The Japanese Retail Bookselling Industry

Although many people in Japan read, and Japan is a large market for retail bookselling industry, there is a steady decline in the sales of books. This essay will provide an analysis of the situation in the Japanese retail bookselling industry. It will first identify the causes of the decline in book sales; justify the pros and cons of the Saihan system, followed by an explanation of the success of Bookoff and Amazon Japan.

The Japanese retail bookselling industry has a relatively low profitability and small scale of sales due to various reasons. Firstly, the emerging popularity of internet has posed as a substitute of entertainment for books, this resulted the sales of books to decrease. It is trends that more people are using internet than reading books. Secondly, the rise of the internet supposed to increase online book sales, however this is not the case in Japan. Japanese people are cautious consumers, they dislike making purchases using credit card to prevent identity theft. Since credit cards are complementary for online sales as it is the primary payment method, the aversion of Japanese to credit card use does not help to increase the online book sales. Thirdly, the lack of industry consolidation induced by the introduction of the Saihan system in Japan is a major cost for the slow growth of the industry. The system is hindering the competitiveness within the industry by making it illegal to set prices lower than market prices to protect small businesses against large retailers.

Saihan system is a protectionist system of price maintenance that introduces laws that allowed publishers to set