4 Essentials to Grow Your Ecommerce Business in Japan: Tips from the Experts

With a population of over 127 million people and a growing appetite for online shopping, Japan is an attractive target for brands looking to grow their business. However, doing business in Japan can be challenging for brands from abroad and when it comes to eCommerce and digital marketing, Japan is quite a unique market.

In this article, we will discuss some tips from the experts on how to navigate the Japanese eCommerce market and grow your business in Japan!

When expanding your ecommerce business to Japan, it is important to consider the following points to get off to the right start:

• Learning Japan's Unique Digital Marketing Ecosystem. The Japanese market is unique and complex. There are many different channels that brands can use to reach consumers, and each has its own strengths and weaknesses.
• Optimize For Mobile. Japan has a very high mobile penetration rate (over 80%), so it is important to have a mobile-friendly website and/or app.
• Offering The Right Payment Methods. Although Japan has high credit card penetration (around 68%),  offering alternative payment methods like e-wallets, payment on delivery and more are important to have a healthy checkout completion rate (Not doing this right will kill your conversion rates!)
• Know How To Connect With Japanese Consumers. Japanese consumers are very brand conscious and often prefer local brands over foreign brands. Your website needs to be properly localised to have a chance of building trust with Japanese consumers. Machine translations will kill your brand.
  

Learning Japan's Unique Digital Marketing Ecosystem

There are unique characteristics to Japan's digital marketing ecosystem and the channels where brands and customers spend their time. Most notably, social media platforms, search engine usage, ecommerce malls and affiliate networks can be quite different from what's common in other countries. This means your marketing budget allocation will also look different when it comes to considerations for advertising budgets and sales channels as well. Below is a closer look at some of the key things to note about Japan.‍

Social Media Marketing‍

In Japan, the top social media platforms are LINE, Twitter, and Instagram. LINE has over 70 million monthly active users and is extremely popular in Japan.   LINE is a Japan-based messaging app that is similar to WhatsApp. It also has a function for businesses to create official accounts and send promotional messages to followers as well as provide chat based customer service.  LINE also offers an advertising platforms so brands can reach a huge audience with targeting options similar to what what you would be used to on Meta ads.

Japan also has a large number of highly active social media users on other standard platforms such as Instagram, Twitter, TikTok and Youtube. Twitter, in particular, is very popular in Japan and YouTube as well. When it comes to platforms like LinkedIn, adoption in Japan is still quite low, however, the platform is growing in popularity, especially among Japan’s international business professionals.‍

Search Engine Marketing

In terms of search engine usage, Yahoo is still a commonly used search engine in Japan.  Google Japan is also popular but many users still prefer to use Yahoo Japan because it’s Japan-based. The latest data shows that Yahoo currently has a  58.64% market share, followed by Google Japan with 31.24%.

Advertising Platforms

Given that Japan's social media and search engine landscape is unique, you can already assume that the channels digital marketers spend their advertising budgets is also quite different. We've written a longer article about this landscape here, but for this article we'll just give you a breif overview:

• When it comes to social media advertising,  Facebook and Instagram are still the most popular platforms among advertisers.
• Twitter's ad platform is also popular, especially among brands in the service industry or brands pushing for upper-funnel awareness marketing.
• LINE has huge market share and their ad platform is a great way to engage with the largest audiences in your market.
• Additionally other channels like Youtube & on Youtube is also extremely common but tends to be better for brand awareness, retargeting, or lead generation and is a difficult channel to unlock for prospecting audiences to direct sales.
• Tiktok Ads is also an advertising platform gaining recent popularity and is a great channel for brands looking to reach a younger audience.
• Other platforms like Pinterest and Snap have low usage and are generally not a top priority (or even a consideration) for brands looking to grow in Japan for the time being.
• When it comes to search engine advertising in Japan, there are 2 places you want to be: Google & Yahoo.  Recent estimates show that Google has a market share of around 70% and yahoo comes in at a distant second with 25% market share. Despite Yahoo's dwindling market share, for the time being we still recommend having a presence here.
• Display advertising is also popular in Japan and includes expected ad types such as banner ads, video ads, rich media ads, and native advertising. Some of the top networks used by advertisers are Google Display Network, Yahoo Display Network, Criteo, Smart News, Adways, Gunosy, Outbrain and more.
  

eCommerce Malls

When it comes to ecommerce in Japan, Rakuten has been the biggest player until recent years where Amazon is now slightly larger. Rakuten is essentially the local equivalent of Amazon and has over 70 million monthly active users and offers a marketplace as well as an advertising platform. Another popular ecommerce mall is ZOZOTOWN, which is a big platform for apparel and fashion brands specifically.

