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eCommerce Marketplaces in Japan

eCommerce Marketplaces in Japan

Japan eCommerce market is more concentrated to marketplaces than for example in Europe.

The leaders in the Japan retail eCommerce market are two marketplaces, the local Japanese Rakuten Ichiba and Amazon’s Japan version amazon.co.jp. The marketplaces controlled around half of the market that in year 2017 had value of 111 billion usd and is estimated to be over 120 billion usd in 2018.

Rakuten.co.jp is the biggest one with the market share of 27 %. The specialty of Rakuten is that it is a massive ecosystem which serves nearly 87 million regular customers. The retail eCommerce is a big part of the ecosystem, with several digital services from bank services and insurances to goods and they serve they customers offline too.

Rakuten has very effective loyalty system called Rakuten points to engage customers to use multiple Rakuten services under their account. Consumers get points for all their transactions in Rakuten and then can use the points to buy more within the ecosystem. Nowadays the points can be even used to buy Big Mac from McDonalds, showing just how deeply integrated Rakuten is in the Japanese society.

Amazon.co.jp is the second biggest marketplace in Japan with market share of around 20 % market share. The fully localized Amazon version is offering all the Amazon services and is increasing popularity in Japan. Particularly people looking for foreign products tend to look for products more in Amazon, making Amazon more preferable option for foreign merchants to start selling goods to Japan.

The success of marketplaces is partly explained with customer behavior of Japanese consumers. They are more careful when it comes to ordering products from new, and especially foreign, online shops. For example, barrier to give their credit card number to a new online shop is higher in Japan than in other countries.

The best strategy to start eCommerce in Japan is to utilize global marketplaces for selling products and to conduct marketing inside and outside the marketplaces to attract consumers. Building awareness for a new brand on the market is expensive and slow inside the marketplaces.

Therefore, especially a new brand for the market should make marketing in Japan with own localized brand page, in Japan social media and in Google.co.jp to get orders from in the marketplaces. Once the brand is more known among consumers and products have marketplace reviews, banner advertisement and other marketing inside the marketplaces will become more effective.

Are you interested in eCommerce in Japan?
Flying Lynx can organise the whole process for your brand, starting from market research to confirm the product market fit. If research shows potential, the next steps are to prepare Japan marketing plan, build up localised sales channel solution, including logistics to Japan and manage money transfers. After that the next step is to SELL.

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