Growth of Japan’s E-Commerce Market and Intensifying Competition among Portal Sites

「In the e-commerce market, the market continues to expand, while competition among operators is intensifying further as new entrants increase, in addition to higher procurement prices and logistics costs. The basis of competition is shifting from price to the quality of the customer experience (CX), while rising unit costs for advertising and sales promotion are putting pressure on operators' earnings.」

「However, although sales of products with strong brand equity remained solid, earnings were pressured by intensifying competition in certain product categories and the impact of pricing measures aimed at promoting sales of the Company’s private-label products.」

「Against this backdrop, in our domestic e-commerce sales, we cautiously advanced price adjustments to reflect higher procurement costs while keeping pace with price competition from competitors. However, private-label product sales remained sluggish, and traffic to domestic malls declined. Although average spend per customer increased, purchases fell below the previous year, resulting in sales of 95.4% of the same period of the previous year.」

「Against this backdrop, in our domestic e-commerce business, we worked to improve the convenience of delivery services, including stable same-day shipping on Sundays and public holidays, while cautiously advancing price adjustments to reflect higher procurement costs. We also revamped our flagship site at the end of July 2025 and enhanced its functions, including enabling product searches by consumers' concerns and by usage scenario, in an effort to acquire new customers. However, sales remained difficult because of declining traffic, sluggish private-label product sales and intensifying competition for national-brand seasonal products.」

「In our domestic e-commerce business, we worked to secure profits by cautiously passing higher procurement costs on to prices while keeping pace with price competition from competitors. Although traffic and purchases on domestic malls fell below the previous year, demand for seasonal products increased in the fourth quarter, when unusually severe winter cold was observed, allowing sales to recover to 98.5% of the previous fiscal year's level.」

「Against this backdrop, in our domestic e-commerce sales, we worked to secure profits by cautiously passing higher procurement costs on to prices while keeping pace with price competition from competitors. Although average spend per customer (the purchase amount per order) increased 2.8% year on year, the continuing decline in traffic to domestic malls led to fewer purchases than in the previous year, resulting in sales of 90.6% of the same period of the previous year.」

「At Rakuten Ichiba, sales of lower-priced products were affected by competitors' discounting measures and the rise of emerging China-based e-commerce businesses, leaving sales sluggish at 89.1% of the same period of the previous year.」

「For domestic sales during the fiscal year, we responded to changes in the external environment, including national-brand manufacturers entering e-commerce and discounting by competing stores, and actively pursued various sales promotions, mainly through coupon initiatives, influencer initiatives and live events, while cautiously passing higher procurement costs on to prices. As a result, total domestic sales were slightly above the previous fiscal year's level at 100.8%, but discounting by competing stores and restrained mall promotions reduced traffic to our main stores, resulting in lower profit margins and fewer purchases.」

「At Rakuten Ladies, the impact of competitors' substantial discounting measures continued. In addition, as the number of searches for certain national-brand keywords on the mall declined, visits to our store also fell. Although we attempted to offset this through Room influencer initiatives and advertising initiatives, sales remained sluggish at 90.3% of the same period of the previous year.」

「Meanwhile, sales at Rakuten Ladies remained sluggish at 89.3% of the same period of the previous year, affected by competitors' substantial discounting measures.」

「We operate primarily an e-commerce business using media such as the internet and smartphones to provide services and products specialising in innerwear. Competitors exist in these fields, and we expect new entrants to continue emerging. We are working to maintain our competitiveness, including by planning, developing and expanding sales of high-margin private-label collaboration products. However, if intensifying competition leads to a decline in market share or price competition results in lower selling prices, this could affect our operating results and financial position.」

「Competitors exist, and we expect new entrants to continue emerging. We are working to maintain our competitiveness, including by planning, developing and expanding sales of high-margin private-label collaboration products. However, if intensifying competition leads to a decline in market share or price competition results in lower selling prices, this could affect our operating results and financial position.」

「Meanwhile, overseas sales were sluggish as competition from manufacturers selling directly to consumers intensified price competition, compounded by weak performance during Singles' Day, China's largest shopping event on 11 November.」

「Sales through overseas sites fell well below the previous year's level as competition among manufacturers and price competition intensified during China's largest shopping event, Singles' Day, on 11 November.」

「However, the environment remained difficult as a result of the impact of freight rate increases that had continued since the previous year and intensifying competition among companies across different business formats.」

「E-commerce operators are expected to be increasingly weeded out as competition to gain market share among major online shopping malls intensifies each year and major e-commerce operators pursue acquisitions.」

「The e-commerce retail industry to which we belong continues to face a difficult environment, including the need to respond to consumers' preference for saving and increasingly diverse values, higher freight rates imposed by the delivery industry, and intensifying competition among companies across different business formats.」

「The retail industry continues to face a difficult operating environment. Consumers remain strongly oriented toward saving, while hiring has become more difficult as employment conditions improve, and competition among companies is becoming increasingly intense as consumer purchasing behaviour changes across online and physical stores.」

「However, we struggled severely as a result of intensifying price competition among companies in internet-based sales channels and higher personnel expenses arising from our proactive assignment of personnel to suitable positions as we worked to establish a robust management structure for the future.」

「Meanwhile, we struggled as intensifying price competition in the innerwear industry to which we belong led to a decline in gross profit margin, while development of high-margin OEM products was delayed.」

「We operate primarily an e-commerce business using media such as the internet and smartphones to provide services and products specialising in innerwear. Competitors exist in these fields, and we expect new entrants to continue emerging. Accordingly, if intensifying competition leads to a decline in market share or price competition results in lower selling prices, this could affect our operating results and financial position.」

「Japan's domestic e-commerce market remains on a growth trajectory, but competition among marketplaces such as Rakuten Ichiba, Yahoo! Shopping and Amazon to acquire customers is becoming increasingly intense.」