Japan is a densely packed island with a large percentage of online shoppers. Most citizens have Internet access and often surf the Web with one or more mobile devices. The Japanese have certain expectations when it comes to shopping online, so retailers should learn about the market beforehand.
A cross-border e-commerce report by The Paypers said Japan’s large urban population and rates of Internet usage contribute to its strong e-commerce market. In 2013, nearly 80 percent of Japanese citizens had Internet access. This number translates to about 101.6 million people.
Seventy-five percent of these Web-surfers – about 16 million individuals – used the Internet to shop. Combined, they spent about ¥11.2 trillion or US$104.7 billion. Of these consumers, 89 percent used a mobile device to make their purchase. Smartphones, tablets and future phones accounted for 22 percent of Japan’s e-commerce sales, resulting in about US$9.7 billion in spending. Phones, it seems, are the mobile device of choice. Fifty-five percent of the population owns a smartphone, while only 10 percent have a tablet.
Japan’s online sales market rose at a healthy pace. Between 2008 and 2013, e-commerce sales grew at a compound annual growth rate of nearly 11 percent.
According to Practical Ecommerce, the Japanese tend to buy from online marketplaces. The nation’s biggest three shopping sites are Rakuten, Amazon Japan and Yahoo Japan Shopping. Combined, they make up about half of the country’s e-commerce revenue each year – Rakuten itself has approximately 95 million users, or seven in 10 people. However, there’s still a lot of room for independent retailers to enter the market. It’s a good idea for them to expand into Japan, as the country’s average order value is high relative to that of the U.S.
Online marketing in Japan
When advertising in this East Asian country, adopting the language is a must. The Paypers noted 99 percent of the population – that is, 125 million people – speaks Japanese. The next commonly spoken languages are Korean and Chinese.
According to a separate report by The Paypers, the Japanese prefer to make purchases with a credit or debit card. Visa and MasterCard were the most popular choices, while JCB came in third. Some citizens also make electronic payments through bank transfers. A payment processing company well-versed in international currencies and methods helps online businesses accept purchases from Japanese consumers.
Practical Ecommerce wrote the Japanese have high expectations for customer service and returns are incredibly rare. The Japanese also place a high value on loyalty programs. They’re very concerned with getting the most for their money, and companies tend to offer greater discounts and prizes than they do to American consumers.
Speaking with Hawaii Business Magazine, Dave Erdman, the founder and president of PacRim Marketing Group, said businesses need a strong team to enter the Japanese market.
“Develop a trusted cadre of resources,” he said to Hawaii Business Magazine. “Interpreters who know your brand and messaging, translators, copywriters and protocol experts. Leverage ‘champions’ of your business for important introductions and business opportunities.”
Despite the language barrier and presence of rivals like Amazon, Japan’s e-commerce potential is huge. Online retailers should make note of customer service and payment options when entering the nation’s market.
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