ECOMMERCE DEVELOPMENT IN JAPAN Catherine Vairappan Teuta Cata

E-COMMERCE DEVELOPMENT IN JAPAN Catherine Vairappan, Teuta Cata, and Toru Sakaguchi Northern Kentucky University

INTRODUCTION E-Commerce: early developments were made in the U. S Japan: The Internet-related industry: one of the fastest growing in Japanese is the third most used language Still the second largest purchasing power in the world The e-commerce development in Japan has lagged behind the US (Sakaguchi, 2001)

PURPOSE It has been more than five years since the above-mentioned research The purpose of this research is to examine the current situation of Japanese e-commerce and see if any interesting developments have been made in this area.

BACKGROUND B 2 C E-Commerce in Japan Slow growth in the late 1990’s Figure 1: E 2 C e-Commerce Market in Japan (Source: METI, et al. , Survey on Actual Condition and Market Size of Electronic Commerce for 2004)

B 2 C E-Commerce in Japan slow penetration of PCs slow penetration of credit cards slow economy?

Figure 2: Reasons for not using the Internet for private purposes (multiple replies possible) (Source: “The 7 th Internet active user survey, ” MIAC, 1999)

Government Support for E-Commerce in Japan IT Basic Bill (passed Sep. 2000) eased regulations on the Internet set up rules to expand electronic commerce made Internet access more affordable Electronic Commerce Promotion Council of Japan (2000) Promoting the use of information technology through the creation of a broadband network infrastructure, ecommerce promotion and the protection of private information

NEW FORMS OF E-COMMERCE DEVELOPMENT IN JAPAN Mobile Devices and M-Commerce Convenience Stores

Mobile Devices 4 million (or 20%) people online use their mobile phones in Japan (JETRO, 2000) i-mode service from NTT Do. Co. Mo a digital packet based mobile phone with Internet access

M-Commerce Entertainment Ringer music tones “Music Tone Full” Screen Pictures Games Reservation Travel Event Tickets

New Platform for B 2 C Commerce - Convenience Stores Kiosks in the store Shop online Receive merchandize at the store Pay at the store Solve major problems in Japan Credit Card Delivery

Other New Notable Developments Web. Nation-CRM e-commerce with database information on CDs, DVDs, etc. Kimonoichiba 19 -hybrid communication (web and human) Convenience store chains and “eretsu” -- e-commerce is just one of the channels

CONCLUSION Japan was late in developing ecommerce businesses Business model developed in the US, PC and credit card transaction did not fit to the Japanese culture Mobile devices and convenience stores were the answers in order to advance in this new arena

Future Studies Emerging business model – e-retsu Other advanced M-commerce countries, e. g. , Asia, Northern Europe New technology for m-commerce, e. g. QR code (2 -dimensional bar code)