Katsunari Konya

Back to Contents of Issue: September 2000

President, Gifty Gifty

by Kyoko Fujimoto

There was nothing in Katsunari Konya's background to suggest he might suddenly lash out and start a Net company, but, despite his 10 years as a highly respected McKinsey consultant, he's always been a bit, as he puts it, amanojaku, or "warped." At McKinsey, he dealt with just about every aspect of business -- except high tech. Whereas most career-switching consultants go into the industries they already know -- in his case marketing, manufacturing, finance, and just about everything but the Net -- Konya felt that going the safe route just wasn't his style. He joined the ISP Rimnet as COO in 1997, getting involved with the merger with PSINet. When Joichi Ito, then director of PSINet, started up the incubation company Neoteny, Konya joined as Entrepreneur in Residence and Strategic Advisor. "I wanted to quit taking care of other people's business, which I had been doing for more than 10 years," he says. "I wanted to do a business of my own. Many people still ask me to help out their business, and I'm a board member of several companies, but I try to avoid more of those other tasks and concentrate on my own." He's now president of Gifty Gifty, a Net company he started in February. Kyoko Fujimoto talked with him at the Gifty Gifty offices in Tokyo.

So, could you explain what Gifty Gifty is?
It's a gift-giving Web site. It does look like a B2C type of service, but actually it's more than that. Of course we've targeted women in their twenties and thirties, who are always making the trends in Japan, but in the long run we're looking at B2B -- that is, not only individual consumers, but individuals inside companies. For example, think about the various gift-giving opportunities in Japan, like oseibo [end of year] and ochugen [midyear].

And think about the shyness of Japanese people. Some want to keep what we call "office love" a secret thing, and we allow them to send secret presents through the Web.

Gift giving involves culture, and the Internet can make it easier. You may want to send a gift to someone who you know through business, but not to his office. But then you don't know his home address. We allow you to send the gift [to his home] if you know his email address. [Gifty Gifty takes care of the rest, including emailing the receiver and asking for his home address.]

Many people say B2C is a difficult business model.
I know there are many comments about the difficulty of B2C, But we're planning to become a kind of ASP using the B2C model. For example, when you want to do something on the Web, you first need to find clients. You can do the ad campaign, but click-through type ads may not actually lead visitors to become real customers. But with our customers, we can ask them to answer a questionnaire and in exchange give away some gifts [from the sponsor]. Such questionnaires are usually the best way to find the right customers. The sponsoring companies don't mind paying for the small gifts, because placing an ad costs as much as giving out presents.

We would like to become an Internet trading company. I know people say there will be no need for trading companies in the Internet world, but we can't skip everything. We know about distribution systems quite well -- we have an employee that worked for Seibu [a big department store in Japan] for 12 years, and he is in charge of our distribution system.

The Internet is just a tool -- like an apple peeler -- and we all need some substance to come with it. And the distribution system is what we have. I understand there are some redundancies in the distribution system in Japan, and I'm not really trying to copy all the redundancy. But you can't just go straight to the customers. The sellers need a place to sell their products, and we can do the marketing here.

So how are you going to get users?
We don't really want to spend money on advertising. What we are trying to do is depend on kuchi-komi ("word of mouth").

Our new service, Onedari ("pleading") will also help bring in people. The system works like this: when you want to have someone buy you something, you can ask the person to buy it for you using our Onedari system. The person receiving Onedari email can either deny it or accept it and buy you a gift. And even if the person denies buying you the gift, he would know about this service -- it's viral marketing.

Do you have any competitors?
There isn't any that's good at distribution systems in the Net business. But our potential competitors are huge companies, like Askul or Kokuyo. They may not think we are the competitors, but for us, they are.

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