Regulatory environment, tax and customs, MoR viability, language barriers, trust-building, local partnerships, logistics expectations, customer support requirements.
Best-fit business models, verticals, readiness criteria.
Executive Summary
Welcome to the sixth edition of Nuvei’s Global Expansion Guide, focusing on high growth economies, and how merchants can plan effective market entry strategies. This year’s report series focuses on a set of countries characterized by maturity and high performance: Germany, Japan, Singapore and Spain.
In our first report, we’re analyzing Japan, one of the world’s most sophisticated digital commerce markets. Within Asia-Pacific, Japan occupies a unique position. It combines the scale of a major consumer economy with a level of digital maturity, infrastructural reliability, and regulatory stability to rival any Western market. For a merchant, this makes Japan an attractive first-entry point into APAC, offering localized growth opportunities with lower operational volatility than its regional neighbors.
By offering holistic views of the opportunities and challenges shaping these markets, we aim to equip merchants with the knowledge to make informed decisions. As we close this edition, we look ahead to the future. We’re hard at work producing our second edition of the Global Expansion Guide, focusing on a new set of regions and countries, continuing our mission to equip merchants for success, wherever they choose to do business.
At a glance
With a population of more than 123 million, a high average income, deep smartphone penetration, and world-class logistics infrastructure, Japan offers a strong foundation for digital-first business models. However, those upsides are hard-earned. Japanese consumers set exceptionally high expectations for product quality, service reliability, delivery precision, and user experience. It’s a market that has a historic preference for domestic platforms with high brand reputations – and this only raises the bar for aspirational, international merchants. Entering the Japanese market requires thoughtful localization and operational excellence to unlock its enormous revenue opportunities and strategic foothold in APAC.
Japan’s eCommerce market was recorded at an estimated USD 193.9 billion in 2024 and is projected to grow to USD 238.9 billion by 2028, significantly outpacing global GDP growth. Expected to add over USD 45 billion in new eCommerce value by 2028, Japan’s buoyant eCommerce sector is comparable to some of the world’s maturest digital retail markets including the UK, Germany and France.
Dense urban environments, high digital engagement, and strong consumer spending are a big reason for this growth. While domestic platforms remain dominant, cross-border eCommerce is accelerating, supported by growing openness among Japan’s younger consumers towards international brands and wider, cheaper product selection. Digital servicesincluding SaaS, streaming, and video gaming - already show particularly high cross-border participation, too.
Payments play a central role in Japanese consumer trust and conversions. Credit cards are the primary online payment method, supported by locally embedded deferred payment structures. Digital wallets are rapidly expanding, however, while cash-based konbini payments are a popular alternative for select demographics.
Operationally, Japan is a stable, rules-based business environment, which offers a clear roadmap to market entry, compared to developing or emerging economies. That said, these localized regulatory frameworks, a rigid language barrier, and the significance of trust in Japanese consumer relationships make local expertise invaluable.
Companies that are combining their globalized digital capabilities with deep Japanese localization across payments, logistics, UX, and customer support are seeing the best results.
Japan is a highly demanding, high-return market.
For businesses prepared to meet elevated consumer expectations and adapt to local operating realities, there is a clear pathway to durable and scalable growth in one of the world’s most advanced digital economies.
What this means for merchants
Merchants must be prepared to localize across the full customer journey to effectively enter the Japanese market.
Expect to invest in tailored user experiences, detailed product communication, Japanese-language support, and delivery operations to meet standards. The trust factor can be established quicker by forging local partnerships or phasing market entry through cross-border models like Merchant of Record, before establishing a deeper in-market presence. Offering the right payment mix is essential.
As mentioned, credit cards, local deferred payment options, digital wallets, and konbini-based cash payments each play a role in maximizing conversion and consumer confidence.
Merchants that replicate ‘home-market’ checkout experiences, without any real adaptation, will risk abandoned baskets and lost business. Localization across payment method and language, detailed interface design, top-quality customer support and reliable logistics all require consideration.
The strongest early opportunities exist in digital services, gaming, streaming, SaaS, travel, and differentiated consumer brands that can meet quality and service expectations. Pricecompetitive international marketplaces are also gaining traction with young, cost-conscious consumers seeking greater value.
In short, Japan’s market rewards commitment over novelty. Merchants that approach the market with realistic investment expectations, local operational support, and culturally attuned customer experiences can unlock one of the most valuable expansion opportunities globally.
