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Japan eCommerce Retail

Japan is the world’s fourth largest eCommerce market after China, the United States, and the United Kingdom.  In August 2022, Japan’s Ministry of Economy, Trade and Industry (METI) released its annual eCommerce Market Survey showing that Business-to-Consumer (B2C) eCommerce sales of goods grew by 8.6% in 2021 compared to the previous year, estimating the total B2C eCommerce market at $188.1 billion.  Compared to 2019 (pre-COVID) B2C sales of goods grew by 32.2%.  The survey further reported that Japanese consumers engaged in $3.1 billion worth of cross-border online shopping from United States outlets in 2021, an increase of 9.3% from the previous year, indicating that Japanese consumers are buying not just from Japanese online stores but from American ones as well.  With Business-to-Business (B2B) eCommerce, the market is estimated at $3 trillion based on the total of all commercial transactions between companies in all industrial categories in Japan.  METI’s 2021 eCommerce Market Survey reports that food and beverage; home appliances, including personal computer related products and accessories; apparel and fashion accessories; and household goods and furniture sold well online.  These four segments totaled more than $18 billion in sales, accounting for approximately 73% of the total market.

According to the Survey of Household Economy conducted by Japan’s Ministry of Internal Affairs and Communications (MIC) on the share of household shopping online in Japan, the number of households shopping online has grown steadily over the past four years: 35.9% in 2018, 39.4% in 2019, 44.4% in 2020, and 47.8% in 2021.  As the B2C eCommerce market expanded due to COVID, a current challenge involves the high redelivery rate.  It is estimated that 20% of packages are redelivered, creating a burden for logistics companies.

A February 2022 survey in Statista’s B2C Japan eCommerce report indicates the top 3 benefits of online shopping for Japanese consumers are: goods are delivered to doorsteps (48.3% of respondents); orders can be made at any time (45.2% of respondents) and prices are lower (45% of respondents).  The report predicts that the number of households that shop online will continue to increase post-COVID.

Rakuten, Amazon Japan, and Yahoo! Shopping are the top three eCommerce platforms in Japan.  Rakuten is the largest platform with more than 100 million registered members, and its gross merchandise sales (GMS) exceeded $45 billion in 2021.  By comparison, in the same year, the GMS of Yahoo! Shopping was $8.9 billion, whereas the 2021 Q4 report of Amazon showed that net sales attributed to Japan including Amazon Web Service were $23 billion.  At this moment, only Fulfillment by Amazon (FBA) and Rakuten are the options for U.S. companies to sell in the Japanese market without having a physical presence in the country.

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