Behind the success of Japanese retailer Books Kinokuniya

The privately-owned retailer mainly trades through large megastores. Its 43,000 sq ft store in Ngee Ann City in Singapore was the largest bookshop in Southeast Asia for more than 10 years before it was surpassed by the opening of Indonesian retailer Gramedia’s flagship store in Jakarta in 2007. A typical store carries around 300,000 titles.

But where many megastore operators around the world have faltered amid competition from online retailers and ebooks – Borders being a prime example – Books Kinokuniya has gone from strength to strength. Even during pandemic-hit 2020 it continued to open new space, having added bookshops in Abu Dhabi and Yokohama in May.

So what has made Books Kinokuniya such a successful operation?

The original experience-led retailer

Books Kinokuniya (meaning ‘bookstore of Kii Province’) has essentially been a retail trendsetter since it was established in Shinjuku, Tokyo in 1927.

The original store incorporated experiential elements – such as a gallery on the upper floor – that could easily have featured in a press release written by any contemporary retailer. When the building was destroyed in the Second World War, it was quickly rebuilt – now including a 1200 sq ft coffee shop.

Expansion around Japan took place in earnest from the 1950s, but so too did the retailer’s  focus on using the stores to promote culture and the arts. Where possible, Books Kinokuniya stores have theatres and art galleries. It has also hosted the annual Kinokuniya Theatre Awards since 1966 – essentially the Japanese version of Broadway’s Tony Awards.

Quick to embrace digital trends

For such a long-established business, it is striking to see that Books Kinokuniya has always moved with the times.

Traditional books specialists suffered greatly from the emergence of online competition in the 1990s – essentially negating the benefit of large megastores carrying a huge range – but the Japanese retailer embraced this new channel.

Books Kinokuniya launched its web shop in Japan as early as 1996, and followed this up with a major overhaul in 2013. Currently, all of its international markets also offer ecommerce, with the exception of Indonesia, Cambodia and Myanmar.

However, disruption caused by Covid-19 means that Books Kinokuniya is only able to deliver books that are currently in stock in its stores. Fortunately, previous investment in its supply chain systems meant that customers were already able to check stock in each of its stores.

Move into ebooks

Ebooks is another area where the Japanese retailer was quick to realise the potential threat. Finding that customers were increasingly demanding to read books electronically, it launched the ‘Kinoppy’ ebook distribution service in 2011 along with iOS and Android apps. Kinoppy became available internationally in 2017, allowing overseas customers the opportunity to access rare Japanese books.

While the popularity of the ebook market has tailed off in recent years, the strong growth seen a decade ago was the final nail in the coffin of quite a number of archaic book operations – hence it was still a worthwhile move for Books Kinokuniya.

International success

Clearly Books Kinokuniya has made the right strategic moves, at the right time. But that doesn’t necessarily explain its international success, which is particularly impressive given that Japanese literature is still somewhat of a niche area.

While interest in Japanese culture continues to gain ground, Books Kinokuniya ensures it takes a very localised approach in its overseas stores. For instance, in its US stores the split between English and Japanese books is roughly 75 per cent to 25 per cent. Over the years, this proportion has shifted slightly towards English.

Books are only part of the attraction of the stores though, as it also sells movies, toys and an assorted range of stationery such as pens and paper. Of course there are also a host of typically Japanese knick knacks, which always do particularly well in international markets.    George Orwell, a former bookstore clerk, lamented that bookshops were  “one of the few places where you can hang about for a long time without spending any money”. Books Kinokuniya is certainly a great place to hang around, yet over the years it has also proven more than capable of getting customers to part with their money.