What should be noticed when open online stores in Japan?

Opening an online store in Japan can be a profitable business venture given the country's large population of over 126 million people and high internet penetration rate. However, there are some key considerations when entering the Japanese e-commerce market. Here is an overview for foreign sellers of what should be noticed when opening an online store in Japan.

Understanding Japanese shopping behaviors before selling in Japan

When venturing into the Japanese market, it is essential to gain a deep understanding of the unique shopping behaviors that prevail in this culturally rich country. To succeed in selling your products or services in Japan, it's imperative to be aware of certain statistics and trends that shape consumer choices.

According to a study conducted by the Japan Retailers Association in 2021, approximately 70% of Japanese consumers prefer shopping in physical stores over online alternatives. This indicates the importance of establishing a strong offline presence and delivering exceptional in-store experiences.

Japanese consumers are known for their meticulous product research. A Nielsen survey revealed that 92% of Japanese shoppers research products extensively before making a purchase. Ensuring that your product information is readily available and transparent can significantly influence their buying decisions.

Japanese consumers often exhibit strong brand loyalty. A survey by Dentsu Marketing Insight found that 73% of Japanese consumers prefer products from brands they trust. Building a trustworthy brand image and maintaining quality is crucial for success.

Japan's shopping behavior is heavily influenced by seasons and holidays. For instance, the New Year's season is one of the busiest shopping periods in Japan. Understanding these seasonal fluctuations can help you plan marketing campaigns effectively.

While in-store shopping is popular, mobile shopping is on the rise. The Mobile Marketing Association of Japan reported a 32% increase in mobile commerce in 2022. Ensuring that your online presence is mobile-friendly is essential to capture this growing market.

Japanese consumers predominantly use cash for transactions. However, digital payment methods like Suica and Rakuten Pay are gaining popularity. Offering multiple payment options can enhance your appeal to a diverse customer base.

By tailoring your approach to align with these behaviors, you can build a strong presence and establish lasting relationships with Japanese consumers.

Legal requirements for opening an online store in Japan

There are some key legal steps involved in setting up an online retail business in Japan:

• Business registration: Register your company at the local municipal office. The process depends on the business entity - sole proprietorship, corporation.
• Tax registration: Sign up for a tax ID number to pay income, corporate and consumption taxes. Sales tax is currently 10% in Japan.
• Permits: Acquire any special permits needed for your product category like food handling license, pharmaceutical license etc.
• Terms of service: Create legally compliant TOS, refund policy and privacy policy displayed clearly on your website.
• Payment provider: Integrate payment gateway that meets data security standards in Japan like SSL encryption.
• Product compliance: Ensure your products meet Japanese regulations around labeling, packaging, chemicals used etc.
• Data storage: Store any customer data within Japan to comply with data localization laws.

It can be observed that the legal procedures for selling goods in Japan can be quite complex. You can simplify this process by partnering with e-commerce enablers like Ezbuy Japan. We provide support for your business registration under the legal entity of Ezbuy Japan and handle all matters related to business laws in Japan.

Popular e-commerce platforms in Japan for opening online stores

When opening an online store in Japan, you can either create your own website or leverage existing e-commerce platforms. Here are some popular options:

Several noteworthy e-commerce platforms in Japan offer a diverse range of opportunities for online entrepreneurs. Each platform has its own unique advantages and considerations to weigh:

• Rakuten: Often hailed as Japan's largest online marketplace, Rakuten stands as a robust contender for online retail ventures. This platform not only provides a wide-reaching customer base but also offers sellers the flexibility to establish their personalized Rakuten online shops. This personalized approach allows businesses to nurture a distinct brand identity and connect with their customers on a more intimate level.

• Yahoo Shopping: Yahoo Shopping, a significant player in the Japanese e-commerce landscape, welcomes third-party sellers to list their products on its marketplace. While it provides an excellent opportunity to tap into a broad audience, it's important to be aware that Yahoo Shopping charges commissions for sales made on its platform. Weighing the benefits against the costs is crucial for your business strategy.

• Amazon Japan: Amazon is a global giant, and its presence in Japan is substantial. However, it's worth noting that Amazon Japan tends to charge higher commissions compared to other platforms. Nonetheless, the sheer reach and reputation of Amazon can make it an attractive choice, especially if you're aiming for maximum visibility.

In addition to these well-established platforms, you might also consider newer and niche platforms such as Mercari and Rakuma. Mercari, for example, specializes in consumer-to-consumer (C2C) sales and is particularly popular for secondhand goods. Rakuma, on the other hand, offers a similar C2C marketplace, providing alternative avenues for entrepreneurs to explore.

