Projects Report | Our Practice | Cool Japan Fund

Telling the World about Japanese Pop Culture

TOKYOOtakuModeInc.

2014/9/25

Investing in a media and e-commerce company – Telling the world about Japanese Pop Culture

Tokyo Otaku Mode Inc., also called TOM, has gained re-known for sharing Japan’s "otaku" culture with the rest of the world. In September 2014, the Cool Japan Fund decided to support TOM by investing up to a maximum of 1.5 billion yen over the next three years. TOM’s Facebook page provides information about anime, manga and other Japanese pop culture phenomena, and they also run an e-commerce website to sell related merchandise. Over 99% of the website’s visitors are from outside Japan. We spoke to the company’s founders to learn how they bring in those customers and earn their business.

＊ Information current as of December 2014.

chapter1　Getting E-Commerce Underway with Over 16.5 million Likes

TOM’s legion of fans has grown dramatically since they launched their Facebook page in 2011, and they have already received more than 16.5 million “likes” on their page (as of December, 2014) – the same number of “likes” as some of the world’s most famous online retailers. One of the secrets to their popularity is their two-way communication with their fans. The Facebook page is full of comments from people around the world who are in love with Japanese pop culture.

Kamei: One of the things that makes TOM so special is that 99% of our customers are from outside of Japan and that we communicate directly with them through our Facebook page. In fact, since the main language we use is English, it took some time for people to realize our site is actually run by Japanese people. (Kamei laughs.)

Kodaka: We get feedback as soon as we post something to Facebook. That real-time response is a really good example of the interactive media unique to this generation.

Kamei: We started the online shop after getting comments from users on our Facebook page saying that they wanted to buy some of the products we were posting about. Right now we’re shifting our focus towards our e-commerce business.

Kodaka: We put all the products we sell into one of two categories - either “otaku goods” or “Japanese entertainment.”

Kamei: We’re almost like a boutique or specialty shop. We carefully choose each and every product, always keeping in mind what will appeal to potential purchasers. It’s difficult to imagine what will be a hit with non-Japanese customers, but if we choose carefully and pay attention to how our users respond, we might achieve great sales with rather surprising products.

Kodaka: One example of a big hit was a line of alpaca-inspired stuffed animals called Alpacasso . We started offering it based on requests from users, but we weren’t sure it would sell well. But then the users themselves started spreading the word on different social networks, and it exploded. Another one is Sushi Socks . The socks were featured in overseas magazines, TV, and other media.

Akiyama: Seeing the regional differences in what products sell is also interesting. In Europe and North America, people really like big, quick-moving action stories. Asian customers are more interested in characters from school stories and other stories that deal with daily life.

Kamei: I think that after a year of running the online shop, we’ve now got a better idea which products will sell which regions. I don’t think a specialty shop should just sell what customers are looking for now; they have to go one step further and try to offer what people will want in the future. I want us to be able to get to that point and market our products around the world. Also, just like how specialty shops sell their own original products, I want to look into TOM doing the same thing and offering products you can only buy from us.

Some of the products TOM sells.

Some of the products TOM sells.

TOM’s Facebook page

TOM’s Facebook page

Sushi Socks

Sushi Socks

chapter2 What Kamei witnessed overseas became the catalyst for founding TOM

CEO Tomohide Kamei says that he was never particularly interested in Japanese anime, but he apparently got the idea for founding TOM from his habit of visiting local markets whenever he travelled overseas. Those visits to local markets showed him just how popular Japanese anime, manga and other creative content was in other countries, especially in Asia, but what really had an impact on him was the sheer number of popular copies and other knock-offs he saw. He took that experience to heart.

Kamei: As a Japanese person, I looked at this stuff and thought, “That’s not right.”

Akiyama: One of our motivations for starting TOM was to get licensed goods on the market so that the content creators could also receive a share of the profits, but originally there were few places where people could buy licensed products made in Japan. We thought that if we could use the internet to create a place where people could buy authentic merchandise, people who were actual fans would buy from there.

Kodaka: Hobby products are a luxury item, so no one thinks, “If it looks right, that’s good enough for me.” Fans genuinely want authentic merchandise. That’s why it’s important for us to guarantee that we sell only authentic goods. If we don’t, the customers won’t come back.

Kamei: We were lucky to get this chance. First, fund-raising talks went smoothly and then we decided to found the company in the USA. Then the Cool Japan fund was established. It was almost a miracle how everything came together, but looking back on it now, I think it makes absolute sense that practically everyone would support our business idea to sell authentic Japanese content overseas.

Akiyama: The staff is made up of both Japanese people and foreigners, and most of them feel a strong connection with TOM. This is a real benefit in terms of the content we handle because these people are all true fans of Japanese content, and have always been. I don’t think this would be possible in a different line of business.

Kamei: I feel the same as Akiyama and Kodaka. I am really lucky to be able to work with people who can do all the things I can’t. It was a miracle that we could bring all these different people together to found the company. That’s why I think it would be hard for anyone to reproduce what we did. (He laughs.)

仲間と大連を視察に訪れたKameiCEO (中）

CEO, Kamei on his trip
to Dalian, China,
with his friends (middle)

TOM’s authenticity policy

TOM’s authenticity policy

TOM’s history gives us a glimpse at the entrepreneurial spirit and strong convictions of its founders –their almost miraculous beginning; their quick understanding of the world’s market conditions; and how they revolutionized the market. However, they don’t look at their potential markets as being “domestic” and “international” – their goal is to reach the whole planet. We asked Kamei, Kodaka and Akiyama one last question: “How do you see TOM moving forward into the future?”

Kodaka: One of our biggest goals is to offer our store in more languages. Right now we offer services only in English and accept payment using US dollars, but we want to expand beyond the English-speaking world to offer services in Chinese, Indonesian and Spanish, and to let people pay using their local currencies. We are looking into various other ideas right now, too, including building a C2C market for users to sell products to each other, developing “otaku-style” video games, and distributing anime and manga. Our aim is to implement these ideas by 2020.

Kamei: E-commerce is no more than our foundation. If we can turn a profit, we can take on any challenge, and the strength of our brand comes from the trust our customers place in us. We want to compete on a global scale by increasing TOM’s brand appeal and giving people exactly what they're looking for.

Akiyama: When people want to buy things, they go to Amazon. When they want news, they go to Yahoo. I want TOM to play the same kind of role for people. When someone wants a cool gadget or some anime merchandise, they go to the TOM website. It would be great if buying products on the TOM site and getting them in a TOM-branded box became a mark of status for TOM users.

Sign inside the entrance to the Tokyo office.

Sign inside the entrance to
the Tokyo office.

CEO Co-Founder

Tomohide Kamei

Tomohide Kamei

Started working at Cyber Communications in 2002. Responsible for media launches and advertising campaigns, and was assigned to work with NTT Advertising, Digital Garage, Dentsu, and other companies. Founded Tokyo Otaku Mode, Inc. in April 2012 in Delaware, USA.

CFO Co-Founder

Naomitsu Kodaka

Naomitsu Kodaka

Began at Merrill Lynch’s investment bank division in 2000, working in finance and mergers and acquisitions. Was later made CFO and head of administrative HQ at Gaiax. In 2012, took part in the 500 Startups program in the USA as co-founder of TOM.

Corporate Officer Co-Founder

Takuya Akiyama

Takuya Akiyama

Began performing a variety of public relations work at Sony after graduating from university. Co-founded Tokyo Otaku Mode in April 2012. In addition to publicity, is also responsible for human resources and other corporate administration work.