Japan E-Commerce Market

Market Overview:

The Japan e-commerce market size reached US$ 231.2 Billion in 2023. Looking forward, IMARC Group expects the market to reach US$ 667.4 Billion by 2032, exhibiting a growth rate (CAGR) of 11.60% during 2024-2032. The growing preferences for convenient shopping experiences, advanced technological infrastructure and high internet penetration, and rising adoption of digital payment methods, such as mobile wallets and online payment platforms, represent some of the key factors driving the market.

E-commerce, also known as electronic commerce, refers to the buying and selling of goods and services over the internet. It comprises various models, including business-to-consumer (B2C), consumer-to-consumer (C2C), and business-to-business (B2B), wherein B2C involves businesses selling directly to individual consumers through online stores, C2C involves individuals selling to other individuals, and B2B e-commerce involves businesses engaging in online trade with other businesses. It is revolutionizing the way business is conducted, offering convenience, accessibility, and a global reach to both consumers and businesses. It eliminates the need for physical presence at brick-and-mortar stores through electronic transactions. It also enables consumers to browse through a wide range of products, compare prices, read reviews, and make purchases with just a few clicks. It helps businesses tap into a global customer base without the limitations of geographical boundaries. Moreover, online operations often require fewer resources compared to traditional retail, leading to cost savings. E-commerce also enables personalized marketing and data-driven decision-making. By analyzing customer behavior and preferences, businesses can tailor their offerings, resulting in a more engaging and relevant shopping experience. As it assists in reducing overhead costs and enhancing customer engagement, the demand for e-commerce is rising in Japan.

Japan E-Commerce Market Trends:

Growth of Mobile Commerce (M-Commerce)

Mobile commerce is experiencing significant growth in Japan, driven by high smartphone penetration and the convenience of mobile applications. According to industry reports, in 2023, Japan had 117.3 million internet users, constituting 94.9 percent of the total population. This is expected to reach 116.4 million i.e. 96.8% of the population, by the year 2028. The rise of mobile commerce has contributed to the overall increase in the Japan e-commerce market share, as more consumers shop via smartphones. In order to capitalize on this trend, retailers are heavily investing in mobile-optimized websites and dedicated apps, ensuring seamless and user-friendly experiences. These enhancements improve navigation and speed while incorporating features like personalized recommendations and secure payment options, ultimately boosting sales and customer satisfaction. The focus on optimizing mobile platforms is crucial for capturing the increasingly mobile-savvy Japanese market.

Personalization and AI-Driven Shopping

In Japan’s e-commerce market, AI and machine learning are revolutionizing personalization by analyzing customer behavior and preferences to deliver customized product recommendations and tailored marketing campaigns. This data-driven approach enhances the shopping experience, making it more relevant and engaging for each user. Additionally, AI-powered chatbots and virtual assistants are significantly improving customer service by providing instant, 24/7 support, answering queries, and guiding users through the purchasing process. For instance, in March 2024, GMO-Z.com RUNSYSTEM launched an AI-powered shopping assistance application in Japan. The application utilizes the ChatGPT system to act as a virtual sales assistant, interacting with shoppers through voice and eliciting user needs. These virtual tools enhance user experience and increase conversion rates by efficiently addressing customer needs, reducing friction in the buying journey.

Expansion of Cross-Border E-commerce

Japanese consumers are increasingly purchasing from international retailers, particularly from the United States and China, driven by a desire for diverse product offerings and competitive pricing. This trend reflects a growing appetite for unique and innovative products not always available domestically. To support this shift, cross-border platforms are adapting to local preferences by offering Japanese language support, integrating local payment methods, and ensuring efficient shipping options. These localized services enhance the shopping experience, reduce barriers to international purchases, and build consumer trust. As a result, cross-border e-commerce is rapidly expanding in Japan, providing consumers with a wider array of choices and fostering global trade connections. For instance, in September 2024, transcosmos partnered with Global-e in South Korea to help retailers and brands expand their cross-border e-commerce business in over 200 destinations worldwide. By leveraging Global-e's technology and logistics, transcosmos aims to assist businesses in South Korea and Japan in growing their international e-commerce operations.

