TOKYO: Ecommerce sales are set to rise rapidly in Japan over the next few years, but most bricks-and-mortar retailers are poorly positioned to benefit from this trend, McKinsey has argued.
The consultancy stated that internet retail revenues reached $46bn in 2011, and will grow by 7% a year to $62bn by 2015. A similar McKinsey study from 2010 had forecast this latter total to reach $56bn.
Amazon and Rakuten, the two pre-eminent players in this sector, have seen their share expand from 32% two years ago to 40% at present, a figure which "could hit 50% soon," the report added.
During the same period, the proportion of Japanese consumers who shop online ten or more times annually has increased from 37% to 49%.
More specifically, 76% of shoppers who make purchases on the web regularly visit Rakuten, and 62% access Amazon, according to the analysis.
Yahoo is the third most popular retail site, having developed a shopping platform in addition to its search engine and content-based portal. Japanet Takata, the direct sales firm, was fourth.
Completing the top ten sites were run by Senshukai, a catalogue retailer, Start Today, an apparel specialist, Nissen, the mail order company, Joshin Denki, the discounter, Dell, the IT group, and Stream, the electronics expert.
McKinsey suggested a noteworthy feature of the rankings was that only Joshin Denki among the leading digital vendors is a major brick-and-mortar operator.
By contrast, seven of the ten largest ecommerce services in the US belong to retailers with large store networks, including Walmart, Best Buy, Office Max, Sears and Staples.
"Japanese bricks-and-mortar players have been reluctant to invest too much online, largely because they generally enjoy privileged positions in their traditional space," the study said.
Yamada Denki, Yodabashi Camera and Bic Camera, the three biggest offline consumer electronics chains, thus generate less than 10% of sales from the web, versus 24% for their US counterparts.
Electronics, apparel, books and software are the top three internet retail segments in Japan, but the main opportunities may exist elsewhere.
"Catching up with Rakuten and Amazon Japan is a stretch; there is little reason to believe they are about to falter," McKinsey said.
"Still, there are some areas of particular promise, such as online groceries and skincare/cosmetics. These online categories are smaller than the top three ... but are growing faster."
Data sourced from McKinsey; additional content by Warc staff