The pandemic put a serious halt on many brick-and-mortar stores. But on the other hand, it accelerated the growth of online shopping, and the Japan eCommerce market was no exception.
In 2020, the Land of the Rising Sun became the third largest eCommerce market. That year, Japan registered an eCommerce revenue of $114 billion USD. This marked a 29% contribution to the worldwide growth rate, according to ecommerceDB.
Imagine the great opportunities Japan has in store for online sellers in 2022!
This prosperous growth does not seem to be close to ending anytime soon. This is why we decided to analyze what the eCommerce market in Japan has in store for you next year.
Let’s dive right in!
Japan Ecommerce Market – Overview
COVID-19 transformed Japan’s eCommerce market. According to GlobalData, online sales registered a 10.5% growth by the end of 2021.
That’s quite a feat, considering Japanese users are slow to adopt new trends. But the pandemic lockdowns forced a new digital change in the country.
Most Japanese are working from home nowadays. This made both consumers and businesses switch to eCommerce platforms.
As of July 2021, Japan’s Ministry of Internal Affairs and Communications estimates that over 50% of Japanese homes order products and services online.
This is not only a local trend. Japanese consumers are now more open to making overseas purchases. DMFA (Digital Marketing for Asia) states that cross-border shopping increased by 17.2%.
At such a rate, it’s expected that Japan’s international purchases will grow by 18.3% in 2022. That’s around 20.2 million consumers shopping overseas.
But it takes more than only listing and advertising products to succeed in Japan. And that’s what we’ll discuss below. Let’s see how foreign sellers can make their mark in the Land of the Rising Sun.
Rakuten Online Marketplace
Since its launch in 1997, Rakuten has grown into the largest digital platform in Japan. In fact, this marketplace is often deemed as Japan’s very own Amazon
It’s also one of the most profitable marketplaces in the world. This is thanks to Rakuten’s long-term acquisitions, such as Buy.com. This purchase allowed Rakuten to expand its operations in the US market.
And the growth is well reflected in their revenue. Rakuten served the needs of 1.9 billion users in 2019. It also reported $31.7 billion in annual sales.
As the largest eCommerce site in Japan, Rakuten is a great venue to expand your store into East Asia.
Set Up Your Rakuten Account
Image source: https://www.rebates.jp/
To enroll in Rakuten, you’ll need to create a Japanese business entity. Then, you must set up a Japan-based bank account.
We recommend new sellers to use Rakuten’s very own partner network. These allies can help you operate your online store in Japan.
Image source: https://marketplace.rakuten.net/
Rakuten also features several eCommerce consultants. These are local experts who’ll advise you on store management. Consultants also give you insights on how to boost sales in the marketplace.
Once you create an account and submit your company’s data, you can upload your items. However, you’ll also have to pass the brand screening process.
This is a four-week process. Rakuten will conduct a business verification. Once you pass, you can select a fee to pay at the marketplace. It can be monthly, per item, or by category.
One perk of note is that you won’t compete with Rakuten for sales. Plus, you’ll be able to introduce brand-new items to Japan.
That’s a great chance to sell overstock of products, and to make your mark in Japan.
Another great strategy for Japan Sellers lies in digital payment services. GlobalData reports that 64% of Japanese consumers prefer to use payment cards for online shopping.
Plus, Amazon Pay has a 3.8% share of online payments. It’s only behind PayPal, which holds 5%.
The best venue to conduct said strategies is LINE. This is the most popular messaging app in Japan. Its daily usage is well above Facebook or Instagram.
LINE is an all-in-one social media platform. Features such as LINE Pay allow customers to make quick online payments.
The app also features healthcare consultation, music streaming, and an AI assistant.
Image source: https://www.amazon.co.jp/
The Retail Giant is on-par with Rakuten as Japan’s leading eCommerce site. Just in 2020, Amazon Japan made $12.3 billion in revenue, according to ecommerceDB.
Amazon Japan can make next-day deliveries to around 95% of the country. This is thanks to Japan’s first-rate infrastructure.
Such ease of transportation delivers a grand opportunity for Amazon Prime sellers to attract new followers in Japan
Amazon merchants in Japan also get access to all of Amazon’s seller tools. This includes Fulfillment by Amazon, Brand Registry, and many more.
Related content: The Ultimate 2021 Fulfillment by Amazon (FBA) Guide
A Few Extra Tips
It takes more than great products and a good marketing strategy to succeed in Japan. Locals expect high-quality, detailed content from sellers.
Here’s what you need to win the trust of Japan’s eCommerce market:
- Go native. Don’t assume your customers will understand English. Make sure your descriptions and customer service are in native Japanese.
- Details. Submit as many product details as possible. This goes both for item descriptions and product images. Japanese consumers want to have all the relevant data of an item before making a purchase.
- Expand. Don’t limit yourself to one marketplace. Set up online stores in Amazon Japan, Rakuten, and Yahoo! Shopping. These are the 3 top online stores in the country.
Japanese cities enjoy world-class communication lines. The country has world-class transport routes. This is crucial to manage fast, national deliveries.
The land of the rising sun also features great delivery services. For example, Yamato is the most popular carrier in Japan. EcommerceDB states that 52% of Japanese online stores use Yamato as their service provider.
Also, Sagawa Express and Japan Post are another two great options. According to Digital Marketing for Asia, these carriers help 45% and 23% of stores, respectively.
Such companies can prove to be great allies for international sellers. For example, Rakuten merchants can work with one of the previous sellers.
So, partner up with one of these service providers. You’ll certainly boost your shipping capabilities across Japan.
Ecommerce is thriving in Japan. As of 2020, around 74% of Japanese consumers had made an online purchase, according to Statista.
GlobalData also predicted a 6% compound annual growth rate (CAGR) for Japan until 2025. And Statista forecasts a CAGR of 8%. That’s a growth of more than $273.4 billion USD!
The country’s population is tech-savvy. There’s high mobile penetration, and users are shifting to online shopping every day.
And then there are stores like Rakuten and Amazon Japan. Such marketplaces will help new brands serve the Japanese market big time.
So, if you’re looking to expand overseas in 2020, then keep an eye on the Land of the Rising Sun. You’ll be set to make your mark in no time.
Esteban Muñoz is an SEO copywriter at AMZ Advisers, with several years’ experience in digital marketing and e-commerce. Esteban and the AMZ Advisers team have been able to achieve incredible growth on the Amazon platform for their clients by optimizing and managing their accounts and creating in-depth content marketing strategies.