Japan - Country Commercial Guide
eCommerce

Describes what a company needs to know to take advantage of e-commerce in the local market and covers prominent B2B websites.

Last published date: 2022-01-08

Overview

For tips on how to use eCommerce in exporting and international business strategy, please visit the eCommerce Innovation Lab (EIL).

Japan is one of the largest eCommerce markets in the world. According to the World Retail Congress Global ECommerce Market Ranking 2019 report, Japan is the third largest eCommerce market by revenue, behind China and the U.S. Growth has been steady. The e-Commerce Market Survey 2020, a survey by the Ministry of Economy, Trade and Industry (METI) estimates the size of the eCommerce Business-to-Consumer (B2C) market in 2020 at $180 billion, remained at approximately the same level of the previous year, and Japan’s internet penetration at 83.4percent.  The sales of goods grew significantly, however, the sales of travel related services dropped drastically due to the pandemic of COVID-19.  The survey estimates the Japanese Cross-Border eCommerce from the U.S. at $2.8 billion, increased by 7.7 percent versus 2019.  Also, the same survey

Current Market Trends

According to METI, Japan’s eCommerce B2C expenditures in (1) goods; (2) general services; and (3) digital services, are segmented as follows:

  • Sales of goods account for 63.5 percent of eCommerce expenditure in Japan, led by clothing sales. This market segment significantly grew by 21.7 percent versus 2019 because of the pandemic. Enterprises such as ZOZOTOWN, Amazon, and UNIQLO have successfully fulfilled the customers’ needs by incorporating internet technology into their growth strategies. As teleworking was encouraged by the Japanese government, products necessary or useful for telework sold well. Food and beverage sales are continuing to grow steadily, as well.
  • Services account for 23 percent of eCommerce expenditure in Japan, led by travel. Travel services include online booking services, including leaders such as RAKUTEN travel. However, eCommerce B2C travel services drastically shrank by 60.24 percent because of the COVID-19.   Food and beverage services also have high potential, including delivery service, online reservations, and ratings systems.
  • Digital services account for 12.8 percent of eCommerce expenditure in Japan, led by online gaming, followed by eBooks. This market segment grew 14.9 percent versus 2019.  This is Increasing use of smartphones for eCommerce purchases is driving demand for online gaming, e-books, and other digital sales.

Spending Holidays

Japan’s biggest spending holiday is New Year.  Japanese clean up house and buy new clothing for New Year.  Also, Japan consistently has 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 Christmas.

Local eCommerce Sales Rules & Regulations

Various GOJ agencies, including METI and the Ministry of Internal Affairs and Communication (MIC), regulate eCommerce in Japan. Consumer and personal information/data protection laws apply to the online marketplace.  Also, all online retailers must follow the Specified Commercial Transactions Law regulated by the Consumer Affairs Agency

In May 2020, Japan’s Diet passed a new law, the Act on Improvement of Transparency and Fairness in Trading on Specified Digital Platforms, that will require e-Commerce platforms to submit an annual report to METI on their business practices. METI will subsequently solicit comments from merchants, conduct reviews and publish the results. U.S. firms Google, Amazon, Facebook and Apple, as well as Japanese firms Rakuten and Yahoo-Japan, are among those affected. See Cabinet Office summary.

The Japan Fair Trade Commission (JFTC), which will assess antitrust issues in B2C e-commerce, conducted and - in 2019 - released an online trade practices survey, which included a perspective on manufacturers, distributors, retailers, online shopping malls, and other players. See results of the survey (https://www.jftc.go.jp/en/pressreleases/yearly-2019/April/190409_1.html).

Local E-Commerce Business Service Provider Ecosystem

Companies using eCommerce channels to reach the Japanese consumers or businesses must consider:

  • eCommerce platforms
  • Payment methods
  • Shipping logistics

Customer service, returns, after-sales service

Companies looking to enter the market should be able to advertise, brand, and provide customer support in Japanese. The major eCommerce companies in Japan include:

eCommerce Platforms in Japan

  • Rakuten
  • Amazon Japan
  • Apple
  • Yahoo! Japan Shopping
  • Department Stores and Retail Outlets
  • Seibu Sogo
  • Mitsukoshi Isetan
  • Daimaru
  • Takashimaya
  • Aeon 
  • Apparel eCommerce Websites
  • ZOZOTOWN
  • Supermarket eCommerce Sites
  • Ito Yokado
  • Maruetsu
  • Books and Media eCommerce Sites
  • Book-Off
  • Kinokuniya  
  • Tsutaya