Japanese interest in buying food online growing rapidly, experts say

Japanese interest in buying food online growing rapidly, experts say

Andrew Pearl, director of strategy and insights for the Europe, Middle East and Africa region at e-commerce analytics firm Profitero, casts his eyes further afield to Japan, a market showing promise for e-commerce FMCG.

Japan boasts one of the fastest growing and most frictionless online retail markets in the world, with around 10% of all retail transactions now online.

E-commerce FMCG in Japan has much in common with other markets, particularly the UK, in that the channel, while still relatively small, it's enjoying rapid growth. The average shopper in Japan has a relatively high disposable income and puts in long working hours, therefore e-commerce really delivers against consumer demand for convenience.

Dr Roy Larke, senior lecturer in marketing at the University of Waikato's management school in New Zealand, says consumer electronics are "a top-seller for e-commerce websites" in Japan but has noted it has been "the more mundane categories such as food and fashion apparel that have experienced the fastest growth in online sales, and these are really set to take off in the next few years".

For food and beverage brands, Profitero analysis reveals that grocery products register some of the highest numbers of product reviews within the wider FMCG sector. Worth noting Amazon has also just launched its Amazon Fresh full line grocery service to Prime members in six areas of Tokyo, with an assortment of 17,000 fresh food items including fruit & vegetables, meat, fish and dairy and 100,000 items in total.

Japanese grocery shoppers, as in other Amazon markets, are increasingly using product reviews to share their experience with food brands and to research new products to try.  Food brands need to understand the number of product reviews for best sellers within their categories as this insight will indicate whether they need to invest with Amazon to boost the numbers of reviews and ratings for their own products.

Digital shelf analytics for Amazon Japan

  Beer and spiritsDog foodHair careMake-upSkin care
Product rating (out of 5) 4.34.44.24.14.3
Product reviews6752262842
Number of images53243
Average priceJPY3,400JPY4,007JPY3,127JPY2,835JPY3,957
Prime eligibility73%95%67%49%52%
Subscribe & Save0%22%27%21%38%

Source: Profitero’s Amazon FastMovers for Japan

Shoppers on amazon.co.jp also have the option to search for regional specialities within certain categories, for example noodles, rice, condiments and saké. It is not uncommon for these smaller brands to act as Amazon "pure-players", available only through amazon.co.jp and over-investing in the e-tailer to outperform more established national brands in both search results and sales rankings. Mainstream brands should therefore continuously monitor these small brands to ensure they can react with keyword sponsorship or promotions through Amazon to drive their performance. 

Today's brands face some of the toughest competition to attract browsers to their products and convert these browsers into loyal shoppers. For suppliers, benchmarking their products' product content against not just their competitors on Amazon but other retail sites, including Rakuten, is equally key to ensure that product titles and descriptions are optimised for the advanced retailer search algorithms.

Finally, the very high levels of mobile device usage in Japan (a recent report from Criteo shows that more than half of all retail e-commerce transactions in Japan took place on a mobile device in the fourth quarter of last year) means brands must understand how to best present their products to provide a simple mobile shopping experience.

Our analytics provide clear guidance on the differences between shopping on amazon.co.jp on both mobile and desktop devices.  For example, differences in the language used by shoppers when searching for products, how to optimise your product titles and descriptions, as well as understanding the importance of simplified images for use on small device screens.