Online Selling in Japan: Quick Overview & Key Points

Online selling in Japan is a rapidly growing industry that presents a great opportunity for businesses looking to expand their reach.

However, selling online in Japan can be challenging for businesses that are not familiar with the country's regulations and consumer preferences.

This article provides a fast overview to get you up-to-speed quickly.

What are the legal requirements for selling online in Japan?

First off, what paperwork do you need to complete in order to sell online in Japan? What legal requirements must you meet?

Here, you will learn the basics on how to register an online business in Japan:

1. The seller must provide their name, address, and phone number

Online stores fall under the "mail order" (通信販売) category governed by the Specified Commercial Transaction Act in Japan (特定商取引法).

According to the Act, the operator's name, address, and phone number must be disclosed when selling anything online.

2. The seller should submit a business opening notification

Also, when opening an online store, it is advised to submit a business opening notification (開業届). There is no penalty if you do not submit it, but in principle, you are strongly encouraged to submit this form within one month of starting your business.

(The business opening notification is also required if you want to use the Blue Return system when filing your income taxes for the year.)

Why do I need to provide my address and phone number? Is there any way around this?

Online selling in Japan in their e-commerce industry and ecommerce sites in Japan are subject to the Specified Commercial Transaction Act, which are Japanese laws that serve to protect the safety and rights of consumers.

All major online store platforms, like Rakuten and Amazon Japan, require that you list your personal address or shop's address and phone number.

The law enables customers to get in touch with the online seller in case of a faulty product or other questions or concerns.

However, there are 2 methods to sell online without disclosing your personal information, which we'll describe below.

Method 1. Use a virtual office or rental address

To protect the shop owners' privacy in Japan's ecommerce industry, many would use a virtual office address or a rental address.

Using a virtual office address or a rental address is the most widely used method for protecting shop owners' privacy in Japan's ecommerce industry.

A virtual office address service often provides mail forwarding as well, allowing any mail addressed to your listed virtual office address to be forwarded to you.

The commonly cited benefits of using a virtual office are:

• You can rent an address in a prime location at a low cost.

• Rental addresses are cheaper than renting office space.

• The best virtual address services allow you to access your mail on the cloud.

• You can protect the privacy of your home address.

• Some places also let you rent a phone number.

One virtual address provider to consider is MailMate.jp, which offers virtual addresses with comprehensive mail forwarding services. With MailMate, you can receive your mail securely and access it online from anywhere, ensuring your home address remains private.

There are some drawbacks of using a virtual office, which you'll want to keep in mind:

• Your address overlaps with other businesses.

• People can find out that you are renting a virtual office if they search your address.

• Some virtual office services do not offer mail forwarding services.

Method 2. Use an online store platform that does not require disclosing your address.

In principle, when operating an e commerce store, the operator's address must be disclosed as the shipping or return address.

However, in 2021, the Consumer Affairs Agency announced that individuals who claim the right to personal information protection are not required to disclose their personal address when opening an online store.

To use this method, however, you would need to sell your products via e commerce platforms that allow you to opt out of disclosing one's personal information. For example, you do not need to disclose your home address if you use the free plan of Color Me Shop.

What are the most popular online selling platforms in Japan?

When it comes to selling online in Japan, there are a few popular platforms that sellers can choose from. Each site will explain how to sell online in Japan on their specific site.

Here are some of the most popular online selling platforms in Japan:

1. Rakuten

So, Rakuten's like the top dog in Japan's online shopping scene with a whopping 100 million users. Holding about 27% of the market share, it’s an awesome spot for businesses to show off their goods. They give sellers some cool perks too—you can tweak your own storefront, get marketing help and tap into their massive customer network. But yeah, there is a monthly fee plus they take a cut from each sale.

2. Amazon Japan

Amazon Japan is a big fish in Japan's e-commerce pond, owning about 23.1% of the market. Think of it as your one-stop-shop for everything from books and tech stuff to things you need around the house. But get this—they don't just cater to shoppers but sellers too! They offer them access to a whole bunch of customers, help out with shipping their goods and even support their marketing efforts. The catch? Sellers have got to pay referral fees and closing fees on every sale.

