CSR
An Overview of Our Progress and Achievements in Corporate Social Responsibility
This is an article reproduced from Web Dentsu-ho

Japan's E-Commerce Market:
Fast Delivery, Low-Cost, Long Tail Goods Have Become the Norm

The market scale of Japan's electronic commerce (e-commerce) recently exceeded 13 trillion yen. With the evolution of Internet communication, personal computers and smart devices, it has become easy for many people to purchase goods online, setting a trend that is changing lifestyles and personal preferences. Here we present a discussion among three members of Dentsu's Promotion Design Division: Junichi Kanno, Naoko Ozaki, and Takanori Iwai. They analyze an e-commerce market study previously led by Kanno.

Kanno:

Dentsu's Promotion Design Division used an independent survey to determine the current state of Japan's e-commerce market.

Survey overview

Purpose: To determine consumer attitudes and behavior relative to e-commerce services
Method: Online survey
Country: Japan (nationwide)
Period: Screening of potential participants, May 19, 2016; Survey, May 23, 2016
Target group: Consumers who, during the previous year, had used an online shopping website operated by any of the following: Amazon Japan, Rakuten, Yahoo Japan, Lohaco (Askul Corporation), and Yodobashi Camera
Sample: 1,500 individuals, classified by gender and age

Individuals Surveyed

Japan's E-Commerce Market: Fast Delivery, Low-Cost, Long Tail Goods Have Become the Norm

Ozaki:

Based on data published by the Ministry of Economy, Trade and Industry, the value of Japan's e-commerce market exceeded 13.7 trillion yen in 2015.
Despite differences among its segments, the overall market continues to expand. In terms of gross merchandise volume, it is now larger than both the supermarket and the department store markets.
Although next year marks the 20th anniversary of Rakuten, Inc.'s first online shopping website, there is still room for Japan's e-commerce market to expand. Not only have the market's services become part of many people's lifestyles, but they appear to be growing increasingly popular.

Japan's E-Commerce Market: Fast Delivery, Low-Cost, Long Tail Goods Have Become the Norm

Japan's E-Commerce Market: Fast Delivery, Low-Cost, Long Tail Goods Have Become the Norm

Kanno:

At the same time, it seems that the market situation is changing. In the past, growth occurred in tandem with better prices, expanded product offerings, and faster delivery times. However, my impression is that growth can no longer be driven by improvements in these key selling points.
This situation has come about because of Amazon Japan. The company leads the market with its unrivaled roster of products, low prices, and speedy deliveries—which include next-day and even within-the-hour services. It may be no exaggeration to say that, among e-commerce users, it has set the industry standard.
Indeed, given that Amazon Japan can provide next-day deliveries throughout more than 95 percent of Japan, I believe it is safe to call Amazon Japan the standard setter for e-commerce services in Japan. This means that for e-commerce players, corporate branding and offering extra services may become more important in differentiating e-commerce service providers than those companies' ability to compete in terms of price, product range, and delivery speed.

Iwai:

Amazon Japan stands apart among the main players in the industry. According to SimilarWeb, Amazon Japan sales in Japan totaled around 1 trillion yen last year, and its website recorded almost 400 million sessions in May 2015.
At the same time, according to its latest financial statements, Yahoo Japan posted a 40 percent, year-on-year increase in sales generated by its e-commerce business. Askul Corporation, meanwhile, saw its Lohaco online shopping sales increase 65 percent year on year. These results indicate a booming market.

Japan's E-Commerce Market: Fast Delivery, Low-Cost, Long Tail Goods Have Become the Norm

Kanno:

It is also very interesting to compare usage time and page views. Amazon Japan focuses on being user friendly, while Rakuten's shopping mall model emphasizes repeat purchases. If the two market sites are compared, Rakuten's website tends to have higher average usage time and page views. As recently as May 2016, however, these results were largely the same for both companies.

Japan's E-Commerce Market: Fast Delivery, Low-Cost, Long Tail Goods Have Become the Norm

Iwai:

Our survey of e-commerce users included questions about the image they have of the websites operated by the main market players in Japan. Participants rated such aspects as whether they consider a website is trustworthy and has a full range of products. Overall, Amazon Japan came out on top. It received higher ratings for information in the website that users regard as important, such as product details, reviews, and recommendations. Based on those results, Amazon seems to be used not only as a platform for online purchases, but also as a source of product information.

Japan's E-Commerce Market: Fast Delivery, Low-Cost, Long Tail Goods Have Become the Norm

Ozaki:

Compared with Amazon Japan and Rakuten, Lohaco seems almost insignificant. However, its website has received top ratings for being well designed, distinctive, and attractive—all aspects associated with its brand image. I believe Lohaco has been attracting a steady stream of followers by appealing to them through its content. This includes its Style Lohaco series of articles about lifestyle and its exclusive products jointly developed with manufacturers, based on the concept of lifestyle-oriented design.

Kanno:

The attitudes regarding shopping among users of e-commerce websites indicate that they like shopping, closely compare products, and find ways to purchase at bargain prices. This suggests that users want to be smart about shopping, rather than simply search for cheaper products. Lohaco holds sales campaigns but, as Ozaki has pointed out, its success appears to be driven by its emphasis on creating a purchasing service that promotes fulfilling lifestyles.

Japan's E-Commerce Market: Fast Delivery, Low-Cost, Long Tail Goods Have Become the Norm

TOP