Skip to content
![[Infographics] Market Insights: Understand Online Shopping In Japan](http://boostcommerce.net/cdn/shop/articles/24fc672f023af399f8c54039442e17c7_1340x1172.jpg?v=1683605660)
Important Highlights of Online Shopping in Japan
eCommerce Performance in Japan
In 2021, eCommerce revenue in Japan was US$128 billion, an increase of 13% compared to 2020. It went ahead United Kingdom and just behind United States in term of revenue from eCommerce. Japan contributed 29% of worldwide growth rate and had an annual revenue growth rate of nearly 15%.
Overview of eCommerce performance in Japan
Average spending per users for online shopping is more than $2,000, which is pretty impressive. By 2025, the market volume of Japanese e-Com market is expected to reach $324M while the number of e-Com users is surpassing 100M.
Top categories the e-consumers in Japan usually spend their money on are Food & Personal care, Fashion, Toys, Hobbies & DIY, Electronics & Media, Home, Furniture & Appliances.
Product categories that the Japanese usually shop and buy online.
Mobile commerce or M-commerce uptake remains relatively low in Japan eCommerce world, accounting for just under a quarter of completed eCommerce sales. This can be explained by an ongoing preference for desktops and also a large aging population, which is more reluctant than younger generations to adopt smartphones.
Cross-border spending accounts for 18% of total eCommerce, with China, the U.S. and Australia ranked as the top 3 overseas shopping destinations.
Overview of mobile commerce and cross border shopping in Japan
Consumer behaviors of the Japanese
Japanese consumers between the ages of 30 and 59 making the highest dollar purchases. Older consumers are more inclined to shop online than younger ones. 76% of women aged 20-29 made online purchases last year, whereas 93% of the 40-49 age range did.
The Japanese consistently have higher online spending in the summer months when Japanese firms are known to give yearly summer bonuses. Average worker bonuses are nearly $3,000 and the spending of that bonus is primarily focused on luxury goods, leisure, and travel. Additional spending holidays include White Day (March 14) and international holidays such as Christmas and New Year. Black Friday is also gradually growing in prominence in Japan, with major domestic brands offering deals since 2016.
When it comes to digital payment methods, cards dominate payments trends (65%) with U$97.6 billion in sales. Alongside debit and credit cards, prepaid cards are also popular in Japan, with brands including BitCash and Mint.
Credit cards are more likely to be used than debit cards to complete an online shopping transaction: the number of e-commerce enabled debit cards is low, at 0.07 per capita. Bank transfers (furikomi), are the second-most utilized payment method in Japan (14% of sales). PayEasy, a popular domestic bank transfer service, offers the ability for shoppers to pay at post offices, banks and automated teller machines.
LINE, a messaging app with has its own payment system, is the dominant social media platform in Japan, followed by Twitter and Instagram. Half of the population uses social media regularly. The Japanese mainly watch videos and follow influencers for opinions on products. Nearly 75% of consumers check social networks before buying certain products, especially cosmetics and fashion.
Social media usage by popularity in Japan.
Japanese consumers require a lot of information before they make a purchase, which is important for companies from other countries to understand as it has a direct impact on the look and feel of product listings and website design.
Japanese people expect prices to be markedly lower on the internet. Unlike many other countries, where the gap is much more narrow, nearly half of products in Japan can be bought cheaper online, when compared to prices in local brick and mortar stores. 44% use price comparison sites. Transparency and loyalty matter to Japanese consumers.
Dominant trends in Japanese eCommerce market
Consumers expect lower prices on the internet
In Japan the lowest price can be found online almost half the time compared to most countries that don’t usually have a price gap between online and offline shopping.
Japanese online stores typically lower prices because online shopping is not a very popular shopping method for many Japanese consumers. With price comparison websites in Japan like kakaku.com, it’s easy for Japanese consumers to find the cheapest products.
The rise of the C2C market
The C2C marketplace includes platforms like second-hand marketplaces, online auction sites, and hand-made products marketplaces.
These marketplaces offer consumers to sell to other consumers, the most prominent example being eBay, but the segment also includes online auction sites, and platforms to sell handmade products, such as Etsy.
The market size of the second-hand C2C marketplace was estimated at 5.9 billion USD (1 USD = 108 JPY) in 2018. The growth has mainly been led by Mercari, an app that allows consumers to easily buy and sell second-hand products.
C2C marketplaces encourage consumers to buy products from retailers because it provides a safety net for customers who are more hesitant to buy products they aren’t sure of. The online auction market size was approximately 9.34 billion USD in 2018.
Seniors are shopping on mobile
Monthly consumption expenditure of those in their 50s is 2,700 USD, while those in their 20s is 1,570 USD. The number of new users in their 60s to 90s has increased by 29.8 times in 3 years (Rakuten). Their average transaction rate is 123% higher than users in their teens and 20s.
Seniors in Japan are spending more in online shopping than young adults.
The pandemic has changed Japanese consumers' sentiment
Consumers are still being pessimistic or unsure about a prompt economic recovery, and most people are remaining very cautious when it comes to their spending.
Up to 32% have taken on new shopping behaviors, including trying new stores and brands. Over 50% cite that convenience and value (better price/promotion, better delivery cost, better value, larger package sizes) as drivers for trying new places to shop.
Most consumers are making drastic changes in the way they manage their money, especially with regard to making purchases of goods and services.
What to consider when you want to penetrate into Japan eCommerce market?
Online retailers in Japan are benefiting from urban density, technically advance customers, developed economies, and a single language is being used for all the purposes in Japan.
Japan's distribution channel is highly developed, and the small size of the country makes shipping and product delivery much convenient. Elderly in Japan are avid smartphone and internet users and they have much money to spend.
These are some certain opportunities when online merchants want to approach Japan market.
Still, those entering Japan’s e-commerce market must master the challenges of a single-language culture. An important aspect of operating in Japan is understanding how keywords are handled. Keywords can be written in a number of different ways and the combinations are further increased by variations in spaces and word order. This is in addition to the typical variation introduced by synonyms.
It’s important for foreign companies to work with native speakers who have a deep understanding of which keywords are appropriate to use, word order, and writing systems.
Regarding competition in Japan eCommerce industry, domestic merchants are releasing sophisticated new offerings in an attempt to unseat Amazon Japan’s dominance.
Sales revenue of e-commerce retailer Amazon Japan G.K. from fiscal year 2013 to 2020.
For example, Japanese online fashion retailer Zozotown has launched the Zozosuit app, which allows online shoppers in Japan to order custom alterations to their clothes and have them delivered. International clothing retailer Uniqlo is using its home market of Japan to test AI functionalities on its e-commerce app, enabling customers to receive product recommendations and voice-activated customer service
Aware of all the opportunities, challenges, and competition of online shopping in Japan, you'll take a further step in penetrating into the market.
Read more: Understand online shopping in Germany
