With the recent purchase of Southeast Asian e-commerce giant Lazada by Alibaba, e-commerce is the industry to talk about here in Asia.
However, Japan gets little mention despite its famous technological advances. InvestAsian discovers that the Japanese e-commerce market is small yet full of potential.
Let’s have a quick overview since Japan’s e-commerce industry is obscure outside of its own borders.
Japan’s e-commerce sector is worth a sizable amount. Sales were estimated at over US$80 billion in 2015 compared to China’s US$650 billion. This is even though Japan’s population is less than a tenth of China’s.
There’s now widespread acceptance among Japanese to shop online. Statistics reveal that about 80% of all Japanese consumers do their shopping online. Seven out of ten Japanese shoppers are registered with Rakuten which is Japan’s market leader.
Due to the Japan’s aptitude in everything technological, the nation was one of the earliest to develop its e-commerce industry. It was the first country to let consumers pay for the products they bought online at convenience stores too.
A firm aptly named Start Today (TYO:3092) is our pick for this week. It’s one of the first companies in Japan to start selling products online.
Start (To Invest in Japan) Today
Start Today focuses on e-commerce and other related services. Its main business is operating the online apparel shop ZOZOTOWN – Japan’s largest fashion e-commerce site. The firm is globally recognized as having ranked #12 on Forbes’ list of Most Innovative Growth Companies.
Start Today does more than sell its own branded products through its store though. It solicits online “tenants” and offers them a place to sell their products. These shops are called ZOZOTOWN’s “original selection shops” and they’re featured prominently on the website.
InvestAsian believes that it’s a good time to invest in Japan with shares of Start Today for more than a few reasons.
First, it’s a profitable company which boasts net profit margins of above 20% – more than any of its competitors. High profitability has also led to better returns for its investors with its ROE and ROI of 40% and 38% respectively.
Not only that, its financials are extremely healthy too. With no debt at all in the company’s current financials, Start Today is able to take on a great amount of debt should it see any opportunities for expansion.
We expect Start Today to grow and bring generous rewards to its investors.
UPDATE FOR 2017: Shares of Start Today have increased by over 50% since our recommendation last year. We now rate them as a hold. Stay tuned for other stock picks, and we’ll update this article if circumstances change.
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