JAPAN FASHION ECOMMERCE MARKET SIZE AND SHARE ANALYSIS - GROWTH TRENDS AND FORECASTS (2023 - 2030)

The Japan Fashion Ecommerce market size was valued at US$ 56.03 billion in 2023 and is expected to reach US$ 127.78 billion by 2030, grow at a compound annual growth rate (CAGR) of 12.5% from 2023 to 2030. Ecommerce fashion includes the online sale of apparel, footwear, accessories, and beauty products. The market is driven by rising internet and smartphone penetration in Japan.

The Japan Fashion Ecommerce Market is segmented by product type, end user, price range, distribution channel, payment mode, and region. By product type, the market is segmented into apparel, footwear, accessories, beauty products, and others. The apparel segment accounted for the largest share of the market in 2022. The growth in online apparel sales is driven by the rising adoption of fashion ecommerce among the tech-savvy young population in Japan.

Japan Fashion Ecommerce Market Drivers:

• Growing internet and smartphone penetration: The rapid growth in internet and smartphone adoption in Japan is a key factor driving the fashion ecommerce market. Internet penetration in Japan stood at 93% in 2021. The country has over 195 million mobile connections and 85% of adults owning a smartphone. This provides easy access to online shopping platforms for purchasing fashion products. The development of high-speed networks like 5G will further boost ecommerce growth by enhancing mobile shopping experience.
• Rising young population and changing preferences: Japan has a sizable young population with high disposable incomes and preference for fashionable clothing and accessories. The 15-39 age group comprised over 42% of Japan's population in 2020. Younger consumers are highly fashion conscious and rely on ecommerce for convenience and value. Their acceptance of online shopping models will strongly drive the market potential.
• Increasing participation of international brands: Many global fashion brands and retailers have entered the Japanese ecommerce market through brand websites and online marketplaces. Brands like Zara, H&M, Uniqlo, GU, Superdry offer the latest international fashion trends. Consumers seeking global brands and styles have boosted the online demand. Marketplaces also enable smaller international brands to easily access the tech-savvy Japanese shoppers.
• Rise of social commerce platforms: Social media platforms are emerging as popular online shopping channels, especially among young consumers. Platforms like Instagram, Facebook, Line, and Pinterest allow users to discover and purchase products while browsing. Over 50 million people in Japan use Facebook monthly. Social commerce offers a highly engaging experience and creates growth opportunities for fashion ecommerce.

Japan Fashion Ecommerce Market Opportunities:

• Omnichannel integration: While ecommerce is rising rapidly, offline retail stores continue to account for a major share of fashion sales in Japan. Existing brick-and-mortar players can adopt omnichannel strategies combining the best of online and offline channels. This includes options like click-and-collect, virtual trial rooms, in-store returns and seamless shopping experience across channels. Omnichannel retail enhances convenience and provides retailers an opportunity to connect with customers.
• New innovative technologies: Companies can leverage technologies like artificial intelligence, augmented reality, and 3D virtual fitting to improve the online fashion retail experience. AI-enabled recommendations provide personalized suggestions. Virtual trials allow checking fit and style digitally. These immersive technologies create differentiation and are especially relevant for apparel and accessories.
• Focus on sustainability: With consumers becoming more environmentally aware, there is a growing demand for sustainable fashion products. Ecommerce players can focus on categories like recycled fabrics, organic cotton, upcycled designs, and promote sustainability through their offerings and messaging. This creates strong emotional appeal among urban millennials and Gen Z shoppers.
• Tapping underpenetrated areas: While Tokyo accounts for a major portion of the market, other cities and rural areas are relatively underpenetrated. Industry players have an opportunity to improve distribution and expand into new geographical areas. Local partnerships and targeted marketing can help gain share in underserved regions and consumer segments.

