Empower and Revitalize Japan for Next Generation
Stay tuned by taking a look at our business updates.Moreover, there will be some useful information for you.
Bring your products to a wider Japanese audience on Rakuten, Amazon and Yahoo! Shopping
As I mentioned in my previous post, launching a localised Japanese store and using AdScale eCommerce to bring customers to your site is a relatively streamlined and easy way to start selling your products in Japan. Limiting customers to only purchasing your products from your online store and requiring Japanese consumers to engage in private imports and wait for international delivery times will greatly reduce your reach and conversion rate.
The three big marketplaces Rakuten, Amazon and Yahoo! Shopping represent close to half of all ecommerce transactions. Due to the point and reward systems of these marketplaces, which are often integrated into every aspect of customers’ lives such as cell phone plans, credit cards, etc, Japanese customers are incredibly loyal to a specific marketplace. If your product is not available on a marketplace, you will miss out on a large number of customers who will only shop on their marketplace of choice, partly due to convenience and partly loyalty programs.
In terms of reaching customers, generally speaking, the more marketplaces your products are available on the better. Of course there are other considerations in terms of branding, marketplace costs and so on.
Another additional benefit of the marketplaces for overseas brands is that you can leverage their warehouse and fulfilment services to offer your customers fast and cheap domestic delivery. With our solution you can set up a single fulfilment channel and sync your inventory and orders across all channels.
So, what are the pros and cons of the different marketplaces? Below I will summarise a few key points.
• Amazon is relatively easy to get started with. Particularly if you already have an existing account in another market, setting up your Amazon Seller account can be achieved in just a few clicks.
• Fulfilment by Amazon is also equally easy to get started with, particularly for brands that are already familiar with it in other markets.
• While Amazon has a very mature advertising platform with excellent tools available, competition is fierce and therefore costly.
• Amazon has fewer options when it comes to branding compared to Rakuten. Product listings are a fixed format.
• Getting a Rakuten account as a foreign company can be tricky and the process takes considerably longer. For American companies it is possible to get your own Rakuten account, but for other companies including EU and APAC this is unfortunately not an option. You have to either start a local company, work with a Rakuten service provider or work with a local agency who will set up the account on your behalf. All three options have their downsides. Rakuten is planning to expand the list of countries that can open their own accounts so expect some announcements in the near future. However this is currently most attractive to US companies.
• Rakuten has its own fulfilment service called Rakuten Super Logistics.
• Rakuten has a particularly strong share in the fashion category and among female and older demographics.
• Brands have stronger control over the branding on Rakuten: you have a storefront, essentially your own website, with more design options for listings, front page and sidebars etc.
• Rakuten has more upfront costs but averaged across a whole year, the costs are quite similar to Amazon.
• Rakuten’s advertising platform is very different from Amazon’s. The equivalent to Sponsored Products is much easier to set up but has much fewer controls. There are however other advertising methods including coupons, newsletter ads and banner style ads.
• A smaller but still considerable market share.
• Yahoo! Shopping is relatively easy to set up.
• Yahoo! Shopping accounts are free and there is no monthly cost but there are certain commissions on sales as well as points awarded to customers.
• The recently opened Paypay Mall is an interesting option for qualifying brands.
• In a future blog post I will examine Yahoo! Shopping in more detail as it has certain unique features that could make it attractive to certain brands.
Any brand planning to enter the Japanese market should seriously consider selling their products on marketplaces in addition to their own online store, especially if they are not planning on having their own domestic warehousing solution. The benefits in terms of customer reach and warehousing and fulfilment options more than make up for their downsides. Especially given the different options available there is generally a good fit for every type of brand. If you have any questions about what marketplace would work for your brand don’t hesitate to contact us.
Global Sales Executive