
Supermarket e-commerce Sites
Books and Media e-commerce Sites
Digital Marketing
Marketing in Japan is incredibly important to a product’s success as a majority of people in Japan have internet access, smartphones, and E-commerce’s increasing market share. Thus recently, digital marketing has become one of the primary ways businesses reach out to consumers. According to a Dentsu 2016 report, digital market spending amounted to 1,159 billion yen in 2016. Mobile advertising are also rapidly expanding. In 2016, around 50% of total digital ad spending was spent specifically on mobile ads. Search Engine Marketing (SEM) also accounted for 59% of digital advertising spending in 2016. In order to reach these segments, Japanese language and knowledge of cultural nuance is required.
 
E-commerce Intellectual Property Rights
Rakuten and other marketplaces have been working to heighten awareness of intellectual property rights issues in the E-commerce sector as well as working to patent business models both domestically and internationally. Intellectual Property rights are strong in Japan and patents are granted on a first-to-file basis.  Rakuten
 
“M-Commerce”
One online purchasing trend that cannot be ignored is the rapid increase in “M Commerce” – mobile e-commerce transactions. The percentage of online transactions on mobile platforms is nearly 60% of all purchases. An important consideration for those looking to reach this segment is proper formatting for mobile devices. Popular e-commerce platforms such as Amazon Japan, Rakuten, and Zozo have readily available applications to facilitate M-Commerce setup.
 
E-Commerce Payment Methods 
Japan’s e-commerce payment options are many. Credit card and debit card payments account for 66% of payments for e-commerce transactions. A variety of other “eWallet” and E-Payment options are also proliferating. In addition, cash payments for online purchases are accepted at convenience stores (konbini). About 17% of such payments are made in cash at konbini after products are delivered, a popular option for many teens without bank accounts or credit cards.
 
Opportunities

Commerce Expo Tokyo
B2B trade exhibition. Seminars covering Payment, Delivery & Logistics, Marketing, Customer Service & Customer Retention Marketing, Digital & Mobile Marketing
February 13 -14, 2018, Annual
 
 
CEATEC Information Technology Trade Show, Tokyo
Certified by the U.S. Department of Commerce Trade Fair Certification Program
U.S.A Showcase organized by U.S. Commercial Service Japan
October 3-6, 2017
 
SEMICON Japan Trade Show, Tokyo
Certified by the U.S. Department of Commerce Trade Fair Certification Program
U.S.A Showcase organized by U.S. Commercial Service Japan
December 13-15, 2017
 
INTER BEE Trade Show, Tokyo
November 15-17, 2017
 
CS Japan Contact
Ms. Atsuko Shimada, Commercial Assistant

Atsuko.Shimada@trade.gov
 
Social Media
In a fashion-forward culture defined by social in groups, it is no wonder that social media has been a dominating and progressive commercial market influence in Japan. For marketers trying to reach this highly mobile market of influencers it is important to keep in mind some of the unique characteristics of Japan’s culture that affect its social media usage. The first is anonymity. People in Japan desire the connection social media creates but are often shy and live in highly urban populations. Society emphasizes conformity over individualism. Online anonymity provides an outlet and an opportunity for freedom of individual expression. Many people seek to customize their online personalities in order to express what publicly would be considered immodest.

In online social circles, Japanese users focus on sharing “moments” and life experiences. This can be seen in Japan’s love and fascination for seasonal rituals, such as the origins cherry blossoms, and once in a lifetime memories are cherished. Social media allows people to share and create these moments. Those wishing to advertise should focus on creating a branding or image that promises to deliver the sentiment that people in Japan seek. Alongside the product, a memory or moment that promises to deliver an emotional moment would be most successful.

LINE is perhaps the most widely adopted social media platform in Japan. It offers an integrated multimedia messaging service and media platform designed for users and marketers alike. With 218 million active monthly users worldwide, an estimated 91% of Japanese social media users are using LINE. LINE also launched Line Pay in 2014 as a mobile payment and transfer service. However, Mixi, Twitter, Facebook, Instagram and other global Social Media platforms also are extremely popular.

 

Prepared by our U.S. Embassies abroad. With its network of 108 offices across the United States and in more than 75 countries, the U.S. Commercial Service of the U.S. Department of Commerce utilizes its global presence and international marketing expertise to help U.S. companies sell their products and services worldwide. Locate the U.S. Commercial Service trade specialist in the U.S. nearest you by visiting http://export.gov/usoffices.



Japan eCommerce Industry Trade Development and Promotion eCommerce