NRI Papers
No.72   January 1, 2004
  Keys to Further Development in Japan's Online Shopping Market  
Ryoji KASHIWAGI
       The Cyber Life Observations (CLO) surveys conducted by Nomura Research Institute, Ltd. (NRI) suggest that the era of rapid Internet expansion is nearing an end. From this point forward, it is vital to focus on market expansion driven by more advanced Internet applications and services, rather than the mere increase of Internet subscribers. With the steady growth of online shopping, which is one of the leading Internet services, the market size as of March 2003 exceeded ¥1 trillion for the first time since we started these CLO surveys in 1997. This upward trend is expected to continue for some time to come. The two main contributors to the growth of the online shopping market are a higher degree of Internet experience and the proliferation of broadband access. These two drivers of growth are expected to remain strong, thereby ensuring a steady expansion of the online shopping market for a number of years yet to come.
       Considering the fact that the increase in Internet subscribers has started to slow down, however, it is highly likely that the growth of the online shopping market might reach a ceiling in the near future if it continues to rely exclusively on these two growth drivers. It is therefore important to identify and develop additional engines of growth at this time. This paper recommends the active implementation of new approaches, including a better use of net communities, improvements in after-sales services, and the utilization of new media such as mobile phones and digital TV in order to ensure the future growth of online shopping.
Contents
I Trends in Using Information and Telecommunications Equipment and Services Among Japanese Consumers
  1 CLO Survey Overview
  2 Era of Rapid Internet Growth Is Nearing an End
  3 Internet Market No Longer Promising Growth and Expansion
II Steady Growth in Online Shopping Market
  1 Online Shopping Market Size Now Tops ¥1 Trillion
  2 Popular Online Purchases
  3 Growing Online Shopping Market
III Two Drivers of Growth
  1 Higher Degree of Internet Experience
  2 Proliferation of Broadband Access
IV Two Drivers of Growth Expected to Remain Strong
  1 Degree of Internet Experience Is Expected to Increase
  2 Number of Broadband Users Expected to Increase
  3 Online Shopping Market Estimated to Reach ¥2.6 Trillion in 2007
V The Third Driver of Growth for Further Development
  1 What Could Serve as the Third Driver?
  2 Different Promotion Approaches Not Dependent on Consumer Internet Experience
  3 Use of New Media Other Than Broadband
  4 Accelerating Development by the Third Engine of Growth
  5 Consumers Life to Be Enriched by Growing Online Shopping Market

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