Japan's 35 Years of Stagnation, and the Arrival of Its 'China Moment

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The phrase "the beauty of economic recovery" has become a popular term in the first half of this year, evoking strong nostalgia for the vibrant past and resonating deeply with countless young people.

In Q1 2025, Japan's GDP once again showed negative growth. This means that since the bursting of Japan's bubble economy in 1989, the country has experienced economic stagnation for as long as 35 years. During this period, Japan’s share of global GDP dropped from about 15.3% in 1989 to 4.18% in 2022. Its total GDP, which was ranked second globally, was surpassed by China in 2010 and by Germany in 2023, falling to fourth place worldwide.

Interestingly, amid Japan's ongoing economic weakness, several emerging Chinese e-commerce platforms have started looking toward this “land of lost opportunities.” On June 30, TikTok announced the launch of TikTok Shop in Japan, officially rolling out its shopping feature, allowing sellers to enter the world’s third-largest e-commerce market (according to Statista Market Insights data, Japan ranks third globally with a market value of $169 billion). In addition, Temu, TAO (under Alibaba), and JD Japan launched their services in Japan between 2023 and 2024, while SHEIN entered the Japanese market at the end of 2020.

If "the beauty of economic recovery" represents a forward-looking, hopeful aesthetic, then over the past "lost 35 years," Japanese youth have largely embraced a lifestyle characterized by minimal effort, reduced consumption, small living spaces, and low birth rates. They have long been disconnected from "beauty" and instead reflect a sense of despair without visible hope.

As we reach 2025, Japan’s trend of economic stagnation becomes even more pronounced. Recently, in the draft of Japan’s "Basic Policy on Economic and Fiscal Management and Reform" released by the government, the word “risk” appeared 18 times (including in the document index), significantly more frequently than in previous years, reflecting the government’s concerns about the economic situation.

So why are Chinese e-commerce platforms now focusing on the Japanese market? Has the sluggish Japanese market begun to present structural opportunities in e-commerce? Could Japan's declining consumer spending open up new possibilities for Chinese products?

It is worth noting that despite both being East Asian societies, the Japanese market is highly unique. On one hand, the yen is the only non-Western sovereign currency among the world's top three reserve currencies; on the other hand, Japan is the only developed economy outside the United States with a population exceeding 100 million (123.44 million as of March 2025, according to the official website of the Ministry of Foreign Affairs). This makes it a "quasi-major" market.

However, in the developed nation of Japan, some habits seem outdated—for example, cash remains the dominant payment method, and the adoption rate of electric vehicles is low. Although Japan’s e-commerce sales are expected to grow at a compound annual rate of 5.2% over the next four years (GlobalData data), its e-commerce penetration rate is still less than 10%. Offline retail still holds an unparalleled advantage, moving in a completely opposite direction from the rapid development of e-commerce in the Chinese market.

This is a complex and contradictory developed economy. In The Chrysanthemum and the Sword, the characteristics of the Japanese people were described as: "loving beauty yet prone to violence, valuing etiquette yet fond of fighting, conservative yet eager for novelty, obedient yet stubborn." At the consumer level, this contradiction can also be observed—Japanese consumers are known for being meticulous and demanding, often considered "the hardest-to-please market."

Yet in seemingly "slow" Japan, Japanese brands had already gained global recognition during Japan's economic miracle period (from the 1950s to the late 1980s) through labels such as "pursuit of perfection," "reliable durability," and "craftsmanship spirit." Before the burst of the bubble economy in 1989, Japan’s outward foreign direct investment reached $67.5 billion, making it the largest outward investor globally that year. Globalization was something Japan had already practiced 30 years ago.

During the creation of this article, Xianguang She used the present as an anchor point to observe Japan's current macroeconomic situation and the potential market opportunities it offers to Chinese merchants. By examining changes across time horizons and the uniqueness of vertical markets, we aim to gain insights into the broader picture. As we navigate Japan's "fast" and "slow" aspects, it may well illustrate the saying "slowness equals speed" and serve as the ideal arena for patient capital.

01

After Tokyo's Youth "Escaped the City":

How E-commerce Can Take Over Japan's Future Consumption

For the Japanese, offline consumption is a form of connection.