Ultimately, the choice of platform should align with your business goals, target audience, and budget. Each platform has its own ecosystem and nuances, so thorough research and a strategic approach are key to successfully launching your online store in Japan.

With the invaluable assistance of Ezbuy Japan, you can effortlessly expand your presence on various Japanese e-commerce platforms. Our dedicated team will guide you through the process of creating a selling account, setting up an appealing online store, and expertly translating all your product information into Japanese. This comprehensive support ensures that you can effectively tap into the Japanese market and connect with a broader audience, facilitating your success in the e-commerce world.

Fulfillment and shipping considerations when opening an online store in Japan

Efficient fulfillment and shipping is vital for any online business in Japan. Key factors to consider include:

• Warehousing: Use third-party logistics (3PL) providers with warehouses near Tokyo and other large cities to store inventory. This enables quick delivery.

• Local delivery services: Leverage networks like Yamato Transport for reliable next-day delivery favored by Japanese consumers.

• International shipping: Offer international carriers such as Ezbuy Japan for overseas delivery. Custom duties may apply depending on products.

• Return policies: Accept returns for at least 7 days. 14-30 day return window common for online stores in Japan.

• Packaging : Use minimal, eco-friendly packaging following Japanese aesthetics. Include thank-you notes.

• Tracking: Provide shipment tracking numbers and delivery estimates. Proactively update customers.

• Inventory management: Use inventory management software integrated with your shopping cart to avoid overselling.

Getting logistics right is crucial for success as Japanese customers expect speedy, reliable delivery and hassle-free returns when shopping online.

Financial planning for opening an online store in Japan

Careful financial planning is important when starting an online business in Japan. Some key costs to budget for include:

• Initial setup:  Business registration, website development, legal fees etc. Can be upwards of $5000.

• Inventory : Factor in cost of initial inventory purchase and safety stock.

• Platform fees:  Monthly fees or sales commissions charged by e-commerce platforms.

• Shipping: Per order fulfillment and delivery costs. Can be negotiated with 3PLs.

• Marketing: Search ads, influencer promotions, social media ads, PR etc. Ongoing expense.

• Staffing: Customer service, tech support, marketing, operations staff if needed.

• Taxes: Corporate, income and consumption taxes. Consumption tax is 10%.

• Insurance: Business liability coverage, errors & omissions insurance etc.

• Localization: Translation, compliance costs to adapt business for Japanese market.

Create sales forecasts and cash flow projections right from the start to manage costs effectively. Consider a lean startup approach to validate demand before scaling up.

Customer service best practices for online stores in Japan

Providing excellent customer service is vital for any retail business in Japan given the country's exacting standards. Recommended best practices include:

• Japanese language support: Hire native Japanese speakers for phone, email, chat support in the local language.

• Quick response times: Reply to queries promptly within 24 hours. Customers expect fast responses.

• Formal communication: Use respectful, humble language with appropriate honorifics in all interactions.

• Helpful FAQs: Create a detailed FAQ section on your website addressing common questions.

• Empower staff: Give customer service team authority to resolve issues independently.

• Responsiveness on social media: Be available and helpful when engaging with customers on social platforms.

• Order notifications: Send shipping confirmations, delivery updates via email/SMS to delight shoppers.

• Post-purchase surveys: Ask for feedback after purchase to improve. Show you value customers.

• Cultural sensitivity: Be mindful of different norms around gifts, wrapping, lucky/unlucky numbers. 

Providing exceptional customer service is crucial for online stores in Japan. The country has high standards, and customers expect quick and polite responses to their inquiries.

Conclusion

In this article, we have discussed what should be taken into consideration when opening online stores in Japan, a market full of potential but also challenges. Succeeding in the online business in Japan requires in-depth knowledge of the culture, market, and legal regulations of the country.

Ezbuy Japan, as an e-commerce enabler providing support for foreign businesses to sell on Japanese e-commerce platforms, has excelled in helping businesses overcome these challenges. With the assistance of Ezbuy Japan, you can easily access the Japanese market, from creating selling accounts to setting up online stores, and even translating product information into Japanese. Ezbuy Japan connects you with a large potential customer base and provides favorable conditions for your success in the world of e-commerce.

In summary, opening online stores in Japan is an attractive opportunity but requires knowledge and proper support. Utilizing Ezbuy Japan is a smart way to leverage this market and achieve success in online business in Japan.