Kinokuniya--Bringing the Word from Japan

The Kinokuniya story starts in post-war Japan, in 1951. The Japanese, struggling to rebuild from the destruction of the war, sought to study new technology and catch up with America, but had nowhere to turn for information.

Kinokuniya may not have hip design or fancy halogen lighting, but it does have an open and functional layout. This is the comic book section in the Breeze Center store, popular with the younger crowd.

Japan's number-one bookstore

Kinokuniya's CEO Matsubara Osamu saw these needs and realized that Japan's bookstores had reached an impasse, so he began dealing in foreign books. In the beginning, he only marketed foreign books to academic institutions. Later, he decided he might as well expand the foreign book department, open locations throughout Japan, and enter the foreign book market on a large scale.

These books provided the Japanese with the information that they had been craving, and were a big success. In their first year, Matsubara's new shops sold ¥62 million worth of books.

In 1964, Kinokuniya broke the traditional Japanese mold for bookstores, expanding its main branch in Shinjuku from 100 square meters to 2000, and becoming Japan's top brand in a single move. Now, Kinokuniya has 59 stores and 37 offices in Japan, making it the nation's largest and most representative bookstore.

In 1969, Kinokuniya moved into overseas markets, opening their first foreign store in San Francisco. Stores followed in Singapore, Bangkok, Kuala Lumpur, Jakarta, Sydney, and Taipei. These stores became sources for Japanese books abroad, and global outposts of Japanese culture.

One especially notable branch is the one built in 1999 in Singapore's Takashimaya department store, which at around 3500 square meters is 650 square meters bigger than Taiwan's largest bookstore, Page One.

Not only is the Singapore operation a large-scale one, but it also expanded quickly. It became the headquarters for the Asian and Pacific stores independent of the Japanese parent company. The Asian-Pacific branches, while responsible for their own financial management, share resources with each other.

Hsu Hsuan-yin, manager for the Taiwan region, says that Kinokuniya currently has six locations in Taiwan. In order to reach a large number of consumers, it has put branches in four department stores: Taipei's Breeze Center, Tienmu's Dayeh Takashimaya, Taichung's Kuangsan Sogo, and Kaohsiung's Talee-Isetan. The other two locations are its business department and its foreign sales department. The business department is in charge of Japanese-language book sales to Taiwanese libraries, universities, and other research organizations. The foreign sales department manages Chinese-language book orders for branches in other countries and keeps track of Taiwan's publishing world.

Kinokuniya may not have hip design or fancy halogen lighting, but it does have an open and functional layout. This is the comic book section in the Breeze Center store, popular with the younger crowd.

Work with what you've got

District general manager Obara Hisanao, who has been in Taiwan for eight years now, reflects, "When Kinokuniya was in Sogo, even though business was all right, the store didn't have its own style. It seemed to be lacking a certain something."

It just happened that Kinokuniya's lease at Sogo was up at the same time that Breeze Center was opening. The company made the move, leaving the Sogo space for Eslite to grab up.

Obara becomes pensive when this subject comes up. He reflects that that was a time for Kinokuniya to rethink itself. At the time, Keijiro Mori, general manager of the Singapore branch, advised him: "A bookstore has to have a position of its own, and you have to work with what you've got."

Without a doubt, Kinokuniya's specialty had always been Japanese-language books, so Mori recommended that making that a calling card would give it a market niche. But Obara had reservations. First, at the time there were only around 16,000 Japanese living in Taiwan. Second, other than people over 70 who were educated under Japanese rule, not many Taiwanese read Japanese or are interested in learning Japanese. This market position would surely be a gamble.

But they were desperate times, and after some discussion Obara decided to take this direction. He boldly set Japanese books and magazines as more than 70% of the store's inventory, with Chinese and other languages taking up the rest. He hopes that the store's "Breeze Era" will offer something fresh to booklovers.

Three years later, this move has paid off better than market research predicted, and the small increase in profits on the balance sheets is providing a good shot in the arm for Kinokuniya.

Hsu Hsuan-yin's take on the situation is: "The smallness of the increase in profits probably has to do with the high price of imported Japanese books. The increase in categories of Japanese books and the greater choice this offers readers has boosted our revenue per square meter of floorspace in the Japanese book section."

Hsu has observed that Japanese customers are in the minority: More than 80% of customers are Taiwanese. They are of all ages. Those who are over 60 are largely interested in books on literature and astronomy. Informational magazines about collecting or hobbies grab the attention of young men, and young women like the books and magazines on topics like beauty, fashion, crafts, and cooking.

Japan's Kinokuniya, an international pioneer in Taiwan's bookstore market.