Around communities, regular customers at neighborhood supermarkets and vegetable shops (Yaoya) receive recommendations for seasonal ingredients along with free side dishes. In established department stores like Takashimaya, staff can remember customer preferences and offer personalized service. During holidays, there is also the tradition of "Fukubukuro" (lucky bags), where packages are carefully selected and accompanied by handwritten cards. Engaging in casual conversation while shopping not only fulfills social interaction but also allows enjoyment of the selection process. Ritual and thoughtfulness represent emotional connections that online platforms struggle to replicate.

Shopping, for the Japanese, is a form of social leisure.

Even the service is commendable. In malls, salespeople maintain an appropriate distance—they greet you with a soft "Irasshaimase" (Welcome) when you enter, but do not constantly push for sales, instead respecting your personal space and quietly returning to their positions. If assistance is needed, they promptly appear to introduce products and meet your needs. Even if you leave without buying anything, they will bow with a smile and sincerely say, "Thank you for visiting." If you make a purchase decision, you’ll receive neatly packaged goods, and upon departure, another deep bow.

There is a core concept in Japanese culture called "Omotenashi" (selfless hospitality), often translated as "customer service." The feelings and connections provided by offline consumption in Japan embody a gentleness that online platforms cannot match.

Studies show that the ability to directly touch and purchase products and enjoy store staff services is a major reason Japanese consumers choose offline shopping.

According to the Teikoku Databank, as of September 2024, Japan had approximately 45,000 century-old businesses—the highest number in the world—and is expected to add around 2,000 more this year. Japan’s historically prosperous offline retail industry has created an almost perfect offline ecosystem. In cities like Tokyo and Osaka, TOD models (developing residential, commercial, and office facilities around subway lines) have reached near-perfection. For instance, underground passages near Shibuya Station connect multiple commercial areas like Tokyu and Seibu, with many residential areas nearby, enabling residents to fulfill all daily needs within a 1-kilometer radius.

Representative department store giants like Mitsukoshi (founded in 1673) and Daimaru (founded in 1717) have histories spanning over 300 years. It is said that Daimaru in Tokyo sees about 80,000 visitors daily, with its lucky bag economy reaching an annual scale of 30 billion yen. Gift wrapping services, charged at 10% of product price, remain in high demand. Targeting high-net-worth individuals, corporations, and government entities, large Japanese department stores have introduced the "foreigner" system, offering detailed VIP services beyond the store.

The prosperity of offline consumption is also related to Japan's high aging population. According to 2020 statistics, there were 36.25 million elderly aged 65 or older, accounting for 29.3% of the total population—a proportion expected to keep growing. Before Japan’s "lost generation," the post-war generation, who grew up during Japan’s 40-year economic boom, became known as the "Dankai no Sedai" (Baby Boomers). These individuals laid solid foundations for many famous Japanese companies, possessing wealth and influence.

Additionally, Japan practices the "Nenkō Joretsu" (seniority-based wage system), a personnel management system centered on employees’ seniority (age, length of service, education, etc.) to determine salary, benefits, and promotion paths. Approximately 49% of wages are determined by seniority factors such as age, length of service, and education, while 47% are linked to job roles.

The longer the tenure, the higher the base salary and seniority allowance, with year-end bonuses increasing with seniority. The Nenkō Joretsu system relies on lifetime employment to ensure long-term employee retention. If employees switch jobs, their seniority resets, leading to significant income reductions (e.g., a 35-year-old switching jobs might see a salary reduction of 1.5–2 million yen), reinforcing employee stability.

The Nenkō Joretsu system locks over 60% of Japan's wealth within seniority-based structures. Therefore, compared to the "lost generation," the "Dankai no Sedai" possesses higher disposable income and controls Japan’s economic power.

A striking example is Japan's highly developed convenience store industry. In 2021, the number of convenience stores peaked at 55,950. Japan has an extremely high density of convenience stores (one per 2,253 people), making them particularly suitable for elderly individuals with mobility issues. Convenience stores within 500 meters of homes not only satisfy immediate daily needs (such as 24-hour operation and shopkeeper guidance) but also function as "community service centers"—providing money withdrawal, ticket booking, bill payments, and home delivery.

