Japan is the world’s third largest—and one of the fastest growing—e-commerce markets in the world. The growth rate has become stable over the past few years, with annual growth estimated at 8.7% in 2016. With Internet penetration estimated at 91% of the population, Japan represents a significant market opportunity. According to the Ecommerce Foundation’s Japan 2016 report, ecommerce accounted for 2.8% of the total GDP of $4.123.3 billion, with over 76.9 million people (70%) shopping online. Japan’s developed economy, highly urban population, and single language make the market attractive to online retailers. Highly developed distribution infrastructure and small country size make delivery easy and convenient. Market growth is expected to be steady for the foreseeable future. 
Currently, the most popular ecommerce trend in Japan involves travel. 91% of leisure flights and 86% of hotel stays were booked online in 2015. Music and car insurance purchases were third and fourth, respectively, with 79% and 67% of sales in these categories being conducted online. Clothing is the most popular item purchased online. Fashion e-commerce is a growing sector, and niche specialty players dominate the space. Food and beverage sales also continue to grow. Overall, high quality items, including well known global name brands are in high demand.
One notable trend is that although a large percentage of purchases are conducted online, only 12% of Japanese shoppers purchased from abroad in 2015. This is one of the lowest levels of foreign buying activity in the Asia-Pacific region. This could be attributed to a lack of trust in foreign suppliers and a reluctance to wait for longer international shipping. Japanese shoppers are risk averse and seek brands they know they can trust. Return rates are low and excellent customer service in Japanese is expected. 
About 85% of Japanese population have one or more creditcards. About half of the cardholding population have a JCB card, followed by Visa, MasterCard and Diners and American Express. Japanese payment methods for online use include credit cards, prepaid cards and wallets (Edy) as well as offline methods such as cash on delivery and bank transfers. Payment at convenience stores, called Konbini, is one of the more popular bash-based payment methods for online shopping. 
While Japan boasts one of the world’s most advanced mobile broadband infrastructures, smartphone and tablet device ownership is generally low. Just 23% of respondents own a smartphone, 9% a tablet. Spending is comparably tiny on these devices, with just 1% of total online spend made via mobile.
There is a large scale penetration rate of smartphones in Japan and, although mobile fraud levels are low today, this may be expected to change as mobile commerce increases. A recent survey has found that, in line with other Asia Paci c consumers, improved personal data security is a key driver for increasing the adoption of transactions and communications over mobile in Japan. International online merchants looking to expand across borders into Japan will bene t from robust online security and fraud prevention capabilities, ensuring they are well placed to attract and retain consumers as the ecommerce market grows.