Japan’s retail industry changes quickly as more and more shoppers switch from bricks & mortar stores to eCommerce options. There are plenty of benefits of being an online-seller here. The country has a small land area which makes deliveries swift and at a low-cost.
Besides, it has some of the most developed distribution channels globally with a large population that has a strong purchasing power. Even if Amazon is one of the most popular eCommerce marketplaces in Japan, there are several other websites that foreigners have barely heard of.
In this article, we list the biggest eCommerce platforms in Japan, explain their history, and what makes them unique. Let’s get started with the biggest one.
1. Amazon Japan
This company needs no further introduction as it’s the biggest eCommerce platform in the world and the third most valuable company, right after Microsoft and Apple. The company made revenues worth around USD 281 in 2020 and with a market value of around USD 1.69 trillion.
Amazon can be found in dozens of countries all over the world and is not limited to a few markets like Rakuten, Lazada, or Tmall, for example. Even if Amazon has seen great success in Western countries, it’s not as big in Asian countries like Vietnam, China, Thailand, the Philippines, Korea, and Singapore.
In fact, the company pulled out of the Chinese market due to fierce competition from local marketplaces.
Fulfillment By Lazada (FBA)
Fulfillment-by-Amazon (FBA) is frequently spoken about in the eCommerce industry as it’s one of the most developed fulfillment systems in the world. It’s very convenient in the sense that Amazon takes care of pick & pack operations, storage, and later shipping.
A benefit of selling on Amazon Japan is that the interface is pretty much the same as in the UK and the US. Thus, it makes onboarding easy.
For a better overview of how to get started on Amazon Japan, here are 10 essential steps for new sellers:
- Register an Amazon Japan account
- Learn about customs and compliance rules
- Do keyword research
- Create your product listing
- Choose Fulfillment-be-Amazon
- Print Amazon labels (if you use FBA)
- Create an inbound shipment to Amazon (if using FBA)
- Print inbound shipping labels for Amazon (if using FBA)
- Ship products to the correct Amazon warehouse (if using FBA)
- Understand taxes and regulations
Founded as early as 1997, Rakuten is one of the biggest eCommerce companies in Japan. The company started to expand overseas in 2005 and primarily through mergers and acquisitions with local companies.
Sometimes referred to as the Amazon of Japan, the company also offers solutions and services in FinTech, communications, and digital content. It operates in 29 countries globally and has more than 1 billion members, which speaks for itself.
In 2019, it had almost USD 75 billion revenues, making it the world’s fifth-largest eCommerce website. Besides, in the past years, Rakuten has won multiple recognition and awards, including:
- Forbes Top 100 Digital Companies 2019
- Forbes Top Regarded Companies 2019
- Linkedin Best companies to work for in Japan 2019
- Forbes World’s Most Innovative Companies 2017
Brands Selling on Rakuten
The platform has managed to attract plenty of renowned international brands, including Nike, Sephora, Groupon, Macy’s, and Sam’s Club. The website is well-known for its many features and services that are highly appreciated among buyers.
Cash-Back, for example, allows shoppers to get Cash Back in their browser extension when available.
If you sell on Rakuten, you can either choose in-country or cross-border shipping models. The price and the nature of your products generally determine what option is best. Do you sell low-priced wines or heavy bulky goods? Then cross-border fulfillment is perhaps not your best option.
3. Yahoo! Auctions Japan
Yahoo! Auctions Japan is similar to another popular website called Mercari in the sense that the websites have plenty of auctions, affordable prices, and are highly accessible. Online biddings and auctions have become increasingly big in developed Asian countries, something that you can read more about in my separate article about eCommerce websites in Korea.
There, G-Market and Auction.co are two of the biggest eCommerce websites and they both offer auctions.
Buyers find online auctions increasingly fun and it’s easy to get started. You only have to follow the below steps:
- Read about the common pitfalls and learn about the most important points
- Log in and move to the head area. You can add money to your wallet using Stripe or Paypal
- You can then transfer money to your auction “deposit”
- Start to put your bids (the website will show your current limit)
- You can find auctions through the search bar
For more information about how you can participate in auctions and about common mistakes done by new buyers, I recommend you to check the website directly.
DMM.com is one of the biggest eCommerce companies in Japan and was founded in 1999. As you’ve probably noticed, most of the Japanese eCommerce websites were founded around a couple of decades and primarily serve the local market.
Thus, Japan’s eCommerce market developed years back and many local brands can survive by simply catering to the local buyers.
Compared to other eCommerce websites, DMM.com primarily focuses on digital products such as DVD movies, different kinds of rentals, e-books, cryptocurrencies, PC games, software, and more.
Selling on DMM.com will most likely not be your first option unless you sell these kinds of products. There are plenty of other more suitable websites for overseas sellers, such as Amazon Japan and Rakuten explained above.
Interestingly, DMM’s subsidiary DMM.com Securities is currently the world’s second-biggest forex company in terms of trading volumes that, not surprisingly, brings in a lot of profits. The founder, Keishi Kameyama, originally started in the pornography industry and where he made his fortune. He currently has a net value of around USD 3.5 billion.
Mercari is another large-sized eCommerce company that was founded in 2013. As such, it’s comparatively new to the other websites listed above. Over the years, Mercari has won numerous awards, including:
- Awarded “Best Shopping App” by Google Play in 2013
- Awarded “Best App” by Google Play in 2014 and 2015
- Awarded “Best Local App” by Google Play in 2016
- Awarded “Forbes Japan’s Startup of the Year” in 2014, 2015, and 2016
At the moment, Mercari only ships within and to Japan. Thus, it doesn’t serve any other markets than the Japanese. Sellers bear all the costs for shipping and popular product categories sold on the site include:
- Women’s Handbags
- Women’s Shoes
- Women’s Athletic Apparel
- Formal Wear for Kids
- Men’s Accessories
- Women’s Wallets
- Women’s Jewelry
- Computers & Laptops
These are just examples of products and you can plenty of other products available. While Mercari is easier to use than eBay according to some people, its reach and product assortment is not as big.
Mercari expats that both sellers and buyers reside in Japan. Thus, it’s not suitable for overseas sellers that live overseas. There are other better options in that case, including Amazon and Rakuten, for example.
The business model of Mercari is simple. It’s a C2C website and the marketplace pocket a 10% commission on each sale made. It isn’t more difficult than that.