Why Japan is a high-return expansion market
Japan combines scale, stability, and digital maturity in a way few markets can match.
01. With a population of 123.3 million and income per capita of USD 34,710, it is the second most populous advanced economy after the United States and one of the world’s most affluent consumer markets
02. GDP exceeds USD 4.3 trillion positioning Japan as the fourthlargest economy globally. These healthy fundamentals create a deep and resilient base of consumer demand 2,3
03. Digital adoption is widespread. Over 90% of households own a smartphone, and more than 80% of individuals are connected digitally 4
04. ECommerce penetration reached 72.2% in 2024 - higher than many other high-income economies including the U.S. (70%), Germany (68%) and the UK (71%) - and continues to rise 5
05. The online market generated USD 193.9 billion in 2024 and is projected to reach USD 238.9 billion by 2028, growing at a CAGR of 5.4%. This expansion significantly outpaces Japan’s broader economic growth, underlining eCommerce’s central role in the country’s future consumption patterns
Japan’s physical infrastructure and logistics networks are very advanced. Delivery reliability is among the best in the world, shaping consumer expectations for speed and precision. Japan’s high population density further is the backbone of this impressive network.
“ Tokyo and other Japanese cities offer uniquely dense urban environments, making them particularly efficient for testing new services. For instance, Amazon chose Japan as one of the first countries to roll out next-day delivery at scale.”
Japan’s economic dynamices are broadened by the pull of the “Japan” brand worldwide: since 2023, Japan has topped the Anholt-Ipsos Nation Brands Index, which has measured country perceptions since 2005, climbing steadily from fifth place in 2019.8
What this means for merchants
Jonathan Epstein Nuvei’s VP for North Asia
Japan offers access to one of the world’s largest and most digitally engaged consumer bases – but this is no plug-and-play market.
Merchants should be prepared to invest in high service standards like precise fulfilment windows and comprehensive localization across language, UX, and customer communication.Consumer trust is earned through consistency and reliability rather than aggressive discounting alone.
Beyond domestic opportunity, Japan also serves as a launchpad for broader expansion. Companies that succeed locally in Japan will already have a operational blueprint and brand credibility that can be leveraged across Asia and international markets.
Several Japanese industries including gaming, digital entertainment, consumer electronics, beauty, and fashion – features of Japanese ‘pop culture’ - are renowned, with a strong outward global reach. These industries offer a ‘built-in’ international demand and brand recognition of their own.
Urban density and logistics sophistication create favorable conditions for digital-first and direct-toconsumer models. Merchants should expect strong domestic incumbent competition. That means displaying clear differentiation through product innovation, pricing, or experience.
Market Dynamics & Growth Outlook
Post-COVID, Japan’s eCommerce market is entering a phase of steady, structurally supported growth.
Online commerce penetration reached 72.2% in 2024, reflecting widespread digital adoption and high consumer preference towards purchasing online.
Penetration Snapshot
Market volume is projected to grow from USD 193.9 billion in 2024 to USD 238.9 billion by 2028, driven by sustained consumer spending power, mobile-first engagement, and continued service innovation.
Commerce Penetration (2024)
This growth meaningfully outpaces Japan’s broader economic expansion.
Overall GDP expansion has averaged below 1% over the past decade and is expected to register 0.6% in 2026digital commerce truly is at the core of Japanese consumption. 9
A slight shift outward
Domestic transactions continue to dominate Japan’s online landscape, with only 9% (USD 17 billion) of total eCommerce volume coming via crossborder spend in 2024.
Strong local platforms, language preferences, and high trust in domestic brands have historically reinforced this balance. However, the tide is turning. Cross-border commerce is now expanding at double the rate of domestic online sales and should continue to outpace domestic spend for years to come.
By 2028, cross-border volumes are expected to reach USD 24.8 billion, accounting for roughly 10% of total online spending. However, compare this share with Germany and Spainwhere cross-border already dominates – and it’s evident that Japan remains untapped, offering clear upside for international entrants.
