Online marketplaces and storesThe Japanese mail-order market offers a variety of channels to distribute products throughout the country, with online sales replacing catalog orders and teleshopping as a flexible method for distance selling. But businesses are still shying away from building up their virtual brand stores, relying instead on the services of established online marketplaces. The three largest e-commerce sites Rakuten Ichiba, Amazon Japan, and Yahoo! Shopping offer third-party sellers a platform to set up their virtual stores, with the websites reaching millions of shoppers in the country.
The domestic market is led by the Japanese e-commerce and FinTech company Rakuten, Inc., which has been successfully operating its business-to-many (B2M) platforms for several decades. With more than 50 million merchants selling over Rakuten Ichiba, the product range rivals Amazon Japan in variety. Apart from B2C retail, the company operates the consumer-to-consumer (C2C) business Rakuma, competing against its rivals, Yahoo! Auctions and Amazon Marketplace’s second-hand goods sales.
Digital shoppers in JapanEven though e-commerce is emerging in Japan and consumers are becoming more familiar with online transactions, the majority of household expenditure remains attributable to physical store retail. Among digital buyers, purchases are mainly made on major marketplaces, with direct-to-consumer (D2C) websites falling behind in popularity. Shopping mall formats like the three leading e-commerce platforms are the most popular types of websites, convincing potential customers with their broad selection, free-shipping services, and a variety of payment methods. To cater to a cash-centered society in which the realization of cashless payment is sluggish, online retailers offer konbini payment to consumers avoiding e-money use, a cash-based billing method for online orders settled at counters of convenience stores.
However, following the coronavirus (COVID-19) pandemic and the subsequent declarations of multiple states of emergency within one year, the penetration of digital shopping and electronic payment were driven by the fear of crowds and physical contact at in-store retailers. Consumers reported an increase in visits to online shopping channels, with general retailers recording the highest influx. With e-retailers announcing their plans to improve user interfaces and simplify the shopping experience, online sales are putting pressure on established consumer goods retailers to revisit their market strategies.