Food and Drink E-Commerce in Japan

PROSPECTS

Food and drink e-commerce growing in popularity

Only media products, apparel and footwear, and “other” registered higher e-commerce value sales than food and drink in Japan in 2019. Moreover, as the range of online grocery options expands, consumers become more familiar with e-commerce generally, and the hectic character of modern lifestyles leaves less and less time for grocery shopping in physical stores, sales are expected to continue to grow during the forecast period.

Growing number of players moving into category

Many players are looking to build a presence in food and drink e-commerce, including specialist online grocery stores, more general e-commerce platforms, store-based grocery retailers that are developing their own e-commerce platforms, department stores and manufacturers. There are numerous examples of large store-based retailers working to expand in food and drinks e-commerce, including Seven & I Holdings development of Omni 7 and Ito Yokado’s online sales, Yahoo! Japan’s Askul, and Seiyu’s partnership with Rakuten.

Addressing the last mile delivery challenge

Logistics, especially last mile logistics, remain a concern in food and drink e-commerce. The issue of redelivery is an important one in Japan.

COMPETITIVE LANDSCAPE

AEON Group joins with Ocado to build online grocery sales

The end of the review period saw Japan’s largest modern grocery retailer, AEON Group, look to develop its online grocery sales, most notably through its establishment of a partnership with Ocado Solutions in 2019. Through the agreement AEON plans to develop a national fulfilment network to serve the whole Japanese market, with the first consumer fulfilment centres (CFCs), serving the Kanto region, expected to go live in 2023.

Amazon launches fresh food delivery service

Amazon partnered with supermarkets operator, Life Corp, to introduce the fresh food delivery service, Amazon Fresh, in September 2019. The service, which initially covered urban Tokyo, enabled consumers to purchase any products available in Life’s outlets, including grocery and freshly prepared meals and bread, via an app.

Oisix focuses on organic produce

Oisix has expanded its consumer base through the acquisitions of Daichi wo Mamoru Kai in 2017 and Radish Boya in 2018. While the company’s e-commerce operations remain small, they are growing strongly.

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