Japanese Home Electronics EC Site Trends


The Ministry of Economy, Trade, and Industry conducted an EC market research report called “International Economic Research Project for Building an Integrated Domestic and Foreign Economic Growth Strategy in the Fiscal Year 2022 (Market Research on Electronic Commerce)”. According to this report, the EC market size in Japan for goods sales to individual consumers exceeded 10 trillion yen as of 2019. This represents a growth of approximately 1.5 times over the past five years.

Taking a look at the EC rate in Japan’s consumer market, it has continued to grow by around 0.5% every year for the past 10 years, reaching 6.76% by 2019. The EC conversion rate in the personal consumption sector exceeded 10% in the U.S. and 35% in China. While in Japan, there is still a lot of room for their e-commerce to grow.

The coronavirus pandemic has caused a relative decline in sales at physical stores which has increased the importance of e-commerce sites.
Even in the consumer electronics industry, the impact of the widespread use of e-commerce and the coronavirus pandemic has been very significant.

First, there has been an increase in consumption due to the pandemic, which has been a tailwind for the home electronics market as a whole. Yamada Denki, the largest home electronics retailer, reported a 75.2% increase in recurring profit in its interim results for the fiscal year ending March 31, 2021. This applies to most other major consumer electronics retailers who also posted large increases in profits.

However, there were some major consumer electronics retailers where the coronavirus created a struggle. For example, many of the consumer electronics retailers in urban areas struggled since the people avoid going out to do their shopping as well as an increase in working from home that reduced stopping to shop on the way home from work. Some urban electronics retailers, such as Yamada Denki in Shinjuku and Bic Camera in Ikebukuro, began to close their doors.

As a result, the ratio of suburban stores and e-commerce sites has increased in the sales of home appliance mass retailers. The main target of suburban stores are families who come to shop by car from home.

Since family units can avoid other people and crowded public transportation, shopping at suburban stores has not decreased.

In addition to this, since consumer electronics have a high EC conversion rate, it is expected that EC in the home appliances field will become more widespread due to changes in demand and purchasing behavior caused by the coronavirus.

Market Size and Market trends of Consumer Electronics EC sites

From Ministry of Economy, Trade and Industry “International Economic Research Project (Market Research on Electronic Commerce) Report on the Construction of Economic Growth Strategy for Internal and External Economy in the First Year of the Ordinance” p.52

According to marketing research company GfK, the market size of the home appliance retail industry in Japan is about 7.8 trillion yen. Among them, the EC conversion rate as of 2019 is 32.75%, which is nearly five times the average 6.67% of consumer EC conversion rate. Home appliances are a product that goes well with EC sites.

Home appliances are often nominated and purchased by their model number or product name. It is also an easy genre to search for when looking for appliances with the same functions by comparing specifications in the catalogs. And since they are mass-produced products, the quality does not change no matter where you buy them.

In addition to this, there is no difference in the time it takes for a product to reach you whether you buy it at a physical store or an EC site since large items must be delivered even if you see and purchase the product at a physical store. These are the main reason why home appliances are increasingly being purchased on EC sites, and the EC conversion rate is increasing.

So, let’s take a look at the market trends focused on EC from the overall market of the home appliance industry.

Overall Market for the Consumer Electronics Industry

Currently, the domestic market size of the consumer electronics retail industry in Japan is about 7 to 8 trillion yen. While this is a large market, it is smaller than the food market of nearly 80 trillion yen and the apparel market of fewer than 10 trillion yen. It is also more susceptible to recession than daily necessities such as food and clothing.

The projections of the domestic consumer electronics market future are not necessarily bright. For the medium to long term, there is a shrinking market size due to the decline in Japan’s population. So, it is expected there will be an increase in single-person households, which will result in the downsizing of necessary home appliances and lower unit prices.

The fact that necessary home appliances are widespread to some extent also creates the expectation that the market will not grow significantly. Furthermore, the unit price of home appliances that have become commoditized, such as TVs and PCs, will decline.

Some home appliances have lost demand due to the spread of smartphones, so some offer a variety of functions in a single device. Such video and audio equipment has been replaced by smartphones, and demand is shrinking.

However, there is a replacement demand for home appliances at the end of their useful life. As well as an increase in dual-income households that increased the popularity of household appliances that encourage shorter work hours. Automatic cookers, robot vacuum cleaners, and dishwashers are gaining in popularity. The rapid decline in market size will not occur as replacement demand supports the market size and new demand is created in place of obsolete genres.

For several years, companies developed their consumer electronics mass retailers to increase their presence in suburban areas. One reason for this is the demand for consumer electronics products among urban workers. They are the main target of urban stores, but this has slowed down and sales have stagnated. In particular, demand for information appliances such as PCs is said to have declined. Another factor is a purchasing behavior known as “showrooming” where customers can look at products at physical stores while returning from work or going out and then place orders on the EC site after returning home. In contrast, the main target of suburban stores is the family unit suburban stores have tended to increase in number to attract families who come to shop with their families on weekends.

This trend has increased since the pandemic. More and more people avoid going shopping in urban areas or have been working remotely, and so urban stores have seen even fewer customers. The lack of any foreign visitors has also been a driving factor.

Compared to urban areas, the number of visitors to suburban stores, where you can go shopping from your home by private car, is still small. More time spent at home has stimulated so-called nesting consumption, which has also helped the consumer electronics industry.

