In China, the rapid spread of mobile payments has caused banknotes to quickly disappear from life in just over a decade. However, in Japan, which is separated by a sea, consumers still prefer to use cash.
According to the data, Japan's mobile payment penetration rate is only 27% [1], ranking last in Asia. However, for Chinese merchants going overseas to Japan, this is an opportunity with huge potential. On Amazon Japan, there is a Chinese company called Sophia, which specializes in “men's wallets.” Relying on in-depth market insight, high-quality products, localized design, and refined operating methods, it has explored a new low-cost, low-risk, and high-premium model of going overseas in Japan.
Today, we invited Mr. Luo, the founder of Sophia, to share with us how domestic wallets can win the hearts of discerning Japanese consumers and keep its star products in the category!

In 2016, the city's new middle class's pursuit of quality of life made “overseas shopping” and “proxy shopping” a popular business. That year, Mr. Luo, who was new to society, had a keen sense of business opportunities. He set up a store on a domestic e-commerce platform and started a business specializing in imported bags. It was during this process that Mr. Luo met a Japanese luggage customer and also got a preliminary understanding of Japan.
However, “cross-border” is not only about “bringing in” overseas products; it is also about “going out” with domestic goods. After three years of “shopping,” domestic e-commerce became more and more “volumetric,” and Mr. Luo, who dared to think, fight, and work, also began planning to “start a second business.” In 2019, President Luo began to shift from imports to cross-border exports, and his first stop was Japan.

CEO Luo, founder of Sophia
The reason I chose Amazon Japan is because Japan has a large customer base with high consumption and high purchasing power, and the market potential is great. My family also relies on being an Amazon Japan site and has achieved good results. They can provide me with some overseas ideas, operational skills, and experience. Amazon can also provide me with professional and timely support and guidance.
Second, we also have our own factory and independent supply chain resources. We believe that as long as we can understand and grasp the preferences of Japanese consumers and quickly adjust and respond to market changes, we will have a chance to succeed.
Moreover, thanks to the advantages of logistics costs and operating costs in Japan, the testing cost of light and light products such as wallets is also very low, the pressure to prepare goods is low, and the capital turnover is fast, making it ideal for inexperienced sellers to get started quickly.

Due to the experience and resources he has accumulated before, Mr. Luo still chose the “wallet” subcategory in Japan, and luggage products such as wallets also have huge volume and potential in Japan. According to statistics, in 2023, China's travel goods and luggage were based on export value. The top ten export destinations were the European Union, the United States, ASEAN, Japan, the African Union, South Korea, the United Kingdom, Australia, Russia, and Mexico, accounting for 78.1%. As can be seen, in addition to the EU, ASEAN and many other countries combined, Japan is the second largest luggage export destination after the US [2]!

CEO Luo, founder of Sophia
Sophia's goal is not to “roll up” the ultimate low price wallet; we initially positioned it in the middle to high end. Japan, on the other hand, is an ideal market for products with high customer unit prices and high profit margins.
First, Japanese consumers generally believe that high sales price corresponds to high quality, and they are willing to pay for excellent quality, exquisite craftsmanship, and unique experiences.
Second, Japan has a huge cost advantage in logistics, operation, etc. Amazon will also provide a full range of support such as a “new product entry plan”, official GSO free translation service, and Gengo free translation service, making it easier for novice sellers to reduce costs and increase profits.
Therefore, in Japan, our ordinary leather products can achieve high sales volume, but we also use higher-end wallets for profit.
Specifically, on the one hand, we will select world-class leather from Tochigi Prefecture in Japan and differentiate ourselves with impeccable materials and craftsmanship.

On the other hand, we will place production in China and rely on the advantages of Guangzhou's local apparel industry belt to control supply chain costs. Moreover, wallets are non-standard products. Compared with popular categories such as 3C, they are less competitive. They are suitable for testing at low cost and low risk, so we can expand into larger categories after achieving steady growth.
At the same time, Mr. Luo not only chose “wallets,” a category that is easier to enter the Japanese market, but also further segmented the product and chose to use it as a “men's wallet.” Behind this is also President Luo's accurate insight into the Japanese consumer group.

CEO Luo, founder of Sophia
The sheer size and purchasing power of male Japanese consumers.
Today, more than 60 million Japanese residents are men [3], and in terms of income, Japanese men are significantly higher than women [4].
Also, unlike the “social animals” and “otaku” labels that many people think, Japanese men love online shopping. According to some data, Japanese men in their 20s use e-commerce sites such as Amazon more than 3 times a month [5].
Amazon's rich selection of products, efficient logistics, and convenient shopping experience have also attracted a large number of male users.

