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Capture the Japanese Market with a .JP Domain Name

Japan has a flourishing business community as the worlds third-largest economy. Its service industry—which includes retailing, telecommunications, insurance, banking, and transportation—is the largest business sector, employing nearly three-fourths of the workforce. Meanwhile, the remaining 25% of Japan's human resources are in the industrial and agricultural sectors.

To make you visible among other businesses and help you capture Japan’s market, a .jp domain, coupled with in-depth market insights, is essential. Here’s a guide that takes a look at Japan’s business landscape and the advantages of getting a .jp domain for your business.

1. Business Landscape

While 99% of local businesses are considered small to medium enterprises (SMEs), Japan's e-commerce market ranks fourth in the world behind the United Kingdom. It's worth nearly $178 billion even if online sales make up just 13% of total retail, according to JP Morgan.

E-commerce growth is set to continue at 6.3% until 2023. Fashion (haircare, skincare, and beauty products), consumer electronics, household appliances, furniture, and travel-related goods are among the most popular segments.

The contributors to the uptick in online shopping include:

High internet penetration

More than 116 million people or 93% of the population are internet users. Japan's excellent infrastructure and relatively small country size are behind its high internet usage rate.

Growing number of smartphone users

From 2015 to 2025, this part of the population is expected to double. A fourth of online shoppers currently make purchases via smartphones.

National holidays

Big retailers have turned many of Japan's 16 national holidays into online shopping festivals.

Twice-a-year bonus

Japanese professionals receive bonuses in the summer and winter, giving businesses an opportunity to organize online sales.

Spending power of the older generation

A third of the Japanese population is aged 65 plus. Many of them are active on the internet and mobile devices and can spend $3,000 monthly on purchases.

2. Brands

More than 92% of businesses in Japan have a website. This includes 41% of SMEs who have an online presence. The online retail market's top three—Rakuten, Yahoo Japan, and Amazon—cater to over 40% of online users.

Companies are investing heavily in digital advertising to reach customers, combining the potentials of celebrity and influencer marketing on YouTube and Instagram. This also includes placing text and video ads on search engines and social networking sites as well as organizing virtual events.

3. Consumers

85% of Japan's internet users shop online and spend an estimated $1,000 annually for purchases. Also on the rise is consumer-to-consumer marketing, where people sell brand new and second-hand goods to each other. Yahoo! Auctions and Mercari lead this segment.

Most common payment modes

The majority of Japanese consumers prefer using their debit and credit card to pay for goods and services. Online bank transfers and cash payments are the second and third most popular options, with many shoppers paying cash-on-delivery for online-bought items. Meanwhile, many teenagers and elderly consumers go to the konbini or convenience stores to pay for goods they ordered online.

Social media as a shopping tool

A growing number of Japanese are following corporate accounts on social media to get discounts through coupons and sales. Line, YouTube, Twitter, Instagram, and Facebook are the top five platforms in Japan. Because the Line messaging app has its own payment system, many of its users also shop on this platform.

4. Domain Name Registration

The country code top-level domain (ccTLD) for Japan is .jp, and the Japan Registry Services Co. (JPRS) manages its registry. This domain name is open to individuals, organizations, and groups with a permanent postal address in the country. There are 1.6 million entities registered with a .jp domain extension.

The .jp domain name falls under three types: general use, prefecture-based (i.e., example.kobe.jp), and organizational (such as example.co.jp for companies, example.ed.jp for primary to senior high schools, and example.ac.jp for universities and colleges). If your company is incorporated in Japan, you may apply for a domain name ending in .co.jp.

Registration Process

The JPRS only works with registrars incorporated in Japan. Companies send their application for their preferred website address to a qualified registrar, who then submits it to JPRS for review. Once approved, the company can register its domain name. Its validity lasts for a year.

The application forms and supporting documents mainly require answers written in Japanese characters. The length of a domain name should be 3 to 63 alpha-numeric characters or 1 to 15 Kanji, Hiragana, and Katakana characters. 

5. Advantages of a .JP Domain Name

Registering a .jp domain name for your Japan-based business has the following benefits:

1.Promotes trust

Less than 10% of Japanese nationals consider themselves fluent in English language use. That’s why localization is important in the country, with foreign entities required to include some Japanese language content in their ads. Using a website address with a suffix representing Japan is one of the first steps to add a local flavor to your business.

A .jp domain name can also boost a brand’s legitimacy, as the law only accepts applicants with physical stores and offices in the country. A website ending in .jp conveys that its goods and services are locally available. More than 450,000 firms carry a .co.jp domain name. This includes organizations registered as gaikoku kaisha or foreign companies.

2. Improves a website's SEO

SEO specialists refer to the use of ccTLDs as geo-targeting or country targeting. That’s because search engines target local domain names. With a local IP address, an enterprise raises its chance of appearing higher in the search engine results pages of Japan-based internet users.

Having a ccTLD is a good foundation for all other webpage content optimization efforts involving written content, visual graphics, and links. Partnering with native-speaking copywriters and marketers can best achieve this.

3. Offers a central hub of information

As mentioned earlier, Japanese consumers are avid social media users. Any time a business places an ad or announces product offers, company updates, or events on its channels, it can include a link to its website. Followers should be able to get more in-depth information, make purchases, and sign up for free trials, webinars, or online events on the official website.

By Ariel Arancibia