Japan E-commerce Market Size

Japan E-commerce Market Analysis

The Japan E-commerce market is expected to register a CAGR of 14.3% during the period 2022-2027. The E-commerce market in Japan is primarily driven by high internet penetration, secured by the Hi-tech network infrastructure. Besides, fast deliveries, and an extensive range of product choices in one place, is another reason for the growth of the e-commerce market in Japan.

• The E-commerce market in Japan is going through significant transformational change as the Japanese are shifting from traditional brick-and-mortar stores to online businesses. E-commerce companies in the region are benefiting from high urban density, technically savvy customers, and a developed economy and further attracting the E-commerce market in the region.
• Along with this, the distribution channel in-country is highly developed and connected, and the small size of the country makes shipping and delivery more convenient at a faster speed, which is also boosting the E-commerce market in Japan.
• Digital advertising in the region is further driving the E-commerce market in the country. Search and display ads are mainly used by brands and advertising agencies primarily with product feeds and shopping ads usually used by major E-commerce companies such as Rakuten, Yahoo! Auction Shopping, and Amazon Japan.
• Furthermore, social commerce is on the rise and is further propelling the growth of the e-commerce market in the region. E-commerce companies use sponsored content, working with influencers and celebrities, and ads on social media to promote products and services in Japan. While Japan has global social media platforms such as Twitter and Facebook, its popularly used social media network is Line, an app similar to WhatsApp with multiple features.
• However, specific laws and regulations pertaining to E-commerce can limit the growth of the E-commerce market in the region. For instance, the Act on Improvement of Transparency and Fairness in Trading on Specified Digital Platforms will require e-Commerce platforms to submit an annual report to METI on their business practices. METI will subsequently solicit comments from merchants, conduct reviews, and publish the results. U.S. firms Amazon and Apple and Japanese firms Rakuten and Yahoo-Japan are among those affected by this law.
• During the COVID-19 outbreak, although Japan hasn't seen strict lockdowns compared to Europe or North America, the multiple states of emergency and the promotion of staying at home have had people adopting online shopping at an unprecedented rate. As a result, more people switched to digital platforms, media, and apps, ordering food delivery and everyday items online.