What is the point of department stores entering the cross-border e-commerce market? I would like to know about examples of department stores entering the cross-border e-commerce market.
Do you have any of these questions or concerns? The market size of cross-border e-commerce continues to grow year after year, so there is an opportunity to gain a large market share if you sell your products to overseas markets. In fact, there are many examples of department stores participating in cross-border EC.
However, achieving success in cross-border e-commerce is not easy. Laws and rules differ between Japan and other countries, so it is necessary to understand local internal conditions beforehand.
In this article, we will explain how department stores can utilize cross-border e-commerce and provide examples of how department stores have participated in this field in the past. By the end of the article, you will understand why department stores should participate in cross-border e-commerce, and you will be able to find a suitable method of participation for your company.
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Should department stores participate in cross-border EC?
The size of the cross-border EC market continues to expand worldwide. With the outbreak of new coronavirus infections and the spread of smartphones, China, the U.S., and other countries are using cross-border EC.
According to the “Market Survey on Electronic Commerce” published by the Ministry of Economy, Trade and Industry in FY2020, the global cross-border EC market is estimated to be worth US$780 billion in 2019, and is expected to grow to US$4.82 trillion by 2026.
As the market size of cross-border e-commerce tends to expand in Japan, many companies have begun to take advantage of cross-border e-commerce. Department stores are no exception to this trend.
Mainly, the following well-known department stores are participating in cross-border e-commerce.
- Tokyu Department Store
- Kintetsu Department Store
- Hankyu Department Store
- Odakyu Department Store
- Isetan Mitsukoshi
Products sold in department stores and cross-border e-commerce go hand in hand, and there is an opportunity to capture a large share of the foreign market.We recommend entering the cross-border EC market as soon as possible to prepare for the future excitement.
Specific ways for department stores to utilize cross-border EC
Many of you may be thinking, “Wouldn’t it be difficult for a department store that has been selling through brick-and-mortar stores to enter the cross-border e-commerce market?” Many people may be thinking, “How difficult would it be for a department store that has been selling in a physical store to enter the cross-border EC market?
Indeed, laws and rules are different in cross-border e-commerce, where products are sold to overseas markets, than they are in domestic markets. Not only that, but in order to increase the number of sales, it is necessary to understand the language of the country you are entering.
In addition, the different ways of dealing with customers and their needs may lead to unexpected problems.
However, it is not necessarily difficult if you develop cross-border EC according to your objectives and business model. Another possible approach is to start small and gradually increase the scale of your business.
There are three major ways to enter the cross-border EC market.
| How to enter | feature |
| Launch your own e-commerce site | The most difficult method You can freely decide the design of your e-commerce site. The ability to promote only your own products allows you to have an ongoing relationship with your customers. |
| Utilize domestic malls | Tend to have lower hurdles to opening new stores Cannot reflect the company’s own design and systems. Fees and initial costs are required. |
| Utilize overseas malls | Direct access to local customers Understanding of the language of the country in which the company is operating is necessary. Cannot reflect the company’s own design and systems. Fees and initial costs are required. |
Depending on your company’s budget and objectives, choose the method that is easiest for you to enter the market. When department stores enter the cross-border e-commerce market, these entry methods are important, but long-term management afterwards is also important. Particular focus should be placed on cross-border EC marketing.
Successful cases of department stores utilizing cross-border e-commerce all involve effective marketing. By effectively approaching your products, you can expect benefits such as an increase in the number of sales and sales.
Five examples of department stores entering cross-border EC
Now that you know how to enter the cross-border EC market, we will introduce five examples of actual department stores that have entered the market. By reviewing these case studies, you will be able to find hints for success.
Tokyu Department Store opens a store on “eBay
In November 2020, Tokyu Department Stores, Inc. opened a store on eBay, the world’s largest e-commerce mall, through its Japanese subsidiary, eBay Japan Inc. This is the first official cross-border EC store opened by a Japanese department store.
To begin with, eBay has the largest number of users in the world for Internet auctions. It operates mainly in the U.S., and its e-commerce scale is comparable to Amazon and Walmart. With its presence in 190 countries around the world, including Europe, Australia, and China, Tokyu Department Store can now expect more sales opportunities by opening a store on eBay.
