Japan, one of the first industrialized countries in Asia, had long held a leading position in Asian economy and diplomacy before China's rise. With a GDP of nearly $5 trillion and a GDP per capita of $39,000, it remains the world's third-largest economy. The pandemic hit Japan hard, and the economy is gradually recovering with strong government support and the reopening of the economy.
Japan has a well-developed mobile communication market, with a nationwide mobile network coverage and a mobile penetration rate of 154%, and text messaging (SMS) and instant messaging (IM) are the most commonly used methods of communication in Japan. In 2011, Japanese mobile operators launched the 40 Mbps high-speed data communication service "EMOBILE G4", and in 2020 launched commercial 5G. Thanks to the developed mobile communication foundation, Japan's e-commerce, mobile payment, digital entertainment and other industries have a high level, and have developed rapidly in artificial intelligence, cloud computing, big data, Internet of Things, blockchain and other fields.
This article covers the main aspects of Japan Mobile Communications and its user structure. It includes general demographic and economic statistical information, mobile Internet market information, local operator market share, SMS service type, access method, and cloud communication service provider selection. It aims to provide a reference for enterprises to prepare well before entering the Japanese market and quickly select communication service providers that meet their business needs.
Source: HKTDC
Japan Population
According to the United Nations, Japan's current total population is 126 million, a decrease of 446,000 (-0.4%) in the past year.
Source: World Population Review
Japan is made up of more than 6,800 islands, with the four largest islands inhabiting 97% of the population. Among them, Tokyo is not only the largest city in Japan, but also the largest in the world - with a population of 37 million, accounting for 29% of its total population, and the population density reaches 6225 people per square kilometer. Other large cities in Japan include Yokohama, Osaka, Nagoya, and Sapporo, all of which have populations of over 2 million.
Japan's urbanization is stable at around 92%. This means that less than 10% of Japan's 126 million inhabitants live in rural areas. The reason is that about 3/4 of Japan's land is steep and can neither be used for agriculture nor suitable for habitation. The settlement is limited to a few plains, coasts and valleys.
In terms of demographics, Japan has the highest proportion of elderly people, with 28.9% of the elderly population over 65 years old, much higher than the world average of 9.5%, and 19% of high-income countries. However, Japan's fertility rate continues to decline, and the population is expected to fall below 100 million by 2058, and the median age of the Japanese population is currently 49.2 years.
DATA SOURCE: DATAREPORTAL
Japanese economy
According to the World Bank, Japan's gross domestic product (GDP) in 2021 was $4,940.88 billion, accounting for 5.11% of the world economy.
Japan is the third largest economy in the world, with diversified industries and advanced technology. As in most developed countries, services account for the highest share of GDP (about 62% of GDP). In the service sector, wholesale and retail trade (about 7% of GDP) and real estate (about 6% of GDP). Manufacturing is the engine of the Japanese economy, accounting for nearly 22% of GDP. The construction industry also plays an important role, accounting for about 5% of GDP.
Source: TRADINGECONOMICS.COM
With the rapid development of a new generation of information technology, the digital economy is becoming an important driving factor leading high-quality economic development. In the context of an aging population, the development of the digital economy can cope with the pressure of Japan's labor force and promote the Japanese economy out of long-term stagnation. The sudden outbreak of the new crown pneumonia has accelerated the process of digital development in Japan, and the government has established the Japan Digital Agency to quickly and focus on promoting the digital society process to improve its international competitiveness, including artificial intelligence, Internet of Things, blockchain and other technology research and development and application.
In terms of e-commerce, due to the well-developed offline retail industry, Japanese consumers' preference for online shopping lags behind that of many other developed countries and is lower than the global average. The pandemic has caused Japanese people to shift to online consumption, with 45.9% of Japanese consumers currently accounting for online consumption, according to GWI consumer data. According to the Global E-commerce Statistics Report released by Statista, the total revenue of B2C e-commerce in Japan is expected to reach $143 billion by 2025.
The COVID-19 pandemic has impacted the Japanese economy, but it has also made both the government and the public see the importance of digital transformation, with strong government support and the reopening of the economy that will drive economic recovery, with real GDP growth expected to be 1.8% in 2023 and 0.9% in 2024.
