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.
