An ecommerce platform includes the basic systems and software required to build and run an ecommerce site. There are various types of ecommerce platforms, each with their own characteristics. When business owners set up an ecommerce 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 ecommerce 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?

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

Ecommerce platforms explained

An ecommerce platform refers to the software or system that forms an ecommerce site’s foundation. Business owners need to choose the type of ecommerce 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 ecommerce 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 ecommerce 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 ecommerce mall, an application service provider (ASP), instant ecommerce, cloud-based ecommerce, package-based ecommerce, and open source. Alternatively, you can build your ecommerce site from scratch without using an ecommerce platform. We will talk about that later in this article.

Ecommerce platform types and characteristics

Here, we will explain the characteristics of the six types of ecommerce platforms. If you choose to use an ecommerce 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 ecommerce platforms, so make sure to check the charges for any platform option you are considering.

Ecommerce mall

The mall category, also known as an ecommerce mall or EC mall, brings together a range of companies via an online mall-style website. Using an existing ecommerce mall reduces the time it takes for a business to reach the sales stage. This is because major ecommerce malls often attract large numbers of shoppers, thus reducing the effort needed to obtain customers. An ecommerce 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 ecommerce mall, you will need to follow the ecommerce mall’s own standards in order to sell your products. The lack of customization for features and design can also make it difficult to differentiate yourself from your competitors on the ecommerce mall.

Application service provider (ASP)

An application service provider (ASP) is a cloud-based ecommerce 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 ecommerce 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 ecommerce 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 ecommerce site as long as you follow the necessary steps.

However, while it’s easy to create a site with this method, its lack of customization 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 ecommerce

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

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

However, while anyone can use instant ecommerce without specialist knowledge, this platform type has low customizability in terms of functions and design, and might not be flexible enough for ecommerce 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 ecommerce

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

Cloud-based ecommerce 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 ecommerce, 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, while cloud-based ecommerce is more customizable than ASPs, customizing it to fit your company’s branding means building your ecommerce site might take longer. If you want to get your site up and running quickly, cloud-based ecommerce might not be the right option for you.

Package-based ecommerce

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

You can start using a package-based system by installing it on your company’s server. Package-based ecommerce 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, while package-based systems are highly customizable, they come with significant startup and operating costs. These costs include server environment maintenance and security measures, and additional costs for installing new functions. Customization 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 ecommerce site in which the source code is available free of charge and there are no license fees, allowing a company to customize a site as they wish. Being able to design your ecommerce site by directly editing the code keeps costs down and lets you fully customize 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 ecommerce platform that offers sufficient security measures and support.

Building from scratch without using an ecommerce platform

In the previous section, we introduced the various types of ecommerce platforms. This section explores how to build an ecommerce 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 ecommerce 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 ecommerce businesses that don’t require outside systems or tools owned by other companies to form the basis of their ecommerce sites. The goal of the method is for a business to build a site that is customized 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 ecommerce 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 ecommerce platform

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

Support

When considering an ecommerce platform, make sure it can provide suitable support. If your skills and knowledge of running an ecommerce site are limited, you’ll likely 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 ecommerce site, first clarify which functions your business needs, and then choose an ecommerce 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 ecommerce 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 ecommerce 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 on-going 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 ecommerce platform provides are worth the cost.

Choosing an ecommerce platform without a medium- to long-term vision or plan can have a negative impact on the operation of your ecommerce site. You want to avoid having the inability to use new functions you might want in the future. Selecting an ecommerce 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 ecommerce site and enter the online shopping market. That is why it’s a good idea to start off with an ecommerce platform that can be used for free.

Ecommerce platform frequently asked questions (FAQs)

Now that we’ve covered the basics of ecommerce 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 ecommerce site?

An ecommerce mall is a form of ecommerce platform where multiple businesses gather together—similar to a physical mall having multiple stores inside it. The businesses then sell their products to online shoppers.

An ecommerce 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 ecommerce malls and ecommerce sites. For more information, please refer to “What is an EC mall? Types and characteristics explained.”

What are some of the major ecommerce sites in Japan?

An example of an ecommerce 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 brick-and-mortar locations, but the rise of online shopping has made their ecommerce sites just as popular as their physical locations. Both companies also allow customers to shop their sites via apps.