August 28, 2025
Cross-border e-commerce is the international purchase by consumers of products and services on the net. With the market continuing to growing year on year, it has attracted considerable attention in Japan and elsewhere as a new market opportunity and means of doing business. This column backgrounds cross-border e-commerce and looks at how the market is evolving, including a simple introduction to the work that JALCARGO is doing to meet the rapid growth in air freight demand that has resulted from its rise.
Contents
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What is cross-border e-commerce?
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Expanding market for cross-border e-commerce
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Rising demand for air freight driven by growth of cross-border e-commerce
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What JALCARGO is doing in response to the rising demand for air freight
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Utilizing airline resources to provide more convenient and reliable cross-border e-commerce
What is cross-border e-commerce?
Cross-border electronic commerce (e-commerce) is the sale of goods or services at online retailers from overseas as well as in Japan. Amid ongoing globalization, the market is expected to continue growing and the sector has attracted considerable attention and expectations in Japan also.
This column describes the basic features of cross border e-commerce, including its pros and cons and the main business models being used.
Benefits of cross border e-commerce
Among the main benefits of cross border e-commerce for vendors are that it means they can target large numbers of customers overseas at a time when the Japanese market is shrinking, and that it provides the opportunity for overseas expansion at much lower cost and effort than would be required to establish a physical presence in those markets. With easily accessible platforms and distribution infrastructure having become available in recent years, it also represents an opportunity to increase profits by avoiding intermediaries.
Disadvantages of cross border e-commerce
As for the disadvantages, these include the need to provide product descriptions and support in the local language and to comply with the laws and regulations of the country concerned. Delivery also costs more than for online sales to customers in Japan, and the risk of products being lost in transportation cannot be ignored. Exchange rate risk is another factor to be aware of when payment is in a foreign currency.
Business models for cross-border e-commerce
There are a wide range of business models for cross-border e-commerce. The easiest option for Japanese businesses is to set up shop or list their products for sale on one of the Japan-based online malls that support cross border e-commerce. For those businesses that already have a comprehensive online presence in Japan, methods are available for adapting their sites to support cross-border e-commerce and localizing them to work with different languages. Although it poses some difficulties, another option is to set up shop or list your products on an online mall or retail site that serves the countries you wish to sell to, or to set up your own site for those countries.
Expanding market for cross-border e-commerce
While cross-border e-commerce has existed since the late 1990s, the market really began growing in earnest from the late 2010s, driven by factors that included the spread of smartphones and AI translation, the localization of e-commerce platforms into different languages, and the standardization of digital payments. The market got a further boost from the widespread uptake of online shopping and electronic payments that came with the COVID-19 pandemic.
Moreover, the market is set to continue its expansion into the future as electronic commerce expands globally and as platforms, logistics, and transportation evolve further. The FY2023 E-Commerce Market Survey by the Ministry of Economy, Trade and Industry includes a prediction that the size of the global market for cross-border e-commerce will reach $US7,938.0 billion in 2030, a 10-fold increase on $US785.0 billion in 2021.
In 2023, cross-border e-commerce purchases totalled 420.8 billion yen (a 6.4% increase on the previous year) in Japan, 2, 530 billion yen (14.4% increase) in America, and 5,391.1 billion yen (7.7% increase) in China. That year also saw Chinese consumers making 2,430.1 billion yen of purchases from Japanese vendors via cross-border e-commerce, a 7.7% increase on the previous year.
Rising demand for air freight driven by growth of cross-border e-commerce
The current growth of cross-border e-commerce is driving greater demand for air freight globally. Cross-border e-commerce has a particular need to get goods to customers as quickly as possible and this makes air freight vital, with delivery times that are shorter than shipping by sea. Likewise, the comparative resilience of air freight to geopolitical risk and the effects of natural disasters is also important given the sector’s need for reliable delivery.
Hisato Katayama works in import and export at JAL’s Haneda Distribution Center (Haneda DC) and had the following to say about the rising demand for air freight resulting from the growth of cross-border e-commerce.
“Recent years have seen a dramatic increase in the import and export of the sort of goods handled by cross-border e-commerce. Imports and exports to China currently make up around 90% of the freight we handle at Haneda, of which about 70% are imports and 30% exports. Young Japanese women buy a lot of clothing, cosmetics, and other such merchandise using e-commerce platforms that deal in fashion goods.
I expect that the reasons for this include how platforms have become much easier to use over the past few years, including it being so easy to purchase goods via apps, with the result that it is now a simple matter for the general public to purchase items that appeal to them or that look like a bargain. Given this situation, I expect that we will find ourselves handling more and more cross-border e-commerce goods on into the future.”
What JALCARGO is doing in response to the rising demand for air freight
JALCARGO has launched a variety of new initiatives aimed at addressing the demand for air freight that has been rising along with cross-border e-commerce. Hisato Katayama went into the details, as follows.
