Bookoff, Amazon Japan, and the Japanese Retail Bookselling Industry

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Japan is a large market for bookselling industry. According to the case, Japanese retail bookselling industry has an annual sale of nearly 8 billion dollars. Even though there seem to be a big opportunity for the retail bookselling company to entry Japan, there are things that need to be considered, especially a law of Resale Price Maintenance System or Saihan System. Since 1953 Japanese publications must be sold at fix price due to the Saihan system. It has a huge impact on the publication business both on internal and external firms. Some groups are gaining advantages from the system while some are requesting an abolishment.

Although the demand of books in Japan is in a large scale, Japanese retail booksellers do not make much profit and their scale are quite small. These may due to several factors. First, Saihan system encourages publishers to publish more new titles. In 2005, over 76,000 new titles were published in Japan. The number of new titles is increasing everyday while the average sales per title are decreasing. They have to spend more money on the process of larger amount of titles while they make less profit on each of them. Especially the large retail booksellers provide more chain stores across country. Second, Nowadays there are much more substitutes, such as second-handed book, E-book, and rental book, for customers to choose instead of buying a new book or even buying a touchable one. Second-handed book is one of the options. There are a great number of second-handed bookstores in Japan. About 2,400 booksellers are associated with the Japan Secondhand Book Dealers’ Cooperation, of which 730 are located in Tokyo. They can simply buy a cheaper book because second-handed books are exceptional from Saihan system. E-book is also becoming more popular. – see figure 1 on the appendix for the development of E-book. Now E-book comes in many formats, the mobile phone, which is very successful because of a huge number of people using mobile phone in...
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