Online shopping in Japan is expected to become a $56 billion industry by 2015, this is according to a research done by global management consulting firm Mckinsey & Company. Virtual shopping is currently a $30 billion market and approximately represents 5 percent of the entire retail sales.
The significant shift from conventional shopping landscape is attributed to the unlimited power of the Internet. The decision to shift was likewise influenced by the consumer’s cost-cutting scheme during the 2009 recession.
The dwindling economy taught consumers to live within means. So instead of “hanging out” they found it more economical to stay home. The most exciting mode of entertainment at home, apart from the television was the Internet, which eventually became their key to the outside world. Pretty soon, it provided everything they needed, from the news and public affairs, social discussions down to the basic commodities.
High speed Internet easily earned a place in the Japanese consumer’s daily life. Worldpopulationreview.com pegged the population of Japan to be 130 million with 90 million Internet users.
Online shopping proved to be cheaper than to going to a retail store. Every shopper knows that a single trip to the mall easily includes food and transportation costs.
Known for their discipline and diligent saving practices, online shopping gives Japanese buyers an opportunity to compare prices. They can even do further research by reading product reviews and discussion forums. And because of the unique sense of consumer empowerment price wars in electronics and apparel has been sweeping the virtual stores.
Previous studies made by Mckinsey & Company further noted that it took decades before consumers welcomed the idea of shopping on credit.
Thus, the astounding shift in consumer mindset is enough to convince retailers to get online and be part of the virtual shopping frenzy. To keep up with their dynamic market they have been developing various selling innovations.
For instance, a mobile gadget like Kindle keeps users glued to Amazon’s shopping catalogue while simplifying the book purchasing process. There’s Zappos.com, the largest online shoe retailer which has a return policy in case the shoe does not fit. Japanese food products use Cookpad.com to market their latest promotions; the cooking and recipe site has over eight million users.
Another significant factor related to online retail success is the efficient delivery system. Japan is known to have the most reliable and the most reasonably priced logistics network in the world. For instance, it is a common practice among Japanese golfers to send their golf clubs to their destination ahead of time. Logistics service is very cheap and it spares them from actually carrying the bulky golf bag during the trip.
Amazon Japan is the only outlet that can bravely offer “same day delivery” feature. The efficient service began in 2009 and orders made at midnight can be delivered in the morning. Japanese buyers can even choose to pick up their orders at any of the 50,000 convenience stores all over the country. The service extends to fresh food products. For an extra fee fresh food like newly caught crab from Hokkaido or Okinawa pineapple can be delivered to the buyer’s doorstep on the same day.
Love for Luxury Brands
Among the most visited shopping sites are Rakuten, Amazon Japan and Yahoo Japan. Rakuten is the number one shopping site. It carries everything from fashion, electronics, home, garden, health and beauty, car accessories, sports, food and drinks. It is one of the top Internet companies in the world along with Google, eBay, Yahoo and Amazon reporting revenue at US$4.7 billion in 2011. Founded in 1997, Rakuten currently has 10,000 employees worldwide.
The number one brand on Rakuten’s search list is Louis Vuitton. The luxury label has consistently been dominating the Japanese retail arena for years. According to an article in the New York Times the international luxury industry relies on the Japanese market for at least 13 percent of their total profit.
With the upper class as their primary market, brands like Louis Vuitton, Coach, Hermes and Tiffany also have significant presence among the middle class. These consumers penny pinch by skipping vacations or avoiding expensive restaurants so they can afford designer clothes, bags and shoes.
The obsession for stylish labels has migrated to the Internet. Other popular brands that are consistently at the top of Rakuten’s search list are Coach, Gucci, Hermes, and Nike.
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About the Guest Author:
Rodolfo Lentejas, Jr. is a fulltime freelance writer based in Toronto. He is the founder of the PostSckrippt, a growing online writing business dedicated to producing top quality, original and fresh content. To know more about him, please visit www.postsckrippt.ca. Like him on Facebook or follow him on Twitter, Google+ and Pinterest.