Japan is the world’s third-largest economy and the fourth-largest ecommerce market, with sales of $105 billion. But online retail only accounts for an estimated 12% of total retail sales in Japan, so there is a lot of room for growth.
Japan is a technologically advanced country, with a high penetration of internet use and smartphones. But it is also deeply conservative and has a unique culture. That extends to Japanese online shopping preferences, such as product pages packed with dense information, which can be difficult for westerners to understand.
In this article we look at the largest online marketplaces in Japan, where the ecommerce landscape is dominated by two companies.
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The largest online marketplaces in Japan
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Amazon and Rakuten are neck and neck as the popular marketplaces in Japan. Amazon has 556 million monthly visits while Rakuten has 544 million. No other marketplaces come close.
Overall, online marketplaces, rather than conventional online stores, dominate ecommerce in Japan. A survey of Japanese consumers by the Ecommerce Foundation found that 39% had bought from an online marketplace in the last month.
However, only 10.2% of Japanese consumers have bought from overseas websites, compared with US cross-border shopping at 54%. This is reflected in only one global online marketplace (Amazon) having more than one million monthly visits from Japan, with no showing for other popular global sites such as eBay or Etsy.
We did register small amounts of traffic from Japan to Chinese marketplace JD.com (451,000 monthly visits), homewares marketplace Houzz (442,000), cross-border marketplace Fruugo (230,000) and eBay (123,000). These are minuscule traffic levels compared to Rakuten and Amazon.
Marketplace sales data is not consistently reported by these companies, and a country-by-country breakdown is not included in their public accounts. Some sources estimate that Rakuten is the largest online marketplace in Japan by sales revenue, while others say that Amazon is now in the lead.
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Amazon in Japan
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Amazon expanded to Japan in the year 2000, and it is now their second-largest market, providing 11% of Amazon’s global online traffic. Japan was Amazon’s fourth foreign marketplace to open, after the UK, Germany and France.
Looking at market share, Amazon had a 23% share of Japan’s online retail market in 2017, according to Euromonitor, compared with Rakuten’s 18.5%. Other sources differ, showing the two companies on an equal footing.
Conversely, a survey by NTTCom Research found that shoppers on Amazon Japan had relatively low monthly spending, mostly on books, magazines, DVDs and video games. It also found weak penetration of Prime membership, at 16.6% of Amazon shoppers in Japan compared to 65% in the US.
Amazon continues to compete hard in Japan, investing in same-day delivery and drawing the attention of the authorities over its pricing practices. The Amazon website has the same design in Japan as the rest of the world, in contrast to the cluttered layouts to be found on Rakuten Ichiba.
Amazon Japan is much more accessible to foreign sellers than Rakuten Ichiba, and is often the first choice for businesses expanding to Japan. Listings must be translated and customer support must be provided in Japanese, but there are several agencies who can help with those requirements and Seller Central provides a familiar interface for managing sales.
Rakuten in Japan
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Rakuten is a far-reaching internet company in Japan, providing banking, credit cards, ecommerce, content and communications services. Its online marketplace, Rakuten Ichiba, has 49,000 merchants, 115 million customers and gross merchandise sales of approximately $28 billion in 2020.
Rakuten Ichiba began life in 1997 and is a pure third-party marketplace. Rakuten does not compete with its sellers on the Ichiba website. The site itself has a distinctive busy design, with dense text and images, far from the minimal layouts that are popular in the west.
The marketplace is seller-driven, providing store owners with full control over how their products are presented and sold. The result is a more varied buying experience than on sites like Amazon. A very wide variety of products are available on Ichiba, with food, home products, and apparel being the most popular categories.
Businesses who want to sell on Rakuten Ichiba must have a company registered in either the United States or Japan. Others will need to use a service partner to apply on their behalf. Merchants are rigorously vetted and retailers need to prove the authenticity of branded products by providing commercial invoices.
Other online marketplaces in Japan
Four other online marketplaces feature in our list: Mercari, ZOZOTOWN, PayPay Mall and Qoo10 Japan.
Mercari focuses on just two countries: the US and Japan. It has 75 million monthly visits in Japan, working out as 70% of its total global traffic. The marketplace model is mainly based around consumer-to-consumer selling but businesses can also trade on Mercari. A Pro seller program currently in beta testing will allow sellers to import listings in bulk, synchronize listings with eBay and manage their inventory. Mercari does not currently have a program for cross-border sellers outside Japan.
ZOZOTOWN is a marketplace as well as a retailer in its own right, and the largest online fashion store in Japan. It has 43 million visits per month in Japan, making up 97% of its traffic. ZOZOTOWN does not make its seller criteria and application process public, but reports suggest that brands need to be well established and that fees are high at 30% of sales.
PayPay Mall was launched by Yahoo! Japan in October 2019, building on payment app PayPay which was launched in June 2018. It has 31 million monthly visits from Japanese shoppers. PayPay Mall is not easy to access for businesses outside Japan, requiring that they either set up a local company or work with a local service provider or agency.
Qoo10 Japan is an eBay-owned company and completely separate from Qoo10 in Southeast Asia. It has 14 million visits per month in Japan. Qoo10 Japan is a pure-play marketplace, selling a wide range of products. The marketplace is not readily accessible to international sellers but as an eBay company it is possible that this could change in the future, perhaps bringing the site into eBay’s global system.
About the data
This article covers six online marketplaces (either pure-play marketplaces or retailers with a third-party marketplace) with more than one million monthly visits from Japan, based on data from SimilarWeb. A global list of online marketplaces, based on the same data, is available in The World’s Top Online Marketplaces.
We have excluded online retailers whose marketplace forms a very small part of their overall business, as well as marketplaces with a consumer-to-consumer model, and marketplaces with a very narrow product niche.
very good!Informative and meaningful.