Japan is the world’s third-largest economy
Japan has only 120 million people, but the per capita income is quite high. The country is almost entirely comprised of Japanese citizens with less than three percent of the country being born overseas.
Tokyo is considered by most to either be the second largest or the largest metropolitan city in the world. The top ten Japanese cities by population make up 85% of the total population within Japan.
It’s a highly urbanized economy that is easily traversed by train. In fact, many citizens can get to and from work by train and never use a car. I lived in Japan for 2.5 years and never used a car other than a very few times using a cab. Otherwise, I traveled all over Tokyo and even the country by train. Thus, the vast majority of citizens have access to stores at a train station either coming or going to work every day.
How successful is Amazon in Japan?
Amazon Japan is the third largest marketplace within Amazon’s regional marketplaces, but Amazon is the largest online seller in Japan. That distinction formerly belonged to Rakuten. It is somewhat difficult for a non-Japan-based seller to sell on Rakuten due to language and other, shipping-related barriers.
Selling through Amazon Japan is likely the best marketplace option.
Does Amazon Japan have FBA?
Yes, Amazon FBA is available in Japan, and there are many fulfillment centers across the country.
If you don’t use FBA, you’d have to use a local shipping/distribution company. That is going to be too costly unless you already have a large presence and brand recognition in Japan.
You don’t have to speak Japanese, but you should work with someone that does!
Of Japanese consumers, less than seven percent speak English at a business fluent level or better. This means you must communicate in Japanese in order to sell your products.
Remember, translation apps like Google Translate are not sufficient to adequately sell to a Japanese consumer. It may allow you to communicate at a basic level in Japanese and get around town as a tourist, but it will not allow you to ‘sell’ your product. You will say or do something that is obviously wrong, which will violate an Amazon policy or lead to a suspension before you can even get started. It is highly recommended that you hire translation and localization services as part of your launch plan.
Start selling on Amazon Japan
Given the density of populations around urban areas, space is at a premium throughout Japan. This means big and bulky products are not ideal, and the packaging for all products is almost as important as the product itself.
The customer base is used to shopping in stores every day, so your competition is not only with online, but in-store as well. This is because almost everyone rides a train at least once a day, and there are stores within most stations. In fact, there is the equivalent of malls at major stations, and customer service at these stores is quite good.
The Japanese customer base is used to spending twice as much time on a product detail page researching products vs. Americans or Europeans because they are able to get this sort of information from sales associates in stores.
Also, a Japanese buyer would almost ‘feel badly’ if they had to return something, as if they had not researched the product enough. This means returns represent less than one-half of what a seller would see in the US or German marketplaces.
And while having multiple images on your detail page matters on the US and EU marketplaces, this matters even more from a conversion standpoint on Amazon Japan.
As an example, the average American male often knows their neck size and sleeve length. A Japanese consumer, in contrast, likely knows not only their chest size but also the distance from shoulder to shoulder and the actual centimeters of the distance from heel to toe.
If you don’t include such specifications on your detail page, you will likely lose a sale to a competitor who has more robust detail page content. Create A+ content for all detail pages, and when in doubt, add more text to describe your product.
How do you compete effectively on Amazon Japan?
Promotions and loyalty programs are more important than in the US and EU, though the average price is typically a little higher across similar product categories.
The competition will run discounts almost every day, and their in-store price may be different than the online price.
The typical loyalty program in Japan is based on points, similar to how you might think about airline miles. In fact, offering a 10% price discount or the equivalent of 10% loyalty points would have a higher conversion with the points.
Amazon Japan offers points to its customer base and it would be recommended to figure out how to participate in double point promotions that Amazon may offer for participating Amazon sellers. It’s a fairly low-cost method to increase conversion and is typically a lower cost than simply running a price discount.
Shipping promotions are not typical since Amazon can ship same day to approximately 85-90% of Japan and next day to essentially all of Japan, including Okinawa and Sapporo.
The competing online marketplaces mostly rely on sellers to ship the merchandise, though they do offer shipping in many cases that is “next day.”
Again, this is essential because most customers are used to shopping every day without any incremental distance to get to a store.
How to avoid a suspension on Amazon Japan
Many of you reading this article may already do business with Amazon in other countries. So you probably already have really low expectations with Seller Support.
If you do something wrong and have problems with ordering, shipping, detail page information, or anything in Seller Central, getting this corrected is likely more difficult in Japan than in US or EU simply due to language barriers.
Amazon’s Seller Support teams are almost all Japanese-only speakers (less than 1% of sales off Amazon.jp is from the English-translated version of the site).
And, Amazon.jp is often stricter than other marketplaces when it comes to following various Amazon policies.
This means doing your homework ahead of time and being diligent about following Amazon’s stated policies are even more important when doing business with Amazon Japan. And, this may make it even more relevant to hire those who are used to doing business in Japan and already have a business history with Amazon.jp.
Bottom line: should you sell on Amazon Japan?
While some of these points may seem complicated or daunting, the potential of selling on Amazon Japan is a very loyal customer base. Meaning, once you convert and please a Japanese consumer, you have a very good chance at a repeat purchaser.
Former Amazon Executive
Stan was a chief merchant/GM of multiple categories for Amazon in both US and Japan for 10+ years, including all apparel, footwear, jewelry, watches, handbags, sunglasses, luggage and costumes. He had full p&l responsibility over first and third-party marketplace sales and expenses for these categories, including all customer experience, marketing, shipping and personnel expenses. His teams ranged in size from 100+ and oversaw revenues of $3.5B+, and he has operated as an independent consultant since leaving Amazon, advising brands and sellers on their topline eCommerce strategy and helping with problem resolution. He has clients that range from $1M to $2B+ in annual sales revenue.