Are you looking to expand your online business and brand to a new market? Have you considered Japan? With a population of 126 million people and a GDP of $4.91 trillion, Japan is the world's third-largest economy.
But what makes Japan a promising market for eCommerce businesses is its steady and consistent growth, even throughout the pandemic. In fact, Japan is the 4th largest eCommerce market in the world, with $113 billion in sales in 2019. However, with only an 8.7% penetration rate, there's still plenty of room for growth.
One of the key players in Japan's eCommerce market is Rakuten, a Japanese online marketplace that operates similarly to Amazon or eBay. To help address this opportunity, we were joined by Rakuten in a recent webinar.
Guided by Nate Shurilla, Head of APAC at Pacvue, and Gina Yi, Senior Business Development Manager at Rakuten, the webinar discussed how Japan’s point systems affect eCommerce loyalty, best practices for expanding your brand overseas, and more.
Gamifying Ecommerce: Building Loyalty with Rakuten's Super Points System
Rakuten's Super Points program is a popular loyalty program in Japan, allowing customers to earn and use points across many categories and companies. It has a cumulative value of JPY 3.3tn and a low point lapse rate of 2%.
With 68% of Japanese people having Rakuten points, it's essential for businesses to build loyalty and retention. Rakuten is a leader in gamification culture, and Amazon has a limited presence. It's a must-consider platform for eCommerce businesses expanding in Japan.
Cross-Border Ecommerce Program
Gina Yi elaborated on Rakuten's cross-border e-commerce program, which allows overseas companies in qualified countries to open a shop on Rakuten with their local entity and receive payouts in their local currency.
The program makes it easier for overseas companies to enter the Japanese market without finding a local distributor or hiring a team in Japan.
The program is intuitive and duty-free for most categories when the order is under 16,666 Japanese Yen.
Import Regulations for Certain Categories
Rakuten has specific import regulations for certain categories, such as food, fashion, and cosmetic/health products.
For example, meat requires temperature control, and fresh fruits require a short shelf life for compliance. Fashion sellers must apply to sell specific brand items and submit authorized proof, and cosmetics/health products must have their ingredients and descriptions checked for compliance with Japanese law.
These regulations aim to ensure that imported products meet Japanese standards and regulations, and businesses should be aware of them when considering selling on the Rakuten platform.
Key Questions Covered in Q&A
Is knowing Japanese a must to expand your business as a seller on Rakuten Japan?
Knowing Japanese can be very helpful in expanding to selling on Rakuten, but it is not required. Freelancers and partners who understand the local market can assist with the nuances of the market. Moreover, tools like Chat GPT can translate nuances in language, making it easier to enter the Japanese market. While speaking, reading, and writing Japanese can be extremely helpful, it is not a must to enter the market.
What categories or products are most popular with Japanese consumers?
The most successful categories on Rakuten for Japanese consumers are supplements, cosmetics, fashion, electronics, baby and maternity products, and outdoor and sports items. However, the Japanese market is open to all categories as long as they like the products. Merchants are encouraged to seek initial market research and product fit evaluation before entering the market. Personal shopping habits show that Rakuten is a broad platform where shoppers can find almost anything.
What turnover size does a US business need to be able to apply to sell on Rakuten?
$1 million in annual sales is ideal; however, Rakuten looks for companies that sell at least $500,000 in their first year on the marketplace.
If you want to accelerate your eCommerce business with new sales streams from additional marketplaces, consider expanding to Rakuten Ichiba today.
And reach out to Pacvue for more information on expanding your brand into new marketplaces at scale.