The Japanese connection

At Kinokuniya, most of the product purchasing is done by referring to reports on the latest publications from the main office in Japan. The heads of the local Japanese-language book departments then independently choose their stock for categories such as children's books, psychology, literature, management, and lifestyle.

Hsu says that Kinokuniya's managers see the store as a "transmitter station" of Japanese culture and information. All of the Japanese main branches and the foreign branches can use the Internet to access current sales figures from all the stores. This also allows them to pinpoint readers' needs and order popular English and Japanese books accordingly.

The Chinese-language books are independently purchased by the Chinese department, but in line with the strategy for purchasing Japanese books: As these stores are in department stores, they need to match the frantic pace of shoppers. Therefore, they carry mostly light, eye-catching leisure books.

Also, Taiwan has long been the world's Chinese-language publishing center, so branches in other locations use the local Kinokuniya to help in selecting appropriate Chinese books to order. Many purchasing pros keep their eyes on the stores here to see what they order, bringing prestige to the Taiwan stores.

In October of 2004, Kinokuniya moved from the basement of Breeze Center to an 825-square-meter space on the fifth floor. To serve the interests of Taiwanese readers, the store features not only its original large Japanese selection but also an expanded Chinese selection which they hope will enlarge their customer base.

With spreading information about Japan and its culture as its mission, Kinokuniya is the first stop for Taiwan's Japanophiles planning trips.

Manga mania

The guiding aesthetic of the fifth-floor Kinokuniya space is bright, caring, comfortable, clear and clean-the typical style of Japanese stores. It is a rather straightforward floorspace, and while it may not be a hip, "designer" space with warm halogen lighting, its layout gets high marks as Kinokuniya always does. In consideration to booklovers, the design is based around using the columns in the space as markers, and can be taken in at a glance.

The biggest attraction of the Breeze Center Kinokuniya, though, would have to be its popular manga section, which is a wall full of Japanese, Chinese, and English comic book titles. On weekends, this section is filled with kids-no other bookstore in the nation can rival it.

It is tough for an international chain bookstore to make a profit in another country. Kinokuniya, which for 17 years has stuck to simply selling publications without branching out to other areas, feels pressure to make a profit. The company depends on income from direct sales to universities and academic institutions to keep in the black, so the stores have to keep pushing.

Kinokuniya may not have hip design or fancy halogen lighting, but it does have an open and functional layout. This is the comic book section in the Breeze Center store, popular with the younger crowd.

Holding fast

Page One, which entered Taiwan's book market with its large quantity of foreign books early in 2004, came from a similar background to Kinokuniya's. In the view of Page One's corporate affairs executive Jose Cheng, Kinokuniya's contribution to Taiwan's Japanophiles is admirable, but at the same time the store's position is quite conservative.

Cheng says that aside from the slow pace of expansion, Japanese companies abroad don't understand how to align themselves with other businesses and are poor at marketing. They simply follow the ways set for them by the main office in Japan. But that's clearly not enough to spread their brand recognition and broaden their customer base in a foreign land.

On this point, Hsu Hsuan-yin insists that Kinokuniya's obstacles are location, manpower, and funds. Kinokuniya is unable to hold public educational activities like Eslite Forum, or promote a variety of products. It can only cooperate with publishers to create publicity, like it did recently with Japanese publishing house Kadokawa to put together an exhibition of movie posters for the film Quill. They hope to improve this aspect.

In facing the "collapse of publishing" in Japan in recent years, the Japanese Kinokuniya stores are trying to get with the times by offering extra services. In 1996, for example, the company introduced its online store BookWeb, beating the pressure and taking the lead in Japan's online book market.

Facing Taiwan's bookstore battleground of contenders local and foreign, Kinokuniya is still grasping for its identity, finding its strengths and looking for a way forward. When asked when Kinokuniya will be able to open freestanding stores as the other bookstores have done, Hisanao Obara says it straight: Kinokuniya is fighting it out and starting from the bottom. His number one goal is to make it so that when readers "want to buy Japanese books, they will come to Kinokuniya." Only when that's been accomplished from inside the department stores will they take that next step. How will Kinokuniya fare in this ever-shifting battle? That's something to watch for.

Kinokuniya may not have hip design or fancy halogen lighting, but it does have an open and functional layout. This is the comic book section in the Breeze Center store, popular with the younger crowd.

Marketing isn't conservative, Japanese-style Kinokuniya's strong point-it only occasionally partners up with publishers to create publicity. This recent exhibition of posters for the film Quill was a collaboration with publishing house Kadokawa.

Kinokuniya's Taiwan District general manager Obara Hisanao hopes that "when people come to Kinokuniya they think of Japanese books, and when they want to buy Japanese books they will come to Kinokuniya."