Note: This article includes information specific to the Japanese e-commerce market (e.g., Japan-specific services, regulations, or customs). Some details may not apply outside Japan.
EC malls (mall-based EC sites) are one of the key options for any business wanting to start selling products online. This article explains in detail the basic concept of EC malls, the features of the major EC malls, and the pros and cons of each. Whether you're just starting out or already using an EC mall, this article is packed with information useful for reviewing your strategy.
What Is an EC Mall (Mall-Based EC Site)?
In a word, an EC mall (mall-based EC site) is an online shopping mall or shopping arcade. It refers to a type of EC site where multiple stores open shop on a single EC site, and each store lists its own products.
EC malls have high name recognition and strong customer-acquisition power, making them an extremely convenient tool for small and medium-sized businesses or individuals with weaker customer-acquisition power to sell products online.
The Difference Between an EC Mall and Your Own EC Site
EC sites can broadly be divided into two types: "EC malls" and "your own EC site."
An EC mall has a shopping-mall-like site structure where multiple stores are gathered in one place, whereas your own EC site is a standalone EC site with its own dedicated domain — that's the key difference.
There are three main differences between an EC mall and your own EC site.
- Cost
- Freedom in site design
- Customer-acquisition power
Let's look at each in detail.
■Point 1: Cost
Costs vary depending on which EC mall you open a store in, but store fees, sales commissions, advertising costs, and other monthly expenses tend to be high. As a result, from a medium- to long-term perspective, your own EC site can be expected to run at a higher profit margin.
Point 2: Freedom in Site Design
With an EC mall, the site layout and design are formatted to a certain degree, making it easy for anyone to set up — but this also means you can only edit the site within a fixed framework.
Your own EC site, on the other hand, offers a high degree of freedom in site design, letting you edit fine details such as the wording on the order button or the content displayed on the checkout screen. However, the downside is that you need to build the site from scratch, which takes more time and cost before you can start selling compared to an EC mall.
Point 3: Customer-Acquisition Power
Since an EC mall already has many users, opening a store there can bring in a lot of traffic, but your own EC site starts from zero customer-acquisition infrastructure, so you need to build up traffic from scratch.
Here's a simple comparison table of EC malls versus your own site.
| EC Type | Cost | Freedom in Site Design | Customer-Acquisition Power |
|---|---|---|---|
| EC Mall | High | Low | High |
| Your Own Site | Low *1 | High | Low |
*1 Varies depending on whether you use an ASP or full-scratch development
For more on the differences between an EC mall and your own EC site, please refer to the article below.
Which Is Better: an EC Mall or Your Own EC Site?
Neither an EC mall nor your own EC site is universally superior — which format to open a store in depends on your store's operating policy, goals, and current phase.
If you want to acquire customers in the short term and prioritize raising your store's awareness and monetizing, an EC mall is recommended; if you want to prioritize branding and profit margin over the long term, your own EC site is recommended.
You can also acquire customers through an EC mall while simultaneously growing your own EC site, but since this requires a significant amount of work and human resources, it's not something we'd particularly recommend in the early stages.
First, clarify what your goal is and what you want to prioritize, then decide between an EC mall or your own EC site.
If you're considering opening your own EC site, please refer to the article below.
Types of EC Malls
EC mall store formats are broadly divided into two types: "marketplace-style" and "tenant-style." Let's explain the characteristics of each.
| Type of EC Mall | Representative EC Malls | Benefits | Drawbacks |
|---|---|---|---|
| Marketplace-style | Amazon | Easy listing and product data management | Hard to build brand recognition |
| Tenant-style |
Rakuten Ichiba Yahoo! Shopping au PAY Market Qoo10 |
Easy to express your store's or brand's individuality | High effort required for site building and product data maintenance |
Marketplace-Style (e.g., Amazon)
Marketplace-style is a form of EC mall where each store lists its products on a single platform. The key point is that it's "listing," not "opening a store."
