Japan: Full of Eastern promise
Georges Berzgal, VP & Managing Director, Global Ecommerce, EMEA, Pitney Bowes
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Japan has proudly stood at the forefront of global tech innovation for decades, wowing the international stage with impressive robotics and connected consumer services. As the third largest economy in the world, it has the resource to invest in future focused retail solutions, and its population has the disposable income to drive a strong consumer marketplace. Accordingly, Japan’s e-commerce is bustling, with 70% of people carrying out some form of shopping online, spending an average of nearly $1,500 per person annually. This activity represents 2.8% of the country’s $4,123 billion GDP, and this figure is set to grow further as the price of connected devices, and the logistics costs behind the distribution of online goods, fall year-on-year.
Japan boasts a wide variety of online vendors of varying sizes supplying goods from international retail brands. Access to these products has skyrocketed in the past couple of years, and consumers now have the tools at their fingertips to expect goods being delivered to them as if buying domestically. According to the ITU Japan Association’s 2016 findings, 92% of the population are on the internet. Furthermore, eMarketer predicts that by 2020, smartphone users in Japan will make up 60% of the total mobile phone users at 64.2 million. So how can international traders to Japan utilise popular e-commerce vendors to generate consumer demand for their brands and flourish in this region of enormous potential?
Step up, Rakuten Ichiba. Rakuten is one of Japan’s leading online retail suppliers, primarily offering luxury retail goods. It is a mature company, with its own bank, credit cards and customer loyalty schemes, and currently garners around 84 million monthly unique visitors. The online platform is offered in Japanese, which means international sellers’ listings need to be translated accurately to appear authentic and reliable, to convert customers successfully. In our dealings with international retailers to the region, we have found these to be common issues across e-commerce marketplaces. Other online players such as Kakaku and DMM also rely on locally relevant content and precise product descriptions to meet consumer expectations and encourage positive user feedback.
Often, a seller’s listing can appear polished with high quality supporting imagery, but if the translation is not spot on, they will lose out to other more knowledgeable suppliers. Japanese retail e-commerce is heavily reliant on user reviews that nurture an online community environment to the shopping process. Traders with poor translations that do not properly represent the product will quickly be discredited by users, and the community will usually respond in kind. This is a very similar dynamic to what we’ve seen in other Asian markets such as China.
Social media also plays an important role in influencing the region’s ecommerce purchasing behaviours. METI research found that a considerable volume of Japanese consumers are now buying products and services based on information they have seen on social media platforms. For retailers, this should further illustrate the value of a robust and professional online offering. This must either be delivered through the regional arm of a brand’s own international website, or through a well established vendor like Rakuten.
In terms of payment and delivery of online goods, Japanese consumers enjoy the advanced logistics systems and infrastructure one would expect of an affluent, tech savvy nation. While credit cards are the primary method of payment for ecommerce purchases, nearly 20% of transactions are made post-delivery in cash, at one of the many convenience stores which act as remote delivery depots. Most online vendors will offer this service to customers, but retailers trading through their own website should be mindful of this as a popular method of payment for Japanese consumers.
Overall, the good news for British retailers is that Japan is a big fan of UK brands. Japanese consumers find British brands hold a certain allure, due to their heritage, high quality and recognisable brand image. Consumers also benefit from being able to purchase tax-exempt online goods cross border, up to the value of approximately £118 per person. International shipping on these items still applies, but the relatively high tax-free threshold for individual consumers helps further motivate online buying from overseas brands.
Rakuten and other vendors see the market potential of British goods and are looking to approach more British brands to further enhance their portfolios. What’s more, these vendors will be aware that the weakening pound sterling puts them and their domestic customers in an even more preferential position than they have been for many years when buying from the UK, so now really is a great time to export to Japan while demand is booming.
Pitney Bowes works with many international brands desirable to the Japanese consumer, and acts as an valuable partner in facilitating cross border trade. Whether we are supporting a retailer or brand to distribute their goods through a third-party platform, or helping to sell their goods via their own website directly, we have the expertise and knowledge to help tap into this demand – the best strategy is to use a multi-pronged approach both through third-party platforms, such as Rakuten, but also establish a relationship with Japanese consumers by going direct.
Ultimately, Pitney Bowes is giving retailers and brands the tools to prosper in the modern retail environment, which enables them to sell their products to consumers in Japan, or wherever else around the globe that they desire.
Learn about Complete™ Cross-Border from Pitney Bowes, the scalable end-to-end global ecommerce solution that can handle all facets of enterprise retail cross-border expansion.
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