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: 2020-10-31

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.  A survey by the Ministry of Economy, Trade and Industry (METI) estimates the size of the eCommerce Business-to-Consumer (B2C) market in 2019 at $178 billion, up 7.65% versus the previous year, and Japan’s internet penetration at 89.8 percent.

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 54.3 percent of total eCommerce expenditure in Japan, led by clothing sales. This market segment grew 7.74 percent versus 2018. Enterprises such as ZOZOTOWN, Amazon, and UNIQLO have successfully fulfilled the customers’ needs by incorporating internet technology into their growth strategies.  Flea market-style mobile app provider MERCARI also is also highly influential in the clothing market. Food and beverage sales are continuing to grow steadily, as well.

Services account for 37 percent of total ecommerce expenditure in Japan, led by travel. Travel services include online booking services, including leaders such as RAKUTEN travel. eCommerce B2C travel services grew 4.8 percent versus 2018.  Food and beverage services also have high potential, including online reservations and ratings systems.

Digital services account for 11.1 percent of total ecommerce expenditure in Japan, led by online gaming, followed by eBooks.  Increasing use of smartphones for eCommerce purchases is driving demand for online gaming, e-books, and other digital sales.
Spending Holidays

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 international holidays such as Christmas and New Year.

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.

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.  Read the the results of the survey.

Local E-Commerce Business Service Provider Ecosystem

U.S. 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

Department Stores and Retail Outlets

Apparel eCommerce Websites

Supermarket eCommerce Sites

Books and Media eCommerce Sites