Japanese SEO and Internet Market

Next only to the USA, Japan’s e-commerce market is growing rapidly at high double digits each year, and the potential for SEO and PPC in Japan is growing rapidly. This is especially applicable to the relatively untapped Japanese retail B2C market, where the catalysts for market growth are increased broadband usage and the greater preponderance of low-cost offshore internet retailing, driven by high credit card penetration levels within Japan. Imperative is fluent, native like Japanese website translations and a strong multilingual SEO plan.

Quick Summary:

Number of Japanese internet users: 86.3 million 

Japanese broadband access: 16.41 per 100 people

Most popular local Japanese search engine: http://www.goo.ne.jp

Most popular Japanese website: http://www.yahoo.co.jp

Credit card penetration in Japan: 2,000 per 1,000 people

Japanese e-commerce spend (2006): US $ 1,230 billion

Number of Japanese who have bought online (2003): 45% of total internet users

Japan is currently the world’s third largest economy, and the second most technologically advanced nation behind the US. Japan’s GDP at current prices for 2006 was estimated at US $ 444,463.6 billion, having experienced a slight de-growth of 2.3% over 2005 Japan estimates, according to the IMF’s World Economic Outlook Database dated September 2006. The Computer Industry Almanac Inc. states that the total number of Japanese internet users in December 2005 was 86.3 million, a growth of 10.6% over 2004 estimates for the same, and comprising of 67% of Japan’s population. The World Bank -ICT Database also estimates Japan’s total number of internet users (per 1000) to be 440 in 2002, out of which 56% was male and 44% was female.

According to 2006 estimates, Japan’s broadband users numbered 20.9 million, being the world’s third largest behind USA and China. Japan’s broadband access per capita was ranked 13th amongst 31 nations, standing at 16.41 per 100 people (under a weighted average of 13 per 100). Innovative technologies like DSL and Fibre-to-the-home (FttH) have contributed to Japan’s large broadband user base. The World Bank – ICT Database states that Japan’s mobile and fixed line subscribers (per 100 people) stood at 61.1(2002 estimates) and 41.1(2000 estimates) respectively, while Japan’s personal computer penetration was estimated at 34.9(per 100 people, 2001 data). CIA’s ‘The World Factbook ’ has also estimated Japan’s fixed line and mobile cellular usage at 58.78 million and 94.745 million respectively, as of 2005.

Japan’s most popular search engines are http://www.google.jp, http://www.yahoo.co.jp, http://www.goo.ne.jp, http://www.search.biglobe.ne.jp, http://www.odin.ingrid.org, http://www.navi.ocn.ne.jp, http://www.excite.co.jp, http://www.dragon.co.jp and http://www.infoseek.co.jp. A Reuters press release dated 13th October 2006 has also rated Yahoo Japan (http://www.yahoo.co.jp) as Japan’s most popular website.

A Merrill Lynch report for 2006 also states that Japan’s credit card penetration is at high levels, i.e. at 2,000 per 1,000 people. This was on account of a number of factors, i.e. increased open-mindedness of the younger generation Japanese towards debt, a slowdown in Japanese disposable income, enhanced credit card functionality due to IC cards and electronic money, and the integration of online shopping with bank cash cards, which has made credit card usage very convenient. Market leader JCB’s introduction of a new credit card scheme in Japan facilitating installment payments in 2004, and Japan’s largest mobile operator NTT DoCoMo’s launch of its own credit card brand iD in November 2005, allowing Japanese customers to pay using their mobile handsets, have also helped to spur overall Japanese credit card usage.

Based on the findings of a 2005-2006 e-commerce market survey conducted under the aegis of Japan’s Ministry of Economy, Trade and Industry, Japan’s B2B and B2C e-commerce market size stands at 140 trillion ¥ (US $ 1.2 trillion) and 3.5 trillion ¥ (US $ 30 billion) respectively, as of June 2006. Both these two estimates put together contribute 2.8% to Japan’s GDP at current prices for 2006.A 2003 survey conducted by NTT DATA Corporation's Research Institute for System Science (RISS) has also revealed that 45% of Japanese internet users engage in online shopping. Also, Nomura Research Institute forecasts Japan’s e – commerce market to reach 160 trillion ¥ (US $ 1.36 trillion) by 2008.Out of this, B2C would constitute around 8.8%, with the remainder 91.2% accruing to B2B transactions, with both B2B and B2C spending witnessing double digit annual growth. This growth would be augmented by a greater incidence of experienced internet users (which would increase online shopping), and the proliferation of broadband access. Offshore internet retailing in Japan therefore has tremendous future growth potential with its lower costs, best bargain deals and quick turnaround times, with direct offshore retailers like Cyberian Outpost and Amazon having already made a significant impact in Japan in this regard.

Reference Sources/Further Readings:

1. IMF World Economic Outlook Database

2. World Bank - ICT Database

3. http://www.nationmaster.com

4. http://www.cia.gov - The World Factbook

5. http://www.high-search-engine-ranking.com

6. http://www.internetworldstats.com/www.c-i-a.com (Computer Industry Almanac Inc.)

7. Merrill Lynch Report, 2006

8. http://www.euromonitor.com

9. Ministry of Economy, Trade and Industry, Japan (METI) - Press Release, June 26th, 2006

10. Nomura Research Institute, 2003 Report

11. NTT Data Corporation’s Research Institute for System Science

12. Reuters - Press Release dated 13th October 2006