The key to growing your ecommerce business in Japan is strategy.
Strategy is where it all starts and is responsible for informing all aspects of your marketing activities including your communications, creatives, as well as implementation.
Current Challenges Facing Ecommerce Businesses In Japan
The current market conditions here in Japan are among the most challenging we’ve seen in a decade.
In addition to rising raw material and energy costs, which have led to increased prices and lowered consumer confidence, ongoing logistical issues continue to have a major impact on ecommerce businesses that depend on steady supply chains and reliable shipping in order to fulfill both their production needs and customer demand.
As serious as these issues are, however, these challenges are shared by all businesses in Japan, both domestically-owned and foreign-owned.
The biggest challenge facing non-Japanese ecommerce brands specifically is formulating a digital strategy for Japan that will enable them to achieve significant breakthroughs in the market.
Unfortunately, this is not an easy problem to overcome as it stems from a fundamental lack of understanding of the Japanese market and its consumers to the level needed to be truly competitive.
This lack of understanding and awareness had, in large part, been allowed to persist thanks to the seemingly omniscient algorithms which fueled the most popular, self-serve advertising platforms in use by digital marketers.
Without having to really even understand the Japanese market, a non-insignificant number of businesses were able to sell their products to Japanese customers because of said algorithms’ extensive use of third-party tracking cookies.
These third-party cookies and the sharing of information on specific customers that went on behind the scenes between various apps and services we use daily is a whole other topic in and of itself, but the over-reliance on these tracking codes in the field of digital marketing has had a detrimental effect on a generation of marketers’ capabilities.
With the changes to invasive tracking brought about by new privacy-focused legislation and the unilateral steps taken by Apple (i.e. iOS 14.5) last year, however, the previous system has more or less all come crashing down. In particular, Meta-owned Facebook have still not found a way to deliver the same results from their platform that they once did to the millions of businesses who previously, and still do, use it for the majority of their digital marketing efforts.
In broad terms, the digital marketing environment we now operate in is not one in which nearly as many brands can succeed in the same way as before without major changes made to how they do business.
This is the harsh reality facing all brands in Japan, regardless of where they originate, but again, is felt even more particularly by foreign brands who have little else to fall back on.
Requirements to Succeed in Ecommerce in Japan
In order to succeed in scaling an ecommerce business in Japan in the current environment, you require a go-to-market strategy that covers all areas of your operations from business intelligence to media buying, not just social media.
What this means in real terms is that your organization requires a laundry list of skills and capabilities to drive growth.
You need expertise and knowledge across the technical aspects of running an ecommerce website, the ability to decipher and interpret marketing analytics to inform decisions across product development and media planning, market-specific knowledge in areas such as consumer behavior and customer insight, as well as real creative chops ranging from design to drafting copy.
Not only that, but these elements all need to be brought together in a comprehensive and actionable ecommerce strategy that keeps in mind the macroeconomic factors which impact the Japanese market.
If that sounds like a lot, it’s because it is, and we’ve probably even left out a few things. Ecommerce is incredibly demanding and challenging in any market but in Japan, as a foreign business, you’re dealing with an unfamiliar landscape, language, culture, and people.
These differences when compared to other markets are significant in both number and magnitude and must be treated as such if you hope to achieve success with your brand in Japan.
Bottom Line
In our experience dealing with ecommerce clients that are headquartered overseas, we have found that strategy is the single most important aspect when it comes to scaling their business in Japan, yet is where they universally struggle the most.
When the right strategy is implemented ecommerce businesses in Japan can grow their revenue even in difficult market conditions, but it takes a certain approach.
Ecommerce is more than ad posting on social media and digital marketers will need to do more marketing, with a specific emphasis on strategy, if they want to succeed in Japan in 2022 and beyond.
Get in touch with us
At Plus Alpha Digital we help D2C businesses navigate the complexities of the Japanese ecommerce market in order to achieve breakthrough growth. If this sounds like something you could benefit from then contact us to schedule a discovery call to see if we’re a good fit.