3. Yahoo! Shopping Japan

Yahoo! Shopping Japan is a popular e-commerce platform in Japan, with a market share of 10.2%. Yahoo! Shopping Japan offers a wide range of products, including electronics, fashion, and home appliances. Yahoo! Shopping Japan also provides a range of services to sellers, including access to a large customer base, marketing support, and payment processing services. Yahoo! Shopping Japan charges sellers a commission fee on each sale.

4. Mercari

Mercari is a popular mobile marketplace in Japan, with a market share of 7.1%. Mercari allows users to buy and sell a wide range of products, including clothing, electronics, and toys. Additionally, this ecommerce market provides a range of services to sellers, including access to a large customer base, payment processing services, and shipping support. Mercari charges sellers a commission fee on each sale.

What are the preferred payment methods for online shoppers in Japan?

After you've decided on the marketplace you will use to sell your products, one of the next steps is deciding on payment methods for your Japanese ecommerce store. 

For online selling in Japan, keep in mind that having more than one payment method listed can actually be part of a good ecommerce strategy.

1. Credit cards

According to a report by Statista, credit cards are the most used cashless payment method in Japan by Japanese consumers, with 36% of transactions made using this payment method.

2. Convenience store payments

Another alternative payment method that is popular is Konbini payments, or convenience store payments, which make up 10% of purchases in Japan. Konbini payment offers an easy way to tap into the cash market for ecommerce due to the ubiquity of 24/7 convenience stores found across the country.

3. Mobile payments

An increasing number of consumers now use their smartphones to make purchases. One of Japan's most popular mobile payment services is PayPay, which has gained significant market share due to its aggressive marketing campaigns and cashback promotions.

4. Bank transfers

In addition to credit cards, Konbini payments, and mobile payments, bank transfers are also a commonly used payment method in Japan. Bank transfers are often used for high-value transactions and are preferred by Japanese consumers who do not have credit cards or prefer not to use them for online transactions.

5. Cash on delivery (COD)

When selling online in Japan, having a COD option allows the buyer to pay for their item once they receive it.

There are two types of COD to be aware of:

• Cash on Delivery (shipping fee): the customer pays the shipping fee only once the item is delivered.

• Cash on Delivery (product): the price of the item will be paid at the delivery time.

Some Japanese sellers and consumers will use this option to avoid online transaction fees.

With COD, payment is always made in cash.

Shipping and returns policies when shipping in or to Japan

Japanese buyers have high expectations when it comes to shipping speed and reliability. As such, it's important to offer fast and efficient shipping options, such as same-day or next-day delivery, whenever possible.

Have clear and transparent returns policies that are easy to understand and follow. This can include things like free returns, no-questions-asked policies, and easy-to-use online returns systems.

Frequently asked questions

Can you sell online in Japan?

Absolutely. The country has over 115 million internet users and an impressive 91.10% penetration rate - that's a huge market to tap into! So if you're thinking about setting up your online store there, it could be a great opportunity for growth. Remember though, having the right facts and data at hand can really make all the difference when diving into this market.

Where can I sell online in Japan?

You can sell online in Japan through popular eCommerce platforms like Amazon, Rakuten, and Zozotown. These platforms have mobile app versions to cater to the trend of "mobile-first" shopping in Japan. By listing your products on these websites, you can tap into a large customer base and boost your online sales.

What is the best-selling site in Japan's ecommerce market?

The best-selling site in Japan is Rakuten. With a wide range of products and services, Rakuten attracts a significant number of visitors, making it a top ecommerce platform in the country. From electronics to fashion, Rakuten offers a diverse selection, allowing shoppers to find what they need with ease.

What do Japanese people use for online shopping?

Japanese people use popular online shopping websites like Amazon Japan, Rakuten, and Yahoo Online Shopping for their online shopping needs. These platforms offer a wide range of products and are trusted by Japanese consumers.

In closing

Online selling in Japan can be a great opportunity for your business to thrive in the Japanese e-commerce market. Understanding the legal requirements and picking the right platform will help you reach a Japanese audience for an online business presence.