Payment and Logistics in Japan

We’re going to illustrate many of the key points of both payment and logistics by walking through screenshots of some typical local website checkouts. As we’ll see, there is a common theme running through them – the importance of those 52,000 convenience stores as both collection and payment locations.

So unlike the UK, where it would be fairly bizarre to group the two topics of Payment and Logistics together in a report, in Japan they are much more intertwined.

Payment Landscape


Japan is much more of a cash society than the UK or US; over half of all retail transactions still take place in cash.

This is reflected in its ecommerce payment landscape (Figure 28). "Others" includes especially payment via internet banking, often at an online ATM in – you guessed it – a convenience store.

It’s fairly standard to charge a handling fee for cash-on-delivery transactions, usually around ¥500, typically with an upper limit on cart-size around the £200 mark, but this still doesn’t seem to put consumers off.

Credit card options always include the JCB scheme. In terms of transaction flow, this is very similar to a standard Visa/Mastercard process, but the acceptance certification process may be different – talk to your payment gateway to see if they are already enabled.

Typical options

Just as a benchmark, Amazon JP offers the following options: cash; many convenience stores (Family Mart, Lawson, Ministop, Circle Sunkus, 7-11 – we’ll see why these particular ones later); ATM payment; online bank transfer; certain local e-wallets; credit cards (starting with JCB, as well as Visa, Mastercard, Amex and Diners); Amazon cards.

To illustrate many of the key points on a simpler screen, here’s the payment options page on the checkout of one of Japan’s large department store groups (Figure 29).

Figure 29 - example payment options screen

Firstly they offer their own AEON card, which operates not only as a payment method but also a loyalty points scheme. Although this particular one doesn’t, typically these offer some sort of small discount: 5% is typical.

Secondly, there are the card options: JCB, Visa, Mastercard.

Thirdly, an e-Wallet option: WAON.

Fourthly, there’s the pay in convenience store option. The customer has a deadline for this: 10 days from placing the order. Note that this is a two-step process – the customer pays in the convenience store before the shipping process commences. It is not "reserve and collect".

If you haven’t implemented a delayed payment method previously (for example because you are already accepting German payment methods such as Giro) then be warned that these can play havoc with your existing order management process and financial reconciliation, because you have orders on hold, and stock against them, without a corresponding payment.

Points make prizes

As noted previously, many larger Japanese retailers operate points-based loyalty schemes, which typically translate directly into online tender. Aoyama for example, used below to illustrate delivery options, offers basically a 4 points per ¥100 spent scheme, where each point is worth ¥1. So there’s a 4% implied discount. But then there’s a 5% discount when using the Aoyama store card too. Oh yes, and at the time we did the research, they were also offering 20% discount on the website compared to the store.

Delivery: Japanese consumer expectations

Local expectations

Unlike the UK or US, where aggressive delivery or collection promises are an escalating battleground, Japanese consumers generally expect to wait a bit longer for their parcels. But once they’ve waited, they often expect a hyper-convenient service.

Here’s a representative example delivery options page from another large Japanese site (Figure 30):

The order was created on the 9th of April, and the earliest available delivery date is only the 14th. Not so impressive. But the customer can then:

  1. Nominate the delivery date.
  2. Choose a precise delivery time: morning; 12:00-14:00; 14:00-16:00; 16:00-18:00; 18:00-20:00 or (shown) 20:00-21:00.
  3. And in case you’re wondering, this is the standard – and free – option.

For customers who live in apartment blocks, incidentally, a rather common option is to specify delivery into the apartment block "locker"; it looks like a letter box for the courier, but the residents have access via PIN code or equivalent.

Global retailers

International retailers with a localised Japanese presence typically make similar promises (because they’re usually using the same local courier companies – see below).

Here for example is Zara’s Japanese checkout (Figure 31):

The lower three options are: standard (2-3 days); express (1-2 days, with a ¥490 surcharge); and once again, nominated day, which is only available after 3 days.

Click & collect

The upper option in Figure 31 is collect-in-store: this is increasingly available in Japan (see below), which is free, but your stuff won’t get there for 2-3 days. Basically this is a (slightly sluggish) click & collect pretty much as you would recognise it at home.

Obviously this isn’t an option you can emulate without stores in Japan. Amazon solves this by offering (as do many Japanese retailers, and most stores on Rakuten) collection at the same convenience store chains from which it takes payment i.e. pretty much all of them. We’ll see below how this relationship works.


Another option you probably won’t be emulating is a version of reserve and collect specifically intended at overcoming the issues associated with selling online in a culture that isn’t very comfortable with the idea of returns: order to up 6 items for delivery to nearby store where you can try them on, without pre-paying. 

Meanwhile Adidas’s Japanese website, has a more, well, "traditional" online returns policy: "if you don’t like it, it’s tough".

This is actually rather exceptional, but returns policies are mostly ungenerous by UK online standards. The standard, which most seem to follow, is a period of between 8 and 14 days for a return to be possible at all, and almost invariably the customer has to contact the call-centre first, and then pay the postage.

One area where international brands can, and do, differentiate themselves is a more sympathetic returns policy: both Zara and H&M, for example, offer 30 day returns at no cost inside Japan.

UK retailers benchmarking

Even Next, which probably has the most localised Japanese site based outside of Japan of those UK retailers checked (Figure 32), doesn’t offer free returns from Japan, and in fact doesn’t have a local Japanese returns address (unlike, for example, in Canada where it has a Toronto local returns address).

