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Online shopping behaviour in Japan

Online retail

General trends (e.g. growth of ecommerce)

Overall, Japan ranks fourth in the world for the total size of retail ecommerce (Figure 13), just behind the UK (China and the US are of course the top two).

Of this total, about 53% is physical goods, 35% "services", and 12% digital downloads. One could reasonably take a view that the services element should excluded, and therefore reduce the overall market size by about a third for better comparison with back home.

However you measure it, however, the overall message is clear: this is a big ecommerce market, significantly bigger than more commonly considered targets such as Germany or France. Overall penetration is apparently low at 4.4%, but this is deceptive because the underlying brick-and-mortar data is skewed by being weighted towards food; the effective percentage is higher.

Category data

Category level data (Figure 14) contains few surprises, with one exception – online food is quite big. It isn’t, in general, online food as you might think of Ocado or Tesco.com doing it though. Instead this is mostly click-and-collect in convenience stores; despite the fact that there is one convenience store for every 2400 people, the Japanese apparently don’t find that convenient enough!

In non-food categories, penetration is not significantly inconsistent with what you might be used to, although fashion penetration is slightly low. As we’ll see in the logistics section below, this may be because returns have not traditionally been part of Japanese retailing culture, which of course inhibits online fashion. This is now beginning to change and we might expect to see fashion penetration grow quite fast; it grew from 7.4% to 8.1% between 2013 and 2014.

In case you’re wondering where online travel has gone, it was a huge £18 bn in 2014, but sensibly the statistics don’t treat it as retail.

One additional comment is worth making about these statistics: the government has an impressively good grip of the high-level data around online retail by comparison with the UK, despite our market-leading position, and publishes regular and timely data.

Online purchasing power

A statistic that tells quite a lot not only about online spending in Japan, but also about its culture – official culture anyway, this is a government source – is average spending per household split by the age of the "head of household" (Figure 15). It’s difficult to find comparable data for the UK!

Of course what’s interesting here is that online spending continues to grow even when the household is "headed" by someone over 70. This is borne out by other data – there are a lot of silver surfers willing to spend online. This is important given the size of this demographic in Japan.

What they don’t spend their online yen on is (probably unsurprisingly) fashion: 15% of online spend is on fashion in households where the "head" is under 50, dropping to 8.7% for over 70s.


A very unusual feature of ecommerce in Japan is that the young are actually less enthusiastic online spenders than the middle-aged: 76% of women aged 20-29 purchased online last year, while 93% of 40-49 year-olds did so. Figures for men are slightly lower.

This trend is also visible in overall amounts spent (Figure 16): spending power amongst under 30s in Japan is (surprisingly?) low, as we saw earlier.

Average cart sizes

Women under 30 spend least often online (<10 purchases per year), and women aged 50-59 spend most often online (almost 20 purchases per year). Average transaction values are rather encouraging (Figure 17).

Most categories are bought by both genders, and there’s little surprise in those that show significant gender bias: computers (59% of men vs 27% of women in previous 12 months), cosmetics (17% men, 59% women) and probably most significantly clothing (45% men, 66% women).

Nevertheless, a country where 45% of men have bought at least one item of clothing online, and 17% bought cosmetics online, in the last year is at least an intriguing target.


Key trend factors

There’s an interesting (if slightly out of date) study published by McKinsey on changing attitudes amongst Japanese consumers. It opens with a rather reassuring statement for anyone considering targeting Japan:

"After decades of behaving differently, Japanese consumers suddenly look a lot like their counterparts in Europe and the United States."

All those department stores apparently dominating the retail landscape, it seems, have a problem, although if you’re reading this report you might well take the view that it’s an opportunity:

"Japanese consumers are … questioning their famous inclination to pay for convenience … in apparel, high-end department stores concerned about the vanishing shopper have started leasing space within their stores to value-focused competitors such as casual-clothing chains Uniqlo and Forever 21, hoping that this will revive customer traffic."

Why do the Japanese buy online?

Japanese mostly cite the expected reasons for buying online: it’s cheaper, easier to compare prices, and so forth.

What’s more unusual is that the top two reasons are convenience-based, not price-based: 71% mentioned being able to buy anytime, and 62% that they "don’t have to go outside." Convenience it seems, despite what McKinsey might say, still matters in Japan: but in the online age, it’s manifesting itself differently from before the rise of internet shopping.

Very significant for an overseas retailer considering targeting Japan is reason #4, cited by 50% of female online shoppers: being able to collect points. As we’ll see later when we look at some local benchmark checkouts, almost every major Japanese retailer seems to offer some sort of points-based loyalty scheme. Typically these translate points directly into Yen, and checkouts normally include points burn options as well as earn options.


  Retail ecommerce is big in Japan; overall, just a fraction smaller than in the UK.

  Non-food category penetration is significant, although fashion, at only 8%, is a slight laggard growing fairly quickly.

  Unusually, online spending is skewed towards the middle-aged, not the young.

  Silver surfers are prepared to purchase online in significant numbers.

  Overall online ATV of £70 is encouraging (especially since this average is skewed down slightly by a number of small food purchases).

  Convenience is very important to Japanese. The way in which this manifests itself is changing in the internet era, but it remains key.

  Points-based loyalty schemes feature in many retail propositions, including online, where checkouts typically allow points to be spent as if they were cash.




Japan's retail landscape

Japan's competitive landscape

Marketing in Japan

Legal framework and regulation in Japan

Internet usage and connectivity in Japan

Payment and Logistics in Japan

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