When it comes to selling on Amazon Japan, there is quite a shortage of helpful material that's actually written in English. Whether you are considering selling your products in Japan or are simply doing some research, please read on as we provide you with the basics of what you need to know.
- Sales and stats
Before diving into selling on Amazon.jp, it’s important to understand the landscape of the market. In terms of monetary value, Japan currently has the 4th largest Amazon market share and accounted for 4.9% of Amazon’s total sales in recent years. Between 2020 and 2021, Amazon Japan produced sales of $20.461 billion and $23.071 billion, an increase of 27.9% and 12.8% quarter over quarter, respectively.
Here is a quick list of the sales generated through the Japanese market by country:
- U.S.A. → $314.006 billion (+19.2% growth quarter-over-quarter )
- Japan → $23.071 billion (+12.8% growth quarter-over-quarter)
- United Kingdom → $31.914 billion (+20.5% growth quarter-over-quarter)
- Germany → $37.326 billion (+26.3% growth quarter-over-quarter)
- Others → $63.505 billion (+38.0% growth quarter-over-quarter)
Revenue calculated for Amazon Japan includes direct business, third-party sales (merchant sales), Amazon Web Services (AWS), and Subscription services. As of 2018, 58% of Amazon’s total global distribution was through Amazon Marketplace sellers. Digital Commerce 360 magazine estimated that this figure was more likely closer to 60%. From those figures and based on a commission income average of 10% of third-party sales, it is estimated that Amazon.co.jp’s total distribution value may have reached about ¥5 trillion! Not a figure you can easily ignore.
While Amazon is clearly growing in Japan, it’s not the only player in the Japanese marketplace. Outside of Yahoo Japan with a ¥890.1 billion sales distribution value, Rakuten is Amazon Japan’s biggest competitor, packing a punch with a ¥3.9 trillion sales distribution value. It’s important to note, however, that this value includes sales distribution of Rakuten’s affiliated services (like the Rakuma app). So actual figures based just on Rakuten's marketplace may not actually give them a much bigger market share than Amazon.
Rakuten is a major player in Japan and offers customers a range of products and services including the Rakuten card, mobile, and travel services. Customer retainment success relies on a points system and discounts when using more than one of their services. The Rakuten points system itself offers major flexibility and can be used across all of their platforms, customers can even exchange their points for a higher value when using these to shop at the Rakuten Ichiba (Rakuten's marketplace), amazing! Rakuten recently introduced free shipping for purchases of over ¥3,980 to attract more customers and offer a better user experience, this was not popular among all stores however.
- The language barrier
Due to its history and development, Japanese is an extremely complex language made up of 3 different families of characters where the same words are repeated in each but written differently, these are: Hiragana, Katakana, and Kanji. There are also so many grammatical differences between Japanese and the English language that even a native speaker, fluent in both languages, may find it hard to always eloquently translate from one language to the other. For these reasons, you can not simply and easily use a tool like Google Translate and expect your listing or advertisement to make any sense to the locals. It is best advised to hire a native team fluent and knowledgeable in both the language and the culture to help you to create your listings and SEO optimisations. If you need help with localisation and listing optimisation, contact eCommerce Nurse.
- Export, regulations and returns
While perhaps boring, understanding regulations and requirements for selling in another country are extremely important for success.
When it comes to labelling, just like in the UK, US, or EU, many products come with essential labelling requirements by law. The labelling of imported goods is only required at the point of sale, however, so sellers can choose to either label their goods after they have cleared customs or do it in-house before exporting the goods. Note that labelling your products after they have cleared customs will require you to hire someone who can do this for you locally. This can add to your costs considerably.
An Importer Of Record (IOR) is required for all exports to Japan, so make sure you are well-prepared with this.
Regulated products need an import application and government approval for each shipment. The list of regulated products includes but is not limited to: Toys for children under 6 years of age, utensils, food, personal care products, and cosmetics. Once a seller gets approval and then going forward, imports can only be made under the Japanese IOR that was obtained.
For both regulated and non-regulated goods alike, foreign online sellers must still adhere to certain import documentation regulations and produce a Foreign Online Seller Report. This report certifies your company name, Japanese online account holder details, and records of sales and sale prices. Some categories of items (for example, quasi-drugs or electronic devices) even require their own special applications. Before you consider exporting any goods to Japan it is probably best to do your research thoroughly and seek expert advice from experts with experience in this area.
Something to keep in mind is that an eCommerce platform may demand that you provide a return address for your seller account. Depending on the platform you decide to use, you may need to find an agency who will accept and process the returns on your behalf in Japan, obviously this will come at extra costs.
Once you make sales in Japan, how will this money be transferred and managed? Banking arrangements will be crucial with any foreign business, so ensure you set this up properly. Only companies with a domestic address can open bank accounts in Japan, however, payment services like Payoneer will allow you to receive sales from Amazon Japan and then transfer those funds to your home country. You will need to do some research into what options are available and decide the most cost-effective way to do your banking. This will depend on your home country, what other countries you do business with, amount of sales per year, and other factors.
