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

Japan fashion ecommerce market size is estimated to be valued at US$ 23,238 Mn in 2023 and is expected to reach US$ 61,235 Mn by 2030, exhibiting a compound annual growth rate (CAGR) of 14.8% 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.Japan fashion ecommerce market is segmented into product type, end user, price range, distribution channel, 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 Mn 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. 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, and 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 Mn people in Japan use Facebook monthly. Social commerce offers a highly engaging experience and creates growth opportunities for fashion ecommerce. For instance, on August, 2023, according to report published by Statista which specializes in data gathering and visualization, in 2022, the global social commerce market generated a staggering US$724 billion in revenue, driven by the rise of social media shopping features. This trend is expected to continue, with projections reaching a whopping US$6 trillion by 2030.

Japan Fashion Ecommerce Market Opportunities:

• Omni channel 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 (AI), augmented reality (AR), 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 market player 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 millennial and Generation Z For instance, in June 2023, Buy Now is extending its B2B platform for the global Japanese fashion industry.
• Tapping underpenetrated areas: While Tokyo accounts for a major portion of the market, other cities and rural areas are relatively underpenetrated. Industry market 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 For instance, based on METI's 2021 eCommerce Market Survey, smartphones accounted for 52.2% of Japan's online goods salesTop of Form. 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, influencers marketing on platforms like Youtube, Facebook advertisements 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 is being adopted to provide immersive shopping experiences online. For instance, Decal is an American film distribution company, offers VR shoppable fashion shows. Zozo operates fashion online shopping sites, uses AR for virtual try-ons. Beauty brands allow checking make-up visually. Such technologies enhance customer engagement during purchase journey. For instance, on November 2023, Tangiblee, a leading provider of immersive e-commerce experiences, has expanded its presence in Japan's rapidly expanding online retail sector with the rollout of new client engagements and product enhancements. From its establishment, Tangiblee has achieved considerable success, thus attracting major international clientele with household names in online fashion retail such as BONAVENTURA, Mikimoto, and Tsuchiya Kaban, who have adopted its services.

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. Most leading fashion brands have a strong offline presence.

Counter Balance: The integration of technology, virtual fitting rooms, augmented reality experiences, and innovative marketing strategies by online fashion brands are enhancing customer engagement, brand loyalty, and overall shopping experiences. As consumer behavior continues to evolve, a hybrid approach combining the strengths of both offline and online retail channels may emerge, offering diversified growth opportunities and reshaping the competitive landscape within the Japanese fashion industry.

• 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.

Counterbalance: The key market players need to provide assured material and quality to all the products that are being sold online, thus ensuring the consumers in getting good products and thereby reducing apprehensions of unsatisfactory product being sold online.

• Delivery and returns experience: The ecommerce delivery ecosystem including first mile, last mile, and reverse logistics remains challenging in Japan. Delayed deliveries and high returns ratios impact customer satisfaction levels.

Counter Balance: Investments in automation, artificial intelligence, data analytics, and real-time tracking systems are streamlining operations, reducing delivery times, minimizing errors, and enhancing transparency throughout the delivery process. Additionally, partnerships with local retailers, convenient pickup locations, flexible delivery options, and customer-centric solutions are being implemented to meet diverse consumer needs, preferences, and expectations. By focusing on continuous improvement, innovation, and collaboration across the ecommerce delivery ecosystem, stakeholders aim to overcome existing challenges, mitigate risks, and elevate the overall customer experience in the rapidly growing Japanese ecommerce market.

Recent Developments

New product launches

• On October 25, 2023, AnyMind Group, an innovative player in the business technology supply chain space, revealed that Sena Kimura, a renowned Japan based fashion influencer with a focus on retro-style clothing, debuted her first direct-to-consumer (D2C) clothing line, eLur.
• On September 27, 2023, the technology-based supply chain corporation AnyMind Group disclosed that Japanese model and celebrity, Ms. Rinko Murata, successfully utilized an array of the company's in-house platforms—AnyX, AnyLogi, AnyChat, and AnyFactory—to introduce her own line of fashion and accessories under the brand name ANU.
• In July 2022, PDD Holdings budget-friendly online shopping platform, Temu, has unveiled its expansion into the Asian sphere, initiating operations in Japan. Known as Pinduoduo's counterpart, Temu has carved out a niche in Western markets, captivating consumers with extremely competitive pricing on a diverse selection of merchandise, spanning from apparel to electronics and household items.

Acquisition and partnerships

• In February 2022, Haku Clothing, the Japan based apparel label, unveiled its worldwide online retail platform through collaboration with Lingble. Lingble is excited to share news of the joint venture with Haku Clothing, by introducing an international website that accommodates both English and Traditional Chinese, along with round-the-clock live chat functionality. Boasting a customer satisfaction score surpassing 98%, well above the average norm of 84%, Lingble's live chat feature not only achieves elevated client contentment but also contributes to increasing the Average Order Value (AOV) for customers by 10%.
• In June 2022, Kento Fukatsu, the creative mind and originator of the Japan based fashion label Metaphor, has debuted the brand's international online retail platform under the new moniker, Maison Métaphore. This strategic move aligns with the unveiling of their Autumn/Winter 2021 lineup, thus marking an ambitious step to broaden the brand's global footprint.

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

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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: 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.