In addition, approximately 150 Japanese products that are gaining popularity overseas, including traditional crafts, were listed on eBay, taking advantage of the Tokyu Department Store’s accumulated connoisseurship and editing skills.
Kintetsu Department Store opens a store in “Kyungdong Global Purchasing
Jingdong Shopping (JD.com) is the leading EC site in the Chinese market. In July 2018, Jingdong Group, the operator of that e-commerce site, and Kintetsu Department Store, Inc. entered into a strategic business alliance, and Kintetsu Department Store opened its first overseas flagship store on the cross-border e-commerce site “Jingdong Global Purchasing (JD Worldwide) “.
The cross-border e-commerce store we opened this time sells hundreds of products, including cosmetics, skin care, baby maternity, and daily household goods. Offline, we also actively engaged in promotional activities to reach more Chinese consumers.
Due in part to our aggressive approach, nearly 200,000 Chinese visitors to Japan came to the Kintetsu Department Store. Accordingly, the annual spending by Chinese tourists at the Abeno main store in 2017 exceeded 20 billion yen.
Hankyu Department Store opens a store in the “Pea Gong Lord
Hankyu Hanshin Department Store, Inc. began opening a store in August 2017 on Pea Gongshu, a cross-border e-commerce site for China.
Japanese food products, including standard items and products only available at the Hankyu Umeda Main Store, are exhibited for Chinese consumers. The store is popular not only with domestic customers but also with visitors from China, and bustles with visitors every day.
In addition, In Agora Corporation, which operates the cross-border e-commerce platform Pea Gongshu, will begin handling Kobe Fugetsudo’s famous confectionery “Gaufuru” sold through Hankyu Food, a mail order website operated by Hankyu Department Store, in July 2019.
Seeking to gain further market share, Hankyu Department Store is actively engaged in cross-border EC operations for China.
Odakyu Department Store Enters Cross-border EC through “orange sense
Odakyu Department Store started full-scale cross-border EC for China through the WeChat mini-program “橙感(Chengan)” in September 2020.
We have been experimentally selling our products to overseas customers since May of this year, and since September, we have established our own zone and expanded our product categories. The product categories to be developed start with a total of 180 products, including cosmetics, baby products, household goods, and accessories. In addition, we are differentiating ourselves from our competitors by selling brands and accessories that have not been deployed in the cross-border EC market for China, thereby increasing our visibility in the Chinese market.
The process of using the cross-border e-commerce is a bit special: first, download WeChat, enter “橙感” in the search and select the mini-program. Then, from the global navigation on the site, select “新宿甄选特辑” to order products.
Isetan Mitsukoshi opens a store in “TianNeko International
Isetan Mitsukoshi began full-scale product sales in November 2016 in conjunction with a major campaign on Alibaba Group’s Tmall Global. As a strategic partner, Isetan Mitsukoshi opened a flagship store, offering a selection of Isetan Mitsukoshi Group’s unique products.
Hiroshi Onishi, president of the department store, had the following to say about the opening of the store on Tianyao International.
The site offers a wide variety of safe and secure products from Japan, including fashionable clothing, high-quality sundry items, cosmetics, baby products, and other original products. In the future, we plan to introduce exclusive products and popular food items on the site, and will continually expand our product lineup to meet customer demand.”
Furthermore, at the 201611.11 Global Shopping Festival held by Alibaba Group in November, Japan ranked first in the world in terms of total distribution by country at TianNeBei International.
In September 2018, Isetan Mitsukoshi also entered into a strategic business alliance with Jingdong Group, the largest retailer in China. In line with this, Isetan Mitsukoshi opened the Isetan Mitsukoshi Overseas Official Flagship Store on Jingdong Zenkyukou, the Chinese cross-border e-commerce site operated by Jingdong Group.
summary
This article explains how department stores can utilize cross-border EC and case studies of department store participation.
The market for cross-border EC continues to expand globally. Products sold in department stores and cross-border EC go hand in hand, and there is an opportunity to capture a large share of the overseas market. However, it differs from sales methods for the Japanese domestic market, and because it must be developed in accordance with local rules and languages, it can cause unexpected problems.
If you are thinking about entering the cross-border EC market, please refer to the case studies described in this article to find the most suitable entry method for your company. Another option for those who are not confident in cross-border EC operations is to hire a management agency. If you have the budget to spare, please consider this option as they can provide support from the launch of the site to its operation.
