Japanese e-commerce represents a great opportunity for brands to exploit. But first you need to know what Japanese shoppers want from their online experience. We explore how to sell online in Japan – with a deep dive on the sector’s biggest player, Rakuten.
For such a small nation, e-commerce in Japan is huge. In fact, it’s the world’s third largest e-commerce market. Japan has a stable economy and a high demand for authentic products. Simply put, it’s an incredibly attractive prospect for online retailers.
Although Japanese shoppers prefer brands to have a physical store, it’s not essential – as long as you can fulfil customers’ expectations in the following five areas.
In Japan, mobile is hugely popular. Conversion rates on mobile sites are high at 10%, and m-commerce accounts for 60% of all online purchases (source: Criteo). So it goes without saying, any successful e-commerce strategy should take mobile into account.
Big e-commerce sites in Japan like Amazon, Rakuten and Zozotown have capitalized on this by launching their own apps, in line with this “think mobile first” strategy.
2. GREAT SERVICE
As a rule, fast delivery is a given in Japanese e-commerce. Amazon, for example, offers same-day delivery to 80% of people and next day delivery to 91.5%. Customers in Japan expect to choose their own delivery dates and times for most purchases. So before you launch, make sure you’re able to provide a good range of delivery options.
For many years, Japan has enjoyed a low returns rate. This is good news for retailers as it keeps operating costs down. It also means that many brands in Japan aren’t transparent about their returns process. So you could stand out by making it easy for customers to find out how to return purchases.
Credit and debit card transactions make up 66% of online payments. But cash on delivery is also accepted at convenience stores (konbini) in Japan. This method is really popular among teenagers who don’t yet have bank accounts, amounting to 17% of payments. If you aren’t sure how to sell online in Japan to a younger demographic, offering this option is a great start.
Japanese shoppers need a lot of assurance before committing to a purchase. Building trust with them is essential – and a surefire way of doing this is by translating user reviews. In fact, users are valued more highly than experts as a source of information for buying in Japan.
It’s also common for Japanese restaurants and shops to create ranking lists of their most popular dishes and products. These lists are a great way of promoting products because shoppers pay close attention to what others have chosen. That’s because Japan is a far less individualistic culture than countries in the West. Shoppers don’t choose products to express themselves. Instead, they prioritize being accepted by and fitting in with their peers.
4. FOREIGN BRANDS
Japanese shoppers have been reluctant to buy foreign products in the past. And although their attitude has softened in recent years, just 32% of Japanese shoppers say they have bought from a foreign website.
This could be because Japan leads the world in its distrust of institutions. To break through this skepticism, you’ll need to build a strong brand image and provide high-quality service.
Openness to foreign brands also varies depending on the type of product. The “Made in Japan” label still resonates with customers in the electronic goods section, thanks to the country’s strong electronics heritage. Foreign brands will find this industry tougher to break into than the luxury market, for example. Western luxury brands have made great inroads in recent years, thanks to their innovative use of social media – check out our blog on Japanese social media for more information.
5. LOYALTY POINTS
Japanese shoppers love earning loyalty points, so developing your own reward scheme is very worthwhile. In fact, 47% choose to buy from a website because of its points system. It also encourages repeat purchases, as customers build up or cash in the points they’ve earned.
Rakuten has a robust points system that links to users’ credit cards. This incentivizes the already loyal customer base to use the platform, and has helped it to become Japan’s largest e-commerce site. Though as one of the largest online retailers in the world, it offers much more than just a well-developed points system.
Often referred to as “The Amazon of Japan”, Rakuten has over 105 million users in Japan alone. That’s more than 80% of the population. So it provides an exciting gateway through which to reach the Japanese public.
CEO Hiroshi Mikitani has described Rakuten as “not like a vending machine, more like a real aggregation of unique shops”.
That’s because Rakuten allows each brand to have a distinct image. Every seller has their own landing page, which takes shoppers directly to their store. The branding options don’t stop there though – you also have a great deal of flexibility with your site’s HTML.
Arguably, this makes Rakuten less of a catalogue store than Amazon. The setup gives you the chance to encourage return buyers, highlight sales and encourage add-on purchases. Because of this design freedom though, localizing your content is a must – check out our blog on Japanese SEO to find out best practice for this territory.
Rakuten is a great way for international brands who aren’t yet sure how to sell online in Japan to make their debut. In fact, brands like North Face, Abercrombie and Burberry are very popular on the platform. This is because there’s a perception that if you can’t get it domestically, Rakuten will have it.
Before you start selling on Rakuten though, you’ll need to meet a few conditions. Firstly, you’ll need both a local business entity and a local business account. Merchants are also rigorously vetted before being allowed to sell on the site. This includes checking the authenticity of your products and approving a screening of your store design. And once you’ve been approved, you’ll need to pay Rakuten to display your products.
Joining the Japanese e-commerce market is an exciting move for any brand. Japanese shoppers have high expectations for authentic brands, so building your online presence is essential. As is developing your infrastructure to deliver on high shipping and service expectations.
If you’re not 100% sure how to sell online in Japan, help is available. As a foreign brand, joining Rakuten can be a great way to dip your toe in the market. You can keep your individual brand identity while having a presence on the biggest e-commerce site in the country.