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Japan eCommerce Country Guide

A guide that can help you improve your cross-border strategy

Japanese ecommerce is a huge opportunity. There’s a big, rich, online country over there. With a population of 126M people, Japan is bigger than Germany plus Benelux and EU Scandinavia combined – something to consider when contemplating any sort of global ecommerce rollout. Don’t be put off by media stories of a country in the economic doldrums; growth may not be great, but it’s still a wealthy place.

Internet use, ecommerce, and underlying demographics in Japan offer some interesting opportunities, which may well complement other countries in a global website portfolio. Overall its ecommerce scale is fourth behind only China, US and UK globally. The population is unusually skewed towards older consumers, who are enthusiastic online shoppers. If your range targets 35-65 year olds, then you’ll find Japan a particularly attractive prospect.

Although shipping is obviously going to be more expensive than to a nearby European country, this is offset by very low customs tariffs (generally in the 5%-10% range, with a minimum threshold of about £65) for most likely product categories. Above a certain price point, you may well find that even including shipping you can still list products more cheaply in Japan than you can at home. Japanese consumers also have a much lower propensity to return products than you might be used to – especially if you’re used to somewhere like Germany – which further improves the potential economics.

Moreover, unlike China, the ecommerce landscape is not totally alien. You’ll find familiar names are big in Japan, such as Google and Facebook for example. However it isn’t quite your domestic landscape. Google is only number two for search, with the local Yahoo JP at number one.

More disconcertingly, perhaps, Facebook isn’t the biggest social network (especially among that attractive 35+ demographic). That accolade goes to LINE, with its rather culturally-specific "cute stickers" as a key marketing tool.

Also half-way between home and China, there’s Rakuten, a big local marketplace for sure, but nowhere near as dominant as the Tmall/Taobao + JD axis in China. You could use it – many western brands do – but you don’t have to use it.

And then there are the subtle differences in taste, style, marketing tone, formality, to a much greater extent than you might see between western European countries. Not forgetting, of course, all those convenience stores, one for every <2400 people, which form an important part of the ecommerce landscape as payment, delivery and drop-off locations.

In summary, Japan is a huge ecommerce opportunity. Once you look into it, you may well start wondering why you didn’t tackle it earlier. At first glance, once you overcome the language barrier, it looks extremely accessible. Nevertheless, the differences in taste, process, expectations, and in some cases tools, such as Yahoo or LINE, should not be underestimated. In short, it’s strangely familiar.

Summary 

  Japan is a rich country, with twice the population of the UK.

  Don’t be put off by the headlines. Japan may not be growing much, but it isn’t poor.

In raw population/GDP terms, entering the Japanese market is approximately comparable with entering Germany plus the whole of Benelux plus the whole of EU Scandinavia combined – an interesting comparison when thinking about the challenges of cross-border ecommerce.

  Be wary of the demographics when making this kind of comparison; the population is heavily skewed towards the old. Don’t, however, worry that all your customers will be gone tomorrow – the projections are for the population to shrink from 126M to about 100M by 2045. But 2045 is a long way away, there’ll still be a lot more Japanese than Germans or French, and they’ll still be wealthy.

  Seasonality is helpfully comparable to back home, although with generally colder winters and hotter summers. Many Japanese have four seasons’ wardrobes.

 

To view the contents of this guide, visit the following links:

Japan's retail landscape

Japan's online shopping behaviours

Japan's competitive landscape

Marketing in Japan

Legal framework and regulation in Japan

Internet usage and connectivity in Japan

Payment and Logistics in Japan