A representative example of this kind of EC mall is Amazon.
To use an offline analogy, think of the produce section at a farmers' co-op market. The way vegetables and fruit grown by different farmers are displayed together in a single store (direct-sale outlet) is exactly like the marketplace style.
Benefits of Marketplace-Style
The benefit of marketplace-style is that registering products is simple.
As long as you've registered your product catalog on the EC mall platform, the platform itself creates the product pages, so the store simply needs to register products on the site to start selling. This makes it easy even for small businesses to get started.
Drawbacks of Marketplace-Style
The drawback of marketplace-style is that it's hard for users to become aware of your store.
What's shown front and center on the platform is ultimately the "product," not the store. From the user's experience, the perception of "I bought it on Amazon" tends to be much stronger than "I bought it from store XX," so even if a product sells, there's little chance the store itself gets recognized.
Also, because the platform creates the product pages, it's harder to control the information displayed on them — another drawback.
Tenant-Style (e.g., Rakuten Ichiba, Yahoo! Shopping)
Tenant-style is a format where each store "opens a store" on a single platform. Each store operates its own store page and sells products.
Representative examples of this kind of EC mall are Rakuten Ichiba and Yahoo! Shopping.
To use an offline analogy, think of a large shopping facility like LaLaport or AEON Mall. The way multiple stores open and operate within a single building is exactly like the tenant style.
Benefits of Tenant-Style
With tenant-style, each store manages and operates its own dedicated store page and product pages, so one benefit is that it's easier to express your store's individuality compared to a marketplace-style EC mall.
It's also weaker than your own EC site, but it's still easier for users to become aware of your store or brand — that's another benefit.
Drawbacks of Tenant-Style
This is the flip side of the benefit above: being able to manage and operate your own dedicated store page and product pages means you also need to devote more effort to site building, maintenance, and product listing — a drawback.
Pros and Cons of EC Malls
Let's explain the pros and cons of opening a store on an EC mall.
Pros of EC Malls
The pros of EC malls are as follows.
- Strong customer-acquisition power
- Easy for users to trust
- Easy to get a business started
- You can receive support from the mall
Let's look at each in detail.
Strong Customer-Acquisition Power
A major benefit of EC malls is their strong customer-acquisition power, since the number of stores already operating, the number of products listed, and the number of active users are overwhelmingly larger than what a newly launched EC site of your own would have.
Easy for Users to Trust
Another benefit is that EC malls have higher name recognition and brand strength than a newly launched EC site of your own, making it easier to earn user trust.
Users of EC sites often have concerns such as whether the site's security properly protects their personal information, whether the product will ship as scheduled, or whether the product is genuine.
Because of this, the more an EC mall enforces a store-opening review process and maintains clear store operation guidelines, the more user trust it tends to command.
Easy to Get a Business Started
Because you can open a store and list products using the mall's own system, a benefit of EC malls is that, unlike your own EC site, you don't need to go through the trouble of acquiring a new site domain or building a site from scratch.
Also, since EC malls have their site layout and design formatted to a certain degree, setup and maintenance are relatively easy, lowering the barrier to entry for starting an EC business.
You Can Receive Support from the Mall
EC malls generally provide stores with support related to operations and marketing.
You can get comprehensive support related to sales — everything from site-building questions, to advice on sales-boosting measures, to help with customer support for users.
Some of this consulting support may be paid depending on the mall and the content, but the fact that you can generally receive this kind of service for free is a major benefit.
Cons of EC Malls
The cons of EC malls are as follows.
- High running costs such as sales commissions
- Difficulty accumulating customer information
- Hard to express your store's individuality
- Price competition tends to occur easily
Let's look at each in detail.
High Running Costs Such as Sales Commissions
Running an EC site involves running costs. This is especially true for EC malls, where monthly fees and sales commissions based on revenue apply, making the burden greater compared to your own EC site.
