RealTime IT News

Sales Booming For Young Japan-based Online Business

Although the potential for strong e-commerce growth in Japan is not in doubt, only a few firms have so far stepped up to reap the Internet's rewards.

A prime example is J-List, an online company based just outside Tokyo, that sells Japanese music, magazines, comic books, hardcover photobooks and adult-oriented products. In business only two years, the company that bills itself as a "wonderful toybox of things from Japan" has already racked up impressive growth and profits.

"In 1997 we averaged 600 to 800 orders a month for our products, bringing our sales for the year to around $500,000," said Peter Payne, President of J-List and JAST, a related venture in the U.S. "For 1998 our orders have leveled off to about 700 per month, but we are still expecting sales in the $750,000 to $800,000 range."

Although J-List as a company would not like to be seen as one that deals primarily in adult products, they have had to come to terms with some inevitable facts about the Internet. Payne estimates adult items are currently responsible for about 65 percent of the company's sales.

While many Japanese banks have been reluctant to adopt standard credit card procedure for online sales, Payne found it easier to have his orders processed through a U.S. bank.

"We approached one Japanese bank but they wanted to charge us a 7 percent fee for processing credit card transactions. This didn't make much sense when we could get a 2.2 percent rate in the States."

J-List was first established in October 1996 before becoming a Japanese Limited Corporation (yugen gaisha) in February of this year.

"There is a great deal of potential for e-commerce in Japan, but there are still barriers that need to be overcome. One is with Japanese banks continuing to favor furikomi (direct bank-to-bank transfers) over credit cards when conducting online sales. Eventually though, what is happening internationally should help to speed this process along," Payne said.