Retail Platform Advertising - Japan

In Japan, ad spending in the Retail Platform Advertising market market is projected to reach US$5.26bn in 2024.
This ad spending is expected to demonstrate an annual growth rate (CAGR 2024-2030) of 12.16%, leading to a projected market volume of US$10.47bn by 2030.
The average ad spending per user in Japan's Retail Platform Advertising market market is anticipated to amount to US$69.52 in 2024.
In a global comparison, the majority of ad spending will be generated the United States, which is projected to reach US$57.63bn in 2024.
In Japan, the Retail Platform Advertising market is increasingly embracing digital transformation, with brands focusing on personalized consumer experiences to enhance engagement.

Definition:

Retail platform advertising (RPA) refers to digital ads displayed on websites and apps dedicated to retail platforms, such as Amazon, Walmart, eBay, Alibaba, and JD.com. This includes all types of advertising across various devices, e.g., PCs, smartphones, and tablets, and covers formats such as sponsored products, banners, and videos. RPA specifically excludes offline retail ads (e.g., in-store displays and billboards), off-site ads (e.g., ads appearing on non-retail websites or apps), ads on social media platforms (e.g., Facebook or Instagram), and ads on search engines (e.g., Google or Bing).

Additional Information:

It is important not to confuse RPA with retail media networks (RMNs). RMNs involve digital ads that are also displayed on retail e-commerce sites or apps, but these ads are purchased through a retailer’s media network or a demand-side platform (DSP). While RMNs include ads on sites such as Amazon and Walmart, they also cover ads bought through networks such as Amazon DSP, Walmart Connect, and Etsy’s Offsite Ads, and these ads may not necessarily appear directly on the retailer’s e-commerce site or app. Unlike RPA, RMNs represent a broader approach that encompasses a range of ad placements, both on and off the retailer’s own platforms.

Digital ads displayed on websites and apps dedicated to retail platforms
All types of advertising across various devices, e.g., PCs, smartphones, and tablets
All types of sponsored ad formats, such as sponsored products, banners, and videos

Offline retail ads (e.g., in-store displays and billboards)
Off-site ads (e.g., ads appearing on non-retail websites or apps)
Ads on social media platforms (e.g., Facebook or Instagram)
Ads on search engines (e.g., Google or Bing)

The Retail Platform Advertising Market in Japan is witnessing mild growth, influenced by factors like evolving consumer behavior, increased competition among platforms, and the shift towards data-driven advertising strategies that enhance targeting and engagement.

Customer preferences: Consumers in Japan are increasingly gravitating towards personalized shopping experiences that reflect their individual tastes and preferences, driving demand for targeted advertising on retail platforms. The rise of mobile commerce and social media influences is reshaping how brands engage with consumers, leading to greater emphasis on interactive and immersive content. Additionally, younger demographics are prioritizing sustainability and ethical practices, prompting retailers to highlight eco-friendly products and transparent sourcing in their advertising strategies, thereby aligning with shifting consumer values.

Trends in the market: In Japan, the Retail Platform Advertising Market is experiencing a surge in personalized advertising strategies, as brands harness data analytics to deliver targeted content that resonates with individual consumer preferences. The influence of mobile commerce is propelling retailers to engage consumers through social media platforms, shifting focus towards interactive ad formats. Furthermore, as younger consumers increasingly prioritize sustainability, retailers are adapting their advertising to emphasize eco-friendly products and transparent sourcing. This trend not only aligns with evolving consumer values but also presents significant opportunities for brands to enhance customer loyalty and differentiate themselves in a competitive landscape.

Local special circumstances: In Japan, the Retail Platform Advertising Market is uniquely shaped by cultural nuances and technological advancements. The country's strong emphasis on consumer privacy influences how brands collect and utilize data for targeted advertising. Additionally, Japan's rich cultural heritage fosters a preference for quality and craftsmanship, prompting retailers to highlight their heritage and artisanal aspects in ad campaigns. Geographically, the dominance of urban centers like Tokyo encourages innovative digital engagement, as dense populations lead to increased competition for consumer attention across various platforms, enhancing the need for distinctive and personalized advertising strategies.

Underlying macroeconomic factors: The Retail Platform Advertising Market in Japan is significantly influenced by macroeconomic factors such as consumer spending trends, technological innovation, and economic stability. Japan's strong economic recovery following global disruptions has bolstered consumer confidence, leading to increased retail expenditures and, consequently, greater investments in advertising. Furthermore, advancements in digital technology facilitate personalized advertising experiences, aligning with consumers' expectations for tailored marketing. Additionally, shifts in fiscal policies promoting digital transformation encourage retailers to innovate their advertising strategies, enhancing competition and fostering a dynamic market landscape.

Data coverage:

Data encompasses enterprises (B2B). Figures are based on Retail platform ad spending and exclude agency commissions, rebates, production costs, and taxes. The market covers advertising by businesses for digital advertisements.

Modeling approach:

Market sizes are determined by a combined top-down and bottom-up approach, based on a specific rationale for each market. As a basis for evaluating markets, we use annual financial reports of the market-leading companies and industry associations, third-party reports, and survey results from our primary research (e.g., Consumer Insights). Next, we use relevant key market indicators and data from country-specific associations, such as GDP, internet users, and digital consumer spending. This data helps us estimate the market size for each country individually.

Forecasts:

In our forecasts, we apply diverse forecasting techniques. The selection of forecasting techniques is based on the behavior of the particular market. For example, the S-curve function is well suited to forecast digital products due to the non-linear growth of technology adoption, whereas exponential trend smoothing (ETS) is more suited for projecting steady growth in traditional advertising markets.

Additional notes:

Data is modeled using current exchange rates. The impacts of the COVID-19 pandemic and the Russia-Ukraine war are considered at a country-specific level. The market is updated twice per year. In some cases, the data is updated on an ad-hoc basis (e.g., when new relevant data has been released or significant changes within the market have an impact on the projected development).

This report presents a comprehensive analysis and additional information on the Advertising & Media market, in a PDF format.