BUSINESSWEEK ONLINE : JANUARY 22, 2001 ISSUE
BUSINESS WEEK E.BIZ -- COVER STORY Land of the Rising Son Retailing scion Yasuhiro Suzuki's cybermall is hot The prospects for big-time American e-tailers such as Amazon.com Inc. and Webvan Group Inc., which face high operating costs and the fears of investors, have turned murky at best. But in Japan, Softbank Corp. is putting together an online shopping destination that aims to sidestep both of those obstacles. Its creator: Yasuhiro Suzuki, whom Softbank president Masayoshi Son plucked from obscurity at a Fujitsu Ltd. software center in Singapore after a chance meeting in 1997. Well, not exactly obscure: Suzuki is son of the well-known founder of convenience store chain Seven-Eleven Japan, Toshifumi Suzuki, one of the most innovative retailers in the country. Now, the son wants to put his stamp on retailing, too, with a little help from Master Masa. Suzuki's baby is e-Shopping!, an Amazon-like site whose shops sell so far, books, toys, auto accessories, and wine. ''The idea is to build an original e-commerce business without spending huge amounts of money,'' says the 35-year-old Suzuki, who as a systems engineer used to manage large teams of programmers at his old job. The site attracts more than 1 million visitors a month, about the same as Rakuten, Japan's largest cybermall, with 5,000 shops. Suzuki gave the business a boost in November with his first ad campaign on Yahoo! Sales of toys and car goods then jumped 200% in December, a traditional gift-giving period in Japan. PARTNER POWER. Suzuki has the luxury of time to make the business work because he designed it to run super-economically. Rather than handling inventories and logistics himself, his partners take care of those necessary evils. And they're some of Japan's top brands, such as Seven-Eleven; Tohan, a large book distributor; Bandai, Japan's No.1 toymaker; and Suntory, its biggest liquor distributor. And the family connection to Seven-Eleven helps: Most of e-Shopping's book customers have their purchases delivered from the distributor to a nearby Seven-Eleven store, where they pick it up and pay for it. That gets around an aversion among security-conscious Japanese consumers to making purchases on the Web. Just as important, Suzuki is not at the mercy of venture capitalists or the stock market. He is funded--to the tune of $15 million so far--by parent Softbank and those same corporate partners, which own stakes of various sizes in the four shopping ventures. Suzuki doesn't expect to be profitable for perhaps three years. And he's treading carefully: He has hired just 50 employees. ''I have enough cash from investors and sales to keep going,'' he says. So far, the big man is impressed: ''We want to make Suzuki a star,'' says Son. The younger Suzuki doesn't just concentrate on making his back office efficient. He looks for consumer ideas as well. Last year, he commissioned Bandai to design a cuddly talking pet as a test product for the Web site. The limited edition of 100 toys, retailing for $80, sold out in 10 minutes. So now he's ordering other original toys. It certainly helps that Suzuki can piggyback on the success of Yahoo, which is 21% owned by Softbank. Yahoo took a 10% stake in e-Shopping and two of Suzuki's shops, eS! Books and eS! Toys, which are now featured prominently on Yahoo Japan's popular shopping site. ''The Yahoo connection makes a lot of sense because it brings in traffic,'' notes Internet analyst Ortwin Gierhake of WestLB Securities Pacific Ltd. in Tokyo. Enough traffic, Suzuki hopes, to turn e-Shopping into a pillar of the Son empire. By Irene M. Kunii in Tokyo _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ _ BACK TO TOP					RELATED ITEMS The Last True Believer TABLE: Softbank's Netbatsu TABLE: Softbank's Dealmakers CHART: Softbank's Cash Flow TABLE: Softbank Has Plenty of Cash Available... TABLE: ...And Its Operating Performance Is Improving Land of the Rising Son ONLINE EXTRA: Son: "It's Still Just the Beginning" INTERACT E-Mail to Business Week Online

Copyright 2000-2008, by The McGraw-Hill Companies Inc. All rights reserved. Terms of Use   Privacy Notice