eCommerce & Technology

The World's Third Largest eCommerce Market

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. [1]

Domestic and preferred card Schemes

70% Credit/Debit Cards 11% Cash 10% Online Banking 5% eWallets 3% Mobile 1% Prepaid

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. [3]

Alternative Payments Methods

  • Bank Transfer: the transfer of funds from one account to another within the same or interbank, as long as supported.
  • Cash on Delivery: the sale of goods by mail order where payment is made on delivery rather than in advance.
  • Mobile Suica: mobile payment system for use in Japan's major cities and towns.
  • PayPal: online payments and money transfer service that allows you to send money via email, phone, text message or Skype. Founded in 1998, PayPal offers products to both individuals and businesses alike, including online vendors, auction sites and corporate users.
  • Pay-easy: payment solutions for the purchase of digital content over the web. The PayEasy system interfaces with digital content providers, billing agents, online payment providers, and consumers to streamline the business of online content delivery such as music, software products, games, articles, icons, pictures or titles.
  • Yahoo! Easy Payment: online payment service mainly used on Yahoo! Japan Auction. [4]

Mobile Appetite

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.

Mobile Payments

TBD

Security

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. [5]

Most Popular Social Network:

Line (217M users)

Most Popular Payment Method:

Credit Cards (70%)

eCommerce Volume:

$70.9 billion

Largest eCommerce Website:

Rakuten