Generally speaking, the larger the mall, the higher the running costs tend to be.
Difficulty Accumulating Customer Information
Because customer information such as who placed an order is collected by the mall itself, a major drawback of EC malls is that it's harder to accumulate customer information compared to your own EC site.
Depending on the EC mall, some even replace a customer's email address with a different, mall-specific address so the store can't see it, making it harder to gather the information you need for marketing initiatives.
Hard to Express Your Store's Individuality
When you open a store or list products on an EC mall, you can only customize the site within that mall's system and format, making it harder to express your store's individuality compared to your own EC site.
As a result, users tend to perceive that they "bought it from the EC mall" rather than "bought it from a specific store," making it another drawback that it's harder to gain brand recognition with users.
Price Competition Tends to Occur Easily
Because many stores are open on an EC mall, price competition tends to occur easily.
In the first place, since it's hard to express a store's individuality on an EC mall, the structure makes it difficult to differentiate yourself from competing stores. As a result, many users end up choosing stores or products based on price, which leads to price competition.
You end up in a dilemma where you won't sell if you don't lower your price, but lowering your price cuts into your profit margin, so you need to establish a clear pricing strategy as a store.
Features of the Major EC Malls
Among EC malls, let's explain the characteristics of the three particularly large and well-known major EC malls: "Amazon," "Rakuten Ichiba," and "Yahoo! Shopping."
Amazon (Amazon Japan): Marketplace-Style
Amazon is the world's largest EC mall and takes a marketplace-style format.
A key feature of Amazon is that you can move relatively quickly from account registration to starting sales. Since products are registered in a listing format, you can start selling with minimal effort regardless of your business size.
Another major feature is that you can use FBA (Fulfillment by Amazon), a fulfillment service.
FBA is a service (paid) that outsources shipping operations to Amazon. This lets a store hand off the entire chain of delivery-related work to Amazon — inventory storage, packing and shipping, and returns handling.
However, some product categories, such as pharmaceuticals and medical devices, may not be eligible, so if you're considering using FBA, be sure to check whether the products you plan to sell comply with the terms.
Rakuten Ichiba: Tenant-Style
Rakuten Ichiba is a tenant-style EC mall that boasts the largest gross merchandise volume domestically.
A key feature is that it captures users within the "Rakuten Economic Zone," who make use of Rakuten Points.
Another feature of Rakuten Ichiba is its high point-back rate for users of Rakuten Group services, including the Rakuten Card.
It also regularly holds its own events (campaigns) such as the Rakuten Super Sale and Shopping Marathon, offering stores that open there frequent chances to boost sales.
In addition, Rakuten Ichiba's store-opening review and store operation guidelines are significantly stricter than other EC malls, giving the mall itself high brand strength.
Yahoo! Shopping (Including the Former PayPay Mall): Tenant-Style
Yahoo! Shopping is a tenant-style EC mall operated by Yahoo Japan Corporation.
Its biggest feature is that there's no initial cost or fixed monthly fee to open a store on the mall. It also offers the benefit of expected traffic from the major search site Yahoo! JAPAN.
Incidentally, Yahoo! Shopping previously also operated a separate, independent EC mall called PayPay Mall, but as of October 12, 2022, the two malls were merged and consolidated into Yahoo! Shopping.
Comparison of Annual Gross Merchandise Volume (FY2021)
| Site Name | Annual Gross Merchandise Volume |
|---|---|
| Amazon | Approx. 2.5 trillion yen *1 *2 |
| Rakuten Ichiba | Approx. 5 trillion yen *3 |
| Yahoo! Shopping | Approx. 1.2 trillion yen *4 |
*1 Converted at the 2021 average exchange rate of 1 USD = 110 yen
*2 Estimated from Amazon's 2021 annual report
*3 Quoted from Rakuten's press release dated January 4, 2022
*4 Quoted from Z Holdings' FY2021 earnings highlights (includes results from PayPay Mall, ZOZOTOWN, ASKUL, LOHACO, LINE FRIENDS, and LINE Gift)
Features of Other EC Malls
In Japan, there are numerous EC malls besides the major ones. Let's explain the features of some representative ones among them.
au PAY Market (Formerly Wowma!)
au PAY Market is an EC mall backed by au, a major mobile carrier. It was formerly named Wowma!, but was renamed au PAY Market in May 2020.
