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Business trends

Cooped-up Japanese turn to e-commerce as options narrow

Indoor trampolines and pricey wine among the hot sellers

Amazon's shipments have surged in Tokyo's 23 wards as business in March tracked toward an all-time high, according to the local logistics service provider.

TOKYO -- With schools shut down and public places the new taboo, online shopping is taking off in a Japan where it had gained only limited traction before the coronavirus outbreak.

"It's like Amazon is having bargain sales every day," said an executive at Maruwa Unyu Kikan, a logistics services provider for local operations of the online retail giant.

Since elementary and secondary schools suddenly closed March 2 at the government's request, shipments have surged in Tokyo's 23 wards, exceeding levels seen in the busy months of July, November and December, the executive reported. And business in March tracked toward an all-time high.

Odakyu Department Store's online orders have increased for cosmetics and other items usually purchased in-store, as well as high-end wines. After revamping its online shopping website March 10 with an expanded lineup, the retailer set up a space with designated staffers at its Shinjuku location to handle goods bought online. Personnel will be added if necessary, it says.

Grocery stores report a spike in web-based demand, with February online sales at one supermarket operator surging 30% on the year.

Sock maker Naigai says sales from e-commerce platforms in March were topping year-earlier levels by around 40%. Demand usually grows at this time of the year, when students and new graduates begin a new school or business year in April.

"Thanks to online shopping, we've been able to capture consumer needs to have new pairs of socks," a spokesperson said.

With school out, parents are scrambling to find ways to let their children burn off energy at home. Qoo10, an eBay Japan-run platform, says it sold 20 times as many indoor trampolines in the first 12 days of March than in all of March 2019.

"Toys and other goods that can be used indoors are selling well," said a spokesperson, who predicted that the platform is on track to sell 25 times as many trampolines in March as a year earlier. February sales of racks for drying laundry indoors more than tripled on the year.

Japan may finally be warming to the convenience of online shopping as an alternative to venturing outside. E-commerce accounted for only 7.3% of total retail sales here in figures from American research firm eMarketer -- far below the 22.7% in China, 16.1% in South Korea, 19.3% in the U.K. and 9% in the U.S.

But the increased demand has the potential to further strain parcel delivery services that had already been struggling with labor shortages.

Bombarded with panicked shoppers seeking to stockpile toilet paper and other goods, the Lohaco e-commerce site stopped taking orders for 48 hours from 3 p.m. on March 4. "We concluded that suspending orders is better than receiving more than we can handle," said an official at office supplies wholesaler Askul, which runs the Lohaco platform.

Askul, which has its own warehouse facilities and logistics network, says it made the extraordinary move out of fears that deliveries that usually can be made as soon as the next day may take up to a week. February sales at Lohaco were 24% above January levels.

Logistics companies are moving to keep customers and staffers safe, particularly after workers linked to Japan Post and SG Holdings unit Sagawa Express have tested positive for the new coronavirus. It took four days for the Japan Post Holdings arm to reopen the affected post office after disinfection. Wider spread of the virus could throw a wrench into the distribution chain.

To practice social distancing, companies are thinking more flexibility on deliveries. Yamato Transport has begun offering the option of leaving packages at the door rather than hand-delivering them and taking signatures. Japan Post has made a similar move.

A further surge in online orders may require shipping carriers to bolster operations. Amazon.com has said it will hire 100,000 workers in the U.S. and raise hourly pay there by $2 through April, as well as implement similar raises in other markets.

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