7-11 Japan: Question 2

Q2. Identify the major obstacles to e-commerce in Japan.

Local Culture

1. Lifestyle

Most of  the Japanese surf the web using mobile phones, which are less suited to online shopping than computers, with bigger screens and calmer surroundings. Therefore, Japanese prefer shopping in person.

2. Cash-based society

Japan had traditionally been a cash-based society. Instead of credit card payment, the most common method payment of e-commerce in the world, cash and bank transfer are the most methods of payment in Japan.

For the Security concern, Japanese consumers afraid to reveal credit card information over the internet. Some researchers found that 70% of Japanese disliked using credit card as a method of payment for online shopping. , since they think the credit card information and other personal data may be obtained by the hackers. Therefore,  Japanese prefer paying by cash to credit card.

3. Psychological Perspective

First, Japanese were used to buying offline, as they could see and touch the products in the physical stores, and get discount. Therefore, Japanese were not keen on using e-commerce.

 

4. Language

Japanese is the home language of Japan  and few Japanese speak English well, so rare meetings at Japan’s e-commerce firm were conducted in English. It hinder the e-commerce firm to grow into a global firm.

Business environment

1. Competition with physical stores

Since offline shopping was very convenient in Japan, there were streets packed with stores selling daily necessities that Japanese can go to nearby stores within 10 minutes and convenience stores were everywhere with 24 working hours . therefore, it is not necessary for Japanese to shop online.

2. Relatively expensive connection charge

Japan had one of the world’s highest combined telecommunication and ISP fees. And the charges of internet connection were based on the amount of time spent on the Internet, then it deferred Japanese from browsing the Web or staying at a website for very long time. As accessing to the Internet is the key to e-commerce, these factors hinder the development of e-commerce.

3. Government policies

In the 1990’s, Japanese Government intervened in e-commerce markets actively in order to promote producer’s interest for the sake of international competitiveness. For instant,  selling music CDs online at a discount is considered as illegal. As a result, it harmed the development ofJe-commerce market in Japan.

Personal experience

Most Japanese consumers were not at home during the time to receive online ordered products, so that they cannot receive their parcels.Therefore, they were doubtful about receiving their parcels from online stores because of mailing error or non-fulfilment on the part of store.

Reference:
Economist. (2012), Online retailing in Japan. Available from: <http://www.economist.com/blogs/schumpeter/2012/07/online-retailing-japan > [14 March 2014]

Economist. (2010), E-commerce takes off in Japan, Available from: <http://www.economist.com/node/16322651> [14 March 2014]
Deric K.K. Tan (2000), SEVEN-ELEVEN JAPAN: VENTURING INTO E-TAILING. Available from: The Asia Case Research Centre, The University of Hong Kong. [14 March 2014]