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5.24.2014

Same Day Delivery Now Cost of Doing Online Business in Japan

Japan is a small country - only 1/25 the land mass of the US of which only 28% is arable, which results in a high concentration of population that creates mega metropolises like Tokyo and Osaka, so even B2C delivery is not as geographically challenging as in the US, but that only means that consumers are willing to pay less - or nothing for same day delivery. And if one cannot offer it, then you may not even make it on the playing field here.

 It has been a while since amazon.co.jp offered same day delivery of goods in their warehouse where we could order by 11 am and receive the items at 17:00 the same day. To realize this, they have built their own warehouse network throughout Japan, and hold Sagawa and Japan Post to contracts that guarantee delivery times.

Image from NHK broadcast on 19 February 2013

Stationery specialists Askul is thus named because the goods come "kuru" tomorrow "asu." Askul's consumer services site (Askul is for businesses) LOHACO, a jointly operated business with Yahoo Japan, has commenced same day delivery as well, and now enjoys three peaks in the course of the day for transactions - once during the traditional online retailer peak of late evening; once between 7 am and 10 am - deadline for same day delivery; and early evening when commuters shop on trains via smartphones. 55% of their customer base is women, many who work full or part time. This is unusual as most "general store" type malls have a higher ratio of male clientele. They now enjoy a turnover of 1 billion yen a month (just under USD 10 million).

Yodobashi Camera (who actually sells a lot more than cameras these days) offers free delivery, but if one is willing to pay a premium, delivery as fast as three hours from time of order is possible so if your PC or phone or TV happens to break down, you won't be without them for long. Some people have ordered suit cases because they needed it for a trip the following day. The three-hour service is realized through the hiring of a chartered truck, but their ordinary deliveries are controlled by in-house specialists who monitor the weather and traffic conditions and plan to ensure peak performance at peak times.



Online fashion mall, ZOZO TOWN, who does not charge for delivery, is aiming to offer same day delivery for 40% to 50% of their goods by end of 2014. 


They found that 80% of their customers choose the earliest delivery slot when given a choice, so it was a logically derived conclusion that most customers want same day delivery - free of charge, of course. 

Size of selection and price are still powerful drivers that bring traffic to e-commerce sites, but such elements are becoming less and less effective to realize differentiation. 

Unlike some other markets, where faster delivery can fetch a premium or additional fees from consumers, in Japan, where convenience is a powerful currency, same day delivery is becoming a cost of doing business in the big league.