Thanks to strategic focus and operational refinement, Sophia relied on a small team of 5 people to become a leading brand in the Japanese men's wallet category. Among them, one of Sophia's star products has reached the top of the category, and products such as card holders and coin purses are also at the top of the category.

For Chinese people, Japan is a country that is both familiar and unfamiliar. On the one hand, China and Japan are across the sea, and trade exchanges are frequent; but on the other hand, Japanese consumers also have a completely different lifestyle from other countries, creating unique consumer trends such as the “silver hair economy” and the “living alone economy,” which tests sellers' ability to localize their insight and operation. Precisely because of a lack of experience in operating in Japan, the first product launched by Sophia was ruined.

CEO Luo, founder of Sophia
Our first product launched in Japan was a small coin purse. This product is small in size and low in cost, making it ideal for “testing the waters” in the early stages of entry.
However, we probably don't understand the needs of Japanese consumers, and we don't have a good grasp on the details of the product. For example, when buying a coin purse, Japanese consumers will consider whether they can hold banknotes or credit cards, but our coin box is not designed to hold banknotes, has a single function, and is not easy to use. The daily sales volume is only about 10 orders, and there are some bad reviews. After this loss, we quickly optimized the design, added a mini bill holder, improved product functionality, and increased sales significantly after re-launch.

Since then, Sophia has gradually accumulated experience in the operation of Japanese stations and has formed a unique set of localized product selection methodologies. According to Mr. Luo, the critical first step is to conduct in-depth and detailed research and insight into Japanese consumers.
01 Willing to pay for quality products and services
They pay great attention to the quality and details of the product. They are passionate about high-quality natural materials such as high-quality textiles, leather, and wood. Their natural “craftsmanship” also makes them value the craftsmanship and design of the product. Any minor defect, such as a scratch or dent, affects their evaluation of the product. But in turn, they are also willing to pay higher prices for high-standard products and services.
02 Have unique aesthetic preferences
Japanese consumers have their own unique cultural and aesthetic preferences. They like simple, clean, and highly functional design styles. They want products not to be designed too much, and mainly in pure colors. However, Japanese consumers don't just prefer basic colors such as black and brown. Our previous green commuter pass holder was sold directly and sold out. Japanese consumers may think green is a lucky color.

03 Prefer feature-rich products
Japanese consumers love products that are versatile and easy to use, provide convenience in their daily lives, and are easy to operate and maintain. Therefore, our wallets are often designed to be moderately sized, which is both easy to carry and can hold enough cards, coins, and notes. Moreover, we will add RFID protection functions, which can avoid risks such as theft and ensure users' payment security.

04 Have higher brand loyalty
Japanese consumers are often very loyal to brands they know and trust, and brand awareness directly affects their purchasing decisions. Building a brand in Japan has always been our goal.

Based on in-depth insight into Japan's core target consumer groups, Sophia will also use competitor products and customer reviews as important research subjects to obtain inspiration for product selection and direction for product improvement.

CEO Luo, founder of Sophia
As small to medium sellers, we need to understand their pricing strategies, marketing methods, and customer feedback by studying similar products or brands that have been successful in the Japanese market, so as to find our own differentiated competitive advantage and develop and operate products according to our own positioning. These brands usually include some international luxury brands, local brands Renma, BEERBELLY, m+ (M+), and Chinese leather brands with excellent localization. In addition to this, we will also actively seek opinions from supply chain partners to optimize and improve the design of products in a targeted manner.
Additionally, we pay particular attention to user reviews in other brand listings, which are the best channel to understand consumer needs and pain points.

💡 Actual case
For example, at the time, we saw that many Japanese products used synthetic leather, and the service life was too short, so we upgraded to a leather fabric from Japan and guaranteed a balance between quality and price, which other competitors could not do.
Furthermore, mobile payments are currently not very popular in Japan, and many residents still use coins, so wallets must have larger coin boxes and card slot designs. These are all key product points that need to be paid attention to and improved.

Sophia's position on the product is very clear. The main group portraits are male office workers. Therefore, Mr. Luo not only had in-depth insight into Japanese “wallets,” but also found the unmet needs of Japanese men when using wallets and improved them, further opening up sales in the Japanese men's wallet market.

