Japanese Online Shopping Mall -Market Share and Strategy of Yahoo! Shopping
The easiest and most effective way to expand your business online would be simply open your store in online shopping malls. Not like US, where amazon is dominating the market, we have 3 major online shopping malls in Japan.
Here is the market share of ecommerce companies and strategy of Yahoo! Shopping, which has been increasing their turnover rapidly.
e-Commerce Market Share
e-Commerce Market has been growing and reached $137 billion in 2016. (9.9 % annual growth).
Among thousands of players in this market, Amazon, Rakuten and Yahoo! Shopping are the top 3 players. Even though Amazon and Rakuten have been top 2 players for long, this may change in the near future because of Yahoo! Shopping's new strategy.
Yahoo! Shopping's New Strategy
Even though Yahoo! JAPAN is one of the biggest media company in Japan, Yahoo! Shopping had lagged behind rival shopping sites and been at 3rd in e-commerce market.
However as their new strategy called "e-commerce Revolution" start working in 2013, they have been outperforming in the market.
The main idea of their strategy is to change business model from fee-based revenue to advertising sales revenue from Yahoo! Shopping store operators.
Prior to "e-commerce Revolution", Yahoo! Shopping was losing their customer due to small number of items compared to amazon and Rakuten. To solve this situation, they first tackled on increasing number of stores and items by removing fees. According to them, costs such as initial fee, system usage fee and loyalty fee are zero. Shop owners just have to pay T-Point, which is popular loyalty card in Japan. Owners can set their percentage from 2.5% up to 16.5% and this point goes to their customer directly.
As this was such a big success, the number of stores increased rapidly from 20 thousands to 130 thousands and items increased from 70 million to 120 million next year. In 2017, they have more than 514 thousand stores and 270 million items, which means they are the online shopping mall with biggest number of items in Japan.
It was not only number of stores and items that has increased. The turnover of Yahoo! Shopping (including LOHACO) reached a record high at 479 billion JPY (≒$46.37 billion and advertisement revenue from shop owners is 17 billion JPY (≒ $15049 million) in 2017.
Yahoo! Shopping also envisioned the scenario.
Strategy in 2017
Thanks to "e-commerce Revolution", Yahoo! Shopping is now ready to attract more customers. They recently decided to give more loyalty point to their customers. If the customer purchases from Yahoo! Shopping on the days with 5 at the end, they get 5% of their purchase as loyalty point. Furthermore, if you are using SoftBank, Yahoo! Premium and YJ card, then you can get 15% extra, which means 20% loyalty point in total .as of March 2017.
Right after their promotion, monthly turnover from SoftBank Users increased to double.
Opening store in those online shopping mall will be the easiest way to attract Japanese customers. Yahoo! Shopping is one of the most attractive online shopping mall for sellers considering the fees even though they are still at 3rd position.