“
Traditionally, Japanese consumers preferred domestic brands — ‘made in Japan.’ But the younger generation is much more open to foreign products. That creates more opportunities for international merchants to enter the market,”
notes Willy Kwa, Nuvei’s APAC Regional Director
Cross-Border inconsistency
Cross-border participation is uneven across verticals, with only two standout segments showing high cross-border activity. In contrast, most physical goods categories, including retail, gaming hardware, and delivery services, remain dominated by domestic transactions. Anecdotally, Japanese shoppers cite concerns like slow delivery times, security concerns and higher shipping costs with international spending as reasons for avoiding cross-border spending. 10, 11
From flights to fashion
Looking at sector growth, online retail remains the largest eCommerce segment, representing over half of total market volume.
Travel is the second-largest segment, supported by recovering inbound tourism and rising experience-based spending.
Gaming continues to benefit from strong mobile adoption and a globally integrated content ecosystem. Ridehailing and food delivery are among the fastest-growing categories, enabled by urban density and evolving regulations. SaaS shows sustained, flatter growth as Japanese businesses continue to cautiously digitize legacy systems like back-office operations.
Overall, competition within the japanese market is intensifying. Long-established domestic marketplaces like Rakuten and platforms like Yahoo Shopping continue to lead, but international and regional challengers - particularly pricecompetitive cross-border marketplaces - are gaining share among costconscious consumers.
This is prompting broader shifts in consumer behavior, with price comparison tools and online bargainseeking becoming increasingly common.
What this means for merchants
Overall, Japan’s eCommerce outlook is characterized by stable baseline growth, burgeoning cross-border participation, and expanding digital service categories.
This will create meaningful opportunities for both domestic and international merchants that understand where demand is heading.
Consumer expectations & localization requirements
The Japanese consumer profile
We’ve examined how Japan bears all the hallmarks of a highly mature digital market: sophisticated expectations, low tolerance for friction, and a strong emphasis on trust and reliability. These characteristics are driven in a large part by a culturally unique consumer profile:
• Demands product and service quality This is considered non-negotiable. It’s a standard deeply ingrained in Japanese culture – colloquially the value is known as omotenashi – a selfless, anticipatory hospitality to others.
“ Consumers expect product quality to be toptier — with no defects and no issues. If something goes wrong, they expect immediate resolution,” explains Jonathan Epstein
“ Delivery precision is also critical. Customers often choose narrow delivery windows and expect strict adherence. In addition, returns must be fast and easy. ”
In some cases, merchants even exceed expectations by delivering ahead of schedule or including small complimentary items - reinforcing a culture of service excellence.
• Expects digital experiences There is a consumer preference for transparency and comprehensive decision-making tools. Price comparison behavior is also widespread, driven in part by the convenience of physical retail in Japan’s dense urban environments. To motivate online purchases, many merchants compete through online-exclusive offers - but trust and service quality still play a big role in consumer choice
• Prefers mobile-first behavior This is now the standard in Japan. Most browsing and transactions take place via smartphones. A merchant would need to ensure that sites and checkout flows are fully optimized for mobile usage while still accommodating Japan’s distinct design conventions. Poor localization of language, layout, or navigation is likely to be perceived as a lack of credibility.
• Displays hybrid brand loyalty
• Prioritizes social commerce
Younger generations highly engaged with social media and a growing foreign community (~3.96 million people, 3.2% of total population, with YoY growth of 10%)12 mean a rising exposure to global culture. Domestic brand loyalty is still alive and well, but these demographic changes are reinforcing a newfound openness to global commerce. Willy Kwa notes:
Social media is incredibly relevant to brand discovery and recommendation. Nearly 80% of the population engages with social media, and contentsharing platforms are deeply embedded in daily digital life, certainly on par with many western nations.13 Combined with a high proportion of singleperson households and high average time spent online per day, there are favorable conditions here for digitalfirst brand building. Provided messaging and community engagement feel locally authentic; this is an important tool in the merchant‘s arsenal.
“ Japan has many people living alone. You’ll see many cafés with single tables and chairs, for instance. People spend a lot of time online and on mobile phones, creating a strong virtual life.”
