How TikTok Shop Will Change E-Commerce in Japan: itsumo's Fujise on Live Commerce's Second Attempt and Winning at "Discovery" Shopping

Fujise heads itsumo's Social Commerce Division. Fujise is also CEO of a group company that runs a live commerce app (rendered as "Peace You" in the subtitles), and of "Peace," an agency for creators active in social commerce and live commerce. The division oversees, as a market as a whole, the area of selling products through social media and live commerce.

As a group, itsumo provides consulting and outsourced operations specializing in e-commerce. It has supported e-commerce marketing for companies ranging from large corporations to small and medium-sized businesses and global firms. Fujise cited a track record of "13,000" engagements. Fujise then explained that the area drawing particular attention lately is social commerce, in which products are sold through social media and live commerce, and by creators and influencers who feature them.

When Iijima noted that live commerce has an image of struggling, Fujise acknowledged it: "It has been struggling. I think it's been struggling for about four years." This refers to the slump that began around 2021.

Fujise looked back on how things unfolded. In China, 2016 is called "Year One of live commerce," and the market has since grown to about 73 trillion yen. At one point, it was growing about 200% a year. Growth has settled at 10–15% over the past three to four years, but until then it expanded rapidly. Following that boom, companies in Japan such as Mercari, BASE and Rakuten introduced live commerce features around 2017–2018. According to Fujise, however, all of those services had shut down by 2020.

itsumo entered live commerce about three years ago, in 2023. Fujise described the timing as "both early and late." It was late because it came after the first wave had ended. On the other hand, having watched the situation overseas and predicted that "it will come again," the company entered anew to capture first-mover advantage.

Iijima summed it up: in Japan, no peak ever formed and things stayed flat, and perhaps a second wave is only now arriving. Fujise agreed, adding that rather than a boom, this year is when it "becomes the norm." Fujise also cited the upcoming launch of TikTok Shop around July as grounds for this. Fujise added, however, that it is still unclear whether it will grow explosively from here. The company's own service keeps growing, but it is still small compared with China, and Fujise's view is that it would be good if Japan could replicate the kind of excitement seen in China.

The biggest feature of TikTok Shop, according to Fujise, is that there is a cart inside TikTok, products are listed there, and the entire process through purchase is completed within TikTok. Companies list products just as they would on Rakuten or Amazon. They then sell them by bringing in influencers or posting their own promotional content.

Here is the path from the viewer's side. While swiping through vertical videos or watching a livestream, a product link or image appears below the video or stream. Tapping it takes the viewer to a product page within TikTok, where they pay with a credit card or other method registered with TikTok.

From the company's perspective, Fujise explained, it is much the same as having your own store within Rakuten. The admin dashboard for businesses includes pages for product registration, order management and analytics.

Asked whether many companies have already gotten started, Fujise answered, "They're starting to." itsumo has received inquiries, and some companies have actually begun registering products. But Fujise also said that, given the size of its impact, it is "not known at all" in society at large.

According to Fujise, the level of enthusiasm differs greatly from company to company. Global brands with overseas operations know that TikTok Shop sells 6 trillion yen in Asia alone, and around another 70 trillion yen in China, so they have no choice but to get involved. They are already quite active, Fujise said. Meanwhile, small and medium-sized businesses that are not familiar with TikTok are not even aware TikTok Shop exists. Fujise believes that in the initial sprint, large companies that can draw on overseas expertise and country-specific know-how have the advantage.

Asked whether any Japanese companies are selling big on TikTok Shop overseas, Fujise avoided naming specific companies because they are also itsumo's clients. Fujise did say that in Asia, TikTok accounts for a high share of e-commerce sales for many major brands, and for some companies TikTok is their best-selling channel. However, Japanese marketplaces and TikTok Shop, including overseas, are operated in completely different ways. With information asymmetry also at play, Japanese companies are struggling considerably with how to run it.

What makes it so different? Fujise offered a framework that divides e-commerce broadly into two types: "intent-driven" and "discovery-driven."

Intent-driven refers to marketplaces like Rakuten and Amazon. Users come to the marketplace with a product in mind and search within the app. This is the consumer behavior that has generally been envisioned until now.

By contrast, what mainly happens on TikTok is discovery-driven. While consuming some kind of content, whether entertainment or products, users unexpectedly come across a product video and buy it on the spot. Whether you can "hack" this discovery-driven consumer behavior changes how you operate entirely compared with other marketplaces. Fujise has the impression that many companies are struggling here.

Fujise further pointed out that live commerce actually does not carry that much weight. Of TikTok Shop's total gross merchandise value, only about 20–30% is sold through live commerce. Although the program's theme was live commerce, according to Fujise, the core of TikTok Shop's sales lies in non-live content such as short videos.

Is there a winning formula for companies taking this on? Fujise's answer was that building a setup to find winning formulas as quickly as possible is itself the winning formula.

As an example, Fujise said that even companies operating in China's e-commerce market, worth 78 trillion yen, have yet to pin down a winning formula. TikTok feels closer to a news app, where what matters is whether something is new and whether it is interesting. What the algorithm prioritizes changes from moment to moment. As a result, even once you find a winning formula, it soon stops working. You produce large volumes of content, expand on the content that hits, and aim for the next hit. Fujise's argument is that a setup that keeps up this trial and error is what matters.