Along with the shift of the trend of actual stores from urban areas to suburbs, the utilization of EC sites is also a concern of the home appliance industry. This is because home appliances that are compatible with e-commerce are very important channels for showrooming and shopping only with e-commerce.

About the EC market in the Consumer Electronics Industry

As of 2019, the consumer electronics industry’s EC market size was approximately 1.8 trillion yen. The EC conversion rate was 32.75%, which is very high compared to the EC conversion rate of 6.76% for the overall consumer market. Of the major industrial fields, only two have a higher EC rate than home appliances.

Office supplies and stationery (41.75%) and books, video, and music software (34.18%). Similar to consumer electronics, these are also fields that are highly compatible with EC. However, in terms of market size, office supplies and stationery (approximately 220 billion yen) and books, video, and music software (approximately 1.3 trillion yen) are not as large as the consumer electronics industry.

There are three areas where the market size is as large as that of the consumer electronics industry: apparel (1.9 trillion yen), food (1.8 trillion yen), and furniture and interior (1.7 trillion yen). The EC conversion rates for these industries are relatively high for furniture/interiors (23.32%) and apparel (13.87%), but not as high as in the consumer electronics industry. Food, at 2.89%, has a lower than average EC conversion rate. It can be said that the consumer electronics industry is an advanced field in the use of EC.

This trend is even more advanced in the coronavirus. The reason for this is that people refrained from going out and spent more time at home, which encouraged consumers to make home time more comfortable.

Demand has increased not only for general household appliances but for cooking appliances as well. People have shifted to eat out less, as well as increase the use of audio-visual appliances and more usage doing remote work via laptops or PCs.

It is expected that many of the special benefits provided by the government were also used for home appliances, as a large sum of 100,000 yen per person was provided, which led to an increase in the purchase of relatively expensive home appliances.

As a result of these factors, consumer electronics retailers have generally performed well in the pandemic.

Sales Ranking of Consumer Electronics E-Commerce Sites

According to the “Internet Sales White Paper,” a study by Monthly Internet Sales, the ranking of sales in the consumer electronics industry by mail order in 2020 is as follows.

  • No. 1: Yodobashi Camera (~138 billion yen)
  • No. 2: Bic Camera (~108 billion yen)
  • No. 3: Japanet Takata (~58 billion yen)
  • No. 4: Joshin Electric (~57 billion yen)
  • No. 5: Yamada Denki (~45 billion yen)

Although the ranking of sales is limited to e-commerce sites and mail-order sales, companies that have many actual electronics retail stores and companies that have developed composite businesses, such as TV shopping, are also included in the ranking.

Features for Consumer Electronics EC Sites

Home appliances are called model number products. These are so-called mass-produced products that have a JAN code, product number, or other code set by the manufacturer that indicates the product. In many cases, the product name is well known and can be found without a doubt by searching by the model number.

For this reason, it can be said that these products are a good match for e-commerce sites. However, this is a field where competition is also likely to increase.

The same product is sold on many e-commerce sites by many companies. In most cases, users look at multiple e-commerce sites for the same product, compare them in terms of cost, delivery time, etc, and then make a purchase.

Since users browse many e-commerce sites, if the site’s structure or operability is difficult to understand, or if the page display speed is slow, the user may leave the site. It is also necessary to enhance the extra features that push people to make a purchase decision.

Let’s take a look at the features of consumer electronics e-commerce sites.

Differentiation Points to be Tackled on Consumer Electronics EC Sites

The consumer electronics industry has the advantage of compatibility because products are easy to buy on e-commerce sites, but it also has the disadvantage of price competition because products are the same no matter which e-commerce site you buy them from.

Users tend to compare multiple EC sites for each purchase of consumer electronics products, and then purchase at the EC site that best suits the price and circumstances at the time. Therefore, even if a customer purchases a product once on your e-commerce site, it does not necessarily mean that he or she will purchase it again the next time.

As long as the same product is sold, it is necessary to have an element that allows you to select your own EC site even for parts other than the product and to devise for that.

Summary Consumer Electronics EC Sites

We have looked at EC in the consumer electronics industry. This industry has been progressing relatively quickly. With a large market, consumers are accustomed to purchasing home appliances through e-commerce sites. With the additional life change with the coronavirus, the consumer electronics EC market is expected to expand further.

Most of the top-ranked home appliance e-commerce websites are well-known companies that also have a wide range of physical stores. However, the order is not proportional to the total sales of the company including actual stores. In other words, even if there are only a few physical stores, there are several companies that are adapting to the EC field and increasing sales.

Each of these successful e-commerce sites has its characteristics and strengths. To increase sales in consumer electronics e-commerce, it is necessary to brand the e-commerce site based on its unique strengths. Yodobashi Camera has increased its sales by targeting people who are used to shopping at e-commerce sites in general. Bic Camera has attracted beginners by making their site easy to search for products, even with their large selection of products. Japanet Takata, on the other hand, has succeeded by narrowing down the number of products and increasing the information on each of them.

Although consumer electronics is a product category that is well suited to e-commerce, it is also a field where competition is fierce because it is a mass-produced product. Without the above characteristics, the industry is prone to simple price competition. It is necessary to position your EC site, set policies, and operate strategically.