Japan Growth in eCommerce
Japan’s Business to Consumer (B2C) eCommerce has been steadily growing.
The Japanese eCommerce market has been growing steadily accounting for $163.5 billion in sales in 2018. Japanese consumers purchase travel related services, clothing, and food and beverage products online. This growth trend is expected to continue, and U.S. companies should focus on good value, high quality products that meet Japanese consumers’ tastes and style demands.
According to the “eCommerce Market Survey” by Ministry of Economics, Trade and Industry (METI), the size of the B2C eCommerce Market in Japan in estimated at Yen 17,984 billion or approximately $163.5 billion in 2018. It increased by almost 9% from the previous year and it makes up just over 6% of the overall retail market.
The Ministry of Internal Affairs and Communications conducts monthly surveys measuring expenditures on goods and services ordered over the internet per household. The latest survey shows Japanese consumers, who buy products/services online, spent an average Yen 33,536 (approximately $305) in January 2020, a 13.7% increase from Yen 29,499 (approximately $268) spent in January 2018. Not only the amount spent, but the number of households who purchased products/services online increased from 36.3% to 42.8%. This is clear evidence of the steady growth of the Japanese B2C eCommerce market.
U.S. and Japanese eCommerce market sizes are expanding at impressive growth rates, although Japanese consumers were initially skeptical of the channel. Between 2012 and 2018 eCommerce in Japan grew from $86.5 billion (3.4% of total retail sales) to $163.5 billion (6.2% of total retail sales), an 89% increase. This compares to USA eCommerce revenues, which were reported US$230.5 billion (5.4% of total retail sales) in 2012 and $519.6 billion (9.9% of total retail sales) in 2018, showing 125% increase. This data is from the Annual Retail Trade Survey: 2018 by U.S. Census and the 2018 eCommerce Market Survey by Ministry of Economic, Trade and Industry (METI) with an exchange rate of JPY 110 to US$1.
Consumers of all ages are willing to purchase products and services online, but with consumers between the ages of 30 and 59 making the highest dollar purchases according to recent data.
Data collected in 2019 and reported through the Average Monthly Expenditures in Japan Report total US$130 per household, with an average of 22 items being purchased. Leading purchase categories include Travel-related products and services ($31.30); food and beverage ($18.00); clothing and footwear ($14.20); education and entertainment ($13.70); home electronics and furniture ($11.40). This data was sourced from the Monthly Expenditure on Goods and Services Ordered over the Internet per Household by Age Group of Household Head (Two-or-more-person Households), conducted by the Ministry of Internal Affairs and Communications (MIAC) and with an exchange rate of JPY 110 to US$1.
Japanese consumers are discriminating and make purchase decisions based on value, quality and style. The ubiquitous availability of rapid delivery services and a variety of convenient payment methods support the continued growth of this channel as a viable option for reaching Japanese consumers. The availability of after-sales service is an important feature expected by consumers and a robust customer care capability must be considered.
It is important that U.S. companies recognize that their online presence in Japan must meet local tastes and use strategies that work for Japanese consumers to drive traffic to their online locations. Please see additional information on eCommerce in Japan found in our report Competing in Japan with eCommerce.
Our eCommerce Innovation Lab offers additional information. CS Japan continues to monitor the growth of eCommerce and we encourage you to contact Hirono Taki, Senior Commercial Specialist at firstname.lastname@example.org to explore this opportunity.