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Japanese ecommerce is modelled on the platform model

Friday 4 March 2016 | 11:14 AM CET

Japanese ecommerce business is dominated by the platform model, reports.

According to the source, Japan has a large ecommerce market that generated roughly USD 80 billion in sales in 2015. This compares to approximately USD 350 billion of ecommerce sales in the US in 2015. China’s 2015 ecommerce sales exceeded USD 650 billion.

The three big ecommerce websites in Japan, in order of market share, are Rakuten, Amazon Japan, and Yahoo Japan Shopping. Taken together, these e-platforms account for roughly 50% of total Japanese annual ecommerce revenue.

Approximately 80% of Japanese consumers shop online. Seven out of 10 Japanese consumers, for example, are registered on Rakuten’s website — approximately 95 million users. Credit cards are the most popular ecommerce payment method in Japan. But other payment methods — such as cash on delivery, convenience store payments, and bank transfers — are also popular.

Ecommerce payment methods in Japan are credit cards (44%), cash on delivery (16%), bank transfers (15%), convenience store payments (9%), and other methods (16%). Ecommerce payment methods in Japan are credit cards (44%), cash on delivery (16%), bank transfers (15%), convenience store payments (9%), and other methods (16%).

Japanese culture values loyalty. Ecommerce merchants reward loyal customers more than in the US. Rewards programs and contests typically include prizes and progressively larger discounts. Promotions are important for Japanese online consumers. Almost everything is marked down to some extent to align with the culture of “getting a deal.” Some websites allow promotional codes to be used on top of already-marked-down products. Often, however, these “special” promotion codes are offered to loyal customers only.

Product returns are very low in Japan. This drastically reduces the operational costs for most websites. It also makes it easier to sell on the large marketplaces. Returns are so rare that some websites do not even have a return policy.

Japanese ecommerce websites have excellent customer service. An international retailer or manufacturer selling in Japan should ensure that it has Japanese-speaking customer service personnel, as 99% of residents speak only Japanese. Some marketplace websites, like Rakuten, allow third-party sellers only if their customer-support personnel speaks Japanese.

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