An e-commerce platform includes the basic systems and software required to build and run an e-commerce site. There are various types of e-commerce platforms, each with their own characteristics. When business owners set up an e-commerce site, they need to choose a platform compatible with their brand and products, as well as their future business plans.

In this article, we’ll explain the basics of e-commerce platforms in Japan, including their types and characteristics, and things for business owners to keep in mind when choosing one.

What’s in this article?

• E-commerce platforms explained
  
• E-commerce platform types and characteristics
  
• Building from scratch without using an e-commerce platform
  
• Points to consider when choosing an e-commerce platform
  
• E-commerce platform frequently asked questions (FAQs)
  

E-commerce platforms explained

An e-commerce platform refers to the software or system that forms an e-commerce site’s foundation. Business owners need to choose the type of e-commerce platform that works best with the scale and content of the site they want.

As a business owner, it’s important to do your research before picking a platform for your e-commerce site. If you want to operate in Japan, you need to first understand the needs of consumers in the Japanese market. In general, your site should be user-focused, providing high-quality customer service and speedy deliveries, including the option to select the day and time of delivery. Japanese consumers place particular importance on attentive service, so any e-commerce site operator should carefully plan the structure of the site to ensure reliable service.

You should also understand the difference between an ecommerce platform and a marketplace. You will often hear the term “marketplace” used interchangeably with “platform”, which is incorrect. For the difference between the two, please refer to “Marketplaces vs. platforms: what’s the difference between them?”

There are six main types of ecommerce platforms that you can use to build your site: an e-commerce mall, an application service provider (ASP), instant e-commerce, cloud-based e-commerce, package-based e-commerce, and open source. Alternatively, you can build your e-commerce site from scratch without using an e-commerce platform. We will talk about that later in this article.

E-commerce platform types and characteristics

Here, we will explain the characteristics of the six types of e-commerce platforms. If you choose to use an e-commerce platform to build your site, it’s best to choose one with features, functions, and costs that fit your company’s needs.

Note: The initial and monthly fees listed above are only guidelines and might differ between e-commerce platforms, so make sure to check the charges for any platform option you are considering.

E-commerce mall

The mall category, also known as an e-commerce mall or EC mall, brings together a range of companies via an online mall-style website. Using an existing e-commerce mall reduces the time it takes for a business to reach the sales stage. This is because major e-commerce malls often attract large numbers of shoppers, thus reducing the effort needed to obtain customers. An e-commerce mall can therefore be a good option for businesses looking to get started selling right away.

However, if you add your online shop to an existing e-commerce mall, you will need to follow the e-commerce mall’s own standards in order to sell your products. The lack of customisation for features and design can also make it difficult to differentiate yourself from your competitors on the e-commerce mall.

Application service provider (ASP)

An application service provider (ASP) is a cloud-based e-commerce platform that provides software functionality via the internet. An ASP can also be called an ASP cart, shopping cart ASP, or an ASP-type cart system, as it focuses on shopping cart-related functions, such as purchases and payments.

In addition to shopping cart functionality, ASPs also come with a wealth of features and services for e-commerce sites that are necessary for building and operating online shops, such as product management functionality. Although an ASP requires a certain level of expertise with e-commerce sites, using one means that you don’t have to perform function improvements, maintenance, or system updates in-house, saving you time as well as maintenance and staffing costs. If you choose an ASP, you don’t need to handle everything yourself, and it’s relatively easy to set up an e-commerce site as long as you follow the necessary steps.

However, while it’s easy to create a site with this method, its lack of customisation can restrict you in terms of design. You should also factor the monthly fees and other charges into your decision when considering potential costs versus sales.

Instant e-commerce

Instant e-commerce platforms are a type of ASP that often don’t have sign-up or monthly fees, and allow you to easily set up an e-commerce site and run a shop without any specialist knowledge.

Instant e-commerce platforms have low initial costs, and users can start using them right away after signing up, making them suitable for people unfamiliar with e-commerce sites.

However, while anyone can use instant e-commerce without specialist knowledge, this platform type has low customisability in terms of functions and design, and might not be flexible enough for e-commerce business owners who want to promote their own brand. Additionally, customer support is often limited to email, so it might not be suitable for business owners who require comprehensive customer support.

Cloud-based e-commerce

Like ASPs, cloud-based e-commerce uses software in the cloud, and the construction and operation of the e-commerce site is performed in the cloud.

Cloud-based e-commerce is superior to ASP in terms of design and functional scalability, but it is also more expensive.

You don’t need to build your own server with cloud-based e-commerce, and automatic updates ensure you have access to the latest systems and additional functions. These platforms also have more comprehensive customer support to assist you with using and running the system.

On the other hand, although cloud-based e-commerce is more customisable than ASPs, customising it to fit your company’s branding means building your e-commerce site might take longer. If you want to get your site up and running quickly, cloud-based e-commerce might not be the right option for you.

Package-based e-commerce

A package is an e-commerce platform that comes with all the necessary functions for building and operating an e-commerce site. Using a package-based system means you don’t have to build your e-commerce site from scratch, and you can customise your site’s functions and design.

You can start using a package-based system by installing it on your company’s server. Package-based e-commerce solutions have a comprehensive support system in place for everything from the creation of a site to operation and management. Many of them have a high level of security, as well as high reliability and safety, including being able to provide support quickly in emergency situations.

However, although package-based systems are highly customisable, they come with significant startup and operating costs. These costs include server environment maintenance and security measures, and additional costs for installing new functions. Customisation and testing must occur during development, and it might take several months before you can expect a fully-implemented site.

