Is Japan missing the mobile commerce trick?

By Natasha Spencer

- Last updated on GMT

Mobile commerce in Japan
The country has a reputation as an advanced pioneer in multiple leading technological sectors, yet Euromonitor International revealed in its report ‘Three Reasons Why Japan Is Falling Behind in Mobile Commerce’ how the APAC nation is inferior when it comes to mobile sales, security reassurance and shopping interests.

Euromonitor International’s Digital Consumer Index 2016 found that mobile digital commerce adoption is less advanced when compared to the rest of the country’s technological landscape.

The market intelligence publisher revealed that in Japan, mobile digital purchases saw a healthy value growth of 17%.

However, despite this positive figure, other Asian countries have experienced minimum sales of 30%. Add to this, Japan’s historical technological progression, and it shows the disparity between the marketplace’s digital expectations and lack of adoption in mobile commerce.

China, on the other hand, the largest player in mobile digital commerce, hit an 81% value increase in 2016, the report stated.

Seniors say no

As smartphones are used as a typical purchasing tool throughout APAC, the industry has continued to optimise platforms and create mobile apps that promote easy-to-use, browse and buy options for consumers.

Despite their widespread popularity, the adoption of smartphones is particularly low in the over-60s demographic, which makes up 34% of the population.

Euromonitor International’s Global Consumer Trends Survey 2016 revealed that in Japan, only 28% of the population aged 60 or above owned a personal smartphone.

As smartphones fail to overthrow feature phones in Japan as the mobile of choice, this prevents a sizeable number of Japanese citizens from accessing digital innovations via apps and commerce opportunities.

Security: A significant setback

Cyber security is a considerable concern among conscientious consumers. It is a worry that has been promoted in the news by media coverage centring on the importance of maximising safety and protection from online crime in the digital arena.

Japanese consumers are particularly conservative, and so are significantly worried about the risks online. The Global Consumer Survey also revealed that in Japan, a mere 6% of online respondents were willing to share personal information digitally - the lowest in 20 of the countries analysed.

Overall, in Japan, consumers are less inclined to make purchases via their mobiles. In South Korea, for, example, 85% of mobile remote orders were paid using digital means. This compares to only 51% in Japan.  

Shoppers avoid mobile

Japanese shoppers are also overwhelmed by numerous purchasing options, Euromonitor International announced in its report.

High levels of competition for mobile proximity payments come from contactless card payments — consumers in 2016 had an average of three contactless cards per person — which offer both face-to-face reassurance and the convenience of tap-and-go payments. The benefits of making contactless card payments are restricting the need for consumers to change to mobile-based purchasing.

If Japan wants to move towards becoming a society that adopts mobile digital commerce at a similar rate to its heavyweight neighbours, brands need to actively encourage their use and offer reassurance to its consumers.

What next?

Going forward, however, Japan is making confident and decisive steps to achieving increased mobile commerce usage. In 2019, for instance, Japan plans to discontinue feature phones, which is likely to have a significant impact on the uptake of smartphones.

Post-paid products are also on the rise, as Zozotown, the mobile-targeted fashion house, introduced a post-pay product in 2016. This payment option, which enables consumers to make remote payments after the purchase has been made,  is likely to help develop mobile-led commerce.

Over the next five years, Japan is expected to see a positive CAGR at 11% in mobile digital purchases. It does, however, have the potential to develop further to achieve even stronger mobile technology growth as other Asian countries are experiencing over 20% value increase.

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