Despite its impressive growth rate, Japan is surprisingly still an under-appreciated eCommerce market, with many retailers ignoring the opportunities it offers for international expansion.
But what are these opportunities? And why should you consider selling into Japan?
To answer these questions, we've teamed up with InterCultural Elements to provide an overview of the Japanese eCommerce market, along with cultural expectations and tips for success.
The Japanese eCommerce Opportunity
With 20 million internet users and some seriously impressive growth statistics - Japan's second quarter GDP for 2017 showed a 1% quarter on quarter growth, which translates to 4% in annual terms compared to the expected 2.5% - it can't be ignored that Japan is an eCommerce market worth capitalising on.
In fact, according to Rob Carnell, economist at ING Bank, this growth rate makes Japan the fastest growing economy in the G7 this quarter.
Moreover, Japan's eCommerce revenue amounts to $84.5 milion in 2017, with an expected annual growth rate of 7.2% from 2017 to 2021, resulting in a market volume of $111.804 million.
Ultimately, this significant advance highlights the strong and consistent growth of eCommerce in Japan, and further signals opportunities moving forward.
Understanding the Japanese market
So, what is there to know about selling into Japan?
Well, to start with, Japanese expansion is certainly more hands on than most Western countries and can prove much trickier than other overseas markets.
To give you an example, only 3-5% of Japanese people speak English well and the vast majority of consumers expect to have a localised shopping experience.
While human native translation is vital when expanding into international markets, it is even more important when expanding into marketplaces in Asia.
In fact, it is particularly important to invest in human translation to avoid the unfortunate consequences of machine translation tools.
So in the specific case of Japan, why exactly is it important to have a native speaking Customer Service Representative and a native professional taking care of the translation of your products?
Well, for starters, Japanese is a highly "politeness-orientated" language. While many European languages only distinguish between a formal and informal pronoun (e.g. du and Sie in German, tu and lei in Italian), the Japanese language has many honorifics and ways to show respect.
Specifically, the dynamics of Japanese honorific speech are so deeply rooted and complex that a non-native speaker, although competent in the language, may not understand all the subtleties in meaning usage.
When it comes to your listings, writing text in Japanese is not only a matter of producing grammatically correct sentences, but also of choosing the right phrasing and appropriate polite forms. This plays a huge role in offering a good customer service experience.
As one of the Japanese Customer Service Representatives at InterCultural Elements explains, not only are customers always right in Japan, but etiquette dictates that they be treated with a lot of reverence: this means addressing customers in a humble and deferential manner and using respectful forms of language to elevate them.
It should not come as a surprise that Japan is often cited by foreigners as a place where service is beyond excellent.
Of course, customers expect to receive a quality product, but they also care a lot about all of the details that accompany the item, such as packaging and presentation.
They want to be able to trust you as a seller, which is why it's so important to show that everything is taken care of with attention to detail. InterCultural Elements' clients further reported that Japanese customers often complain about things that aren't necessarily related to the product itself, e.g. a buyer noted that the tag on her t-shirt was slightly folded, even though the t-shirt itself was perfectly fine.
On another occasion, another customer complained that their order arrived in a bag, as opposed to a box.
These hopefully give you an example of how attention to even the finest of details can go a long way in pleasing consumers in this market.
Additional Tips for Succeeding in Japan
Something worth keeping in mind is that Japanese consumers dislike template answers.
If they write an email concerning a faulty item or a problem with the order, they expect more than a sterile standard reply, no matter how polite it is.
They want to receive personalised clarification regarding their specific enquiry, as well as the impression that the person assisting them is taking particular care of their case.
Another crucial thing to consider is that trusting a non-native speaker to take care of your emails may result in Amazon JP suspending your account.
Poor non-native customer service is one of the main reasons for Amazon suspension and can seriously jeopardise your business.
For all these reasons, if you'd like to expand into the Japanese market, we heartily recommend having the work done by native speakers and eCommerce experts.
It also makes god business sense to invest in a robust inventory and order management system, especially when expanding to Japanese marketplaces, so that your team only needs to learn how to process listings and orders once. Plus, there's a lot more advantages to inventory management software worth exploring.