Open source

Open source is a method of building an e-commerce site in which the source code is available free of charge and there are no licence fees, allowing a company to customise a site as they wish. Being able to design your e-commerce site by directly editing the code keeps costs down and lets you fully customise the site to fit your company’s needs and branding.

That said, open source platforms require advanced expertise and coding skills. Though there is no cost for the open source itself, you will either need in-house specialist IT personnel or to outsource support, resulting in higher costs.

You will also need to prepare and manage servers for installing open-source software and deal with security vulnerabilities in-house. Your company will be responsible for all operations, so it’s important to establish a comprehensive system that allows you to respond to problems or failures. If it’s difficult to implement a reliable system, consider choosing an e-commerce platform that offers sufficient security measures and support.

Building from scratch without using an e-commerce platform

In the previous section, we introduced the various types of e-commerce platforms. This section explores how to build an e-commerce site from scratch without using a platform.

This method involves developing and creating something in-house from scratch, without using existing products. This is referred to as “full scratch”, an English phrase invented by the Japanese to refer to the creation of original works, but now used in relation to the development of systems and applications, and as a term for building an e-commerce site.

To build from scratch, you need to prepare your own infrastructure, including the server – without using any existing frameworks, templates, or source code. The initial cost of development alone can be upwards of tens of millions of yen. The monthly cost is also hundreds of thousands of yen, making this method the most costly and time-consuming way to build an ecommerce site.

The full scratch method is used by e-commerce businesses that don’t require outside systems or tools owned by other companies to form the basis of their e-commerce sites. The goal of the method is for a business to build a site that is customised to its unique business model and specific brand or products. However, this doesn’t mean a business using full scratch won’t need outside help. Designing, building, and running an e-commerce site built from scratch typically requires both in-house teams and external parties, such as developers and engineers.

Due to its cost and lengthy timeline, full scratch construction is usually adopted by large businesses aiming to process annual sales of several billion yen.

Points to consider when choosing an e-commerce platform

You’ll want to consider the following points when choosing an e-commerce platform. Remember to set yourself up for success by choosing the platform that fits your business model.

Support

When considering an e-commerce platform, make sure it can provide suitable support. If your skills and knowledge of running an e-commerce site are limited, you’re likely to require more support. It’s also important to check if there is a system in place to provide quick support in the event of unexpected problems or issues, or if you have bigger picture questions.

For example, if you want to discuss effective advertising management for sales, it’s a good idea to check the quality of the platform’s support, such as whether you can speak to a representative via live chat or phone, or solely email.

Range of functions

Before setting up your e-commerce site, first clarify which functions your business needs, and then choose an e-commerce platform that provides those functions.

For example, it’s important to offer customers multiple payment methods, including app payments. According to an infographic presented in the 2024 Information and Communications White Paper from the Ministry of Internal Affairs and Communications (MIC), the rate of mobile device ownership in Japan has reached 97% (90% for smartphones specifically). And in recent years, payment apps such as PayPay have become more common for making transactions on e-commerce sites. Because smartphones are a more convenient payment method than ever, it’s important to offer flexible payment options, such as app payments, when building your site.

Stripe provides a variety of online payment functions and services, and it is compatible with a wide range of payment methods, including convenience store and credit card payments.

If you are looking to strengthen payment functions and simplify payment flow on a platform that involves multiple parties (e.g. sellers and customers) you can use Stripe Connect. Stripe can help you develop your e-commerce site more smoothly and efficiently. It can also automatically allocate a portion of payments made by customers on the platform as sales commissions, allowing you to appropriately divide sales between multiple parties.

Cost effectiveness

There are various costs involved with using an ecommerce platform. It’s important to plan ahead and consider whether initial development costs and ongoing operating costs – such as the monthly fee to use the platform and sales commissions, respectively – are within your budget. You also need to check if the functions the e-commerce platform provides are worth the cost.

Choosing an e-commerce platform without a medium- to long-term vision or plan can have a negative impact on the operation of your e-commerce site. You want to avoid having the inability to use new functions you might want in the future. Selecting an e-commerce platform that fits within your budget and is in line with the scale of your business and your brand image is key.

It might be difficult for sole proprietors and small businesses to accurately predict how much profit they will be able to make when they first set up an e-commerce site and enter the online shopping market. That is why it’s a good idea to start off with an e-commerce platform that can be used for free.

E-commerce platform frequently asked questions (FAQs)

Now that we’ve covered the basics of e-commerce platforms, let’s take a look at some questions that people often have about them.

What’s the difference between an ecommerce mall and an e-commerce site?

An e-commerce mall is a form of e-commerce platform where multiple businesses gather together – similar to a physical shopping mall having multiple stores inside it. The businesses then sell their products to online shoppers.

An e-commerce site is for one business operating by itself and that business has its own domain. The business doesn’t share a platform with other sellers.

There are advantages and disadvantages to both e-commerce malls and e-commerce sites. For more information, please refer to “What is an EC mall? Types and characteristics explained.”

What are some of the major e-commerce sites in Japan?

An example of an e-commerce site in Japan is Yodobashi.com by Yodobashi Camera, which sells a wide range of items, from home electronics to everyday products and toys. Another example is Nitori Net, run by Nitori Holdings, which sells furniture, cooking utensils, bedding, and other household goods. These companies both have physical locations, but the rise of online shopping has made their e-commerce sites just as popular as their physical locations. Both companies also allow customers to shop their sites via apps.