Source: TRADINGECONOMICS.COM
Japanese operator
Japan has a highly developed infrastructure, mobile network coverage across the country, about 190 million mobile Internet users, and a mobile penetration rate of 154%. Although mobile operators launched commercial 5G in 2020, 4G technology is still the dominant way for Japanese users to access the network, accounting for 83%. According to the GSMA report, the Japanese government allows operators to install 5G base stations on traffic lights, thereby accelerating the deployment of 5G nationwide, and it is expected that by 2025, 5G will dominate the Japanese mobile market, accounting for 68% of use, and 4G will account for another 32%.
At the same time, the Japanese government plans to invest billions of dollars to promote the development of ultra-high-speed communications and build a 6G domestic network and technology base. Japanese equipment manufacturers NEC, Fujitsu and Finnish equipment manufacturer Nokia announced experimental trials of new mobile communication technologies with a view to commercializing 6G services by 2030.
Source: GSMA
In terms of connected devices, the use of smart devices among mobile users in Japan is 71%, and based on the continuous development of mobile communications and the digital economy in Japan, the GSMA predicts that this proportion will continue to increase by 10% in the next few years to 81%, and Japan is expected to have 169 million smartphone users by 2025.
Source: GSMA
The Japanese telecommunications market is highly fragmented in nature. Key players in the market include Nippon Telegraph and Telephone Corporation, KDDI Corporation., SoftBank Group Corp., Rakuten Mobile, Inc., and Internet Initiative Japan, Inc. The marketplace also hosts other Internet Service Providers (ISPs), MVNOs, and fixed-line service providers
Source: Mordor
There are three major mobile operators, namely NTT Docomo (NTT), AU (KDDI), and y!mobile (SoftBank). Among them, NTT is the largest mobile operator in Japan, with more than 88.9 million mobile subscribers, accounting for 46% of the market share. AU by KDDI is the second largest mobile operator in Japan, with over 59 million mobile subscribers and a 30% market share. SoftBank is the third largest mobile operator in Japan, with its sub-brand Y!mobile having more than 46.6 million subscribers and a 24% market share. Due to the fierce competition in the market, mobile communication services in Japan are known for high download speeds (40.92 Mbps on average) and cheap tariff levels.
Source: ITU
Overview of SMS in Japan
As the basic communication service with the widest user coverage, SMS has always been the preferred way for overseas enterprises to conduct customer authentication, transaction notification, marketing promotion and other customer interaction links, and Japan is no exception, with a mobile network penetration rate of 154.49%.
Similar to the domestic situation, local operators in Japan do not directly provide services to ordinary SMS demand enterprises, and most enterprises do not have the traditional telecom SMSC (Short Message Service Center) gateway access capability. The cloud communication platform (or Communication Platform as a Service - CPaaS, Communications Platform as a Service) focusing on the communication service itself came into being, assuming the role of opening up qualification licenses, business negotiations and eliminating technical barriers, becoming an important bridge between SMS consumer enterprises and operators, and exporting scalable elastic resources in the form of cloud computing. It enables enterprises to quickly integrate SMS and various communication services into their own business without investing a lot of capital and R&D manpower, ensuring the efficiency, stability and security of information transmission. This flexible, cost-effective, and easily scalable product model for applications and enterprises of all sizes has gradually replaced traditional IT communication service providers as the dominant force in the market. Especially in retail, healthcare, insurance and financial services, financial technology, logistics, tourism and other industries.
At present, mainstream CPaaS platforms, such as Twilio, Vonage (Nexmo), Unimatrix, etc., provide SMS communication capabilities based on the integration of local operators in Japan, covering various message sending scenarios such as verification code SMS (OTP), SMS Notifications, and SMS Marketing, and output standardized Messaging API products.
Enterprises with SMS verification as the main use case should pay attention to whether the service provider provides Omni-channel (also known as Multi-channel by some vendors) multi-channel distribution function, which is a communication enhancement service around message reach, which integrates popular instant messaging applications (IM App) to complete the delivery and interaction of messages, such as WhatsApp, Facebook Messenger, Viber, Line, etc. To make up for the problem of undeliverable SMS or operator blocking in poor network environments, and at the same time make the reach channels of enterprises and customers more diversified and effective. The IM applications supported by Omni-channel vary by platform and region.
