In recent years, as digital transformation (DX) in Japan's retail industry has steadily advanced, online shopping has become more common. In addition, more customers are prioritising time efficiency, increasing the need for product subscription services on e-commerce sites.

Recurring purchases driven by product subscription services have gained attention as an important strategy for businesses. They can help stabilise revenue and maintain relationships with customers.

In this article, we explain the basics of recurring purchase services, including reasons for the growing demand for these subscriptions, as well as their benefits, challenges, and features.

Key takeaways

• Recurring purchase services involve customers signing up once and receiving products on a regular basis. These subscriptions are widely used for food and daily necessities.
  
• Recurring purchase services have gained popularity in direct-to-consumer (D2C) businesses that handle health food products.
  
• Recurring purchases offer a variety of benefits for both customers and businesses, but it is important to also know their drawbacks.
  
• To provide recurring purchase services, it is important for businesses to use systems that support recurring billing.
  
• With Stripe Billing, you can handle all aspects of managing a product subscription service, such as setting up recurring billing and creating multiple plans.
  

What are recurring purchases?

Recurring purchases – also known as "product subscriptions" – involve businesses automatically delivering specific products to customers at regular intervals, such as weekly or monthly. Once customers sign up for subscription services, the entire process – from placing orders to making payments – is handled automatically. This eliminates the need to go through every step of the purchase process each time.

Product subscriptions are widely used across a broad range of categories but are primarily used for consumables – such as supplements, cosmetics, food, and detergents – that customers use on a daily basis. Recurring purchases have become an indispensable shopping method for customers with busy lifestyles.

Differences from service subscriptions

In general, a service subscription involves a customer paying fees based on the length of time they use a service. For example, with digital content streaming services, customers can watch as much content as they want by paying monthly subscription fees.

In contrast, product subscriptions – or recurring purchases – are characterised by the regular receipt of specific products. In other words, product subscriptions are similar to contracts for the repeated sale of goods.

The fundamental difference between the two is that a recurring purchase is aimed at buying and owning items, and a service subscription focuses primarily on the right to experience and use services.

Differences from subscription clubs

A subscription club involves customers receiving different products with each delivery and is based on the business operator's specialisation. Offerings can include seasonal fruits and vegetables or a monthly wine pick. The biggest appeal of a subscription club is the sense of surprise and excitement that comes from not knowing what kinds of items will be delivered each time.

The most significant differences between recurring purchases and subscription clubs is the purpose of the purchase and the customer experience. With recurring purchases, customers repeatedly receive the same products. With a subscription club, the value lies in new discoveries and encounters.

Why is demand for recurring purchases rising in Japan?

The e-commerce market in Japan continues to grow year after year. According to figures from the Ministry of Economy, Trade and Industry, the sector’s size for consumer-facing electronic commerce transactions in Japan was ¥26.1 trillion in 2024. This is a 5.1% increase from the previous year’s figure of ¥24.8 trillion.

Currently, customer purchasing behaviour is becoming increasingly diverse, and convenience is a top priority. Therefore, demand for product subscription services on e-commerce sites is higher than ever.

This is largely the result of online stores having become an established part of daily life since the COVID-19 pandemic. When shopping for daily necessities and other items, customers have come to strongly value convenience. The key selling point is the ability to obtain products easily by eliminating the need to locate products in a physical store, purchase them, and carry them home.

Because product subscription services are extremely well-suited to these customer needs, they are highly valued by customers who want to make their lives more efficient.

Rising interest in health foods in the direct-to-consumer (D2C) industry

In the D2C Business model, manufacturers sell products directly to customers without intermediaries. The adoption of subscription services has been particularly widespread in this sector. Many businesses have adopted this model as a necessary revenue structure for building long-term relationships with customers and maximising Lifetime Value (CLV).

Among D2C businesses, the health food sector is particularly well-suited to recurring purchases. The effectiveness of health foods is based on their consistent consumption, similar to supplements or vitamins. Health food subscriptions are popular among customers who want to purchase products directly from trusted manufacturers and place a high priority on quality and distribution channels.

Advantages of recurring purchases

Recurring purchases offer the following benefits to both customers and businesses.

Advantages for customers

• Eliminate the hassle of repeated ordering.
  
• Remove worry about forgetting to make purchases.
  
• Consistently deliver products at the right time.
  
• Offer products at lower prices than usual.
  
• Provide benefits such as free shipping.
  

Advantages for businesses

• Create stable revenue with recurring billing.
  
• Accumulate long-term data for highly accurate sales forecasts.
  