For this group, online shopping is unfamiliar. They fear mobile payments and prefer "face-to-face cash transactions," feeling safer that way. According to the People’s Bank of China, the mobile payment usage rate among those over 60 is only 47.8%, while Japanese seniors’ acceptance of electronic payments like PayPay is even lower than 25% (LINE survey).

Where the main purchasing power lies determines the trade model, so Japan’s offline retail industry holds unparalleled advantages.

The key turning point came after the pandemic. According to Ravi Sharma, Chief Analyst for Banking and Payments at GlobalData: "Thanks to the high penetration rate of mobile and online platforms and consumers' strong preference for online transactions, Japan's e-commerce market has achieved sustainable growth over the past five years. Consumers are increasingly shifting from in-store to online shopping, making e-commerce one of the few sectors that maintained positive growth even during the COVID-19 pandemic." Overseas research firm Mordor Intelligence also predicts that Japan's e-commerce market will achieve a compound annual growth rate of 14.3% from 2025 to 2030.

During the pandemic, the homebound online consumption model drove the development of Japan's e-commerce industry, prompting some Japanese people to try online shopping for the first time. After the pandemic, under government promotion and upgraded e-commerce infrastructure alongside remote work trends, some Japanese consumers retained their online shopping habits, complementing Japan’s previously thriving offline scene.

One notable contributing factor is the "return wave" among Japanese youth. Post-pandemic, there has been a clear trend of Japanese youth returning to their hometowns and working remotely. Particularly from 2023 to 2024, Tokyo saw continuous net outflows of population, with people in their 20s and 30s leading the migration.

Japanese sociologist Akira Miura, specializing in consumer research, mentioned in an interview: "Because of the pandemic, more people are moving from Tokyo to suburbs, rural areas, and local cities. In the past six months, more people have moved out of Tokyo's 23 wards than moved in. Tokyo’s population had increased over the past two decades mainly because more tower apartments were built in the city center, attracting wealthy individuals who didn’t want to commute from the suburbs—it took too much time. However, since the outbreak of the pandemic, some companies allowed employees to work from home, leading more people to consider leaving the city for places with lower rent and living costs, avoiding expensive housing expenses.

Tokyo is indeed attractive, but you don’t need to live here every day—you can just shop online. Tokyo exerts strong 'cultural dominance,' but visiting three days a month suffices to enjoy it. In distant rural areas, spacious second-hand houses can be purchased for less than 5 million yen (approximately 313,000 RMB), with beautiful natural scenery, making them ideal for families with children. More and more young people naturally believe there’s no need to live in Tokyo.”

Furthermore, Japanese society presents an olive-shaped structure dominated by the middle class. From the 1970s to the 1980s, about 90% of Japanese people identified themselves as belonging to the "middle class," with a Gini coefficient as low as 0.349 (in 1980), indicating minimal wealth disparity. Since the 1960s, during the 30 years of rapid economic growth, Japan integrated urban and rural medical insurance and pension systems. That means whether in Tokyo or Hokkaido, whether serving as prime minister or working as a farmer, every Japanese citizen receives the same standards of healthcare and pensions.

Regarding differences in life experiences between big cities and rural areas, Zhou Yang, Chairman and CEO of Rakuten Group China, stated: "From the perspective of convenience, there isn't much difference between rural and urban life in Japan. In rural Japan, you can still enjoy excellent coffee, including cafes ranked among Asia’s top 50, which doesn't differ much from what's available in big cities."

Young people returning to rural areas still crave "Tokyo’s charm," and the development of e-commerce can remotely fulfill these demands, encouraging people to maintain online shopping habits post-pandemic. What about the future?

02

When Japan's Shrinking Middle Class Meets Made-in-China:

The Cross-Border Opportunity of Affordable Alternatives

Japan's e-commerce penetration rate of less than 10% leaves considerable room for growth compared to China and the U.S. Moreover, the 1.5x growth rate over the past five years demonstrates Japan's promising e-commerce growth prospects. Currently, Japan's market presents significant structural opportunities, with the combination of "low penetration + high growth" indicating that incremental space far exceeds existing competition.

