Japan

Japanese e-commerce

With a population of 126.8 million and an e-commerce revenue of 159 billion USD in 2017, Japan is the fourth largest e-commerce market worldwide and the second largest in Asia. In 2017, Japanese spent 1,158$ US per capita online, compared to 14,530$ US at POS locations. A steady growth in e-commerce up to 204 billion USD is expected until 2022, a compounded growth rate of 6%. This is facilitated by a very high Internet penetration, with the quasi-totality of the population online. M-commerce growth is slowed down by the low smartphone use amongst old generations. Nevertheless, it grew by 29% in 2016. The biggest market segment in e-commerce in Japan is “electronics and media”, with a volume of 19 billion euros in 2016.

The Revised Banking Act, passed in May 2017 by the House of Councilors and came in effect in spring 2018, aims to encourage collaboration between banks and Fintech enterprise to provide convenient low-cost financial services. Banks will be obliged to share their APIs. In an effort to reduce card fraud before the 2020 Tokyo Olympic and Paralympic Games, the Revised Instalment Sales Act was adopted in October 2016. The Act states the necessary measures to be taken to create a safe and secure environment for consumers to use their credit card in.

Preferred payment methods

Credit cards dominate the payment process at 56% of the transaction volume. Konbini (payment for online orders in small, neighborhood businesses) and cash payment are other popular methods of payment. The second and third preferred payment methods in Japan are the classic PostPay and Bank transfer.

E-wallet are also popular in Japan. Mobile wallets were used to pay for 3% of e-commerce and offline transactions in 2017. The e-wallet Pay-easy offers an interesting local alternative. This is a payment solution to purchase digital content over the Internet. Pay-easy focuses mainly on the optimization of online content in the field of music, Software products, games, articles, icons, pictures or titles. Mobile Suica is another well-known mobile payment system in Japan. It is mainly used in large cities. No major changes in payment methods are expected in the coming years.

Japanese Card landscape

Cash payment are more popular in Japan than in other countries. However, consumers are opening up to a shift towards card payments. Promotional activities, loyalty and reward programs are used to attract new customers, as well as encourage existing customers to use their cards for smaller transaction and recurring payments, such as utility bills.

Japan ranked fourth in the largest e-commerce markets

Japan is one of the world’s largest economic powers. Most of its e-commerce exchanges are made with the USA and China. Only one tenth of the Japanese population buys from online foreign shops.

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