Osaka Innovation Hub Drives E-Commerce Market

According to YCP Solidiance's report, “Top E-commerce Cities in Asia”, Osaka is among the top e-commerce cities in Asia.

May 2019 , by

With a booming economy and a shift in consumer values, Osaka has a vibrant start-up ecosystem driven by Osaka Innovation Hub (OIH), making the city very attractive as the base location for e-commerce. The city of 2.7 million population has 62% smartphone penetration, 83% internet penetration rate and 83% digital banking penetration, presenting striking opportunities for small and medium ecosystem and ideal market for e-commerce. 

According to our latest report, Top E-commerce Cities in Asia, Osaka is among the  top e-commerce cities in Asia, together with other cities in the region, including Jakarta, Beijing, Mumbai, and many more,. The report spotlights the Asia's e-commerce landscape and how it has quickly adapted to global trends. An "e-commerce city" here is defined as an urban city, facilitated with interconnected infrastructure that makes up an e-commerce ecosystem and helps it thrive.

Osaka E-commerce Report

Japan is getting more open to mobile commerce, proven by 80% of its population shops with their mobile phones, along with the shift from feature phones to smartphones, and upheaval in Japanese cyber security, Osaka has a high e-commerce penetration across all age demographics (>95% for 55 yr. and older), represents attractive opportunities for various service and product segments.

The availability of advanced infrastructures also put Osaka on the digital commerce heat map at a global scale The OIH also serves as a melting pot where talents interact and coagulate with one another and drive a higher concentration of talent pool. The Japanese government has also placed significant attention to the market by setting a set of regulation for vendors and consumers without impeding on its growth potential, for instance, the absence of a special regime for online business. 

The deeply-rooted culture in etiquette and respect is also reflected in Osaka's e-commerce market, which considers fast delivery (next day or same-day delivery) as important. Nevertheless, most of the population in the city only speaks Japanese. Therefore, translating the e-commerce site is of critical importance despite the curiosity in other culture. The market landscape currently gives opportunities for local players to serve the majority of Japanese consumers, while still limiting the presence of foreign platforms.

Our study shows that the world's e-commerce industry has continued to witness exponential growth, with an astounding USD 2.86 trillion in 2018 and a projected USD 6 trillion market in 2022. Moreover, the Asia Pacific market also had a 35% economic growth rate in 2018 with USD 1.8 trillion retail e-commerce sales, making the region to be a clear leader in achieving the target of one-fourth of global e-commerce share by 2023.

Osaka and other global cities can enhance their e-commerce ecosystem through the recommended framework in this paper, which is comprised of 5 key building blocks for startup ecosystem in reaching its full potential, including: stable and predictable regulatory environments; market readiness and robust infrastructure; adequate talent; funding to scale up the business, and global culture to empower innovative ideas.

Download the full report on Top E-Commerce Cities in Asia.

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