• Enjoys world-leading financial access Nearly all Japanese adults have a bank account, a world-leading rate of 98.5%, it’s well above the global average. Japan’s banking system supports multiple accounts per person, and the banking sector holds over 1.1 billion personal accounts, equaling an average of around 10 accounts per person - a function of free account maintenance and a ‘personal savings’ culture.14
“ Japan is one of the world’s largest and most affluent consumer markets. Even as the population ages, strong spending power, sizeable middle class, and technologically sophisticated consumers continue to support an increase in eCommerce demand and innovation,”
adds Willy Kwa Nuvei’s APAC Regional Director
What this means for merchants
Across all these characteristics, we can surmise that Japanese localization is not a surface-level exercise. It’s well-documented that Japan has an ageing population; the average age is 50.2 (up from 47.7 only 5 years ago), and more than 28% of Japanese people are over 65. This places Japan in third for highest average age globally – only behind the small nation of Monaco and territory of Saint Pierre and Miquelon.15
Older demographics, including Gen X, are still expected to lead consumer spending through the next decade as cross-border spending grows. This demonstrates a hybrid consumer profile, desiring international goods, while still expecting traditional “operating as local” models, even from those international brands.
Friction tolerance is low by global standards. Local language, detailed descriptions, A-grade customer support, and easy delivery or return processes are all cultural norms.
Payment landscape & checkout preferences
The country benefits from very high financial inclusion, with nearly all adults over 15 years old (98.5%) holding bank accounts and widespread ownership of both debit and credit cards. This is a mature online payments environment, with a distinct local flavor in its structure and consumer habits.
• Credit cards continue to dominate Japan’s eCommerce transactions, accounting for around 60% of online sales volume. Their prevalence is reinforced by locally embedded deferred payment schemes, which allow consumers to manage repayments through flexible structures such as two-time interest-free payments, revolving credit, or bonus-timed repayments aligned with seasonal salary bonuses. These mechanisms are familiar to Japanese consumers, remain a key driver of online purchasing comfort.
• Digital wallets are rapidly expanding their share of online payments. Wallet transaction volumes are forecast to grow at more than four times the rate of credit cards through 2028, driven by convenience, QR-code payment adoption, and aggressive loyalty and cashback programs. Today the most popular digital wallet in Japan is PayPay, which has over 70 million registered users and is operated by PayPay Corporation, a joint venture between Yahoo Japan and SoftBank.16 Alongside them, Rakuten Pay and auPAY benefit from strong brand recognition, cross-channel
acceptance, and integration into broader digital lifestyle platforms. Government initiatives promoting cashless adoption have further accelerated this shift.
• Cash-based payments maintain relevance despite a highly digitized ecosystem through Japan’s popular konbini payment networks. Consumers receive payment references and complete transactions, in cash, at well-known convenience stores such as 7-Eleven, Lawson, and FamilyMart. Given the central role convenience stores play in daily life, konbini payments are a unique component of Japan’s checkout landscape.
“ It (konbini) is not only used by older consumers. Many younger consumers use this method either because they do not have credit cards or because they prefer to keep their purchases private from their parents, ”
comments Jonathan Epstein
• Buy Now, Pay Later solutions are still a relatively small share of online payments (4% in 2026) but represent the fastest-growing payment category at a projected 13.4% CAGR through 2028. Local providers and embedded BNPL options within major platforms are expanding consumer choice, supported by culturally strong credit discipline and lower default risk in the market.
“ “The levels of risk for BNPL providers in Japan is relatively low because credit discipline in Japan is very strong. If you miss payments, there can be serious consequences, including blacklisting that affects job applications or apartment rentals, ” says Xiaoxi Zhang Nuvei’s Head of Product for APAC
What this means for merchants
For merchants, this diversity of payment behavior means that offering only international card schemes is insufficient. Successful checkout strategies in Japan require a localized mix of credit card acceptance, local deferred payment functionality, leading digital wallets, and possibly even konbini cash options.
David
Wang, Nuvei Solutions Director for APAC, quotes:
“ Although card penetration is quite strong in Japan, offering local payment methods is crucial to improve convenience and conversion. ”
17
eCommerce opportunities and consumer behavior in Japan
Retail is Japan’s largest eCommerce segment, accounting for 53% of total eCommerce volume, equivalent to USD 102.1 billion. Our research forecasts that, by 2028, the sector will generate over USD 20 billion in new value, reaching USD 122.3 billion.
Historically, Japan’s ‘e-retail’ market has been dominated by three major players:
• Rakuten – A local marketplace supported by a popular loyalty program and a comprehensive ecosystem.
• Amazon Japan – Notable for extensive cultural localization and logistics investments.
• Yahoo Shopping – Operated by Z Holdings under SoftBank.
