Cross-Border E-Commerce vs. Domestic E-Commerce: Why Localization Succeeds in Japan

あゆみ佐藤
Oct 28
4 min read

Introduction

Japan’s e-commerce market is mature, reaching approximately ¥29 trillion in 2025. While cross-border e-commerce (EC) continues to expand with global brands entering the market, domestic e-commerce growth remains robust. However, success in Japan is not merely a matter of sales channels; it hinges on “Japan-specific localization.” This article clarifies the differences between cross-border and domestic e-commerce and explains why localization strategies are critical in Japan, illustrated with the latest concrete examples. (retailasia)

1. Current Status and Challenges of Cross-Border E-Commerce

Growth Trends in Cross-Border E-CommerceCross-border e-commerce refers to the market in which Japanese consumers purchase a variety of foreign products online. Data from 2023 indicates that this market is expected to expand at an annual rate of 7–8% through 2028, outpacing the growth of domestic e-commerce. Products such as cosmetics, fashion items, health supplements, and character goods are particularly popular, with high-quality international brands gaining significant attention in Japan. (kakusouzoku+2)

Challenges in Cross-Border E-Commerce

Despite its growth, cross-border e-commerce faces several constraints:

Shipping delays and high costs: Overseas shipments often take time, and shipping fees can be expensive.
Language and customer support: Insufficient Japanese-language support can reduce purchase intent.
Differences in payment methods: Japan’s unique payment culture (convenience store payments, cash on delivery, etc.) can pose barriers.
Regulatory and customs compliance: Food, pharmaceuticals, and cosmetics require careful adherence to Japanese regulations.
Trust-building difficulties: Acquiring repeat customers is challenging, making strategies to enhance “brand recognition” and “consumer confidence” essential.

2. Characteristics of Domestic E-Commerce and the Importance of Localization

Domestic e-commerce in Japan is characterized by operations closely aligned with the local market, utilizing platforms such as Rakuten Ichiba, Yahoo Shopping, Amazon.jp, as well as proprietary e-commerce websites.

Why is localization key?

Japanese consumers are highly sensitive not only to product quality but also to packaging, delivery options, post-purchase support, diversity of payment methods, and cultural preferences. Market penetration is difficult without addressing these aspects, and it is not enough to translate language alone; “localizing the overall experience” is essential. (english.emktg+1)

Specific localization elements include:

Cultural considerations beyond language (e.g., seasonal awareness, gift-giving customs)
Optimization of product sizes and packaging for the Japanese market
Diverse payment options (convenience store payments, cash on delivery, QR payments)
High-quality customer support and clear return policies
Logistics capabilities such as same-day delivery and time-specified delivery
Strengthening trust through partnerships with local brands or partners

3. Learning from Concrete Examples of Successful Localization

(1) Airbnb Japan’s Localization StrategyAirbnb is a typical example of cross-border e-commerce, but initially struggled in the Japanese market. By localizing its approach to reflect Japan’s accommodation culture and regulatory environment, Airbnb partnered with local marketing agencies, developed local hosts, and strengthened Japanese-language content. As a result, it gained support from Japanese travelers and achieved significant growth. (english.emktg)

(2) TechPro Innovations (North American Smart Home Devices)TechPro adapted its products to Japanese housing conditions by creating slimmer, energy-efficient devices. It developed a Japanese-language app and partnered with major home appliance manufacturers. This strategy led to a 200% year-on-year growth starting in 2024. This case highlights the importance of adapting to Japan-specific technical requirements and user experience. (onestepbeyond)

(3) BeautyBliss (UK Cosmetics Brand)BeautyBliss redesigned its products to suit Japanese skin types and beauty preferences and introduced minimalist, eco-friendly packaging. It expanded domestic sales channels and launched Japan-exclusive product lines, achieving a 15% share in the premium foreign cosmetics category within 18 months. (onestepbeyond)

(4) Matcha Potato Chips (Japan-Exclusive Imported Snack)The importer tailored product packaging and campaigns to reflect Japan’s unique “gift-giving culture” and seasonal promotions. This approach secured a 20% share of the premium imported snack market, with sales increasing by 150% during gift-giving seasons. (onestepbeyond)

4. Challenges Faced by Cross-Border E-Commerce in Localization and How to Address Them

Language Barriers

For cross-border e-commerce, it is essential to provide a fully Japanese-language website and customer support. All communication channels—including websites, email newsletters, and social media—must be carefully translated and culturally adapted to maintain consumer trust.

Payment and Logistics Optimization

Introducing Japan-specific payment methods is critical, such as convenience store payments, cash on delivery, and QR code payments. Shipping speed and costs must also meet the standards of domestic e-commerce. Advanced cross-border logistics solutions, including automatic customs calculation and tax-specific delivery management systems, are increasingly important. (ezbuy)

Building Trust

Establishing brand credibility is crucial for gaining repeat customers in Japan. Strategies include leveraging local influencers, encouraging customer reviews, simplifying returns, and offering free returns. Strengthening these customer touchpoints helps build trust and loyalty among Japanese consumers.

5. Key Factors for Domestic E-Commerce Success in Localization

Customer Service Rooted in Japan’s “Omotenashi” Culture

Providing courteous, attentive customer service that reflects Japan’s unique culture of hospitality leads to high customer satisfaction and encourages repeat purchases.

Variety of Payment Methods and Delivery Options

Standardized options such as convenience store payments, cash on delivery, and scheduled deliveries meet Japanese consumer expectations. Services like parcel locker delivery and flexible drop-off options demonstrate customer-centric innovation.

Optimized After-Sales Service and Information Delivery

Providing instructional videos, comprehensive FAQs, and interactive communication through social media enhances brand loyalty and improves the overall customer experience.

Regionally Focused Marketing

Implementing seasonal campaigns and offering region-specific products fosters a sense of connection with customers and strengthens their engagement with the brand.

6. Collaboration Initiatives Between Cross-Border and Domestic E-Commerce

Rakuten’s Support for Direct Sales by Overseas BrandsRakuten has strengthened its cross-border e-commerce platform to facilitate direct sales from international brands to Japanese consumers.
Shopify Japan’s Integration with Local Logistics and Payment SystemsShopify Japan collaborates with local logistics and payment providers to support Japanese companies in expanding their cross-border operations.
Increasing Partnerships with Domestic Agencies and Marketing FirmsForeign brands are increasingly partnering with local Japanese agencies and marketing firms to implement effective localization strategies.

7. Summary and Outlook

Success in the Japanese e-commerce market requires more than simply selling cross-border or replicating overseas business models; deep localization is essential. Meeting the high quality expectations of Japanese consumers, understanding unique consumption habits, and adapting to local delivery and payment needs are key factors.

Cross-border e-commerce operators should collaborate with local partners, provide comprehensive Japanese-language and service support, and focus on designing customer experiences that align with Japanese preferences. Domestic e-commerce operators should continually reassess the unique characteristics of the Japanese market and pursue further service innovation.

From 2025 onward, the Japanese e-commerce market is expected to continue growing. Cross-border and domestic e-commerce will coexist, and the level of competition in localization is anticipated to become increasingly sophisticated.