TOKYO: Despite the luxury sector’s traditional reluctance to embrace direct-to-customer ecommerce solutions for sales, two mature luxury markets have shown a particular divergence as just 73% of brands in Japan have adopted, compared to 90% of the same brands in the US.

This is according to L2’s Luxury Japan report, published yesterday, which found that the same set of brands’ adoption of ecommerce has been uneven across mature markets.

Furthermore, the report finds that brands in the watches and jewellery category are particularly hesitant in the Japanese market, with only 57% selling goods on their Japanese websites.

Brands offering DTC ecommerce platforms in the US but not in Japan include Hugo Boss, Ralph Lauren, Tod’s, and Chanel. As a result of the ecommerce void, L2 said, international pure e-tailers are entering the arena.

Dedicated luxury retailers are, therefore, enjoying financial and commercial prominence as a one-stop shop. Earlier this month, Reebonz, a Singapore-based online luxury retailer began a funding round seeking $150 million to fund expansion into East Asia.

“Luxury is a growing market and Reebonz doesn’t have many competitors,” said Ajay Sunder, vice president of digital transformation at Frost & Sullivan in Singapore. “They are the first portal people in cities like Singapore go to for luxury.”

Despite currency fluctuations that have affected the luxury category’s growth rate, Japanese customers remain powerful. Japan accounts for 11% of global luxury spend, making it the second largest luxury market by country.

As a mature market with decreasing tourist spending, domestic shoppers are central to any luxury brand’s strategy. To connect with local consumers, brands have been increasing investment in localised social media, including the popular East Asian messaging app LINE.

A partial explanation for the stalled adoption of DTC sales is the ongoing popularity of brick and mortar stores in Japan, taking up 88% of all fashion sales and 98% of all watch sales. This focus is reflected also in website functionality, as 97% of brands’ Japanese websites have store locators, less than one fifth allow shoppers to buy online and pick up in store.

“Virtually all luxury brands have a formidable presence in Japan,” according to Luxury Goods in Japan, a 2013 report by McKinsey & Company. “Japanese consumers remain some of the most discerning, loyal and important luxury customers in the world."

Data sourced from L2, Bloomberg; additional content by WARC staff