Japan B2B Ecommerce Market — Insights & Analysis

Posted By Jim Kersey

We explore some of the major things taking place in the B2B sector today, including how many firms are significantly improving efficiency and productivity by implementing new online sourcing and transaction processes for parts and raw materials.

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Overview of Japan’s B2B Ecommerce Market

Japan has one of the largest and fastest-growing consumer ecommerce markets in the world (third after the US and China), but is also home to a massive B2B ecommerce industry that exceeds 370 trillion yen, with wholesale accounting for the largest share of the market at around 101 trillion Japanese yen.

The nation also has a substantial transport manufacturing and electrical equipment manufacturing industry in the domestic B2B ecommerce market and is at the center of a large and evolving East Asian B2B ecommerce landscape, in which it is set to play an increasingly significant role.

Sector Size (Trillion JPY)
Wholesale 100.61
Transportation machinery manufacturing 54.22
Electrical equipment manufacturing 39.11
Textile, daily necessities and chemicals manufacturing 37.65
Food manufacturing 27.1
Ferrous and nonferrous metals manufacturing 25.25
Construction and real estate 20.86
Industrial machinery and precision equipment manufacturing 18.12
Telecommunications 16.7
Finance 14.2

Source: Statista

The Role of B2B Ecommerce for Businesses in Japan

Manufacturing plant using parts from Japan b2b ecommerce market

Whether it’s out of necessity or to take advantage of new opportunities, Japanese corporations are setting up new digital-first processes to carry out sourcing, supply chain management and B2B transactions. Many companies now purchase raw materials through digital portals or marketplaces.

On one hand, this allows sales to be conducted faster and more efficiently than previous methods by phone or email. However, one of the biggest benefits for firms is the cost savings that come with reorganizing internal structures to leverage the availability of procurement options online – accessing competitive pricing options and reducing the workload of internal staff previously tasked with carrying out lengthy inquiry activities.

As we see more organizations restructure and evolve to survive amidst global competition, we’ll likely see more businesses integrate B2B ecommerce into their standard workflows.

For sellers of parts and materials, moving processes online is also a no-brainer. As well as cutting down manual order processing and inquiry response times through a centralized system, having a strong digital presence also allows for greater client acquisition opportunities, through SEM marketing and digital ads targeted at specific markets.

Importantly, many B2B interactions take place between businesses with existing relationships. As suppliers launch new online processing features for orders, clients are migrated online, often with onboarding support offered by the seller. This leads to greater efficiency for both parties.

Key Features of B2B Ecommerce

  • A wider range of products, parts and materials can be reviewed more efficiently by buyers without the necessary delivery of brochures, presentations or explanations from sales reps
  • Prices can be adjusted in real-time and costs and reductions may appear more transparent
  • Systems can be set up to allow for both repeat transactions and ad-hoc purchases
  • Intuitive online order features may allow for more customized order

Drivers of Growth in the Japanese B2B Ecommerce Sector

Inventory team managing stock for japan b2b ecommerce market

There are a growing number of exchanges taking place online between buyers and sellers in Japan. Some of these are a result of existing trade relationships that have moved from traditional forms to digital, yet there are also many new interactions emerging.

The Emergence of New Japanese B2B Ecommerce Marketplaces

B2B marketplaces such as Monotaro or ASKUL offer several benefits, such as scalability, analytics, and an approach that aims to enhance the customer experience. Strategies used by these platforms closely mirror those used by B2C ecommerce platforms like Amazon — introducing features like suggestions, ratings, reviews and more to both support the buying journey but also strengthen their relationship with the marketplace itself rather than individual suppliers.

As more materials and parts become available, such as construction materials, electrical parts, chemicals and other specialized items, the usage of these platforms by businesses is likely to grow. And as the reputation of online B2B platforms grow, businesses that have yet to make the move to digital transactions may be enticed to consider new supply options to support their efficiencies and access more competitive prices.

Learn About Japan’s B2C and C2C Marketplaces!

Corporations Restructure for Greater Efficiency

While Japanese corporations aren’t as hierarchical or traditional in terms of management structure or internal processes these days, many are still in the process of adapting from long-established dynamics. As we see more corporations evolve, a greater volume of transactions are likely to be carried out online through B2B ecommerce in Japan. Procurement systems are likely to be optimized as part of this evolution with a greater online component playing a role.

Trading Houses Set Up Digital Platforms

Many trading houses in Japan such as Mitsubishi Trading Co. have already established internal B2B ecommerce platforms for their customers, supporting online exchanges with existing buyers and opening doors for other ecommerce activities. As these companies anticipate the threat of new B2B marketplaces enticing buyers away, we’re likely to see even heavier investments made in this space.

Key Insights and Analysis

Assembly line for electronics using parts from Japan b2b ecommerce market

The pace of adoption for B2B ecommerce as an alternative for big corporations is likely to depend on the sector. Where Japan is a global leader, the nation can control the speed at which the market moves online. For instance, this may be the case with consumer electronics.

However, in segments where European or US companies lead the way, Japanese companies may be forced to migrate faster to B2B ecommerce in order to keep up with competition.

In situations where Japanese companies are selling directly to buyers in markets that are already familiar with and, to a large extent, expect digital-first ecommerce functionality, there will also be an expectation for organizations to adapt more quickly – setting up online platforms that meet the needs of their clients.

Market to Develop As Supply Chain Realities Change

Businesses across the world have felt the impact of disrupted supply chains during the pandemic. The reliability of these chains as well as the cost of operating are crucial components in strategic decision-making for Japanese business owners. Any business that relies on parts and materials from East Asia and beyond will place heavy scrutiny on how production speed and efficiency can be improved.

Obstacles to Expansion

The emphasis on product quality and uniqueness from both the Japanese consumer population as well as manufacturers may limit the inclination to source products from B2B marketplaces and suppliers operating from abroad. Many procurement methods are also entrenched in non-digitized forms and official documentation processes.

Japanese Market Entry in 2022 — A Crash Course for Inbound Business

Getting Into Japan’s B2B Ecommerce Market?

Fulfillment manager shipping parts for Japan b2b ecommerce market

Most experts predict growth in the B2B ecommerce market in Japan, as well as in the wider APAC and East Asian region. This may provide new opportunities for both suppliers with online platforms and digital marketplaces to build new connections with buyers.

Equally, Japanese manufacturers and producers appear inclined to adopt new digital processes if the offering is right. On the side of both buyers and sellers, there is an increasing need to be highly responsive, technologically capable and open to adopting more efficient digital processes in the world of sourcing and procurement.

If you’re getting into the Japanese ecommerce market, whether it’s B2B or B2C, let us know and we’d be happy to offer advice or support during the process!

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