Payment cards remain the preferred payment method for online purchases in Japan, collectively accounting for nearly 63% share in total e-commerce payments in 2023. The e-commerce market in Japan grew by 9.1% in 2023 to reach JPY24.8trn ($177.3bn), driven by a tech-savvy population, high internet penetration, and secure payment solutions, reveals GlobalData, publishers of EPI.
According to GlobalData’s 2023 Financial Services Consumer Survey, 87.2% Japanese consumers reported having shopped online in the past six months, while only 5.7% of respondents stated that they never shopped online.
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GlobalData’s E-Commerce Analytics reveals that an increasing number of consumers in Japan are opting the convenience of online shopping. The e-commerce market is expected to continue the strong momentum and is estimated to grow by 8.2% to reach JPY26.9trn ($191.9bn) in 2024.
Kartik Challa, Senior Banking and Payments Analyst at GlobalData, comments: “The Japan e-commerce market is experiencing significant growth, driven by factors such as a tech-savvy population, high internet penetration, well-developed online payment infrastructure, and the availability of various online payment solutions. With a preference for online shopping due to its ease and time-saving benefits, Japanese consumers are embracing digital platforms, making e-commerce an integral part of their shopping experience.”
Online shopping events such as Black Friday, Cyber Monday, Singles’ Day and Amazon’s Prime Day have all contributed to Japan’s market growth
Meanwhile, the presence of secure payment solutions, including Mastercard ID Check, and faster checkout options such as PayPal Checkout have encouraged consumers to shop online.
GlobalData’s survey also reveals that among the various tools used for e-commerce purchases, payment cards are the most preferred. They collectively accounted for 62.9% share of the e-commerce purchases in 2023, with credit and charge cards having a dominant share of 60.8%.
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By GlobalDataCredit card usage is driven by benefits such as reward points, cashback, discounts at partner merchants, and the availability of installment payment facilities. Banks are offering virtual credit cards for enhanced security and to encourage their usage in ecommerce payments.
While payment cards continue their dominance, alternative payment solutions are also increasingly used for online purchases and collectively accounted for 28% share. PayPay remains the most preferred alternative payment option, with international brands such as PayPal and Amazon Pay also making their presence felt.
Challa concludes: “The Japanese e-commerce market is expected to continue to evolve at a healthy pace going forward and is forecast to reach JPY34.9trn ($249.1bn) by 2028, registering a compound annual growth rate of 6.7% between 2024 and 2028. Growing consumer preference for online shopping, the rising popularity of online shopping festivals, as well as evolving authentication measures that offer enhanced security will further encourage online payments.”
