B2C online retail market size in Japan 2014-2023

In 2023, the value of the business-to-consumer (B2C) e-commerce market in Japan amounted to around 22.7 trillion Japanese yen. The market size grew steadily in the last decade, boosted by the interest in smooth processing services and efficient distribution channels. However, it declined slightly for the first time in 2020, facilitated by a drop in the service segment, which included travel bookings as a major product category.

E-commerce market in Japan

Japanese electronic commerce is characterized by the unproportionally large size of the business-to-business market and the high potential of the B2C market. As around one in three business transactions of the B2B market are already processed through online commerce, the growth potential is limited. In contrast, the ratio of consumer-focused online retail is still floating below ten percent of all commercial transactions in Japan, with the trend pointing upward.

The push towards online shopping

Even though domestic businesses offer fast and reliant transaction and delivery services, the e-commerce penetration of Japanese households remained low compared to its Asian neighbors. Common dissatisfaction with online shopping stems from the limitations of only being able to view online. Without the possibility of inspecting goods for size and faults, in-store retail remains the preferred shopping channel of consumers. Meanwhile, online retailers are steadily improving the consumer experience to push shopping activities further online.