As well as being one of the largest and most developed economies in the world, Japan has the fourth largest ecommerce market globally, after only the US, China and Germany.
Excellent logistics infrastructure, an affluent population and a strong demand for products and services of all kinds have been core to the nation’s huge and growing ecommerce sector. And as with Japan’s oldest (and wealthiest) demographic groups taking up online shopping more readily, the market is set to keep growing.
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
The maturity of the Japanese ecommerce market has been supported by high internet penetration rates, a desire for convenience and the fact that over 90% of the country’s population reside in urban areas—making next day deliveries and easy returns possible for most. In fact, over one third reside in and around Tokyo which benefits from several nearby fulfillment centers from both Amazon and Rakuten.
Other key drivers of continued growth include:
- A high GDP per capita of $39K+
- High mobile penetration with 85% owning a smartphone
- Fast average internet connection speeds (fixed – 93.26 Mbps & mobile – 40.89 Mbps)
- Increased confidence in shopping online and on mobiles
- The convenience and dominance of ecommerce giants like Amazon and Rakuten
- An increased range of payment options
Most Visited Ecommerce Platforms By Monthly Visitors
Rakuten is Japan’s homegrown ecommerce giant hosts over 49K brands and virtual shops and is the country’s second largest ecommerce platform. However, Amazon has remained the market leader since overtaking Rakuten several years ago after sustained investment and brand building in Japan.
Interestingly, Yahoo, despite its diminished global presence, is still thriving in Japan and is now the fourth most popular platform by monthly visits. And more recently, we’ve seen C2C platforms like Mercari pull in a huge amount of attention from the local population — offering people a new way to shop.
![C2C platforms like Mercari](http://</div></section><section class="section-box section-box--grey shortcode push-articles">
<div class="reader-col">
<h2 class="pointText u-text-align-center">"Articles</h2>
<article>
<a href="https://www.humblebunny.com/starting-business-in-japan-guide-for-2022/">
<div class="push-articles__thumb fadeout-link" style="background-image:url('https://www.humblebunny.com/wp-content/uploads/tokyo-office-buildings-starting-business-in-japan-2022.jpg')"></div>
<h3>Starting A Business in Japan — A Guide for 2022</h3>
</a>
</article>
<article>
<a href="https://www.humblebunny.com/how-to-build-trust-online-stores-in-japan/">
<div class="push-articles__thumb fadeout-link" style="background-image:url('https://www.humblebunny.com/wp-content/uploads/customer-service-representative-online-stores-in-japan.jpg')"></div>
<h3>Selling On Online Stores in Japan – How to Build Trust</h3>
</a>
</article>
</div>
</section>){kind=link}
As well as functionality, product availability and pricing, loyalty schemes and community engagement are a huge factor in whether shoppers frequent various platforms. For instance, a large portion of Japanese shoppers choose Rakuten for their ability to rack up rewards with the Rakuten Super Points, which is connected to the already popular credit card product.
| Amazon JP | 592M |
| Rakuten | 519M |
| Mercari | 131.9M |
| Yahoo Shopping | 97.8M |
| Zozotown | 47.5M |
| Au Pay Market (Wowma) | 27.1M |
| Paypal Mall | 27.8M |
| Qoo10 Japan | 17.9M |
Sourced: SimilarWeb’s November 2022 domain overview
Japan Loyalty Program Market Size Growth Projections
| Year | Value in Trillion JPY |
| 2019 | 2.01 |
| 2020 | 2.07 |
| 2021 | 2.1 |
| 2022 | 2.15 |
| 2023 | 2.24 |
| 2024 | 2.33 |
| 2025 | 2.43 |
Source: Statista
The Japanese B2B Ecommerce Market
Japan’s B2B ecommerce industry is massive and exceeds 370 trillion yen, with wholesale accounting for the largest share of the market at around 101 trillion Japanese yen. Experts predict continued growth in this area as Japan’s largest corporations set up new digital-first processes to carry out sourcing, supply chain management and B2B transactions. A growing number of businesses now purchase raw materials through digital portals or marketplaces.
| Market Segment | Trillion (JPY) |
| Wholesale | 100.61 |
| Transport Machinery Manufacturing | 54.22 |
| Electrical and Information-Related 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 | 14.12 |
Source: Statista
Most Popular Online Shopping Segments in Japan
The concern for many Western brands is the domestic preference for Japanese-made products in addition to the very high expectations for quality. Yet, we’ve already seen a strong appetite for the right kind of products from abroad, especially in the luxury products segments.
Market Share of Leading Ecommerce Segments
| Airlines and Hotels | 22% |
| Food and Drink | 18% |
| Electrical Goods | 12% |
| Clothing and Footwear | 11% |
| Health and Beauty | 7% |
Source: Statista
Most Commonly Offered Shipping Providers By Ecommerce Platforms in Japan
Short delivery times, with next day options expected by most consumers, are the default in Japan. As well as being a relatively small and well connected country, there are countless courier services for sellers and customers to choose from.
| Yamato | 57.0% |
| Sagawa Express | 45.0% |
| Japan Post | 23.0% |
Source: EcommerceDB
Learn More About Japan’s Logistics and Fulfillment Landscape
Preferred Payment Methods for Online Purchases in Japan
Japanese customers like to make payments online in a range of ways today, not just with credit cards. The payments landscape continues to evolve to suit the preferences of more people, removing potential barriers for ecommerce growth. For instance, those who still prefer to use cash on delivery are able to shop online with ease in Japan today.
| Credit Card | 75% |
| Convenience Store Payments | 33% |
| E-Money And Qr Code Payments | 28% |
| Bank Transfers, Direct Debit, Atm & Post Office | 21% |
| Cash On Delivery (Cod) | 16% |
| Bank Transfers (Mobile & Online) | 16% |
| Direct Carrier Billing | 1% |
| Other | 6% |
Source: Statista
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. |
Read Our Full Guide On Getting Into Japanese Ecommerce
Learn More About the Japanese Ecommerce Market
With growth predicted in the Japanese ecommerce market, it’s no surprise that many brands have considered expanding operations here. By leveraging the right value proposition, we’ve already seen Western brands achieve a huge amount of growth here when sales in their home market have stagnated.
No doubt, a better understanding of the market and the right strategy may provide brands with new areas for growth, building connections with consumers in one of the biggest consumer and ecommerce markets globally.
If you’re getting into the Japanese ecommerce market, let us know and we’d be happy to offer advice or support during the process!