Japan, for example, has 102 million social media users, an increase of 8.2 million (+8.7%) over the past year. The penetration rate of instant messaging (IM) applications reached 81.1%. LINE is the most commonly used social media platform in Japan, with a mobile user penetration rate of 79.6% as of early 2022, with around 89 million users, accounting for 70.7% of the total population. Instant messaging (IM) apps such as Messenger and Whatsapp have relatively low user penetration in the Japanese market, at 12.2% and 2.4% respectively.
DATA SOURCE: DATAREPORTAL
SMS access method
A mature cloud communication platform should send SMS messages to Japan or any country in the world in a uniform, easy-to-use, and secure way. Most SMS providers provide standardized HTTP API access; The development team is complete and the service provider with active community will provide mainstream programming languages such as Java, Go, Node.js, Python, PHP, C# and other SDKs based on HTTP API encapsulation to help developers integrate SMS services more quickly; It is worth mentioning that although SMPP is a traditional and complex communication protocol, it can still be used by procurement companies as a valid indicator to evaluate the professionalism of SMS vendors.
In contrast, the aforementioned three types of programmatic access methods are not very friendly to enterprises or departments that do not have development capabilities, and some cloud communication platforms also provide online sending functions so that non-technical personnel such as products, operations, customer service, and administration can send SMS to customers in batches without any programming, which is very efficient in the notification and marketing mass SMS scenarios.
Twilio supports HTTP API and SDK access, Vonage supports HTTP API, SDK, SMPP protocol access, Unimatrix supports HTTP API, SDK, SMPP protocol access in addition to providing online sending support, users can simply operate through the web page, up to 500,000 numbers at a time to send SMS in batches.
SMS pricing and billing model
International SMS services are roughly divided into P2P SMS and A2P SMS camps according to their different service output methods. P2P SMS full name Person to Person SMS (sometimes interpreted as Phone to Phone or Peer to Peer SMS), as the name suggests, it stands for person-to-person short messaging, that is, by renting a mobile phone number to deliver SMS messages between mobile networks with another mobile phone, this form supports the assignment of specific numbers for different recipients. Another form of A2P SMS is called Application to Person SMS, which is directly initiated by the application to send SMS, A2P SMS users do not need to pay too much attention to the rental fee of the sending number and the operator's sending frequency limit for different types of numbers, these complex and deep technical details will be managed by the cloud communication platform.
P2P SMS and A2P SMS have mature service providers in Japan, P2P SMS is represented by the old communication service providers Twilio and Vonage (Nexmo), Twilio Japan number rental fee is 1 US dollar per number per month (converted to 7 RMB per month) + SMS service fee 0.08 US dollars per message (converted contract 0.5760 RMB per article), Vonage Japan SMS service fee is 0.0747 US dollars per message (converted contract 0.5378 RMB per article); A2P SMS takes Unimatrix, which has become popular in recent years, as an example, the price of Japanese SMS is 0.0778 US dollars each, supports RMB settlement, the quotation is 0.45 RMB each, and there is no monthly fee for numbers. Enterprises can choose the appropriate SMS service provider according to their own functional needs and user scale.
Payment settlement and localized operations
Regardless of the form of SMS service, the above three service providers focus on pay-as-you-go settlement, which is based on real-time billing according to the number of SMS sent, which is convenient for enterprises to reasonably control costs and expenses based on the forecast sending volume. For enterprises and teams with small sending volume or less predictability, the A2P SMS platform includes unlimited streaming mode with no monthly rent and brings more flexibility and flexibility.
On the other hand, due to the long-term complex supply and demand relationship in the telecommunications industry, the international SMS business has formed a settlement system with the US dollar as the main currency, and credit/debit card online payment, bank transfer, remittance, etc. are generally supported payment methods. At present, in addition to Twilio that only supports US dollar settlement, Vonage has branches in Europe and supports euro settlement, and Unimatrix has an independent localization operation company in China that supports RMB settlement and provides Alipay payment channels.
A quick overview of Japanese text messages
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