Launching E-Commerce in Japan (APAC)

The Market

Some numbers to keep in mind when planning your e-commerce presence in Japan: Japan’s GDP is #5 in the world, e-commerce spending even #4 globally. Out of 127 Million Japanese, 109 Million are online. 97% of these online users have made purchases online. While 74% of browsing is done on smartphones, e-commerce spending is split, with 48% on a PC and 46% percent on a smartphone (tablets with 6% are also on the rise).

Big Players

Japan’s online market is dominated by large online shopping malls. In mindshare, Rakuten is the behemoth of online shopping in Japan, 80% of online shoppers have an account there. This is not to say that international companies can’t compete, Rakuten with 27.7% market share is closely followed by Amazon with 25.9%. A somewhat distant third is Yahoo! Shopping with 9.3% market share (Yahoo! in Japan was bought out by SoftBank years ago and is completely independent of its hitherto parent company in the US). Apple, interestingly, is at #4 with 6.9% market share.

Why have two US companies been able to capture such large market segments in Japan? Despite the great connectivity and technology many Japanese retailers are still struggling with the shift to e-commerce, and as 7&i holdings (owner of the 7-eleven convenience store chain) puts it, are roughly 10 years behindcompared to the US.

This means there still is a lot of opportunity for foreign companies who enter the e-commerce market in Japan with a sound strategy and a modern versatile platform that allows them to innovate in this field. Many e-commerce platform offeringsfrom traditions local IT vendors are barely on par with the status quo of e-commerce in Japan and not particularly advanced in usability, feature set or scalability.

Products & Pricing

The lion’s share of products being purchased online are clothes, shoes & accessories. Food items are frequently purchased online as well, generating sales equivalent to US$ 4.8 billion in 2013.

For pricing strategy it is advised to be either very cheap or very expensive. Mid-range priced products don’t do that great in Japan, so you’ll ideally brand your upper market products as very exclusive. Alternatively try to hit the market with functional cheap products.


Japan is ethnically a very homogenous country with 98.5% of the inhabitants being Japanese. Accordingly your e-commerce site needs to be fully localised into Japanese. Using English as a fallback is not an option.


Japan’s culture provides plenty of opportunities for marketing activities. There many local holidays and traditions that can be used for a themed seasonal sales push (New Year, Hanami season, “ochûgen” – mid-summer presents, etc.). Adding to that Japan has happily adapted various western (Christian) holidays for marketing purposes. Although only 2% of Japanese are Christian, big marketing campaigns are run every year in time for Christmas, Halloween or Valentine’s Day. Easter is not (yet?) widely known in Japan, though.


While there certainly are demographics and places famous for their crazy and colourful fashion (e.g. Harajuku), the reality of online shoppers’ preferences might not be as exciting – the vast majority still prefer to just blend in when it comes to apparel & accessories. So, it comes with no surprise that the most popular colours in Japan for a very many products are: black and white.

Online Shopping Peculiarities for Japan

The main reasons that keep Japanese from purchasing online are the lack of physical contact (you can’t hold the product in your hand and touch it), and concerns over the secure payment.

To overcome the former, Japanese consumers expect to find a wealth of information about every aspect of the product on product detail pages. A short description will only suffice for products that are well defined where customers already know what they are getting (batteries, t-shirts). For unique products, providing additional pictures from many angles, e.g. inside of a bag, showing all interior pockets, and a detailed description of the product can make all the difference between a top and a flop.

For the Japanese customer trust is a key element for the decision whether to make a purchase or not. This includes trust in the vendor as well as trust in the brand. To gain that kind of trust, high visibility in the market is very important. Familiar looking brands are more trusted than new ones. When entering the Japanese market you will have to think about strategies to reach this kind of high visibility.

Concerns over online security can be alleviated by offering alternative payments that don’t rely on online transactions, such as cash on delivery and convenience store payment.

Payment Types

Credit card is the most popular payment method, used by 44% of e-commerce shoppers (most popular credit cards are: Visa, Mastercard & JCB).

Cash on delivery and bank transfers are a distant second with around 15%, followed by convenience store payment at 9%.

Paypal is mostly used by foreigners living in Japan (of which there aren’t too many) and is not a common option for payment in Japan. If you want to sell products from Japan to overseas customers, however, including PayPal as a payment option is recommended.

Payment Gateways

Unfortunately there is rather little choice in regards to available payment gateways in Japan, namely: Paygent, GMO, Wellnet,Softbank, DSK– innovative gateways such as BrainTree are not offered in Japan (as of the writing of this article). Note: Stripe is currently in Beta for Japan which is an exciting new development in this space.

Leave ample time for setting up and testing your payment gateway. It can be much more difficult to get online payment setup and started in Japan, the application process takes more time and is more involved than comparable services in the US & Europe. Also, fees are often higher in Japan than comparable services in the US & Europe

Logistics & Warehousing

By European standards Japan is an average-sized country, from the viewpoint of the US it seems tiny – just about the size of California. The reason why the cities seem so overcrowded is simple: Japan is an archipelago of over 6000 islands, 68% of which are covered by (mountainous) forests. Because of this, population density in the lower regions and particularly along the coastal lines is very high.

92% of Japanese consumers live in urban areas and delivery is expected to be quick,1–2 days max, with the exception to the more remote areas such as Okinawa Prefecture, an over-1000km (620 mi) long chain of hundreds of islands. Delivery to these places is usually excluded from normal shipping times and often higher priced for postage & packaging (even if you have fixed pricing for shipping otherwise).

For e-commerce, teaming up with one of the warehousing and/or logistics providers for efficient fulfilment is probably the most effective solution. The Plant has developed integrations with Otto Japan and Tri-net, other large logistics/warehousing providers in Japan are Nippon Express (日通) and trans cosmos.

E-Commerce Platform

Providing an e-commerce platform ourselves, we’re not going to be particularly unbiased here. We have found that turn-key ecommerce platforms might give you a quick start, but in the long run do little to establish you as an innovator in the field, and will have to make way for a costly replacement at some point. These systems are often overly complex, because they try to be everything for everyone, imposing an unnecessary burden on the people struggling to run them efficiently.

With QOR The Plant provides a modern, open source solution for e-commerce that can grow with your needs. QOR based solutions are tailor-made to your requirements at a fraction of the cost of other ‘custom-made’ solutions, but with the same high level of integration and ease of use. The efficiency and ease-of-use of QOR allows a dedicated small team to run large e-commerce sites efficiently. Instead of launching yet another online shop made to match the lowest common denominator of turn-key solutions, QOR provides the tools and platform to develop unique features, and become an innovation leader in your field.


If you also plan to sell products through physical stores, you should consider tight integration of online with offline systems from the outset.

Concepts that blur the lines between online and offline purchasing are becoming mainstream. There is the “endless shelf” that lets customers buy from the online shop directly in-store, in case certain products are not available in the physical outlet. “Omnichannel” where you order online and pick up the products in a store nearby and vice-versa have become more common along with a unified point or loyalty system that spans all channels.

We have been implementing these kind of solutions with some major global brands based on our QOR platform, so if you’ve become curious about how The Plant could help you to offer your customers a modern and innovative service with plenty of room to grow for the future, just drop us a line.