Currently, “cross-border EC” is attracting particular attention as a means of developing business in overseas markets. Especially in today’s infectious disease epidemic, where inbound consumption has drastically changed, the demand for web inbound consumption is increasing, and in addition, if cross-border EC can be successfully utilized, sales of products can be expected to be higher than ever before.
Therefore, in this issue, we will explain the size of the cross-border EC market in 2020, mention the products sold in the first half of FY2021, and then explain the advantages and cautions of using cross-border EC.
Cross-border EC demand is growing today.
According to a survey by Tokyo Shoko Research as of 2021, “Buyee” was the number one purchase support service adorning the total value of cross-border EC distribution.
Here is an explanation based on that information.
The size of the global cross-border EC market in 2020 is a whopping $912.3 billion.
In terms of Japanese yen, this figure is approximately 101 trillion yen, which is a very large amount.
According to Tokyo Shoko Research, the market size is expected to rise to approximately 541 trillion yen around 2027.
The following sections will focus on the following two items.
- Two popular genres in the first half of 2021
- Consumption trends in the first half of 2021
Let’s take a closer look.
Two popular genres in the first half of 2021
The two most popular genres in the first half of 2021 were
Let’s start with the following.
On the hobby side, Japanese culture such as anime has attracted global attention, largely due to the presence of enthusiastic overseas fans who trade trading cards for tens of millions of yen overseas. In addition, hobby-specific products have a good relationship with cross-border e-commerce, which can be linked to overseas markets, and products tend to be consumed in pursuit of limited-edition items sold only in Japan.
There is a close relationship between cross-border EC and country-specific scarcity.
In terms of fashion, Japanese apparel brands have become even more popular in recent years, as their attention to detail and quality have earned them a very good reputation overseas as well.
Among them, Japanese designer fashion and street fashion are particularly popular. Japanese reused products are also in high demand due to their good condition. Furthermore, so-called long-tail products such as Japan-only sneakers are also gaining popularity.
Consumption trends in the first half of 2021
The “guesswork” activity attracted a lot of attention in Japan in the first half of 2021.
The new coronavirus made it impossible to hold in-person live concerts, and this and other factors led to the popularity of purchasing goods at online stores, where people could easily meet their guesses, and the increase in home time led to more frequent content viewing.
It can be said that such enthusiastic overseas fans of Japanese culture purchased Japanese products through cross-border EC, leading to active distribution.
Japan has a high reputation for quality, and sales of Japanese-made scissors and other cutlery items also rose in cross-border e-commerce. The blades are very delicate and are used for embroidery and for handicraft purposes, as many people have started doing handicrafts because they have more time at home.
Furthermore, in the popular genre of culture and hobby products, die-cast sports cars and fishing equipment used as outdoor activities that can be considered social distance are among the top ranking products with high sales rates on cross-border EC.
Standard products exhibited by Japanese companies are purchased, such as Japanese hair gel and Japanese shopping hooks that can support bulk purchases by Corona Vortex.
What are the advantages of using cross-border EC?
Here are some of the advantages of using cross-border EC.
Cross-border EC has two major advantages.
- From an initial cost perspective
- In terms of effectiveness in attracting customers
Let’s take a closer look.
From an initial cost perspective
Cross-border EC has the advantage that initial costs can be kept very low.If the stores are actually set up overseas, the cost of land, building and renovating the stores, and other expenses will consume a lot of time.
In addition, it takes more time and effort to restock inventory overseas than in Japan, as it takes more time and effort for each problem to occur, such as in the unlikely event of a stock-out.
However, cross-border EC does not require such costs because it allows Japanese goods to be sold on the Internet.
Therefore, cross-border EC makes it possible to open and exhibit at a small initial cost plus reduced risk.
In terms of effectiveness in attracting customers
Let’s look at it from the perspective of effectiveness in attracting customers.
If foreign tourists who travel to Japan like a certain Japanese product and have a way to purchase it when they return to their home country, they are more likely to repeat their purchase, which in turn will increase sales.