- Registering your brand and trademark
In Japan, it can take about 6 to 9 months after submitting your application to be the registered trademark owner of your brand if your application is approved. Before then, you will not be able to obtain brand registration rights for your products with Amazon. Being registered with the Amazon Brand Registry has many benefits in 2022 and beyond. The Brand Registry allows you to protect your brand from people trying to sell replicas or fakes of your products. This can be important when expanding internationally. You will also obtain the rights to run Sponsored Ads and create A+ Content, both of which we can help you to create for all locales at eCommerce Nurse.
Even though being a registered owner of your brand in the U.S will also allow you to obtain a registration for Amazon Japan, it is still recommended that you try to obtain the official Japanese trademark registration and use that to get Brand Registry with Amazon Japan instead. This will better protect you should infringements or issues arise with marketing content.
- Know your local limits for content
So, you are all set up, brand registered and ready to sell to the great Japanese public. You simply need to add your items to the catalogue and translate the existing content and descriptions of your products into Japanese. Simple, right? Well, unfortunately not. As mentioned before, Japanese is a completely different language of its own and so converts differently towards total byte or character counts and limits. The letter "a" in the English language is 1 byte, while "あ" ("a" in Japanese) is counted as 2 bytes. Completely different character and word limits also apply for listings on Amazon Japan; most recently, there is a total word limit of 1000 characters for your listing and a limit of 40 characters for any product title. For these reasons, you can not simply translate and use existing content you may already have for your products.
Not only are there technical limits, but cultural ones, too. Culturally, research has also shown that Japanese people actually prefer shorter and simpler titles and that titles that are hard to read or contain too many keywords struggle to get many click-throughs. You must take this into consideration while of course trying to get your items indexed correctly according to Amazon’s keyword algorithms. As with many things and maybe more so for the Japanese audience, balancing simplicity with information is key.
- Design fundamentals and infographics
Something to note when producing support imagery and infographics is that Japan is not really an ethnically diverse country. The Amazon audience does not relate well to imagery that features models who are not Japanese. This may create a problem with reusing existing imagery. You may not be able to translate and re-use existing product imagery as this might affect your sales.
A similar attitude to text-heavy titles also exists towards graphics and infographics. In Japan, sellers often find that less is more. Simpler, easy-to-follow text is definitely preferred and will probably yield better results. As always when you have an international audience, a little local knowledge goes a long way. For example, weight should be given in kg, length in cm and you should avoid giving values using lbs and feet altogether. You should always create your listings specific to the Japanese eCommerce market to ensure maximum success.
- Marketing and Amazon Advertising
Amazon Japan, like Amazon in many other countries, offers two main avenues of advertising: Sponsored Ads and DSP. Both methods currently only enjoy limited success but Sponsored Ads is by far the most preferred method of advertising at present. This could be due to the fact that Amazon's DSP API has not yet been made fully available to the Japanese market, and so there are not many external tools available to support DSP advertising. As a result, many sellers are now starting to develop Sponsored Brand videos (SBV) as well as additional sponsored product ads as alternatives.
Another problem with online advertising in Japan comes from the fact that the Japanese language is made up of 3 sets of different characters, each of which can be used differently to search for the same outcomes and results online. This makes it incredibly difficult for marketing to decide on the best combinations of keywords and search terms to use. Even a simple word like “horse” can be written in three different ways depending on the preference of the user and intended meaning. Throw in whole sentences and phrases, and the different possible combinations of words become impossible to fully take into account. When it comes to banners, ads and advertising on Amazon Japan, it may just have to come down to lots of trial and error, or hiring an agency to handle this for you.
- More about Rakuten
This article applies mostly to selling on Amazon.jp. However, it may limit sellers to not at least know a bit more about Rakuten, the other major player in the market. As explained at the beginning of this article, there are three major eCommerce malls in Japan: Amazon, Rakuten, and Yahoo.
Once you have obtained your IOR and worked out all the other details I have mentioned above, you are pretty much ready to stock your FBA warehouse and sell in Japan as you would in any other Amazon marketplace. You can even use your existing Seller Central account to register your products.
Rakuten in comparison, does not allow you to sell your products directly and instead you are forced to choose one of the following 3 options:
(1) Establish a Japanese subsidiary and list your products on Rakuten through the subsidiary.
(2) Have a Japanese agency import and sell your products for you.
(3) Ship your orders directly from the US, or another country when orders are placed.
In May 2022, Rakuten started advocating the listing of items on Rakuten Japan from overseas. They are also working on a scheme in which you are able to store your inventory in a Rakuten warehouse, much like you can currently do with Amazon.
Need more help?
Selling on Amazon in Japan may seem like a huge step with lots to consider. Many businesses simply cannot handle the ins and outs of international expansion without professional help. Let’s face it, no business has the resources to operate in every country when it comes to logistics, marketing, or even strategy. For more information on anything Amazon related or if you are interested in our services for boosting your sales, please check us out at ecommercenurse.com
This blog post was written in collaboration with the team at Picaro, the seller agency to help you flourish on Amazon Japan.