The Japanese online payment market

In Japan, the e-commerce market is growing and pulling in new consumer demographics

Countries Japan

Intro Japan

The Japanese e-commerce market is one of the world’s largest and most sophisticated. With the right approach, it can also be highly profitable. The average Japanese e-commerce shopper spends over $1,735 a year with online merchants [1]. And since 2020, new demographics have come online and are spending with e-commerce outlets.

As in most Asian economies, there’s no sign yet of Japan suffering the rising inflation we’re seeing in Western countries. Its inflation rate at the time of going to press was just 1%, up significantly from 0.1% last year, but still low by the standards of many developed economies [2].  The IMF predicts it will fall to 0.8% in 2023, still well below the central bank’s 2% target. The fund predicts that growth will spike at 2.4% this year, before falling to 2.3% in 2023 [2]. Remarkably, and bucking international trends, Japanese consumer confidence was still rising in the second quarter of 2022, at the time of going to press [3].

Japan’s e-commerce market

Japan is the world’s fourth-largest e-commerce market, with annual sales valued at US$218 billion and growing at a rate of 7% a year [1]. The most popular Japanese e-commerce purchase categories are travel (18%), food and drink (14%), and health and beauty products (12%) [1]. The average online shopper spent US$1,735 a year [1].

Japanese consumers buy 13% of all e-commerce purchases from overseas merchants [1]. The value of these goods is more than US$26 billion a year at the last count [1]. Ten percent of all retail purchases are made online — and 27% of these are completed on a mobile device [1].

Seventy percent of Japanese consumers have shopped online at least once [4]. Since the pandemic, older consumers (Japan is an ageing society) have started to shop more online. Merchants report almost a 10% increase online shopping by the over-70s [5]. However, this important demographic may not be getting the best user experience. Between 2010 and now, the rate at which elderly consumers have contacted citizens advice about problems with online orders has increased by 350% [6].

Payment methods in Japan

Japan is one of the Asian markets most similar to the Western standard for payments. The Japanese pay for 62% of online transactions using a credit card [1]. But in Japan, alternative payment methods are also widely used. E-wallets are the most popular method payment alternative, with an 11% market share [1]. 6% pay using bank-transfer apps, 4% with cash and 17% with assorted other payment methods. Local and alternative card schemes dominate the card market, with a 43% market share [1]. Visa has 32%, Mastercard 22% and American Express 3% [10].

Enabling and limiting factors in the Japanese e-commerce market

98% of Japanese have a bank account and 68% a credit card [1]. What financial exclusion there is, exists mainly among smaller marginal populations such as the unemployed, disabled, foreign residents and the low-income elderly [7].

Over 93% of Japanese have an Internet connection and 68% have an Internet-enabled smartphone [1]. Japan has one of the world’s highest-quality broadband networks. Nevertheless, in 2020 the communications ministry made US$496 million available to local governments to build long-distance, high-performance data networking and telecommunications, mainly for the benefit of remote and rural communities [8].


  1. Original PPRO research
  7. Financial Inclusion and Japanese Society, March 2016, Japan NPO Center (PDF)

Popular Payment Methods in Japan

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Quick facts

Japan is a very easy place to shop online. Delivery is quick and there is a wide range of products available. The top online market place in Japan is Amazon with 12 distribution centres and 4 Amazon Prime centres in the country.

ouseholds shopping online in 2020 rose to 50.5%, a rise of 8.2% from 2019. 46% of consumers said they would continue to buy fashion items online with 14% feeling the same about perishable food.

The Japanese economy dropped by 4.8% in 2020 but is forecast to grow by 3.3% in 2021 and 2.5% in 2022 according to the IMF. Inflation remained steady in 2020 but is expected to rise by 0.1% in 2021 and 0.7% in 2022.

General Information

  • Population 126.5m
  • Population 15 + 98.0m
  • Online Population 117.6m
  • Area 377,975 km2
  • Currency JPY
  • GDP 5,048.7bn USD
  • GDP per Capita 40,146 USD

Payment types

  • Card-based payments
  • Cash-based payments
  • Bank transfer
  • Wallets
  • Other
[{"label":"Card-based payments","value":"62"},{"label":"Cash-based payments","value":"4"},{"label":"Bank transfer","value":"6"},{"label":"Wallets","value":"11"},{"label":"Other","value":"17"}]

Banked population
  • Japan 98%
  • Asia Pacific 71%
  • World 67%
Credit card penetration
  • Japan 68%
  • Asia Pacific 13%
  • World 19%
Internet penetration
  • Japan 93%
  • Asia Pacific 60%
  • World 62%
Smartphone penetration
  • Japan 68%
  • Asia Pacific 71%
  • World 70%

The E-Commerce Market

Top e-commerce segments 2019 | 2020

  1. Airlines & Hotels: 23% | 18%
  2. Food & Drink: 8% | 14%
  3. Health & Beauty: 7% | 12%
  4. Electrical Goods: 10% | 11%
  5. Media & Entertainment: NA | 11%

Cross-border e-commerce

  1. Cross-border proportion of total e-commerce – 13%
  2. Value of cross-border e-commerce ($US billion) – 26.4
  3. % of online shoppers who have shopped cross-border – NA

Top 3 cross-border shopping origin markets

  1. China: 32%
  2. USA: 30%
  3. South Korea: 11%
E-commerce % of total retail
  • Japan 10%
  • Asia Pacific 23.8%
  • World 20%
E-commerce completed on a mobile device
  • Japan 27%
  • Asia Pacific 59%
  • World 53%

E-Commerce Trends

  • E-commerce market size ($US billion) 196.8bn USD
  • E-Commerce spending per capita ($US) 1,565 USD
  • E-commerce spending as % of GDP 3.8%

The Credit Card Split

  • Visa
  • Mastercard
  • American Express
  • Local Schemes
  • Other
[{"label":"Visa","value":"32"},{"label":"Mastercard","value":"22"},{"label":"American Express","value":"3"},{"label":"Local Schemes","value":"11"},{"label":"Other","value":"32"}]

The information on our Insights pages has been compiled by us in cooperation with Datamatics and Wright & Brown. The data shown is partially owned by us and partially owned by GlobalData. © 2021 by PPRO Financial Ltd. No data and information can be used for any further publication without the explicit approval of PPRO.


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