• Reveal customer needs via regular surveys that can be applied to marketing strategies.
  
• Nurture long-term relationships with customers and enhance brand loyalty.
  
• Improve forecasting of inventory levels.
  
• Make it easier to provide appropriate support, as order details for recurring purchases are more easily tracked than those of one-time customers.
  

Disadvantages of recurring purchases

While recurring purchases can offer many benefits, they also have some disadvantages and challenges. Below, we discuss the main disadvantages for customers and businesses.

Disadvantages for customers

• If customers no longer need products, they must cancel their subscriptions.
  
• Until customers cancel subscriptions, they are ongoing expenses that can strain household budgets.
  
• Customers could receive more products before using items in previous deliveries.
  

Disadvantages for businesses

• Customers could lose interest in the business's other products.
  
• Fixed product lineups can generate stable revenue for businesses, but they can also stall efforts to develop new products and improve quality. This can lead to predictable product lineups, which is referred to as "status quo bias."
  
• To ensure that product subscription services remain operational, it is important for businesses to have solid and stable systems that are capable of handling payment issues and other problems.
  

How to prevent cancellations of recurring purchases

To achieve business growth, it is important to minimise Churn rate. In this section, we explain specific measures to prevent customer churn and increase CLV.

Understand reasons for cancellations

The main reasons customers cancel product subscriptions include the following:

• Unsatisfactory results
  Customers might cancel if their expectations don’t match received products. Therefore, it is important for businesses to clearly state the correct directions for use, provide effectiveness checklists, and feature customer reviews that mention positive results.
  
• Lifestyle changes
  Customers’ lifestyle changes could eliminate the need for products, leaving them with excess items. To combat this, businesses can offer Subscription pauses or frequency adjustments.
  
• High prices
  Customers might not be able to continue subscriptions if prices increase. Businesses can offer Subscription-only pricing, improve quality, deliver value that aligns with prices, and clearly state product features and qualities.
  

Businesses need to clearly identify the reasons for cancellations and develop marketing strategies for each one.

Prepare for unintended cancellations

It is also important to prepare for involuntary churn related to payments. For example, failed payments that result from expired credit cards or insufficient Funds are the leading cause of unintended cancellations. These occur regardless of the customer’s intentions.

To prevent this, businesses can implement payment systems that provide customer notifications about failed transactions and automatic payment retries.

Required features for recurring purchase services

Providing a smooth and secure website environment is directly connected to creating customer trust and is key to business success. In this section, we introduce the features needed to launch a Subscription service.

Recurring billing systems

For a business to offer a Subscription service on its e-commerce site, it must implement a payment system that supports Recurring billing. Specifically, when selecting a payment system, the business must consider those that can flexibly accommodate standard Billing cycles—such as weekly or monthly—as well as irregular schedules, such as “every 10 days” or “every two weeks.”

In addition, it is important that the Recurring billing system includes a payment retry feature for failed payments and an automatic notification feature for customers.

Self-serve portals

Providing a Self-serve portal that allows customers to change their delivery frequency or temporarily suspend deliveries on their own is also a key factor in strengthening customer retention.

Enhancing the website environment in this way improves the customer experience and serves as the foundation for building strong, trusting relationships.

Data analysis

To continuously improve a product Subscription service, it is important to have the ability to analyse customer purchase history and behavioural data. This makes it possible to personalise recommendations based on customer attributes, including length of service use, purchasing behaviour, and other factors.

How Stripe Billing can help

Stripe Billing lets you bill and manage customers however you want – from simple recurring billing to usage-based billing and sales-negotiated contracts. Start accepting recurring payments globally in minutes – no code required – or build a custom integration using the API.

Stripe Billing can help you:

• Offer flexible pricing: Respond to user demand faster with flexible pricing models, including usage-based, tiered, flat-fee plus overage and more. Support for coupons, free trials, prorations and add-ons is built-in.

• Expand globally: Increase conversion by offering customers' preferred payment methods. Stripe supports 125+ local payment methods and 130+ currencies.

• Increase Revenue and reduce involuntary churn: Improve Revenue Capture and reduce involuntary churn with Smart Retries and recovery workflow automations. Stripe recovery tools helped users recover over US$8.2 billion in Revenue in 2025.

• Boost efficiency: Use Stripe's modular tax, revenue reporting and data tools to consolidate multiple revenue systems into one. Easily integrate with third-party software.

Learn more about Stripe Billing or get started today.

FAQs about recurring purchases and product subscriptions