How Convenient to Be a Konbini

Back to Contents of Issue: March 2000

by Steve Mollman

I remember having a conversation a few years ago -- I lived in San Francisco then -- with an art director who had just returned from Tokyo. We talked about the wired differences one senses when going from Japan to America. The first thing that came to mind for me was how everyone in America seemed to move like cows; that is, everything seemed twice as slow (sorry if that's insulting). But the first thing that came to mind for him -- OK, OK, it's Daniel Carter at Wired magazine -- was how convenient everything in Japan was. Americans, he said, just don't understand how convenient convenience can be.

He was right. Now that I live in Tokyo, I can't believe how handy everything is. As long as one doesn't mind walking, which you do a lot of here, there's not much you need that isn't within 10 minutes. And if it isn't nearby you can just call up a store and have it delivered, COD. Hell, you can have the corner store deliver something even if you live on the opposite corner. Convenience stores -- and it seems you can't walk two blocks without passing one -- accept payments for all your utility bills. They also have multimedia terminals where you can order tickets -- and just about anything else -- and pay for them at the register. This is all very sweet for Japanese people, though they may not realize it. (I suppose to truly appreciate it you have to spend a few years navigating traffic nightmares in Silicon Valley, New York, et cetera. Not that Japan doesn't have its share.)

The question, then, is why anyone living here would bother to shop online. That's what we explore in the following pages. Tanya Clark compares buying computers on foot to buying them online, and Koki Tachino gives us an overview of the convenience-store sector. You might also be interested in what Yoko Shibata has to report about the post office's moves into e-commerce, and in her company profiles for the convenience store sector (page 56 of the print magazine).

Online, check out our story on the US-based etailer Bargain America. The company runs the fourth-highest-ranked online shopping destination in Japan, placing it well ahead of and, for that matter, most Japanese sites. Perhaps it does so well because there's a real reason for Japanese to use it: They can buy things from America at American prices. Now that's something they can't do on the way to the subway station. But Bargain America wasn't just lucky. It listened to the market: Its primary sales vehicle is not its website, but an email newsletter, which makes sense since most Japanese are still stuck paying per-minute charges by NTT whenever they're online (however, see "Ray of Hope for Net Users".

Also interesting is to look at what sells best at Bargain America -- music CDs. In Japan, under what's called the saihan system, it's illegal for retailers - or etailers based here -- to discount CDs, because of a law designed to protect copyright holders. The result is that customers end up paying ¥2,200 or more for CDs. I haven't bought one since I arrived, and I don't intend to (I used to buy them at a CostCo, for cryin' out loud). But the point here is that if you're going to try e-commerce in Japan -- or if a company you're thinking about investing in is -- you have to listen to the market. Things are different here, and that's something Americans in particular are stubborn to accept. (In the Star Trek series, mind you, every civilized race in the universe speaks English. I'm a big fan.)

Yes, e-commerce is taking off in Japan, that there's no denying. A Fujitsu Research Institute report indicates that some 65 percent of Japanese Internet users have already had some experience buying online. But it's telling that Sony, NEC, and five other major firms teamed up with 7-Eleven to start an e-commerce joint venture. The group will launch a site in June and expects to handle ¥300 billion worth of online transactions in fiscal 2003. Customers will pick up the merchandise at one of 7-Eleven's 8,000-plus outlets.

The convenience store (aka konbini) seems to be a threat -- or potential partner -- to nearly every business in Japan. Delivery companies worry the konbini's highly efficient logistics infrastructure will steal some of the e-commerce pie away from them. Banks fear the konbini will invade their turf even more than they already have. Ito-Yokado, which owns 7-Eleven, has applied for a banking license and hopes to install ATMs in all its stores. If it does so, it will have more ATMs than any Japanese bank. The post office fears the konbini will steal some of the e-commerce pie as well.

Who could have foreseen this situation back in 1974, when 7-Eleven opened its first few shops here? If anyone did, and invested accordingly, congratulations to you. Hope you stayed long.

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