Japan is one of the most developed e-commerce markets in the world and ranks second in Asia, just behind China. The market has recorded sustainable growth over the past five years, supported by strong mobile and online penetration and growing consumer confidence in online transactions. E-commerce growth has been further accelerated by the COVID-19 pandemic, according to GlobalData, a leading data and analytics firm.
Analysis by GlobalData E-Commerce Analytics reveals that e-commerce sales in Japan are expected to grow 10.1% in 2020 to 21.4 trillion yen ($197.1 billion), compared to an earlier estimate of 7.2% before COVID-19. E-commerce sales are expected to grow at a compound annual growth rate (CAGR) of 7.5% between 2020 and 2024, reaching 28.6 trillion yen ($263.5 billion) in 2024.
Nikhil Reddy, Banking and Payments Analyst at GlobalData, comments: “While the crisis has caused a plunge in overall consumer spending, there is an increase in online spending as wary consumers stay home and use online channels. line. With social distancing rules in place and many brick-and-mortar stores closed, shoppers have had to embrace the online channel even for day-to-day purchases.
According to the “Household Consumption Survey (May 2020)” conducted by the Ministry of Internal Affairs and Communications of Japan, the percentage of households using online shopping reached 50.5% in May 2020, an increase 8.2 percentage points compared to the same period last year.
As Japanese consumers continue to embrace online shopping, the use of electronic payments will increase as consumers move away from cash payments for fear of infection.
According to GlobalData’s 2020 Survey of Banks and Payments for Online Shopping, payment cards are the most preferred payment method for online shopping in Japan, accounting for 71.6% share, while alternative payment solutions accounted for 18.4% share.
Mr. Reddy concludes: “The pandemic has caused a permanent shift in consumer shopping behavior, pushing them online, a trend that is expected to continue even beyond the COVID-19 pandemic.