Haneda DC enables speedy delivery
“Once they arrive at the airport, how do you quickly get goods to customers located around the country? How do you get goods quickly from the warehouses of local vendors to the airport? It is not just import and export. How to manage nation-wide logistics efficiently is another major challenge that comes with the growth of cross-border e-commerce. JALCARGO has embarked on a variety of initiatives aimed at addressing this issue. One part of the solution is the Haneda DC that commenced operation in 2019 at its site on the third floor of Mitsui Industrial Park Haneda.
Located only 600 m from the Haneda exit of the Shuto Expressway, the Haneda DC enables goods to be dropped off and picked up directly from Haneda Airport. This means that cross-border e-commerce goods can be transported more speedily than in the past. Alongside the need to achieve or improve on lead times for getting goods to customers as the growth and competitiveness of e-commerce drives an increase in domestic freight volumes, issues such as labor shortages and rules on overtime work are also making it more difficult for transportation operators to meet delivery demands. We ensure that the distribution of goods runs more smoothly by taking account of the entire distribution network, including domestic transportation. This involves delivering goods to the bonded warehouses that are required for customs clearance, and handling the other associated tasks efficiently. It was for these reasons that we introduced our new export storehouse services and import distribution processing services.”
Export storehouse services shorten delivery times and cut costs
“Our export storehouse services handle the ancillary tasks required for export documentation at the airport or at a bonded warehouse adjacent to the airport. These are tasks such as weighing, measuring, and labeling that in the past would have been done by the air freight agent at the shipper’s designated warehouse. This eliminates the double-handling whereby shippers deliver goods first to the designated warehouse to complete export procedures and then to the cargo depot at the airport. The result should be shorter lead times and lower delivery costs. It also reduces the risk of damage to goods as they are loaded and unloaded fewer times.
It is also efficient, as customs can be cleared at the airport (in the case of Narita) or at the DC adjacent to the airport (in the case of Haneda), and the goods are loaded as soon as customs processing is complete. We pack goods into a state ready for loading onto the aircraft and store them prior to clearing customs. We also offer a service that brings out goods at an appropriate time once customs clearance has been obtained.
Weighing and measuring are extremely important in the case of air freight as errors have the potential to cause a major accident. This is because the values obtained by measuring the weight and size are used in the transportation of the goods. Here, it is also essential that checks be performed on dangerous goods such as lithium-ion batteries and toxic or flammable materials. We have also introduced the DG AUTO CHECK system for converting dangerous goods declarations to an electronic format and performing automatic checks that reduce human error and make the work more efficient.
Although we are located outside the airport, we conduct explosives inspection here at the Haneda DC. While we currently use an ETDS that works by swabbing the surface of the goods and checking it using a special machine, from 2026 we will be required to also perform internal safety checks on consignments. Accordingly, we plan to switch to using X-ray inspection machines once they are ready.”
Import distribution processing services that add value through more efficient logistics
“For importing, we go beyond tasks such as sorting imported goods and holding them until they clear customs to also provide added-value import distribution processing services.
At Narita Airport, we have an advanced automatic rack system that provides safe and accurate operation for sorting and the affixing of dockets. The purpose of this is to shorten delivery lead times and reduce logistics costs. While staff at the Haneda DC currently do this work using scanners, we intend to work with freight forwarders and adopt new technologies such as the use of RFID tags and simultaneous scanning of bar code labels to perform the work more efficiently.
In the past, work like sorting and the affixing of dockets was often done at a suburban warehouse located away from the airport. The problem with this was that the time taken to transport goods to the warehouse meant it took longer to deliver them to the customer. By instead having us perform this work at a location close to Haneda Airport, times can be shortened and costs reduced.
As a major courier company has a hub right next door to our Haneda DC, everything that needs to be done to get goods to the customer’s home after arrival at the airport can be completed at a nearby location. This means speedy delivery to the customer of the goods they purchase by cross-border e-commerce. Whereas in the past it may have taken two to three weeks for customers in Japan to receive products they purchased on a cross-border e-commerce site, items now arrive in just three to four days.”
Utilizing airline resources to provide more convenient and reliable cross-border e-commerce
As explained here, the export storehouse services and import distribution processing services are set to play a greater role than ever in meeting the demand for air freight that has been rising along with cross-border e-commerce. In this final section, Hisato Katayama offers his views on the outlook for the future.
“Shortening lead times will remain an important mission going forward. We hope to play our part in achieving speedy delivery to the end-customer by taking advantage of the Haneda DC’s location close to Haneda Airport to shorten the time taken from the arrival of goods from the airport until they are handed over to the delivery company. To achieve this, we are seeking to make our operations more efficient than ever.
Speed is not the only requirement for import/export operations. Security and accuracy are also vital. One example would be the accidental release of goods held in a bonded warehouse that have yet to clear customs. Essentially, this would equate to smuggling. We must at all cost prevent such mistakes. As mistakes will inevitably happen when work is done manually, we are actively pushing ahead with mechanization and automation to prevent errors.
As a JAL employee, I have access to a variety of resources that come with being an airline. By making good use of these resources, we work with our partners at freight forwarders and logistics companies to provide air freight services that enable even more convenient and reliable cross-border e-commerce.
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