Stable Growth of Japan's C2C E-Commerce Market and Implications for Overseas Manufacturers

Japan’s consumer-to-consumer (CtoC) e-commerce market continues to expand steadily, driven by the widespread use of flea market apps and secondhand trading platforms.According to the FY2024 “E-Commerce Market Survey” by Japan’s Ministry of Economy, Trade and Industry (METI), the CtoC-EC market reached 2.53 trillion yen, up 1.82% year on year, maintaining stable growth.This market enables consumers to sell and purchase goods directly with each other online and spans a wide range of categories including fashion, household goods, hobby items, and electronics.

1. Overview of the CtoC-EC Market

CtoC e-commerce refers to online transactions where consumers sell unwanted items directly to other consumers.Low transaction fees and convenience have accelerated user adoption, particularly among younger and family demographics.The market size in FY2024 stood at 2.53 trillion yen (+1.82% YoY), and steady growth is expected to continue in the coming years.(Source: METI, FY2024 E-Commerce Market Survey)

2. Growth Drivers

2.1 Popularization of Flea Market Apps and Smartphone Usage

Improved UI/UX and the high penetration rate of smartphones have significantly supported the market’s expansion.Mobile-first platforms have become the standard access point for most users.

2.2 Rising Awareness of Sustainability

Growing consumer interest in reuse and recycling has boosted demand for secondhand transactions.Brands and platforms emphasizing environmental responsibility are expanding their collaboration efforts.

2.3 Fee Structures and Payment Solutions

Listing fees generally range from 3% to 10% (based on platform disclosures).Diverse payment options—including credit cards, PayPay, and post-payment systems—facilitate smoother transactions.Secure escrow payments and AI-based fraud detection have further reduced psychological barriers for new users.

2.4 Trust-Building Mechanisms

User rating systems for both sellers and buyers ensure transparency and reliability.Major platforms are strengthening safety functions through AI-based fraud detection and identity verification.

3. Category Trends

While METI’s official report does not disclose category-level breakdowns, general trends indicate active transactions in the following areas:

Category	Market Trend	Key Factors
Fashion & Apparel	Continuous growth in user base	High resale value, ease of listing
Electronics & Mobile Accessories	Stable transactions	Shorter product replacement cycles
Hobbies & Collections	Steady niche demand	Limited-edition and collector items
Home Goods & Furniture	Increasing activity	Enhanced delivery support services

These segments demonstrate how ease of listing and broad buyer reach continue to drive market expansion.

4. Competitive Landscape and Platform Strategies

Japan’s CtoC-EC market is dominated by several key platforms:

• Mercari – The largest player, leading in both user base and transaction volume (based on company disclosures).

• Yahoo! Auctions (Yafuoku) – Focused on auction-style trading, strong in premium and collectible items.

• Rakuma (Rakuten) – Leverages Rakuten ID integration for ecosystem synergy.

All major platforms are enhancing API connectivity, data analytics collaboration, and partnerships with external payment and logistics services to expand their value-added offerings.

5. Strategic Insights for Overseas Manufacturers

For overseas manufacturers considering entry or collaboration within Japan’s CtoC ecosystem, the following strategic approaches are effective:

5.1 Brand Recognition and Trust Building

Establish official accounts or verified outlets within CtoC apps to guarantee authenticity and combat counterfeit issues.

5.2 Supply Chain Collaboration

Partner with domestic reuse operators to develop channels for refurbished products and manage product returns or resales.

5.3 Data-Driven Marketing

Leverage transaction data to identify demand cycles, regional trends, and optimize pricing and inventory. Social listening and review analytics can also inform new product development.

5.4 Sustainability Engagement

Highlight eco-friendly product features and circular economy initiatives to attract environmentally conscious users.

6. Risks and Countermeasures

• Quality Assurance – Introduce certified inspection programs to ensure product condition and reliability.

• Legal Compliance – Establish systems adhering to Japan’s Antique Dealings Act, Consumer Product Safety Act, and Copyright Act.

• Fraud and Misconduct Prevention – Implement AI-based monitoring and escrow payment systems to minimize risks.

7. Outlook

With the growing influence of digital-native generations, Japan’s CtoC-EC market is expected to maintain stable growth.Emerging trends and experimental models are also gaining attention:

• Subscription-Based Reuse Models – Regular product exchanges creating recurring revenue streams

• Live Commerce Integration – Real-time sales via live-streamed product showcases

• Metaverse-Based Product Display – Virtual spaces enabling interactive shopping experiences

The convergence of these innovations will further expand the value of the CtoC-EC ecosystem, offering sustainable and strategic growth opportunities for overseas manufacturers seeking entry into Japan’s evolving circular economy.

References

• Ministry of Economy, Trade and Industry (METI), FY2024 E-Commerce Market Survey (August 2024)https://www.meti.go.jp/policy/it_policy/statistics/outlook/250826_kohyoshiryo.pdf

• Public information from major CtoC platform operators (Mercari, Rakuma, Yahoo! Auctions)