Cross-border e-commerce is an effective route for these purchases.
Alternatively, if you are simultaneously developing cross-border e-commerce and physical stores, there is a possibility that overseas customers who have purchased Japanese products online through cross-border e-commerce will actually visit your actual stores when they visit Japan.
In this way, cross-border e-commerce can be a major advantage because it can increase the effectiveness of attracting customers to the actual store, or the phenomenon can occur where a customer likes a product in the actual store and purchases it through cross-border e-commerce.
Japan’s High Potential for Cross-border EC Use
Each country that uses cross-border EC has its own unique characteristics. If the quality of the product is good or the company is highly trusted, the number of users who will purchase the product in the future will increase accordingly.
There are three major strengths for Japanese companies using cross-border EC.
- Courteous response
Let’s take a closer look starting below.
Japanese companies are highly reliable, which makes people feel more secure when buying Japanese products.
Piracy is frequently rampant overseas, and counterfeit products are often available.
For this reason, just the fact that a Japanese company sells genuine Japanese products is of great value overseas.
In addition to trust, Japanese products also have strong brand power due to their high quality and attention to detail, which is a great advantage when using cross-border EC as a means of selling products overseas.
Japan is known for its spirit of “Omotenashi,” or hospitality, and every service is very attentive and detailed.
Dealing with customers that lead to solutions to their problems from the customer’s perspective is especially important in the sales-type business.
However, because cross-border e-commerce deals with overseas customers, it is necessary to have a customer service system that is as well organized as that of Japanese companies in order to maximize the strengths of Japanese customer service.
In order to achieve flexibility, we must also pay attention to hiring native speakers from different countries.
Japan is already a country of great global influence.
Domestic business has developed to a certain extent, and in recent years, many companies have been managing their business in cooperation with foreign countries. Inevitably, there are many opportunities to be involved with foreign countries.
Japan, with its accumulated sales know-how on what and where to sell products and what kind of products are in demand, can play a major role in overseas transactions through cross-border EC.
The results of marketing strategy can be used not only in Japan but also abroad.
The above will enable smooth business development by making good use of Japan’s strengths in the use of cross-border EC.
Points to keep in mind when using cross-border EC
Here we will introduce some points to keep in mind when using cross-border EC.
How to promote your products
In selling products, it is necessary to consider the characteristics of the target countries and how to appeal to them in order to sell the products.
If there is a gap between the products sold on a cross-border e-commerce site and the products actually delivered to the customer, it can lead to a loss of trust in the company, so great care must be taken.
Although it may be difficult to do so online, the attractiveness of the product should be accurately conveyed to the customer.
Payment methods differ in their means and regulations in each country.
Since laws differ depending on the country where the transaction takes place, it is necessary to have a payment method that is in line with the policies of that country.
If you want to have many Japanese cross-border EC users in each country, you will naturally need to translate into multiple languages.
Specifically, in Europe and the United States, the main online payment service is called “PayPal,” while in China, a well-known online payment service called “Alipay” is the main method of payment, and another credit card called “UnionPay” is the main method used.
Prepare a payment method that can be used safely by residents of any country.
Cost Considerations in Cross-border EC
In cross-border EC, sold products are shipped directly to overseas destinations. This means that shipping fees are required, but unlike in Japan, these fees can be expensive.
Shipping costs vary widely depending on the region from which the product is purchased, making it difficult to indicate prices that include shipping costs.
Circumstances regarding distribution also vary from country to country, making it difficult to obtain information on how long it will take to arrive.
In this issue, we used data from the first half of 2021 for cross-border EC, and after presenting a breakdown of this data, we went on to explain the benefits and cautions of cross-border EC.
Cross-border e-commerce allows you to do business more extensively, and even products that are price-competitive in Japan can be sold abroad to fewer rivals than ever before.
We urge you to consider using cross-border EC, taking into account the opinions of experts.