Its feature is that it can capture users of the KDDI Group, including au carrier customers. Another appeal is the expected traffic to au PAY Market from KDDI Group services.
It also has a tie-up with the Taiwanese company Ruten, giving it a cross-border EC feature that lets you list products on a Taiwanese EC mall.
Qoo10
Qoo10 is an EC mall operated by eBay Japan LLC, aimed at the domestic Japanese market.
A major feature, like Yahoo! Shopping, is that there's no initial cost or fixed monthly fee to open a store on the mall. Generally, only a sales commission on revenue is required, keeping running costs low.
Qoo10's main target is women in their 20s to 40s — 75% of Qoo10's members are women, and 70% are in their 20s to 40s (as of 2020). Because of this, the mall tends to sell relatively affordable items in the women's fashion and beauty/cosmetics categories.
Yamada Mall
Yamada Mall is an EC mall operated by Yamada Denki.
Its features include being able to use points earned at Yamada Denki's physical stores, and vice versa — points earned on Yamada Mall can be used at physical stores. Also, since Yamada Denki also operates a real estate business, many customers hold large amounts of Yamada Points from purchasing real estate.
Since users who frequent Yamada Denki tend to visit, home appliance category products sell well. On the other hand, if you deal in products outside the home appliance category, a drawback is that customer-acquisition power is weaker than other malls.
d Shopping
d Shopping is an EC mall jointly operated by NTT DOCOMO, Inc., a major mobile carrier, and All About Life Marketing Inc.
Its features are that you can earn and use d Points, and it has many DOCOMO carrier users. Since DOCOMO carrier billing can be used as a payment method, DOCOMO communication service users are more likely to flow in — a positive factor for customer acquisition.
Sample Hyakkaten
Sample Hyakkaten is an EC mall operated by All About Life Marketing Inc.
Its biggest feature is that it's a sampling site. Because it lets users try product samples for free or at a discounted price, it has a different character from other EC malls.
Another feature is its low running cost. Since there's no fixed monthly fee, all you need to pay Sample Hyakkaten is a sales commission on revenue.
On a more detailed note, Sample Hyakkaten's product pages are somewhat harder to maintain compared to other EC malls.
Pricing and some product information can't be edited directly by the store — you need to request a correction from the operator's customer support — which may feel like a drawback for businesses that want to make frequent, detailed adjustments. (Information as of October 2022.)
Ponpare Mall
Ponpare Mall is an EC mall operated by Recruit Co., Ltd.
Since the Recruit Group operates services like Jalan and Hot Pepper, you can expect traffic from those services, giving it customer-acquisition strength.
On the other hand, in addition to sales commissions, it also charges an initial cost and a fixed monthly listing fee, so be aware that running costs apply.
Recommended EC Malls by Business Type
Among the many EC malls available, here we focus on five malls and explain which businesses each one is recommended for, based on their characteristics.
| Site Name | Features | Recommended For |
|---|---|---|
| Amazon | Can outsource logistics operations | ・Individuals or small-scale EC businesses ・Products are widely recognized NB (national brand) items ・Want to prioritize quick sales results over brand building |
| Rakuten Ichiba | The largest domestic mall with strong customer-acquisition power | ・Want to prioritize brand recognition ・Want to express a unique brand world ・Willing to pay somewhat more to acquire customers |
| Yahoo! Shopping | Relatively low running costs | ・Want to open a store while keeping costs down ・Already have a fast delivery system in place ・Want to run initiatives linked with external sites |
| au PAY Market | Has many au carrier users | ・Want to reach a different audience than the major EC malls ・Main target for your products is people in their 30s to 50s ・Considering cross-border EC into Taiwan |
| Qoo10 | A high proportion of young women among members | ・Your target audience is women in their 20s to 40s ・Can sell at relatively affordable prices |
Amazon Is Recommended For:
Amazon is recommended for those who want to start an EC business more quickly, or smaller businesses, since you can outsource logistics-related tasks and it's relatively easy to go from listing to starting sales.