Affiliate Marketing

Affiliate marketing in Japan is also commonly used however the dominant affiliate networks and service providers are different than other countries. The most common networks in Japan would be Rakuten Linkshare, A8, Rentracks and others as well.  

As you can see, Japan has a complex digital landscape and it can be difficult to know where to start. The good news is that there are many agencies and consultants who specialize in helping foreign brands grow their businesses in Japan.

At Digital Primate, we have a dedicated Japan eCommerce team that can help you navigate the market and grow your business. We offer a full suite of services, from market entry strategy to digital marketing and media planning and buying.

If you’re looking to grow your eCommerce business in Japan, please contact us today to learn more about how we can help

Being Mobile First In Japan  

Japan has one of the highest percentages of mobile phone users in the world, with over 80% of the population using smartphones. This is a huge opportunity for ecommerce brands, as mobile commerce is still in its infancy in Japan. In order to take advantage of this, brands need to have a mobile-friendly website and make sure that their advertising and site experience is targeting mobile users.  This means having a responsive design and fast loading times on your website, as well as making sure your ads are served on mobile platforms. Additionally, you need to offer the right payment methods otherwise you'll kill your conversion rates. This brings us to our next point...

Supporting Alternate Payment Methods

In Japan, it's important for ecommerce websites to use alternate payment methods. Although Japan's credit card penetration rate of around 68% is one of the highest in Asia, businesses still need to offer other payment options like e-wallets, cash on delivery, or paying at convenience stores. Payment methods of a typical ecommerce website will offer include LINE pay, amazon pay, Rakuten pay, and Apple Pay, Pay Pay, payment on delivery, or payment at the nearest convenience store. Not offering these alternate payment methods will hurt your check out completion rate on your website.

Creating a Localized Japanese Website

When creating a website for the Japanese market, it is important to keep in mind that Japan has a very different internet culture than the rest of the world. For example, most Japanese people do not use Google as their primary search engine, instead using Yahoo Japan or Nifty. This means that SEO strategies that work in other markets will not necessarily work in Japan. In addition, Japanese people are much more likely to visit a website through a link from another site than by typing in the URL directly, so it is important to focus on building links from Japanese websites. It is also worth noting that Japan has one of the lowest levels of English proficiency in the world. This means that brands targeting the Japanese market need to have a website that is entirely in Japanese. Even if your target audience is Japan's small English-speaking population, it is still important to have a Japanese website as most people will not be able to find your site if it is only in English.

Understanding How To Brand Yourself With Japanese Consumers

Foreign brands entering Japan need to take extra measures to make sure they are perceived as being  trustworthy and of high quality.  Not localizing your marketing material, or doing things like usin machine translations on your website will kill consumers trust of your brand and your website's conversion rates as well.

Just think about it, if you want to a website and the English on the checkout page where you're sharing your credit card info was horrible, you'd start to have 2nd thoughts too!

Not only do you need to properly localize your website and marketing material in Japanese, you also need to make sure the image you are projecting as an ecommerce brand is aligned with Japanese values. When people buy a product from a certain brand, they are not just buying the product itself, but they are also buying into the values and image that brand is projecting.  

A classic example of this is for US apparel brands who often use flashy and sexy imagery to market their clothes. For many Japanese consumers, this could be perceived as a bit too much and more modest imagery would resonate better with their tastes.

Below are some ways to help your brand connect with Japanese consumers and partners to build trust:

• Making sure that your website and all marketing materials are in Japanese .  Do not use machine translations! Higher an actual expert that is native in Japanese to help you.
• Building a social media presence in Japan. This can be done by hiring a Japanese speaking community manager and creating content that is relevant to the Japan market.  Having a Japan specific social media profile can help you localize your organic social strategy and help build trust as users will likely check out your social media pages along the customer journey.
• Sponsoring or partnering with Japanese influencers who can help promote your brand and build trust with local consumers.  
• Creating Japan specific content such as blog posts, infographics, or e-books.
• For anyone trying to build out business partnerships, it's important to note that Japan is a relationship-driven culture. In order to succeed in business here, it is important to first build relationships. This means taking the time to get to know your Japanese partners, customers, and others you do business with.  (This could be a whole article in itself)

Conclusion

Japan is a unique and challenging market, but also one with great potential for ecommerce businesses. By understanding the local culture and taking the time to build relationships, you can create a successful Japan ecommerce strategy.

If you're looking for help with putting together the right strategy for your brand in Japan, just fill out our form and one of our Japan ecommerce experts will get in touch with you.