Here are the shipping promises to Japan for a sample of others:

One best-practice which is definitely worth copying is Asos’s returns shipping process from Japan, which includes a form to complete pre-printed in Japanese, with a pre-designated courier (Black Cat – see below) which offers returns drop-off at (no surprise here) convenience stores. They charge a flat ¥2350 (about £15) for each such return.

Logistics Landscape


Standard parcel shipping across Japan, assuming a likely central zone port-of-entry, typically operates to the following service levels (Figure 33):

The legend is: blue (which as you surely remember is a lucky colour in Japanese culture) is 1 day; green 2 days; pink 3 days to the islands, most especially Okinawa. There are also one or two more remote islands that are technically part of Japan, but you can safely ignore them for ecommerce purposes.

Local parcel carriers … and their convenience stores

The local parcel delivery landscape is dominated by three main players: Japan Post, Yamato (Black Cat), and Sagawa (Figure 34). A fourth, Nippon Express ceased operating in 2010.

So far, so simple. But, Yamato and Japan Post have strategic alliances with different convenience store groups: Yamato with 7-11, Family Mart and Circle Sunkus, Japan Post with Lawson and Minishop. (Oh yes, and both Yamato and Sagawa have a reciprocal arrangement with DHL while Japan Post has an alliance with Fedex.)

Cutting through all this complexity: if you aren’t shipping much to Japan, then you’re probably going to be accessing it via a domestic partner of Japan Post. It’s unlikely you’ll be able to take advantage of the full range of delivery options, but you may well be able to offer returns-via-convenience store. Royal Mail, for example, partners with Japan Post. You prepare customs form CN22 (<£270) or CN23, and off you go. 5-7 day delivery is the norm.

If you are doing more volume, then Yamato has offices across Europe; Asos are using them in Japan for example, and as noted in the returns section above, have a pre-printed returns form with Yamato’s black cat logo very prominent on it. In this case, more of the range of service and convenience options, including some of the sophisticated things like nominated day, may become available to you. Given that Japanese ecommerce is not quite as urgent in its standard shipping options as in the UK or US, you might well be able to be credibly competitive. Incidentally, if you are already using Metapack as a shipper integration solution, Yamato is one of its pre-integrated partners.

Global carriers

UPS, DHL and Fedex all offer services to Japan. Their key offers shipping outbound from the UK specifically into Japan are summarised in Figure 35 (not an exhaustive list).

Direct access alternatives

A growing alternative is to use Direct Access solutions, such as those offered by wnDirect, P2P eSolutions and others. Such solutions are used to consolidate volumes to achieve better air transport rates and provide a fully managed service that includes:

• Customs clearance, often ‘wheels up’ in advance of arrival.

• Multiple points of entry, which reduce overall lead times by reducing in-country travel.

• Calculation and payment of duties, under HS code classification (HS = Harmonised Schedule. Harmonised Tariff Schedule is a moderately standardised global coding structure for applying customs duties to different kinds of products. )

• Tracked returns.

Customs & Duties

General comments

Despite Japan’s occasional media reputation as a somewhat "closed" market with high tariff barriers, this isn’t true for anything you are likely to be selling via international ecommerce. In reality, average import duties are extremely low, in the 5%-10% range for typical candidate categories. There’s also a fairly high minimum duty threshold of ¥10,000 (about £65) below which the rate is effectively zero.

Japan uses the global standard HS coding system to classify products for assessing tax rates, so if you’ve already implemented this elsewhere (for example to ship to the USA), then there’s no incremental data maintenance burden (and if you haven’t already done so it’s a useful forward planning activity anyway).

Japan has made its official process documentation available in English,99 and its HS tariff rates are also available in English.

In summary, the process is straightforward, documentation is available in English, and perhaps most importantly, you’ll generally be able to list your products more cheaply than you can anywhere in the EU.


For illustration, here are a few sample duty rates (Figure 36):


 • Convenience stores feature strongly in the Japanese landscape; all 52700 of them may be payment locations, collection locations or return pick-up locations.

•  Convenience in Japan typically manifests itself not in urgency but in service; one or two hour timed nominated day delivery is common for example, but same day/next day delivery is less necessary.

•  When accepting card payments, you will probably need to put accepting the JCB scheme high on your to-do list.

•  Payment integration with convenience stores is definitely a nice-to-have.

•  Japanese are keen on loyalty points. Obviously this will be difficult to participate in, unless Rakuten is your preferred route-to-market.

•  The Japanese parcel delivery landscape is dominated by Yamato, Japan Post and Sagawa.

•  For small scale players, Japan Post is your likely partner, possibly accessed via your domestic parcel carrier (e.g. Royal Mail).

•  If you have volume, then Yamato have a strong presence in many countries.

•  Yamato and Japan Post both have alliances with different group of convenience stores. You may be able to exploit these, especially for returns handling.

• Japan generally doesn’t have a strong returns culture. An overseas retailer may be able to create some differentiation by being more flexible in this area than the locals.

• Asos’s pre-printed returns form, pre-integrated with Yamato, is a practice worth copying!

•  Customs tariffs are surprisingly low. Obviously there’s the cost of shipping to Japan to consider too, but the underlying selling price of your products is likely to be lower in Japan than back home, even after tariffs are applied.




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