Facing established players like Amazon and Rakuten, Alibaba enters the Japanese e-commerce market with Tao.

Alibaba Group has unveiled Tao, a cross-border e-commerce platform tailored for Japanese consumers, as part of its latest push into international markets. The platform, first reported by Chwang on October 31, features around 3 million products across various categories and incorporates localized services such as customer support, payment methods, and tailored product recommendations. To enhance consumer trust, Alibaba has introduced a 40-day free return policy, and partnered with leading Japanese logistics firms like Yamato and Sagawa to ensure smooth delivery operations.

Tao launched in Japan on October 3, according to Google Play, and has so far recorded between 10,000 and 50,000 downloads, as per Sensor Tower statistics. Despite its early traction, the app has faced mixed reviews, earning an average rating of 2.5 stars as of December 16. User concerns have largely centered on its recommendation algorithm, inconsistent customer service, and inadequate after-sales support.

The platform offers a wide range of payment options to cater to Japanese shoppers. These include PayPay, Japan’s largest digital wallet; Pay-easy, which enables payments via online banking, ATMs, or post offices; as well as credit cards and convenience store payment methods.

This extensive payment variety aligns with Japan’s evolving e-commerce habits. Historically a cash-heavy society, Japanese consumers have gradually embraced alternative payment methods for online purchases. According to JP Morgan’s 2021 report on global e-commerce, credit cards are the dominant choice, accounting for 68% of all online transactions. This is followed by bank transfers (13%), with cash and digital wallets each representing 5%. The report, which cited Japanese e-commerce data from WPL, highlights a shift in consumer behavior toward digitalized transactions.

Alibaba’s move comes as e-commerce continues to expand in Japan. Revenue in the Japanese market is expected to hit USD 169.4 billion this year, with projections suggesting it could grow at a compound annual rate (CAGR) of 9.23%, reaching USD 263.4 billion by 2029, according to Statista. While Japan’s aging population has at times been associated with slower tech adoption, the pandemic has seen significant digitalization in recent years, driving a surge in e-commerce activity.

Competition in Japan’s e-commerce market is fierce, with well-established players like Amazon, Rakuten, and Yahoo Shopping (Japan) holding strong positions, alongside smaller rivals such as Mercari and DMM.com. Findings from a 2024 report by the Japan External Trade Organization (JETRO) suggest Alibaba has a foothold, cited alongside AliExpress by 16% of surveyed users for recent engagement. Amazon, however, led with 24%, reflecting its dominance in the market.

Alibaba’s venture into Japan reflects its broader international ambitions. The company has made significant investments in other markets through platforms like Lazada in Southeast Asia, Trendyol in Turkey, and AliExpress, which has expanded its presence to 215 countries. Taobao and Tmall, initially focused on China’s domestic market, have also ventured into cross-border commerce, recently adopting English interfaces and diversifying payment and delivery options to attract global buyers.

Japan presents a unique opportunity for Alibaba. The country’s aging population, coupled with a shrinking labor force, has created challenges in meeting consumer demand. Cross-border e-commerce platforms like Tao can help address these supply gaps.

At the same time, Japan’s receptivity to emerging technologies like drone deliveries demonstrates how it is adapting to shifting logistical needs. By launching Tao, Alibaba positions itself to capitalize on Japan’s maturing e-commerce landscape while reinforcing its role as a global e-commerce leader.

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