With the Japanese government urging consumers and businesses to step up their efforts to contain the COVID-19 pandemic, shoppers might finally have no excuse but to embrace e-commerce and wean themselves from bricks-and-mortar stores.
Japanese Prime Minister Shinzo Abe on Tuesday declared a state of emergency in Tokyo and six other areas. In response, Uniqlo owner Fast Retailing Co, department store operator Isetan Mitsukoshi Holdings Ltd and other retailers have temporarily closed shops or cut hours, while grocers and other essential services remain open.
Online shopping got a boost in the US, China and the rest of the world as more people turned to the Web to buy essentials, and to shop for clothes, gadgets and other discretionary items.
In Japan, it has been a different story — the archipelago has so far avoided the severe shutdowns that have crippled other nations and e-commerce penetration has long been among the lowest of developed markets.
Only 7 percent of transactions were online in 2018, government data showed.
“There could be first-time users during this time who see the merits of e-commerce,” Nomura Research Institute researcher Takeshi Mori said. “After the coronavirus outbreak calms down, more people will be online in Japan.”
That would be welcome news for the Japanese government, which has been promoting cashless payments and pushing businesses to embrace new retailing technology. More demand for Web shopping could also nudge traditional retailers to invest in digital infrastructure to attract customers.
Japan’s online shopping rate lags well behind the US and even more so compared with China, where a fifth of retailing is online.
One early convert is Shun Iwata, 51, who before the outbreak used to eat out during the week and shop in stores. Concerns over privacy also kept him away from online shops. Now, he considers it an essential service and signed up for an Amazon.com Inc account a month ago.
He initially sought to buy masks and disinfectant because stores were sold out, but now browses for knickknacks, including a hard-to-find case for his car keys.
“There’s a lot of things you can get online that you can’t find in the stores,” Iwata said.
Japanese e-commerce company Rakuten Inc said that its online marketplace sales this year are higher than they were last year.
A company spokeswoman declined to provide figures, but said daily essentials were selling well.
A spokeswoman for Amazon, which has been in Japan for two decades, declined to comment.
“There’s a big chance for e-commerce right now,” Fast Retailing chief financial officer Takeshi Okazaki said at the company’s earnings conference earlier this week. “We haven’t seen any declines in e-commerce demand, and we’re having trouble keeping up with with shipping and logistics.”
Even so, rising digital sales are not likely to make up for lost brick-and-mortar sales, not to mention the chilling effect the economic downturn is having on consumption.
Most large retailers have said they are bracing for hard times ahead.
Tokyo Governor Yuriko Koike yesterday requested that all non-essential shopping facilities close to slow the spread of the coronavirus and offered up to ￥1 million (US$9,220) to support businesses that shut multiple outlets.
Seven & i Holdings Co chief executive Ryuichi Isaka said that the convenience store operator is considering new services, such as a system that would shorten shopping times in stores.
“Consumers will change their shopping behavior,” Isaka said in an earnings call.
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