When Iijima asked whether this means that by the time you think "this is what we should do," you should already be doing it or it is too late, Fujise replied, "It might be best to post right then and there." Fujise is calling for a speed where you film and post a product the moment you pick it up.

Fujise admits that building such a setup takes resources and is honestly difficult. That said, Fujise named two key points.

The first is using AI. When Chinese companies expanded into Asia, they translated product videos made in China using AI and posted them as is. The companies that increased their posting volume this way and ran through many PDCA cycles ended up succeeding in Asian countries outside China. Fujise said that, setting quality aside for the moment, what is needed is to generate videos as fast as possible with AI, in other words, volume.

The second is leaving things to the instincts of young people. Fujise gave the example of a partner company that runs TikTok Shop operations in Vietnam. Of its 70 employees, about half are student interns or employees no more than two years out of school. These young people can plan content for TikTok, so it is important to put them at the center of operations, Fujise said.

Wouldn't an approach that prioritizes volume and leaves things to young staff look risky to Japanese companies? In response to this point from Iijima, Fujise acknowledged that companies considering running TikTok Shop have indeed raised concerns about the risks. Fujise went on to say that, even overseas, major brands are actually at a disadvantage. They may have the information, but their execution cannot keep up.

Fujise pointed to how business plans are drawn up. Large companies create plans that lay out how many videos they will post over three years and what average view count they expect for each. In reality, though, that cannot be predicted. Flexibility to adapt to circumstances is needed. It is a world where, once you create a viral hit, a single video can cover a full year's business plan. The more time spent on decision-making, the greater the disadvantage. To put it in extreme terms, small and medium-sized businesses with nothing to protect are more likely to succeed on TikTok, and Fujise has the impression that major brands are struggling to get off the ground overseas as well.

Iijima noted that there was a period when D2C brands proliferated in Japan, but now, with declining ad effectiveness and worsening ROAS, it has become hard to get results even when spending on ads. Iijima then suggested TikTok Shop might be another chance. Fujise agreed, saying the D2C market has in fact shrunk. Many D2C companies can launch new products and ensure volume, so Fujise sees it as a considerable opportunity.

Fujise also offered a candid view from the opposite side. Because itsumo mostly supports major brands, Fujise said, as a support provider they actually see D2C brands getting serious about TikTok Shop as a threat.

Asked whether there are concrete examples of small brands that became famous through TikTok Shop, Fujise said no specific names came to mind. But Fujise said that stories such as a brand that had just launched selling 1 million in a month are commonly seen in the news.

Iijima summarized that the conventional approach had been to set an ad-spend ratio and plan to build awareness and sales on a steady upward trajectory. By contrast, TikTok Shop may be a world where sales spike all at once like a "pulse," Iijima said. Fujise agreed that this is possible.

At the same time, Fujise also raised a caution that comes with this phenomenon. Overseas, there have been cases where a company that boosted sales through a single viral hit was sold, and the buyer then realized "that was just a viral moment." This may be a point investment firms should be careful about, Fujise noted.

Fujise added that TikTok is originally an advertising platform, and ad plans dedicated to TikTok Shop are also available. Driving sales in pulses matters, but in order to generate those pulses, continuous investment and efforts to build stable sales are also necessary, Fujise said.

Iijima broadened the discussion to the potential for side businesses that support companies. Iijima suggested there seem to be many adjacent businesses, such as video production, planning ideas that go viral, specialized influencers and dispatching livestreamers.

According to Fujise, in China, companies that support TikTok Shop have actually gone public. They are on the scale of 100 billion or 200 billion yen, and companies that would be considered mega-startups in Japan have gone public by providing behind-the-scenes support for TikTok Shop. Fujise sees the door as being that wide open.

Support involves several components, such as ad operations and influencer casting. Among them, Fujise emphasized, the strongest position is being able to support all of it. TikTok Shop has multiple aspects, including e-commerce, influencer marketing, ad operations and logistics, and end-to-end support makes it easier to drive sales. When Iijima asked whether this would be something like the Dentsu of TikTok Shop, Fujise answered that companies offering comprehensive support in the manner of a full-service agency would likely achieve the best results.

Asked whether an ecosystem would form in which comprehensive support companies outsource to smaller ones, Fujise acknowledged that was possible. However, itsumo itself has brought its comprehensive support functions in-house and limits its partners to a very select few. That way, all functions can be coordinated.

Iijima offered a different perspective in response. TikTok's algorithm is hard to hack and changes rapidly, so the key is simply taking as many shots as possible. Competing on comprehensive strength may require a certain continuity over time. If so, it would be interesting to see players emerge that win by moving quickly on a single point, and Iijima would be glad if any viewers started such a business. Fujise responded that D2C brands attacking with a single-point strategy are a very good fit for TikTok Shop.

Finally, Fujise said TikTok Shop has become a huge trend overseas, so companies should get started early. Fujise also said great possibilities are opening up for young people. Since things are just getting started, Fujise's closing message was a call for viewers to take on the challenge of capturing content share as first movers.

Iijima took this to mean that this is a wave one should not miss. Iijima then encouraged viewers to apply the discussion to their own businesses, to new ventures and to advice they give others. As for whether live commerce and social commerce in Japan will grow explosively as they did in China, Fujise described it as being at a crossroads of "whether it grows or not," and the answer is not yet in.