The deep discounts available through internet shopping are shaking up the target inflation goal set by Japan’s central bank. Economists call it “The Amazon Effect,” and for some small retailers, that spells opportunity and challenges.
CGTN’s Stephen Ross reports.
Economist Yoichi Itoh believes the influence the digital marketplace is having on Japanese society, and on the Bank of Japan’s elusive goal of reaching two-percent inflation, “The ‘Amazon Effect’ will continue to have an impact on Japan and the world. It upsets the Bank of Japan’s two-percent inflation goal, so it can be viewed as either good – or bad.”
Japanese consumers are attracted to internet shopping’s low prices and the convenience of delivery, but Itoh suggested that Japan’s central bank is still looking for a way to respond to this relatively new phenomenon. “The government really needs to understand the full effect of online shopping to make effective policy.”
Even in foul weather, large-scale sales by Amazon and other major internet retailers mean that express delivery companies like this one remain ever-pressed to get packages to their destinations on time. But the “Amazon Effect” is also giving small sellers a leg up.
Hiroyuki Izumi sold his small, struggling restaurant and set up a shop online. “Online selling doesn’t cost a lot to get going. Online selling is easier,” he said.
Now he imports watch bands and other items from China and sells them to eager Japanese buyers. He uses several websites, including his own, and another well-known vendor.
But, with some 80 percent of Japan’s retail sales taking place in “brick-and-mortar” stores, Izumi said the “Amazon Effect” won’t alter business basics, “The seller must know his customer well. If so, he’ll do well in sales, just as in the old-style marketplace.”