But the sector isn’t immune from international disruption. In recent years, some fast-growing international marketplaces have gained traction among younger, price-conscious consumers. The Financial Times highlighted in May 2025 that these platforms “offer products at prices that undercut local retailers by as much as 90%.” Rising cost-of-living pressures and younger consumers’ willingness to experiment with foreign brands have accelerated this trend.
Another element of the Japanese retail sector that deserves a spotlight is the luxury resale market. Renowned globally, it’s built on a deep cultural reverence for vintage fashion. By 2028, luxury reselling in Japan is expected to generate almost USD 6 billion (5.84 B) alone. Popular items include a range of globally curated products like vintage European wines, high fashion pieces, and Swiss watches.
TRAVEL
The online travel sector is the secondlargest eCommerce category in Japan, representing 12% of total eCommerce.
Leading local OTAs such as Rakuten Travel and Jalan.net compete with global platforms like Booking.com, leveraging Japan’s growing inbound and outbound tourism. This segment is expected to grow at a rate of 6% CAGR from 2024 to 2028.
GAMING
Gaming accounts for 9% of eCommerce (USD 5.7 billion), with strong contributions from mobile gaming.
Japan’s gaming market is globally integrated and world-renowned – featuring the likes of Squarenix, CapCom and Nintendo -, with participation from domestic, Korean, and international companies.
RIDE-HAILING & FOOD DELIVERY
Projected to increase market share from 5% to 7%, growing at a CAGR of 12.1% between 2024 and 2028 – this is one of the fastest growing segments.
Japan’s largest ride-hailing service is the GO app, with Uber and DiDi also operating in the market. Regulatory changes in 2024 now allow limited private vehicle utilization, supporting expansion beyond major urban centers. Key food delivery players include Uber Eats, Demae-can, and Menu.
SOFTWARE-AS-A-SERVICE (SAAS)
SaaS adoption is one of the most sluggish in growth terms, expected to remain flat in terms of its eCommerce share by 2028.
Growth, where available, will be driven by domestic businesses needing to modernize with cloud-based solutions, flexible subscription models, and digitalization of operations.
Consumer behavior
Research from Rakuten showed that Japanese consumers are more likely to use price comparison tools than shoppers in the U.S. - and with good reason.19 45% of online products priced cheaper in Japan than within physical retailers (compared with only 22% of goods in the U.S.).20
Willy Kwa explains: “ Over the past 20 years, Japan experienced economic stagnation and household income hasn’t grown much. Now, many consumers are looking for lower-cost alternatives, and some international marketplaces help them meet that demand.”
The most popular eCommerce platforms are typically data-rich, with mobile optimization crucial since most browsing and transactions occur on smartphones. A younger generation coming of age, and roughly ~4 million foreigners, are increasingly drawn to international products offering variety, affordability, or unique design.
The high awareness of international products in Japan likely stems in some part from high rates of social media engagement. Nearly 90% of the population actively uses apps like LINE, YouTube, X, Meta, and Instagram. They play a central role in product discovery and recommendations.
Coupled with the fact that around one in three households consists of a single person, many Japanese consumers spend a lot of time online and often prefer a mobile-friendly shopping experience as a result.
Go-to-market & operating considerations
Japan offers a stable, transparent, rules-based environment for international business. It consistently ranks highly in global benchmarks for regulatory quality and investor protection, providing foreign companies with confidence in the predictability of commercial operations.
Japan’s headline corporate tax rate is 23.2% (moderate to high by global standards), but the effective statutory corporate tax rate ranges from approximately 31–35%, depending on company size. This can include local corporate tax, enterprise tax, inhabitants’ tax, and special corporate levies.21
For a merchant, Japan’s market might feel like two very different sides of a coin. There’s plenty of documentation around GTM standards and taxation in Japan, but market entry includes acclimatizing to all these complex frameworks and cultural norms.
ACT ON REGULATION OF TRANSMISSION OF SPECIFIED ELECTRONIC MAIL (ARTSEM)
Regulates commercial email and spam prevention. Ongoing / Periodic – Interpretative Guidelines by Government Authorities (e.g., METI). Supplement statutes with detailed guidance, updated periodically.
ACT ON SPECIAL PROVISIONS TO THE CIVIL CODE
Concerning Electronic Consumer Contracts and Electronic Acceptance Notice. Provides rules for electronic contracts and consumer acceptance.
ACT ON THE PROTECTION OF PERSONAL INFORMATION (APPI)
Sets standards for handling personal data; amended 2017 and 2022 for stricter privacy rules.