Zhou Yang believes the Rakuten market is a "blue ocean" for Chinese merchants: "Over the past 25 years of development, our platform has only accumulated over 50,000 stores. We encourage merchants to focus on brand building rather than engage in price wars, creating a very 'non-competitive' environment—an essential characteristic of a blue ocean market."

Opportunities exist, but are they specifically favorable for Chinese merchants?

Firstly, let's examine the strengths. One key strength lies in China's supply chain advantages accumulated over many years. If we look closely at the supply chains of various Japanese industry leaders, it's evident that the Chinese market has always been a core production base for Japanese leading enterprises. In other words, there is virtually no distinction between Japanese and Chinese products in terms of supply chains.

Secondly, Japan's current consumer trends clearly lean towards "quality at affordable prices." Many professionals in the Japanese market believe that Chinese products hold overwhelming advantages in cost-effectiveness and iteration speed, perfectly matching this consumption trend and maximizing our competitiveness.

We also observe signs of Japan's consumption downgrade. For example, white-collar workers opt for secondhand suits, resulting in better business for vintage clothing stores; after 8 p.m., more people gather in supermarket discount sections, and convenience stores' 500-yen ($25 RMB) bentos become standard fare for office workers.

For a long time, Japan's middle class has been shrinking. After the bubble economy burst, middle-class wages remained stagnant while facing rising costs of housing and education. The Japan Times illustrated this trend with two figures: in 1996, the median household income in Japan was 5.5 million yen, dropping to around 4.4 million yen by 2021. Professor Takeshi Shinozaki from Waseda University and researcher Yoko Takahashi from the Japan Institute for Labour Policy and Training divided Japanese society into four classes: the poor class, low-income class, middle class, and high-income class. Their research revealed that in 1985, the middle class accounted for 63.9% of Japanese society, while the high-income class made up 7.4%. By 2018, the middle class had declined to 58.1%, whereas the high-income class had risen to 10.3%.

The pandemic accelerated this shrinkage. An article in Global Times mentioned a real estate professional in his 40s whose income decreased by one-third during the pandemic, along with a male clothing store manager whose annual salary dropped from 6 million yen to 4.5 million yen during the same period.

Due to their discerning nature, Japanese consumers pursue high-quality products but are also price-sensitive, always looking for ways to save money. Thus, Chinese products with high cost-performance ratios might stand a chance to become the top choice for affordable alternatives.

An even more critical advantage lies in the fact that after years of efforts by numerous Chinese companies in the Japanese market, Japanese consumers’ awareness of Chinese brands has significantly increased in recent years.

There are cases where Chinese brands have filled gaps left by Japanese companies failing to meet demand. For example, the Chinese mobile energy storage brand Ecoflow launched the EcoFlow RIVER on Japan’s crowdfunding platform Makuake in 2020, raising over 5 billion yen and setting a record at that time in Japan. Japan is a region frequently affected by earthquakes and typhoons (around 1,500 annually), and Ecoflow positioned its product as an "essential household disaster-preparedness item," aligning with local households’ urgent need for emergency backup power. Additionally, Japan has a thriving camping culture, with portable power sources becoming nearly standard equipment at RV sites, further boosting demand for mobile energy storage.

Ecoflow discovered a blue ocean in Japanese market demand, leveraging supply chain advantages to manufacture high-cost-performance products that met consumer needs, quickly capturing market share and filling the gap. Similarly, the Chinese smart home brand SwitchBot identified a blue ocean opportunity. Despite the presence of traditional electronics giants in Japan (like Sony, Panasonic, Toshiba, etc.), which enjoy high brand loyalty among local consumers, Japanese users tend to be cautious when purchasing high-tech products. According to SwitchBot’s parent company Woan’s prospectus, about 60% of its revenue comes from Japan.

SwitchBot opened the Japanese market by innovatively offering retrofit smart upgrade solutions. For example, its smart switches support IFTTT service (If This Then That, an automation service platform). Through IFTTT, users can link triggers and products from different brands to enable cross-brand automation.

