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)

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Quick facts

The BNPL payment type is expected to grow by CAGR 28.2% between 2022 and 2028 resulting in it being worth 55,702.3 m $US by 2028. Growth of the payment method in the travel market has been substantial and new products are entering the Japanese market including some from outside the country.

Card payments are expected to rebound in 2022 after they lost market share due to the Pandemic. It is forecast that they will grow by 8.5% and continue to grow to reach a value of 953.6 bn $US in 2025.

Rakuten was the most popular e-commerce website in Japan, with 49% of users preferring to buy their daily necessities. Amazon came second with 45.9% of the market share.

Despite the slightly lower than expected rise in GDP for the second quarter (2.2%), the Japanese economy has returned to its pre-Pandemic size.

General Information

  • Population 126.1 m
  • Population 15 + 110.5 m
  • Online population 119.2 m
  • Area 377,975 km2
  • Currency JPY
  • GDP 5,103.1 bn $US
  • GDP per capita 40,469 $US

Payment types

  • Card-based payments
  • Cash-based payments
  • Bank transfer
  • Wallets
  • Other
[{"label":"Card-based payments","value":"64"},{"label":"Cash-based payments","value":"9"},{"label":"Bank transfer","value":"7"},{"label":"Wallets","value":"12"},{"label":"Other","value":"8"}]

Banked population
  • Japan 98%
  • Asia Pacific 76%
  • World 67%
Credit card penetration
  • Japan 70%
  • Asia Pacific 29%
  • World 19%
Internet penetration
  • Japan 95%
  • Asia Pacific 61%
  • World 62%
Smartphone penetration
  • Japan 72%
  • Asia Pacific 62%
  • World 70%

The E-Commerce Market

Top e-commerce segments

  1. Food & Personal Care: 27%
  2. Fashion: 20%
  3. Toys, Hobby & DIY: 19%
  4. Electronics & Media: 19%
  5. Furniture & Appliances: 15%

Cross-border e-commerce

  1. Cross-border proportion of total e-commerce – 16%
  2. Value of cross-border e-commerce – 28.4 bn $US
  3. Online shoppers who have shopped cross-border – 21%

Top 3 cross-border shopping origin markets

  1. China: 32%
  2. US: 30%
  3. South Korea: 19%
B2C e-commerce growth 2020->2021
  • Japan 8.5%
E-commerce % of total retail
  • Japan 16%
  • Asia Pacific 29%
  • World 20%
E-commerce completed on a mobile device
  • Japan 32%
  • Asia Pacific 65%
  • World 53%

E-Commerce Trends

  • E-commerce market size 181.7 bn $US
  • E-commerce spending per capita 1,452 $US
  • E-commerce spending as % of GDP 3.9%

The Credit Card Split

  • Visa
  • Mastercard
  • American Express
  • Local Schemes
  • Other
[{"label":"Visa","value":"30"},{"label":"Mastercard","value":"21"},{"label":"American Express","value":"2"},{"label":"Local Schemes","value":"46"},{"label":"Other","value":"1"}]

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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