ACT ON ELECTRONIC SIGNATURES AND CERTIFICATION SERVICES
Legalizes electronic signatures and certification services.
ACT ON SPECIFIED COMMERCIAL TRANSACTIONS (ASCT)
Governs commercial transactions, including online and distance selling.
UNFAIR COMPETITION PREVENTION ACT
Protects businesses from unfair practices and misuse of trade secrets.
BUSINESS
Regulates telecom services, including electronic communications infrastructure.
Establishes fundamental
REGULATION
Law around digital commerce in Japan is well established but complicated, covering everything from electronic contracts to commercial transactions and digital communications. These laws are supported by interpretative guidelines issued by government authorities such as the Ministry of Economy, Trade, and Industry (METI), which are periodically revised.
While foreign companies are generally not required to establish a local legal entity to sell into Japan, certain regulated sectors do require local licensing or representation. For many international merchants, a cross-border entry supported by a Merchant of Record model provides a practical way to launch operations while managing compliance obligations efficiently.
“ Regulatory ambiguity is a challenge,” notes Jonathan Epstein
“ Rules are not always clearly written, and companies may only discover where the boundaries lie after enforcement actions occurmaking the support of local experts crucial.”
IMPORTS & CUSTOMS
Taxation and customs procedures are clearly defined. Imported goods sold through eCommerce are subject to consumption tax and customs duties based on product classification and declared value.
Simplified tariff schemes apply to lower-value shipments valued below JPY 200,000 (around USD 1,300, and de minimis thresholds of JPY 10,000 (approximately USD 70) to reduce friction for small personal imports.
Merchants selling physical goods in Japan must also comply with product safety, quality, and labeling regulations, particularly in sensitive categories such as food, cosmetics, and personal care.
LANGUAGE AND CULTURAL BARRIERS
Some Japanese consumers will typically only engage with nativelanguage communications. 28% of Japan is over 65 years old, where we see more demand for this level of hyper-localized services.22 Many foreign companies therefore pursue partnerships with local logistics, marketing, or service providers to accelerate credibility and reduce reputational or operational risk.
“ In some cases, building trust requires a local team, which means high upfront costs. Once trust is established, however, Japanese consumers are loyal—and they have a strong spending power,” says Xiaoxi Zhang.
Japan’s delivery infrastructure is exceptionally reliable, and consumers expect precise delivery windows, realtime communication, and frictionless returns. Local warehousing, specialized cross-border logistics partners, or established marketplace ecosystems can aid in hitting these tight logistical windows.
TRUST
Building and maintaining trust is a defining element of commercial strategy in Japan. ‘Trust’ is conceptual, and hard to measure, but the dominance of domestic purchasing hints at a sustained pattern of familiarity equaling long-term loyalty in Japan. However, hospitality, Quick service restaurants and retail brands like 7-Eleven, KFC, Louis Vuitton, Apple, Disney and L’Oreal have all demonstrated effective localization strategies. Successful integration tactics have included:
• Reducing portion sizes to suit Japanese tastes
• Adjusting store layouts
• Offering Japanese-language support
• Running culturally inspired seasonal campaigns
• Tweaking beauty product formulas for regional skin types
“ This is an excellent place for companies to test new products and services, as well as develop a strong, differentiated voice that can later scale across Asia and globally,” says Jonathan Epstein, Nuvei’s VP for North Asia.
AI ADOPTION
AI adoption among Japanese businesses has been more cautious than most. Less than half of Japanese businesses committed to using AI in future, compared to over 80% of Chinese and 68% of US businesses, according to a recently published government white paper.23 The longer adoption curve does seem to finally be trending upwards. With the rollout of products like Rakuten AI more SMEs are able to access AI-powered tooling.24 A GMO Research and AI survey into Japanese businesses noted that at least two thirds of respondents were hoping to expand AI adoption.25
Capabilities like AI-driven personalization, automated customer service, and data-led merchandising, services that enhance customer experience and operational efficiency, have far more market fit in Japan today than they did only a few years ago. Merchants able to deploy these technologies responsibly and transparently can certainly gain early competitive advantages.
If a merchant can demonstrate reliable operations, sensitive communications, and dependable customer experiences, they are far better positioned to overcome initial entry barriers and sustain their market presence.
Who is Japan ideal for?
