TRENDS & INSIGHTS
Spotlight on… e-commerce in Japan
As one of the world’s biggest e-commerce markets – with a unique consumer demographic – Japan is an intriguing destination for European e-commerce businesses.
Japan is the fourth largest e-commerce market in the world, after China, the U.S. and the UK.3
Japan is an advanced country with a substantial consumer market. It’s GDP of $5.18 trillion makes it the third largest economy in the world,1 and its big e-commerce sector continues to grow.
The country also has an interesting demographic mix, with older generations making up a large – and very active – consumer group.
Japanese consumers in general are distinguished by high levels of disposable income and a preference for premium goods and services.2 And with cross-border e-commerce forecast to grow, the country offers exciting potential to ambitious businesses.
E-commerce in Japan: at a glance
The size of the B2B e-commerce market in 2019 (€2.7 trillion).4
The B2C e-commerce market size in 2019 (€149 billion), having more than doubled during the prior decade.5
The forecast compound annual growth rate (CAGR) for cross-border e-commerce, worth $2.59bn in 2019, between 2020-2030.6
The average number of national holidays Japan has each year – with several now becoming key online shopping festivals.7
of Japanese citizens are over 658
In focus: Japan’s older consumers
Older generations make up a key consumer group in Japan. Currently 28% of its citizens are over 65,8 and by 2035 one in three people will be 60 or older.9
They are also the nation’s most active consumers,9 which can partly be explained by the many seniors remaining in employment. Almost 50% of those aged 60-69 are still working, as are approximately a third of those aged 70-74.10
Many older consumers in Japan are also very active online, showing similar tendencies to other generations. The Statistical Handbook of Japan states that in 2019 the internet usage rate exceeded 90% in each age group between 13 and 69 years old.11 And in 2020, almost half of Japan’s online shoppers were over 45 years old.12
Getting to know the export market
Japanese business culture can be very different to that found in Western Europe. One of the biggest differences is that it can be much more formal.13 There’s also a strong emphasis on building trust – developing direct relationships and showing commitment are an important part of doing business in Japan.1
It may worth considering other elements of Japanese business etiquette when doing business in person, for example if you are visiting customers or exhibiting at a trade fair. A useful overview can be found here.
Some of the main cultural pillars can also translate into the foundations of successful customer interactions. For example, using polite language in all social posts and marketing, and showing high levels of respect to customers at all times.14
Japanese consumers research products very heavily before making a purchase, paying close attention to reviews, recommendations and other elements that can help them judge a brand’s reputation.12 They are also brand loyal – particularly older consumers – and quality and service expectations are high.15 Finding ways to tap into these consumer preferences could prove rewarding.
Three more things to know
Localising could help you get ahead
Japan is a single-language country, so to win over consumers it’s important to adapt all content to the local language. In fact, Japan’s single-language culture has been cited as a key reason behind the country’s low rate of cross-border e-commerce, which is 10% of the total, compared to 50% across the wider APAC region.7 Of course, that also means that cross-border competition is lower than in other countries in the region, so investing in a professional translation of your website could help your business to get ahead.
The pandemic is influencing e-commerce
The Covid-19 crisis has had a big impact on e-commerce in Japan. Around 45% of people say they have purchased more online since the start of the pandemic, including more than a third of consumers over 60.16 And some of these changes are expected to continue beyond the pandemic. A survey by McKinsey shows that 96% of people currently purchasing online will continue to do so. It also indicates that over 1 in 10 people have tried a new digital shopping method during the pandemic – with 97% of those saying they intend to continue using it.17
Reliable deliveries are key
Japan is a relatively small country with good logistics services, so customers are used to fast and reliable deliveries.12 Being able to offer this could be an important element in successful trading. Ensuring you are well-informed on customs practicalities and procedures, as well as using reliable logistics service providers, could help to keep shipments moving smoothly.
Disclaimer: The information provided on this page does not constitute legal, tax, finance, accounting, or trade advice, but is designed to provide general information relating to business and commerce. The FedEx Small Business Hub content, information, and services are not a substitute for obtaining the advice of a competent professional, for example a licensed attorney, law firm, accountant, or financial adviser.
1. Exporting to Japan | Great.gov.uk
2. Why do business in Japan? | Export to Japan
3. Global e-commerce explained: stats and trends to watch in 2021 | Shopify
4. Business to business (B2B) e-commerce market size in Japan from 2010 to 2019 | Statista
5. E-commerce in Japan – statistics and facts | Statista
6. Japan cross-border e-commerce market report, 2020-2030 | Grand View Research
7. 2020 E-commerce payment trends report: Japan | JPMorgan
8. Countries with the oldest populations in the World | PBR.org
9. Turning silver into gold: Marketing to Japan’s dynamic seniors | Carter Japan Market Resource Network | 2019
10. One in Three Japanese Aged 70 to 74 Still in Employment | Nippon.com
11. Statistical handbook of Japan, 2020 | Statistics Bureau of Japan
12. Getting into ecommerce in Japan? Here’s everything you need to know | Humblebunny
13. Japanese business etiquette | Export to Japan
14. How to win the hearts and trust of Japanese consumers | Info cubic
15. Japan: reaching the consumer | Santander Trade
16. Impact of the coronavirus (COVID-19) pandemic on the online purchase behavior on consumers in Japan as of March 2021 | Statista
17. Survey: Japanese consumer sentiment during the coronavirus crisis | McKinsey
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