Take an example: a user has both A-brand smart curtains and B-brand smart bulbs installed at home. Both brands support IFTTT service, so the user can use this platform to automatically turn off the B-brand bulb when closing the A-brand curtain. Simply attaching the device next to any switch enables remote control, meaning the installation flexibility is extremely high without altering the structure of the object itself, thus establishing the concept of "non-invasive retrofitting."

With profound insights into Japanese lifestyles and social culture, introducing low-cost, painless upgrades from small improvements enabled SwitchBot to rapidly capture the market.

Zhou Yang told Xia Guang She: "'High cost-performance ratio' and 'high technological innovation' might roughly summarize Japanese consumers' perception of Chinese brands. Japan's e-commerce is an incremental market, and the growth trend itself is the biggest opportunity. Furthermore, as cross-border e-commerce-related systems and infrastructure improve, including advancements in AI technology, cross-border e-commerce could become increasingly 'pure,' making good ideas and products easier to spot.

Looking at categories, 3C electronics seem to have built trust with Japanese consumers ahead of others. New consumption scenario products like IoT, due to gaps in local offerings, are rapidly taking market share for Made-in-China products. Overall, regardless of category, companies offering high-quality products and innovative capabilities find it easier to penetrate the Japanese market.

Besides 3C products, beauty industry researchers also noted that the branding trend of Chinese beauty products is crucial for entering the Japanese market. According to 2023 data, Japan’s per capita cosmetics expenditure was 414 yuan (about four times that of China). Higher spending power implies greater room for brand premium.

For example, Huaxizi has successfully tapped into the Japanese market through social media, KOLs, and oriental-style marketing. Currently, products like the Mongolian ethnic lip veil and Jade Facial Powder achieve higher premiums in Japan, showing brand recognition. In 2024, Japan accounted for 40% of Huaxizi’s overseas revenue, making it the largest overseas market.

Regardless of the product category, Chinese companies entering the Japanese market share common advantages: Compared to Japanese companies or even global enterprises, Chinese companies demonstrate exceptionally rapid innovation and iteration. Moreover, the bigger appeal lies in the fact that although the Japanese market is tough, other markets won't be this picky—using Japan as a springboard can help create international influence by being perceived as a "Japanese brand."

To sum up, in a Japan where offline trade thrives, the growth potential of online channels, the trend of low-priced, high-quality products, and the rising recognition of Chinese brands provide entry points for Chinese merchants aiming to explore the Japanese market. However, Japan isn't winter—it's merely the arrival of early spring. Wanting to sprint in the Japanese market is still an ambitious goal.

03

Japan Is the Representative Market for Patient Capital

Is Japan really not competitive? Not exactly—it's just that Japanese companies compete differently.

Due to their meticulous attention to detail, Japanese companies usually follow standardized and unified procedures rigorously. Zheng Ge, a student who began studying in Japan from junior high school, shared with Xia Guang She: "I worked part-time at a chain tonkatsu restaurant called Saboten in Tokyo during high school. They provided a thick manual for training part-timers, covering everything from dress code before entering the store to how to wash hands and marinate various meats, complete with photos and detailed step-by-step instructions."

In Japan’s business environment, when choosing between short-term profits and long-term operations, the latter always wins. The conservatism of the Japanese market (long decision cycles, high brand loyalty) requires companies to abandon short-term scale pursuits and focus on product refinement and trust-building. Excessive pursuit of short-term results may yield no satisfactory outcomes.

From the perspective of Japanese companies, price wars are seen as "suicidal competition," with "differentiation" being the foundation for survival. Competition isn’t based on price but on innovation and quality. Walking along Kiyomizu坂 in Kyoto, each wagashi (traditional Japanese confectionery) shop hardly lowers prices to compete. Instead, they build lasting relationships with customers through products, services, and culture, winning the market through trust rather than temporary discounts.

Then, when Japanese consumers’ wallets shrink, does their sensitivity to price increase? Where lies the balance between price advantage and the pursuit of high-quality products?

