Digital Landscape in Japan

PROSPECTS

Trialling 5G

Japan is working to be an early adopter of 5G mobile internet connectivity, initially planning to introduce the technology by the 2020 Tokyo Olympics as it sought to use the global spectacle to showcase its expertise and leadership in the development and commercialisation of 5G technology. Several local telecom operators are trialling 5G technology in the Internet of Things (IoT) and areas of entertainment such as e-sports.

Increasing use of smartphones to access the internet

According to a study conducted by the Ministry of Internal Affairs and Communications, access to the internet by mobile phone exceeded that by PC for the first time in 2017. The ongoing increase in use of mobile phones to access the internet reflects the way in which smartphones are becoming ever more deeply embedded in Japanese consumers’ daily routines.

Ageing population presents obstacles and opportunities

As older generations tend to be less open to the adoption of new technologies, the fact that Japan has the oldest population in the world is a potentially significant obstacle to the development of the digital landscape. According to the Ministry of Internal Affairs and Communications, while more than 90% of Japanese residents between the ages of 13 and 59 use the internet, the proportion drops to below 77% for the 60-69 age group, 51% for those aged between 70 and 79, and to less than 22% for those aged 80 and over.

COMPETITIVE LANDSCAPE

Rakuten finally launches mobile phone service with low-price offer

April 2020 saw major domestic e-commerce player, Rakuten, launch a full-scale mobile phone service in Japan, having initially planned the launch for October 2019. The company is utilising a low-price strategy as it looks to compete with the three existing major players, NTT DoCoMo, SoftBank, and KDDI.

Intensifying competition in cashless payment

The increasing number of players entering the cashless payments market and using aggressive marketing campaigns boosted consumer awareness of digital apps at the end of the review period. The Japanese Government is supporting the development of a cashless society, introducing measures such as the Cashless Point Reduction Programme, running between October 2019 and June 2020 (which allows consumers to earn points back by using cashless payment methods), and providing subsidies and guidelines for retailers to renew their POS systems and introduce QR code payment methods such as PayPay and Line Pay.

5G will take some time to realise potential

The Japanese Government initially planned to launch 5G in the country prior to the Tokyo Olympics in 2020 in order to showcase the country’s technological expertise and leadership. Amongst the major full-scale mobile phone service operators, NTT DoCoMo, SoftBank, and KDDI launched 5G services in March 2020, while Rakuten aimed at June of the same year.

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