Japan offers compelling opportunities for international expansion, but it is not a universal fit for every business model.
DIGITAL SERVICES AND INTANGIBLE PRODUCTS
SaaS providers, cloudbased software platforms, streaming services, and digital content companies present some of the strongest early entry opportunities. They already demonstrate high crossborder participation in Japan’s online economy. These categories benefit from minimal physical logistics requirements, established consumer familiarity with international platforms, and growing demand for subscriptionbased access to advanced technologies and entertainment.
SELECT CONSUMER GOODS BRANDS
Foreign brands are making tracks in beauty, fashion, lifestyle, electronics, and specialty retail. They are judged by reliable fulfillment, detailed product advertising, customer service, and compliance with local quality and labeling standards.
GAMING AND DIGITAL ENTERTAINMENT
Japan is less suitable for merchants unwilling or unable to localize deeply. Low-touch commodity sellers, brands with limited customer service capabilities, or those offering more generic checkout experiences are likely to struggle to compete in Japan where trust, transparency, and service excellence drive loyalty.
TRAVEL AND EXPERIENCE-BASED PLATFORMS
Japan’s gaming market is large, globally integrated, and highly engaged, with strong mobile adoption and openness to international content. Businesses offering differentiated content, seamless in-app payment experiences, and localized community engagement can scale effectively.
Rising inbound tourism, recovering outbound travel, and growing preference for online booking alternatives, support continued sector expansion. International brands that offer localized booking flows, Japaneselanguage support, and trusted payment options can compete effectively alongside established domestic platforms.
PRICE-COMPETITIVE INTERNATIONAL MARKETPLACES
In a nation with more cost-conscious consumers seeking greater value and variety, this has created opportunities for platforms that can combine competitive pricing with trustworthy delivery, transparent communication, and localized support.
Conclusion
Japan presents a compelling study in balance: a market shaped by deep-rooted customer expectations and tradition, steadily integrating modern payment technologies and digital innovation. It is mature, highly competitive, and data-driven. Growth may be less dramatic than in emerging economies, but the increased predictability of Japan’s business infrastructure is supported by clear regulatory frameworks and wellestablished commercial norms.
For merchants able to meet the standards of the Japanese consumer, the opportunity is clear and obvious. Japan remains one of the most strategically important expansion markets in APAC.
Cross-border digital services, gaming, travel, SaaS, and differentiated consumer brands are gaining traction. Payment innovation, mobilefirst engagement, and evolving platform ecosystems are shaping how consumers discover, evaluate, and transact with international businesses.
The bar for entry is high operationally, regulatorily, and culturally. Japan is not a market for rapid experimentation without localization; it’s one that responds to careful planning and disciplined execution.
As global commerce becomes increasingly interconnected, Japan is powerful but complex place to do business in. For merchants willing to approach expansion thoughtfully and meet its exacting standards, the returns can be both meaningful and sustainable.
Nuvei’s role is to support that journey for merchants, regardless of which markets they’re expanding in or from.
Since 2003, Nuvei has been empowering merchants to unlock new business models and accelerate revenue through a localized payment approach on a global scale. One intelligent infrastructure, built for scale and flexibility, so that merchants can conduct business locally – in Japan and everywhere else.
Methodology and approach
To develop the data and analysis on each market in the PCMI eCommerce Datapack, PCMI first compiles all publicly available data from official sources, including central banks, banking authorities, company financial reports, chambers of commerce, eCommerce associations, fintech associations, local press, market reports and government statistics, as well as data from the World Bank and affiliated international organizations.
The PCMI team analyzes the data with a critical approach, identifying the holes, errors, and inconsistencies in this data to prepare it for primary research. Then, PCMI conducts interviews with local eCommerce industry stakeholders to clarify, deepen, and streamline data collected via secondary research.
In the 2024 creation of this dataset, PCMI interviewed over 80 eCommerce executives including banks, acquirers, payment gateways, payment service providers, merchants, and consultants. Finally, PCMI conducts a rigorous analysis of the primary and secondary results, leveraging the perspective of our historical data collected since we first began building this dataset in 2015, to arrive at the final results.
The methodology takes a top-down approach, utilizing macro industry data and the perspective of industry
aggregators (i.e. acquirers, PSPs) rather than a bottom-up approach, based on consumer surveys.