Muji, Japan’s most representative brand, had a renowned CEO named Tadahisa Matsuda. In his book Decoding Muji, he wrote that Muji’s philosophy is "reasonable affordability" and "just right." He pointed out that "affordable" and "high quality" aren't mutually exclusive—they aim to produce products of equal quality and brand reputation but at 30% lower prices. Costs can be saved in "unnecessary areas," such as not relying on brand or packaging to select products. Yet this reflects another lifestyle attitude—a rational choice amidst national pessimism.

What Japanese consumers need isn’t necessarily upscale products but ones that resonate with the majority of consumers and demonstrate care and service in minor details. Only products meeting these criteria possess competitiveness. Truly difficult to please.

Avoiding price wars may seem "slow," but it's actually another kind of "speed."

How long will this patient cycle take? Zhou Yang gave an estimated figure: "At least a year—but for Chinese merchants, that's already a long time."

Moreover, even if you want to move fast, you can't in the Japanese market. Japanese consumers are notoriously demanding, exhibiting highly unified "research-oriented consumption" traits in e-commerce. They thoroughly research product information, actively utilize consumer reviews and Q&A sections, and approach purchasing decisions with caution.

Even social media recommendations are slow. Japanese people typically proactively and independently seek information, making social media more of a relationship field. In Japan, visibility results from slow-burning trust. It’s not "believing because it’s trending," but rather "trending because it’s trusted."

Take Huaxizi as an example. Despite its "Eastern aesthetics," it took five years—from launching on Amazon Japan in 2021 to opening its first Ginza store in 2025—through initiatives like the "Eastern Makeup Challenge," collaborations with Japanese drama Animals, and makeup artist Hiro Ogakita.

The benefit of Japanese consumers’ highly cautious purchasing habits for sellers is that the average return rate in e-commerce is only 5%-10%, a promising figure for cross-border sellers. Another distinctive feature of Japanese e-commerce consumer behavior is "high loyalty." Once loyal to a brand, consumers exhibit high stickiness and are likely to repurchase. This contrasts greatly with the domestic e-commerce market, where numerous digital methods have been developed to boost repeat purchases. In Japan, maintaining long-term relationships with consumers might naturally result from effective initial product education.

Another factor limiting Japan’s e-commerce growth speed is insufficient commercial infrastructure, primarily concerning logistics and payments.

In logistics, inefficiencies in long-distance transportation, last-mile delivery, and high labor costs caused by Japan’s labor shortage affect consumer shopping experiences.

In an analysis by the public account Jifeng Notes, it was pointed out: Japan’s long-distance transport efficiency is low due to its narrow, mountainous terrain complicating route planning. Land transport costs from Tokyo to Osaka exceed those of equivalent distances in China’s Yangtze River Delta region by 20%-30%. Warehouse rental costs in core cities like Tokyo and Osaka are more than twice those in Shanghai. Regarding last-mile delivery, Japan has many detached houses, with 70% of residential areas located on narrow streets where large trucks cannot enter. Small electric vehicles must make multiple trips, causing last-mile costs to account for 10%-15% of the product selling price (compared to 5%-8% in China). Japan’s labor shortage is exacerbated by aging, with 22% of logistics workers over 60, further increasing overall labor costs.

Additionally, the top five logistics companies (Nippon Express, Japan Post, Yamato Transport, Sagawa Express, Kintetsu World Express) monopolize 80% of the market, but their systems are incompatible and data openness is low, adding to the difficulties.

If users are dissatisfied with received goods, the return cost in Japan falls entirely on the consumer. Japan’s Consumer Contract Law imposes strict requirements on e-commerce returns and exchanges, mandating consumers to bear shipping fees themselves. Compared to the service experience of Japanese department stores, online after-sales service offers no advantage.

Currently, the stage-specific dividend is the Federal Reserve's aggressive interest rate hikes since 2022, leading to sustained yen depreciation. In May 2024, the USD/JPY exchange rate broke through 160, hitting a new low since 1986. The yen’s low exchange rate means reduced costs for marketing, logistics, operations, and warehousing.

In payments, QR codes have been promoted in Japan for ten years but still haven’t gained widespread adoption. In the Japanese market, consumers, financial systems, and businesses haven’t formed synergies. Japan has many incompatible QR code systems (PayPay, LINE Pay, Alipay), making scanning inconvenient, with handling fees as high as 3%-5% (compared to less than 1% in China).

