Japan is one of the most exciting places in the world for online sellers. As well as being the third largest ecommerce market in the world with excellent logistics infrastructure and a domestic population that has significant purchasing power, consumers have a strong appetite for Western products that are localized and marketed in the right way!
From the traditional barriers to entry that typically deter online merchants to the key opportunities that exist here, below is our window into the world of ecommerce in Japan.
Ecommerce in Japan — Market Overview
A Crash Course from the Humble Bunny Team!
If you do nothing else, watch this short video of our team breaking down some of the most important points and takeaways from this article, covering what ecommerce businesses owners need to prepare for and top tips on how to make sure you get off to a great start with any ecommerce marketing strategy.
Most Popular Online Shopping Segments in Japan
Source: GWI, Statista, JP Morgan
5 Key Opportunities for Cross Border E Commerce Businesses
| A strong appetite for high quality and luxury Western products | Western brands with an existing reputation internationally have the potential to do very well in Japan. Leveraging global credibility is an important way to build presence and scale quickly. However, primary reasons for buying from non-Japanese brands also include availability, prestige, quality, and price. |
| Online shopping is easy and rewarding | Japanese people like to shop online. Brands and ecommerce platforms work together to create a rewarding ecosystem that meets the needs of consumers efficiently and proactively — meaning millions of people actively search for the products they need online every day. |
| Older shoppers have migrated online | Many consumer groups that were once hesitant to trade their love for brick-and-mortar shopping and cash payments have migrated to online shopping. This is a result of several things including the pandemic and a growing confidence in ecommerce as a safe, reliable and convenient way to shop. |
| High disposable income in certain consumer segments | Japan is among the richest countries in the world and many shoppers have significant personal wealth — with older segments driving huge demand for certain products and services such as healthcare, medical equipment, pharmaceutical products, biotechnology, and safety equipment. |
| Amazon is Japan’s most popular ecommerce platform | Existing Amazon sellers can take advantage of the platform’s popularity in Japan, allowing them to navigate the set-up and management process with ease. |
Forecasted Ecommerce Growth
| Year | Revenue in million USD (US$) |
| 2021 | 112,465 |
| 2022 | 120,292 |
| 2023 | 128,054 |
| 2024 | 135,666 |
| 2025 | 143,279 |
Source: Statista
5 Biggest Hurdles for Foreign Sellers
| A preference for familiar domestic brands | While consumers are enticed by Western brands that already have strong brand equity globally, they are less inclined to buy from foreign brands if there is already a popular alternative offered by a domestic company. Outsiders, therefore, are sometimes at a natural disadvantage here. |
| Extremely high customer service expectations | Japanese consumers value customer service as a top indicator of credibility and a determining factor in whether they will shop from a company again. |
| The complexity of Japanese ecommerce platforms | Many ecommerce platforms are harder to get started on than others – especially if you don’t have extensive Japanese language support in your team which will make registration, management, and ongoing localization more complicated. |
| Japanese standards for quality are very high | The Japanese are incredibly selective about the products they buy and will typically evaluate purchases with considerable scrutiny. A great deal of attention will be paid to things like technology parts, ingredients, materials, overall durability and whether a product will actually do what it’s designed for. |
| Consumers want rewards and loyalty schemes when shopping online | Brands and companies that don’t offer some kind of rewards or loyalty scheme to customers are at a disadvantage in Japan. Most consumers are invested in multiple loyalty schemes, whether this is ecommerce platform-based or directly from the brand. |
Learn More About the Japanese Consumer!
Most Visited Ecommerce Platforms
Sourced: SimilarWeb’s September 2022 domain overview
Japan Ecommerce – Amazon, Rakuten or Yahoo!?
Top Ecommerce Trends for Japan
- Mobile is the most preferred device for online shopping in Japan, meaning everyone from ecommerce sellers to the ecommerce platforms themselves need to make their content mobile-first. Pictures, videos, descriptions, landing pages and more all need to be built to offer a strong UX on mobile.
- The Social Commerce industry has recorded strong growth over the last few years, supported by increased ecommerce penetration and high social media usage across society – especially in the nation’s largest urban areas like Tokyo and Osaka.
- There has been a rise in the popularity of the ecommerce C2C market and platforms like Mercari — now one of the best ecommerce platforms in Japan — offer customers a new way to shop (and sell). However, this doesn’t seem to have eroded the popularity of Japan’s biggest B2C platforms like Amazon and Rakuten.
Top Ecommerce Websites in Japan – Popular B2C & C2C Marketplaces
Preferred Payment Methods for Online Purchases in Japan
Localizing Your Japanese Ecommerce Strategy
Products and content that isn’t localized for the Japanese market don’t tend to do well. This includes everything from the way product descriptions are designed and how photography is approached to the actual way products are packaged and adapted for local needs. Some of the biggest risks for foreign brands and sellers that don’t localize effectively include:
- Poor feedback from users who might spread negative messages about your brand and products
- Customers requesting refunds because product information is inaccurate
- Shoppers perceive you to be too “mysterious” and not as transparent as Japanese brands
- You may get fined for inaccurate descriptions when working in sectors like finance or health
- The inability to create a strong connection with your new audience
Ecommerce In Japan – Top FAQs Answered
What’s the delivery/logistics landscape like in Japan?
The delivery market is led by Amazon (Amazon’s FBA service) and Rakuten (Rakuten super logistics). Both are viable options for any foreign brand selling in Japan, however, there are also several domestic shipping and delivery companies like Japan Post, Yamato Transport and Sagawa, whose services have evolved to support ecommerce businesses. If you have your own storage facility or you are partnering with someone who does, there are countless courier services that will help you deliver your products to your customers.
What’s the most recommended cross-border shopping model?
We always recommend using in-country warehousing in Japan, whether you use independent solutions for long-term storage and fulfill the “last mile” (to the customer), or choose to use Amazon FBA or Rakuten Super Logistics to both store and ship your products. This will reduce shipping costs and ensure faster and more reliable deliveries as well as reduce additional friction that might come with shipping products directly from other countries to the end user in Japan.
Which ecommerce platform should I use as a newbie in Japan?
Amazon is typically where most international sellers begin their journey in Japan and the platform we recommend. With a familiar “look and feel” your team can jump straight in and start setting up your products in very much the same way you would in your home market. You can also consolidate listings if desired with the platforms Build International Listings (BIL) feature. Rakuten is also a fantastic platform to sell on — it just takes a little more time and energy to do right!
Logistics in Japan — 3 Need-to-Know Tips for Cross Border Ecommerce
Getting Started!
We’ve helped several ecommerce brands from Europe and the US enter the Japanese market with their product and we can say without a doubt that the potential is real!
Yet, we would also advise that anyone attempting to bring their operations to Japan should only do so with the right resources, support and strategy in place first. If you’re on this journey yourself, whether you’re just getting started or looking to level up your approach, get in touch for a free consultation.