Japan E-Commerce Market Segmentation:

IMARC Group provides an analysis of the key trends in each segment of the Japan e-commerce market report, along with forecasts at the country level for 2024-2032. Our report has categorized the market based on type and transaction.

Type Insights:

• Home Appliances
• Apparel, Footwear, and Accessories
• Books
• Cosmetics
• Groceries
• Others
   

The report has provided a detailed breakup and analysis of the market based on the type. This includes home appliances, apparel, footwear, and accessories, books, cosmetics, groceries, and others.

Transaction Insights:

• Business-to-Consumer
• Business-to-Business
• Consumer-to-Consumer
• Others
   

A detailed breakup and analysis of the market based on the transaction has also been provided in the report. This includes including business-to-consumer, business-to-business, consumer-to-consumer, and others.

Regional Insights:

• Kanto Region
• Kinki Region
• Central/ Chubu Region
• Kyushu-Okinawa Region
• Tohoku Region
• Chugoku Region
• Hokkaido Region
• Shikoku Region
   

The report has also provided a comprehensive analysis of all the major regional markets, which include Kanto region, Kinki region, Central/Chubu region, Kyushu-Okinawa region, Tohoku region, Chugoku region, Hokkaido region, and Shikoku region.

Competitive Landscape:

The report has also provided a comprehensive analysis of the competitive landscape in the Japan e-commerce market. Competitive analysis such as market structure, key player positioning, top winning strategies, competitive dashboard, and company evaluation quadrant has been covered in the report. Also, detailed profiles of all major companies have been provided.

Japan E-Commerce Market Recent News:

• In March 2024, Mitsui & Co., Ltd. and Shopify Japan K.K. announced their partnership to introduce "Plus Shipping," a service aimed at supporting the digital transformation of delivery operations for e-commerce merchants in Japan. This integrated one-stop solution will streamline delivery orders, reduce workload, and address the existing challenges in the Japanese logistics market. The service is expected to contribute to the sustainable growth of Mitsui by enhancing quality of life and creating an eco-friendly society.
• In July 2024, Amazon launched Amazon Pharmacy in Japan, enabling customers to purchase prescription medications online through partnerships with major drugstores like Ain and Welcia Yakkyoku. The service allows users to upload electronic prescriptions via the Amazon app and consult with pharmacists online. Medications can be delivered or picked up in-store. This service benefits people with chronic conditions or mobility issues and could accelerate Japan's healthcare digital transformation. Amazon plans to expand its network of partner pharmacies.

Japan E-Commerce Market Report Coverage:

Key Questions Answered in This Report:

• How has the Japan e-commerce market performed so far and how will it perform in the coming years?
• What has been the impact of COVID-19 on the Japan e-commerce market?
• What is the breakup of the Japan e-commerce market on the basis of type?
• What is the breakup of the Japan e-commerce market on the basis of transaction?
• What are the various stages in the value chain of the Japan e-commerce market?
• What are the key driving factors and challenges in the Japan e-commerce market?
• What is the structure of the Japan e-commerce market and who are the key players?
• What is the degree of competition in the Japan e-commerce market?

Key Benefits for Stakeholders:

• IMARC’s report offers a comprehensive quantitative analysis of various market segments, historical and current market trends, market forecasts, and dynamics of the Japan e-commerce market from 2018-2032.
• The research study provides the latest information on the market drivers, challenges, and opportunities in the Japan e-commerce market.
• Porter's five forces analysis assist stakeholders in assessing the impact of new entrants, competitive rivalry, supplier power, buyer power, and the threat of substitution. It helps stakeholders to analyze the level of competition within the Japan e-commerce industry and its attractiveness.
• Competitive landscape allows stakeholders to understand their competitive environment and provides an insight into the current positions of key players in the market.