Japan is a special blue ocean. High compliance thresholds and cultural adaptation challenges objectively exist in the Japanese market. Taking Rakuten Market as an example, sellers need strong product capabilities and compliance certifications. Additionally, Japanese consumers tend to be cautious when facing new products or brands. Therefore, having talent proficient in Japanese language and culture is essential for effectively communicating with consumers and providing high-quality services,” Zhou Yang said.

Currently, as structural variables begin to emerge, several emerging Chinese e-commerce platforms successively enter the Japanese market—a tentative attempt. Most practitioners indicate that e-commerce opportunities began appearing after the pandemic, with emerging e-commerce platforms representing additional shopping channels. However, for platforms and merchants aiming to enter the Japanese market, this represents a long-term opportunity requiring a prolonged陪跑期 (companion phase).

The public account "Jingshuo Riben" mentions that Japan has 1 million overseas Chinese and Chinese students, especially the "new Chinese" arriving in Japan for study and work in recent years. Temu's primary customer base in Japan consists of these "new Chinese," who then influence older generations of overseas Chinese who have lived in Japan for 20–30 years, eventually impacting mainstream Japanese society.

Currently, Temu’s biggest advantage is affordability, but its main issue lies in mediocre product quality. For example, a sofa on Temu can cost as low as 3,000 yen (~¥150), while on Amazon, nothing is available below 10,000 yen (~¥500). Consequently, budget-conscious families and offices opt for Temu products.

In a sense, China’s path to e-commerce cannot be fully replicated in Japan, though certain segments hold reference value.

Japan is slow yet advanced, implying its e-commerce development will significantly differ from China’s. The trend should lie in finding balance between online and offline, conservatism and progress. In other words, online methods should supplement abundant offline resources, enhancing specific offline processes intelligently—not merely pursuing e-commerce transformation.

The End

The beauty of an upward economy can manifest as a thriving vitality, but it can also be a blurred prosperity that lacks clarity.

Market sentiment, the herd mentality of the majority, and rising figures often cause people to overlook risks and forget reality. In 1986, Japan’s largest real estate company, at the time, purchased Tiffany & Co.'s building in New York City at the highest price in history. At that point, the amount of Japanese capital invested in U.S. real estate soared from 1.9billionin1985to1.9billionin1985to16.5 billion in 1988. Back then, even in Australia, you could literally buy land using Japanese yen.

Japan's brief moment of dazzling prosperity once amazed the entire world. By the late 1980s, including many Westerners, people generally believed that “Japan would be the center of the global economy in the future, because Japan's economic system was superior to those of European and American countries.”

At the time, several researchers from MIT published a book titled Made in America: Regaining the Productive Edge. The book stated, “American companies must also develop in the same way as Japanese companies.” Even in the 1990 film Pretty Woman, the male lead was a successful businessman obsessed with investing in Japan.

In January 1992, former U.S. President George H.W. Bush visited Japan. During a banquet, he vomited onto the lap of Japanese Prime Minister Kiichi Miyazawa, who was sitting next to him, and then fell off his chair. At the time, many Japanese people thought, “The U.S. president fell down, and the Japanese prime minister helped him up. That is the symbol of the U.S.-Japan relationship—Japan is stronger than America.”

But then the applause suddenly stopped. Like a flat soda, Japan’s economy has been drinking bland “sweet water” for 35 years—no highlights, nothing extraordinary. After the pandemic, many people began searching for similarities between China's economy and Japan's, suggesting that we too are entering this stage of flat, unremarkable growth, as balance sheets become increasingly difficult to move forward. People still deeply miss those energetic little bubbles that used to rise sharply and pop loudly. We also hope to create another period of high-speed growth overseas.

Just like in Japan during the latter half of the 1980s, some now say, “I really miss the bubble era; I wish it could happen again.” But after the bubble bursts, there emerges a different kind of beauty—one that is healthier and more sustainable. It leaves a sweet aftertaste in your mouth, gentle yet lasting.