Amazon's own customer-acquisition power is also huge, and if you handle well-known, widely recognized NB (national brand) products, it's easier to generate sales, making it well suited for those who want to build a sales track record quickly.
On the other hand, it's difficult to boost brand recognition, so it's not particularly recommended for those wanting to sell PB (private brand) products.
Note that Amazon prohibits the use of in-mall advertising for certain categories, such as pharmaceuticals, so check in advance whether ads can be used for the products you plan to sell.
Rakuten Ichiba Is Recommended For:
Rakuten Ichiba has strong customer-acquisition power but also high running costs, so it's recommended for those who want to prioritize customer acquisition even at some cost.
It also offers relatively high freedom in site design among the major EC malls, making it especially well suited for those who want to prioritize expressing their brand's world, even at extra cost.
Rakuten Ichiba's store management system, RMS, comes with a full set of features needed for EC operations — from site building to order management, email delivery, and data analysis — making it one of the easier major EC malls in which to run a marketing PDCA cycle.
Yahoo! Shopping Is Recommended For:
Since Yahoo! Shopping has no initial cost or fixed monthly fee, it's recommended for those who want to open a store while keeping running costs down.
Yahoo! Shopping has a mechanism called "Excellent Delivery," which gives stores with a low shipping-delay rate and a short lead time from order to shipment a boost in in-mall search ranking.
Because of this, it's especially recommended for those who can respond quickly, from order through delivery.
It also has no restrictions on external links under the mall's terms, letting you build a traffic path to your own EC site, making it recommended for those running their own EC site in parallel. Note that this is information as of October 2022, so be aware the guidelines may change in the future.
au PAY Market (Formerly Wowma!) Is Recommended For:
au PAY Market is recommended for those who already have a store on a major EC mall and want to reach a different user base as well.
Also, au PAY Market's user base is roughly 50/50 between men and women, but by age, people in their 30s to 50s account for about 80%, so it's recommended if your product's main target matches this age group. (Information as of October 2022.)
Qoo10 Is Recommended For:
The majority of Qoo10's users are women in their 20s to 40s. So it's recommended for those handling relatively affordable products in the women's fashion or beauty/cosmetics categories.
One thing to note: since Qoo10 originally started as a Korean EC mall, the specifications of its management system, QSM, differ somewhat in character from domestic Japanese EC malls.
You may also notice some awkward Japanese phrasing when using its operational support services, so this EC mall tends to be easier to use for those who already have a certain level of EC business know-how.
Summary: Points for Choosing an EC Mall and Future Outlook
EC malls are a highly effective platform for starting online sales. As explained in this article, each EC mall has its own characteristics, and it's important to choose based on your business goals, the products you handle, and your target customers.
The key points for choosing an EC mall can be summarized as follows:
- Does it fit your company's business size and goals?
- Does your target customer base match the mall's user base?
- Does the product category you handle match the mall's characteristics?
- Do the initial cost and running costs fit within your budget?
- Does the mall offer solid support and tools?
It's also important to take a long-term view when using an EC mall. We recommend a phased strategy — making use of an EC mall's customer-acquisition power in the early stages, while also keeping an eye toward building your own EC site in the future.
Going forward, as technology evolves and consumer behavior changes, EC malls are expected to evolve in form and function as well. Staying on top of the latest information and flexibly adjusting your strategy will be key to success in online sales.
