Axios – Japan’s first ecommerce marketplaces, which are backed by Alibaba Group, ecommerce giants like Amazon and eBay, and a host of other online retailers, are getting closer to opening for business in Japan.
The country’s new Ministry of Economy, Trade and Industry (METI) will soon release regulations for the country’s eCommerce marketplaces.
But unlike other countries, where regulators have been trying to establish rules to help ecommerce businesses, in Japan ecommerce has had its sights set on the government.
The government has been pushing for ecommerce to thrive and is in the process of creating a “national ecommerce initiative” aimed at creating a network of ecommerce platforms to enable the economy to move forward, a spokesman for METI told Quartz.
“It is the government’s intention to build a national ecommerce platform and create a network with a clear aim for growth and success,” the spokesman said.
“We are also looking for ways to encourage the creation of e-commerce companies that are good at connecting people with products and services.”
There are currently more than 100 ecommerce companies operating in Japan, which makes up nearly 2% of the countrys total market, according to a recent report by Japanese brokerage Mizuho Securities.
Japan’s online shopping market is currently estimated at $16.6 billion.
The nation is also home to the world’s largest ecommerce marketplace, Japan e-Commerce Association (JECA), which has over 50,000 registered members.
“Japan is a global leader in ecommerce,” JECA CEO Masahiro Fujimura told Quartz in an interview last month.
“And we will continue to fight for the growth of e commerce in Japan.”
While Japan has been slowly expanding ecommerce since the 1990s, it hasn’t seen the kind of rapid growth seen in other countries.
There are only a handful of Japanese ecommerce firms in the top 10 countries in terms of number of active sellers, according a 2016 study by e-tailer Supermarket, and Japan has yet to overtake France in terms.
Japan has also lagged behind other countries in a number of ways, including the lack of a central regulatory body.
“The Japanese government has not set up a national network, but it has focused on the development of national regulatory agencies,” Masaharu Kawasaki, the head of Japan’s trade group the Japan International Trade Association, told Quartz via email.
“There is a clear desire among the Japanese government to create a national regulatory agency to ensure that ecommerce becomes a key sector for Japan.”
Japan’s Ministry of Finance, which is responsible for setting up the ecommerce regulations, has been meeting regularly with METI since early 2018, to discuss how ecommerce is regulated.
A new ecommerce law that was announced in October 2017 makes it easier for the government to regulate ecommerce.
“This legislation will provide a framework for eCommerce companies to set up businesses in Japan and create new jobs,” METI’s spokesman said in an email to Quartz.METI, which has been set up with the support of Prime Minister Shinzo Abe and the Cabinet, is currently trying to regulate the marketplaces and make sure they are operating within the law.
According to the ministry’s website, the purpose of the regulatory body is to ensure fair competition for e-selling, promote investment, provide information and services to companies, promote development of eCommerce, and protect consumers from the risk of counterfeiting.
METI has also been tasked with setting up a network to provide the public with information on the e-shopping marketplaces that it operates.
The Ministry of Trade and Innovation (METII), the government agency responsible for e commerce regulation, is also planning to expand its role in the e commerce sector, according TOKYO-based trade association Tokyo-based ecommerce business consultancy Softbank.
“It’s important for METII to have a more visible presence in the market,” said Tokyo-born economist and former METI official Yutaka Nakamura, who served as a policy adviser to the METI.
“The regulator is looking at how to strengthen its capacity to regulate this industry, and how to ensure a proper safety and security of the eCommerce platforms.”