Digital Consumer in Japan

Increasingly favourable environment for digital payments, despite persistent fondness for cash

Japan’s ongoing bias towards cash transactions is supported by consumers’ faith that they are unlikely to be robbed in what they consider to be a safe society, as well as concerns about the security of digital information. The fact that Japan has the world’s oldest population, which is rapidly approaching a median age of 50 years old, also contributes to the market’s continued fondness for cash, as older consumers tend to be less open to adopting new technologies.

5G enhancing conditions for digital commerce development

The roll out of the 5G network, which the government initially planned to have in place for the Tokyo Olympics in 2020 in order to showcase the country’s technological expertise and leadership, is contributing to the increasingly favourable conditions for the development of digital commerce in the Japanese market. The major full-scale mobile phone service operators, NTT DoCoMo, SoftBank, and KDDI, all launched 5G services in March 2020, while Rakuten planned to follow in June of the same year.

Retailing remains key, but foodservice growing fast

Mobile phones are becoming increasingly popular for gaining access to the internet amongst Japanese residents, particularly younger ones. The use of mobile apps and platforms is becoming increasingly important for communicating with consumers for both store-based and online retailers and foodservice operators.

Blurring the boundaries between the physical and digital arenas

The Japanese market is witnessing the continued integration of the physical and digital commercial arenas. This can be seen in the blurring of boundaries between store-based and online retailing, as companies’ efforts to build e-commerce activity and target consumers with digital marketing are combined with moves to enhance consumers’ in-store experience in terms of emotional resonance and convenience.

Ageing population presents opportunities, as well as obstacles

The ageing of an already old society presents one of the key obstacles to the development of Japan’s digital landscape because of the reluctance of elderly people to adopt new technologies compared with their younger counterparts. However, the ageing of the population also presents notable motives and opportunities for investment in technological innovation.

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