CEO Luo, founder of Sophia
As an example, in our research, we found that a very typical characteristic of Japanese male office workers is that many office workers wear formal attire on a daily basis. When wearing this type of clothing, they have specific requirements for the design of wallets and card holders, so the shape and thickness of the Sophia wallet must match their daily wearing habits, and they will focus on describing this characteristic on the listing.
In addition to this, when we visited offline businesses in Japan, we also saw that many offline products in Japan provide customized services, but there are few custom wallets on Amazon, and we are also considering whether we can make customized leather products, such as personalized lettering, custom designs, etc. This kind of customized service has great potential in the Japanese market, especially in the high-end market.
We also explore specific niche markets in depth. For example, high-end sports leather products, luxury travel leather accessories, etc., all have the potential to be successful among specific groups.

Having a localized selection of high-quality products is only the first step in successfully going overseas. Achieving high sales and revenue growth requires an effective operating strategy.
Since entering the market, with the support of Amazon's “increasing” promotion policy year by year, Sophia, as a new non-local brand, has continuously increased its popularity through refined operations, and has steadily increased sales volume in the Japanese site.
In this regard, through gradual exploration, Sophia has also summed up practical experience in operation that needs to be paid attention to in order to do a good job in Japan.

No.1 Steady launch
Impress Japanese consumers with localized listings
Currently, Sophia has maintained a new steady pace of product selection for about a month. This pace can keep personnel costs stable, plan the supply chain and inventory more rationally, and gradually open up the huge market in Japan.
At the same time, in terms of upgrading, Sophia will also focus on two parts. One is to use the “VINE Plan” as a required option to quickly accumulate a large number of high-quality reviews; the other is that when creating listings, Sophia will not use particularly bright and bright colors, but will choose dark or light colors, which are more in line with the aesthetics of Japanese consumers.
At the same time, the copy of the listing is also very important. We will use AIGC to edit it, and we will also ask our local friends in Japan to see if the terms are authentic.

No.2 Lending FBA
Next-day delivery across the world creates an outstanding user experience
In terms of logistics, we will basically use FBA for delivery, but we also have overseas warehouses as preparation warehouses, which can reduce the pressure of preparing goods to a certain extent. FBA has a very fast time period. Next-day delivery can be achieved almost throughout Japan. Third-party logistics may not be as timely, and FBA can reduce many of our customer experience concerns.

No.3 Advertising+Promotion Combo
Accelerate drainage transformation
We will also use advertising tools such as product promotion and display promotion, and we will also sacrifice part of the profit for promotions such as “coupons”. This combination can enable products to grow rapidly in a short period of time. In addition to this, brand promotion videos are also an effective tool to increase brand awareness and drive sales conversion in Japan.

No.4 Annual 30+ Big Sale
Traffic is filling up and growing rapidly
At the same time, Japanese consumers are very easily attracted to benefits such as discounts and points, and promotions are the key to doing well in Japan. Amazon Japan has more than 30 major promotions throughout the year, and traffic is full. Every time we participate in the promotion, we can almost double our sales volume.
From February to April's new life, to the major Prime Day in the middle of the year, to the “Black Five Network One” at the end of the year, they are all major promotions we focus on. Like Prime Day, we only need to prepare products and maintain listings and reviews, and we can have the opportunity to double our growth through promotion+organic traffic.
At the same time, Japan also has some very unique promotions. For example, Japanese workplaces give “year-end bonuses” twice a year in summer and winter, and the bonus amount is equivalent to 2-3 months' salary [6], which is also a very important promotion point. In addition, at important points such as graduation season, we will also do some targeted promotions and promotions.

According to Sophia, men's wallets are a relatively stable category. As long as they can keep steady and penetrate the category, they can not only begin to achieve explosive growth, but also maintain stable sales over a long period of time. Relying on excellent quality and service, Sophia's return rate in Japan is only about 1%, further reducing operating costs and increasing profit margins.
With the spread of mobile payments in Japan and the advent of the “cashless era,” Sophia is not set in stone, but is continuously improving and adjusting its product selection strategy and design direction according to changes in Japanese business development. At the same time, Sophia is also planning to enter Amazon's US website to explore new business growth in a larger market.

Do you have any good suggestions or experiences for sellers who want to enter Japan in 2024?
For small to medium sellers, you can initially choose relatively niche or emerging product categories to avoid direct competition with large brands and reduce market risk. At the same time, Japanese consumers pay attention to quality, details and service, and have high requirements for product packaging, design, and after-sales service. Sellers need to thoroughly understand these characteristics and make necessary adjustments or improvements to the product according to the preferences and habits of Japanese consumers, such as adjusting the size, color, material, etc., to increase the acceptance of the product.