Topic of the week – The eCommerce Market in Japan
As we all know, when it comes to technology Japan is a powerhouse, and one of the leading innovators, so it is no surprise that the eCommerce market in Japan has grown by over 33% in terms of revenue pre-covid to present. This growth comes down to a number of factors, from increasing smartphone and tablet usage, to the effects of the pandemic and the recent boom in reCommerce. Consumer needs changed during the pandemic, and with more disposable income, much like the rest of the world, Japanese consumers flocked online to purchase. Interestingly, 2021 (the height of lockdown) saw a revenue high of $154.41bn USD, which then dipped back down to $145bn USD the following year, with predictions to reach an all-time high by the end of 2023 and continued growth forecasted. While Japanese consumers have been quick to adopt online shopping, they have struggled to get on board with online payment methods. The popularity of alternative payment methods has grown over the years, but cash is still king for some consumers.
While eCommerce is popular amongst all demographics in Japan, those aged 45-54 years old take the majority at 28.3% of a total 96 million users. The reasons for online shopping boiling down to the convenience of being able to order at any given time (51.8%), having products delivered to consumers’ homes (47.9%) and lower prices (44.3%) according to a share of respondents. The leading type of eCommerce sites in Japan are dominated by eCommerce marketplaces such as Amazon with a staggering 91% in popularity. In fact Amazon was the most visited online marketplace of 2022 with 623 million visits, followed by two Japanese marketplaces, Rakuten (558 million visits) and Mercari (132 million visits). Although Amazon remains the leader of the pack, it is interesting to see Japanese marketplaces close behind.
As mentioned, Japanese consumers were reluctant to adopt new online payment methods, with cash still being the most preferred payment method amongst 20.5% of respondents, however, credit card payments are currently the most popular across Japan amongst 75% of respondents. While Japan may not be as modern in terms of payment options, Japanese consumers have been early adopters of social media buying and the rising reCommerce trend. Although most consumers opt not to purchase through social media platforms, 13% of total consumers have purchased between 3-6 times throughout 2022, and 12% regularly purchasing through social media as one of their main online shopping channels. This also leads into the boom in livestream shopping that has emerged across 2022 to present. The highest amount of live commerce shoppers consists of those aged 30-39 years old at 3.6% male and 4% female. The total reuse market in Japan currently sits at over 3 trillion Japanese yen. The total market size of flea market apps in Japan in 2021 sat at over 1,243 billion Japanese yen with over 25% growth from the previous year.
The eCommerce market in Japan is huge and full of opportunities for retailers. If you are looking at expanding into the Japanese landscape, keep an eye out for modern trends and see if you can target the consumers preferences mentioned in this market update.
In other news
Inter-island Postal Drones
The first permanent UK drone delivery project has been announced in a collaboration between Royal Mail, Orkney Islands Council Harbour Authority, and Loganair. The service will use Skyports Drone Services’ Speedbird Aero DLV-2 aircraft, with a capacity of up to 6kg. The all electric drones will be used to deliver letters and parcels between Stromness to Royal Mail staff on Graemsay and Hoy. Postal workers will then conduct their regular postal routes. The need for safer and more efficient inter-island mail deliveries comes from the troublesome weather of Orkney, which can often cause delays in ferries and safety issues when it comes to docking. The service will operate for a 3 month test period with planned extensions. Read the full press release here.
Guy Fischer A1 Retail
Pro Carrier’s own Managing Director, Guy Fischer, featured in the July edition of A1 Retail Magazine, where he covers the need for smooth delivery and return processes, customer expectations when it comes to the online shopping experience and the increasing popularity of Pick-Up Drop-Off (PUDO) options. If you would like to read the full article, you can find it here.
eCommerce Market Stats
See some statistics relating to this week’s topics in the eCommerce market below.
eCommerce in Japan
- Japan is the 3rd largest eCommerce market
- Revenue is predicted to reach $153,984 million USD by the end of 2023
- User penetration rate is forecast to reach 82.8% by 2024
Most Popular Purchase Categories by Revenue (in billion USD)
- Fashion – 36.78
- Electronics – 31.82
- Beauty & Health – 23.03
Device Usage Split
- Desktop - 52%
- Mobile - 48%
*All statistics sourced from Statista, Shopping behaviour in Japan report, eCommerce in Japan report, eCommerceDB
That’s all for this week…
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