Starting with the general demographics of the e-commerce users. considering several general factors such as allowable incomes, internet knowledge and usage in different brackets, it can be seen that most frequent e-commerce users are in the age brackets of 30’s and 40’s for both males and females. Surprisingly, females in the 50’s age bracket are also frequent e-commerce users. This is due to the fact housewives are still very common in Japan. On a side note, online grocery shopping has become very competitive and saturated in Japan as the ageing populations grows. In terms of frequencies, shopping from a few times a month to once every three months represent the majority of the general usage.
In terms of the average purchase amount, the range between 10K to 30K represents the most frequently purchased amount. This comes to no surprise when considering the most frequently purchased product types (refer to previous post). The purchase amount below 10K usually relates to general disposable household goods, such as razor blades or soaps. The purchase amount between 30K to 70K usually relates to computer or technology products. One notable finding is that the general average purchased amount is distinctively higher than that of the retail stores. Depending on the store, the general average purchase amount range from 2K and up. One plausible hypothesis is consumers are limited in how much actual volume they can carry, especially for general household goods, where volumes and weight can stock up quite easily, preventing additional purchase in one round.
Like many other markets, the primary reasons for shopping online is to seek cheaper prices. Other primary reasons include convenience and exclusiveness. (Japanese consumers give in easily to limited goods or services.) Other incentives to shop online include points (see previous post regarding Rakuten points), and convenience. Especially given the transportation conditions in metropolitan in Japan, where the majority do not own cars, home delivery is a huge incentives. Additionally, due to general long working hours, home delivery sometimes may be difficult for certain individuals. New apartments have deposit boxes to accommodate such needs, where the delivery staff can deposit the package in the box and lock it with a password, and the the password will be notified to the customer in the post box. The deposit box solution may only be viable in areas where security concern is relatively low, though in general, Japan is a very safe country.
On the other hand, the reasons for not shopping online should be noted as well. The general concerns towards online shopping all apply to this market, though please keep in mind that majority of the people are quite are used or frequent users of online shopping.
In terms of site selection criteria, the top ones in order are price, product assortment, and delivery fee. These are fairly common across different countries in the world. Especially in the online world, most people would expect to pay less for same goods. The notion is that online stores don’t require the same fixed and staff costs as the retail stores. This notion is becoming less and less true nowadays. Product assortment will help the customers shorten their online shopping time, thus they are more willing to go to a one stop shop online than go to several sites to get the same amount. This mentality is often reinforced by the delivery fee or collective discounts offered if you purchase more. A customer may be able to get the same goods from different sites, but sometimes the combined shipping fees may wipe out the discounts. Here, it is worth noting that almost all customers around the world are very sensitive to free delivery. Even if the merchants offer the same discount value as the delivery fee, customers feel that the free delivery has higher degree of discount value.
In general, online shopping pertains higher risks, thus the common concerns towards online shopping are often the direct contact with the merchants. The lack of physical shops hinders the customers to see and touch the actual goods before purchase. Should there be any problem with the goods or service, the customers would want to know there is a real person behind the site for the after service. As well, when customers seek discount priced goods, they often visit small shops operated by individuals or small companies, which customers may raise concern about how their information is being used beyond the transaction.
Internet is a sea of e-commerce sites offering different prices. Getting to know an existence of site is very difficult. In serving the customers with seeking the lowest prices, price comparison site, such as kakaku.com is often the go to site for customers who are used to online shopping. Such site not only offer price comparisons but also provide user reviews on the products and the merchants. kakaku.com is such a great service that I use it quite often once I have my eyes on a particular product. For most general public, if one is inexperienced with online shopping, search engines would be the go to service to find the goods they want. Lastly, contradicting with finding lowest price possible, one can always go to the brand official site to get the goods at full MSRP.
Japan is one of few mature markets that prefer to use primarily credit cards for online payment methods. This may be particular to Japan due to the fact that credit companies often offer complimentary incentives such as mileages or points, which lead to higher usage of credit cards. The second most frequently used payment method is also particular to Japan (and Taiwan). Convenience stores have a extremely high geographic coverage rate, that you would spot an convenience store every corner in the major cities. Convenience stores in Japan not only sell snacks and drinks but also provide various services such as parcel delivery and pick up, bills payment, laundry, and etc. Payment collection is one of the extraneous services that convenience stores offer. In addition, convenience stores payments can be done before or after the parcel arrival depending on the merchant’s payment policy.
These points hopefully provide some insights about the customer behaviour towards online shopping in Japan market. Next post will be the last instalment of this series, and I will be talking about the issues and logistics aspects of the business.
Till next time...
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