In Japan, surging e-commerce and novel logistics

Northeast Asia has become a significant e-commerce market, attracting numerous international brands. Its large consumer base, representing 22% of the global population, has made it one of the most densely populated regions globally. With a busy lifestyle and an efficient logistics network, e-commerce has grown rapidly, transforming the local retail industry.

The e-commerce market in Northeast Asia is dominated by a small number of platforms that prioritize improving technology, logistics infrastructure and expanding their user base in smaller cities. During the pandemic, the e-commerce market experienced rapid growth, with China, Japan and South Korea being the top three fastest-growing e-commerce markets in the world.

Japan, despite being a tech-savvy nation, has been slow to adopt e-commerce. Although its e-commerce market is one of the largest in the world, nine out of ten purchases are still made offline. However, the nation is starting to adopt technological advancements in delivery and logistics, with autonomous delivery methods being deployed for e-commerce parcels, including drone delivery by Japan Post from 2023.

Steadily growing e-commerce market

The most popular online product categories in Japan are beauty electronics and fashion, with Amazon, Rakuten, and Yahoo Shopping being the top three e-commerce platforms. The country’s e-commerce market has been steadily growing and now accounts for 11% of the total retail market, amounting to a $144 billion market in 2022, excluding food (Figure1). Over three-quarters of the local population has shopped online, with an average annual spend of $2,158 per capita.

Despite this, the country has one of the lowest compound annual e-commerce growth rates (CAGR) at 7% in 2023, which could be attributed to its large aging population; more than 40% of the population is aged 55 or older. Beyond 2023, the growth rate is estimated to be between 8-9%. Figure 1 - Japan E-commerce Market: Development and Future Estimated Revenue

Source: TMO Group

Boosting sales

Mobile commerce in Japan is projected to grow at a compound annual growth rate of 7% through 2027. About one-third of Japan's total e-commerce is conducted through mobile devices, amounting to $48 billion in sales in 2022. This trend is supported by the increasing use of smartphones among the Japanese population, with a current penetration rate of 76%, and a high internet penetration rate of 88%.

Japan's numerous public events and customs offer merchants the opportunity to boost sales. There are 16 national holidays per year, and certain occasions like White Day, which follows Valentine's Day, are significant gift-giving events. Another example is the traditional new year practice of Fukubukuro, or "lucky bag," where retailers sell mystery bags filled with discounted products. This has become a popular online shopping event, with luxury brands and major Western retailers like Apple and IKEA participating.

Cross-border shopping in Japan makes up a significant portion of e-commerce sales at 10% or $14.5 billion. The United States, China and Korea are the top three countries Japanese consumers shop from when buying products online.

Air cargo improvements

Moreover, as Japan continues to strengthen its logistics capabilities, particularly in air cargo and autonomous delivery methods, the nation is expected to benefit from enhanced efficiency and reduced costs in the supply chain. Earlier this year, Silk Way West Airlines and Nippon Express Holdings signed an Air Cargo Memorandum of Understanding (MOU) to improve air cargo transportation services for customers and adapt to changing supply chains.

The memorandum strengthens Silk Way West Airlines' position in the Japanese market and enables Nippon Express Holdings to expand its business globally by offering cargo capacity across a worldwide network. In addition, Swissport plans to open a new air cargo center at Chubu Centrair International Airport (NGO) to keep up with the growth in Japan's Tokai region, which is home to many large manufacturers.

The development of airfreight logistics plays a critical role in bolstering the growth of Japan's e-commerce market. As companies like Silk Way West Airlines, Nippon Express Holdings, and Swissport continue to enhance their air cargo transportation services, the country's e-commerce landscape will benefit from increased efficiency, reduced shipping times and a more seamless international shopping experience.

Investment in air freight logistics is crucial for Japan as it strengthens its global e-commerce presence. Enhancing air cargo infrastructure and adopting new technologies will drive growth in Japan's e-commerce sector and position the country as a major player in the worldwide digital retail market.

In Japan, surging e-commerce and novel logistics

KLM, Delta challenge to AMS slot cutback upheld in court

Airfreight patterns are comparable to pre-pandemic norms

Related Posts

Routes, risk and resilience: The transformation of global freight

June brings stability, not relief

May freighter capacity extends April’s higher operating level

Airfreight patterns are comparable to pre-pandemic norms

Cargo Facts Free Newsletters

Cargo Facts Connect Podcast

Follow Us

Welcome Back!

Retrieve your password