To the extent possible, the dataset is built using real, official numbers, such as official credit and debit card volumes, bank transfers and other official reporting of payment methods. Primary research combined with institutional knowledge are combined to make the needed estimations and assumptions to arrive at all breakdowns in the dataset. Projections are calculated based on the opinion of industry stakeholders and accounts for factors such as inflation, GDP growth and regulation.
PCMI avoids making projections based on the launch of new products or features, due to the unpredictable
How do we define eCommerce?
In this data set, our eCommerce analysis covers all online purchases of goods and services, regardless of the device or payment method used.
Our analysis includes:
• Purchases made by local citizens using all locally-issued payment methods
• Cross-border purchases made with locally issued payment methods
• B2C and B2B purchases that move through an eCommerce checkout
• All product and service verticals, including travel, retail, and digital goods and services
Retail is defined as: All physical products purchased directly from the merchant or marketplace.
Travel is defined as: Travel services including airline tickets, car rentals, tour packages, hotels and AirBnB stays.
Ride hailing and delivery is defined as: Digital services that include services including ride-hailing and delivery apps.
Online gaming is defined as: Spend on online games or in-game purchases, which can be played via mobile, desktop, or a dedicated console. This does not include sports betting, online gambling or games of chance.
Online streaming is defined as: Video and music streaming, typically purchased as a subscription.
Other is defined as: Additional digital goods and services including sports betting and online gambling, online education, digital downloads, mobile top-ups, and recurring purchases such as monthly bills, insurance payments, school tuition payments, home ownership association fees, parking, taxes and government licenses and fees if they are paid online over an eCommerce gateway.
These expenses are not included if they are paid online via online banking or direct debit from a check or savings account.
Recurring payments to a credit or debit card are included, as are one-time payments over an online ACH portal such as Botón PSE in Colombia.
SaaS is defined as: The purchase of software delivery accessed via cloud services, rather than through the installation of said software on a computer or other device. Our data includes SaaS purchases made via an online website/checkout process, including subscription and recurring payment models, i.e. Microsoft Office, Slack, Hubspot, Canva, Dropbox, etc. These may be used for both consumer and business purposes and both are captured in our data.
We do not include SaaS purchases that are not made through an official online checkout, such as invoice payments via online banking or wire transfer.
All locally issued payment methods including:
• Locally issued credit and debit cards, online bank transfers, cash payment platforms such as Oxxo in Mexico or Fawry in Egypt, digital wallets such as PayPal, MercadoPago, ApplePay, cash on delivery, and other miscellaneous payment methods
Please note the following definitions:
Cash Payment is defined as:
A payment platform that enables a shopper to make an online order, receive a bar code or unique PIN and use that bar code or PIN to make the payment in cash at an affiliated retail location. Such platforms often allow payment using an online bank transfer. Examples include Oxxo in Mexico and PagoFácil in Argentina.
Digital wallet:
PCMI defines a digital wallet as a payment method that stores any funding source on file, including a credit card, debit card, bank account, or stored balance, and uses that funding source to remit payment.
eCommerce volume falls into the digital wallet category if the wallet brand is selected at checkout, even if a different funding source (such as a credit card) is ultimately selected as the funding source. Examples include staged wallets such as PayPal, TigoMoney and MercadoPago.
Please note: Tokenized card wallets, or passthrough wallets, such as ApplePay, are included under credit and debit card volume.
Bank Transfers:
When applicable, PCMI names the specific bank transfer scheme, such as UPI or Pix. If the bank transfer scheme is selected at checkout, this volume is classified as the bank transfer scheme, not the bank or digital wallet ultimately used to execute the payment.
BNPL:
is defined as a payment button offered by a BNPL fintech that enables the shopper to finance the purchase at the time of checkout, with multiple payment methods, including credit cards, debit cards, bank transfers or cash. BNPL offerings that take place within a wallet ecosystem (such as MercadoCrédito) are not considered here.
Hybrid payment methods:
Payment methods that group several of these payment methods under one brand are specified by their name, i.e. PagoEfectivo, Fawry.
Our analysis excludes:
• Payments made by international visitors with internationally issued payment methods
• P2P payments
• Sales made over social media and paid for in cash or using an A2A payment solution
• In South Africa, InstantEFT is considered within bank transfer payment methods OZOW and Stitch
• Unless otherwise stated, all currency is expressed in US dollars
Country specific notes
• Please note that numbers contained in figures and tables may not add due to rounding