Japan Fashion Ecommerce Market Trends:

• Mobile commerce gaining traction: Mobile shopping is gaining tremendous traction in Japan with over 72% online shoppers making purchases through smartphones in 2022. Retailers are focusing on mobile apps and compatible websites offering convenience like saved information, faster checkout and notifications. As more purchases shift to smartphones, providing optimal mobile experience will be crucial.
• Social media marketing: Social media is emerging as the preferred digital marketing avenue for fashion brands instead of traditional channels. Instagram shopping, influencer marketing on platforms like Youtube, Facebook ads are popular. Retailers are leveraging interactive social media engagement for promotions, new product launches, and driving sales.
• Experiential shopping through AR/VR: Virtual and augmented reality are being adopted to provide immersive shopping experiences online. For instance, Decal offers VR shoppable fashion shows. Zozo uses AR for virtual try-ons. Beauty brands allow checking make-up visually. Such technologies enhance customer engagement during purchase journey.
• Contactless deliveries and payments: The pandemic has led to increasing preference for contactless payment options like e-wallets, QR codes, tap-and-go cards. Most brands now offer cashless payment on delivery too. Retailers provide pick-up lockers and doorstep drops without contact. Seamless contactless transactions provide safety and convenience to shoppers.

Japan Fashion Ecommerce Market Restraints:

• Fierce competition from offline retail: While growing rapidly, ecommerce fashion faces stiff competition from the established offline retail industry in Japan comprising department stores, specialty retailers, discount stores and more. These physical retailers benefit from favorable Japanese consumer habits and retain a majority market share currently. Most leading fashion brands have a strong offline presence.
• Issues with product quality and fit: Consumers are often unsure about the material, quality, measurement and fitting of fashion products purchased online. This results in apprehensions over receiving unsatisfactory products. While technologies like virtual trials are evolving, consumers continue to prefer physical stores where they can touch and feel products.
• Delivery and returns experience: The ecommerce delivery ecosystem including first mile, last mile and reverse logistics remains challenging in Japan currently. Delayed deliveries and high returns ratios impact customer satisfaction levels. Fashion items require

Japan Fashion Ecommerce Market Segmentation:

Recent Developments

New product launches

• In September 2022, Amazon Japan launched a try-before-you-buy service for fashion products, allowing customers to try clothes before making a purchase decision. This improves customer experience and reduces returns.
• In June 2021, Zozotown launched ZOZO Second youth fashion resale platform, tapping into the growing resale market in Japan. It makes fashion more affordable and sustainable.
• In March 2022, Rakuten launched Rakuten Fashion Week TOKYO, a digital fashion week presenting the latest Japanese brands. It aims to promote local brands globally.

Acquisition and partnerships

• In September 2021, Yahoo! Japan merged with Line Corp to integrate messaging and ecommerce capabilities. This expanded user base and service offerings.
• In June 2022, Amazon Japan partnered with Stripe to offer BNPL payment options and boost conversion rates. This caters to preference for flexible payments.
• In April 2020, Rakuten acquired OverDrive, a digital ebook platform. This strengthened Rakuten's digital content offerings.

Figure 1. Japan Fashion Ecommerce Market Share (%), by Price Range, 2023

Top companies in Japan Fashion Ecommerce Market

• Rakuten
• Amazon Japan
• Zozotown
• Yahoo! Shopping
• LOHACO
• SHOPLIST
• iStyle by Cosme.net
• com
• WEGO
• Felissimo
• @cosme
• Winc
• TRADEMARK JAPAN
• CaSa
• SHOP JAPAN
• Felisiya
• dot-st
• LOFT
• JAPANNET Shopping
• Happy Mail

Definition: The Japan Fashion Ecommerce Market refers to the online retail sales of fashion products including apparel, footwear, accessories, and beauty items in Japan. It involves business-to-consumer online retail activities done via websites and mobile apps by fashion brands and online retailers. Key participants include dedicated fashion ecommerce platforms, online marketplaces, brand websites, and social commerce platforms.

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