A major home shopping company well-known for its live demonstration on TV, Japanet Takata Co.,Ltd., has been struggling.
Japanet Takata’s total sales figures peaked in 2010, but decreased to the same level as 2007 in 2012. In response to the decline, the president expressed his determination to resign if the sales of this year did not go up.
Why Japanet Takata has lost momentum, or more precisely, been weakening in recent years? According to an analysis, the main cause for the stagnation is a drop in home appliance sales
TV sales was more than 20 billion yen per month in 2010, but has reduced to 500 million -1 billion yen these days. In addition, smartphones took the place of PCs, and tablets have been selling outstandingly well since the beginning of this year. Digital cameras were replaced by smartphones equipped with a camera, and consumers are losing an interest in car navigation devices.
(http://www.sbbit.jp/article/cont1/26352)
Some say online shopping companies are threatening Japanet Takata, but I don’t agree because Amazon and Japanet Takata do not share their target consumers.
The proportion of Japanet Takata’s customer base is unique. About 80 percent of its sales profit comes from consumers in their 40s or elder while purchasers in their 20s and 30s account for only 7 percent.
Since the majority of middle-aged to older people are not familiar with electronic devices, online shopping won’t attract them. With that in mind, Japanet Takata narrowed its target market to the group, which resulted in the advertisement activities heavily dependent on TV commercials and flyers. The strategy of not tapping into the online shopping industry has enabled Japanet Takata to stay competitive despite the growing global giants like Amazon.com. （U-NOTE）
Japanest Takata doesn’t offer low prices (actually rather high), so online shoppers would not make a purchase at Japanet Takata. Its main customers are those who watch TV and read newspapers, in short, middle-aged to elder people.
Japanet Takata has significantly contributed to removing the barrier to the group unfamiliar with digital devices. Middle-aged and elderly people used to be reluctant to use such devices as digital TVs, digital cameras and PCs although they knew those devices were convenient. The company’s product demo has made digital devices accessible to them and received a big support.
But those people have already caught up the trend, then, on what market will Japanet Takata embark now?
Their flyer printed in November 2013 was advertising “down futon”, “massage chair”、”vacuum cleaner”, “handy karaoke”, “walking shoes”, “treadmill” etc. It seems like they were trying to shift the focus away from the conventional items, home appliances.
Having seen numerous companies, I found most of small to medium sized companies would allocate vast resources in pursuit of selling their current items, but hesitate to do so for developing new products. In some cases, a president creates new products whole doing other business. It is not rare to see five staff members developing new products at a company that holds 100 employees.
No product continues to sell well forever. It would be wiser to work on business that won’t earn profit immediately especially when sales of present products are increasing satisfactorily.
Let’s see how Japanet Takata is going to shift the direction of their business.
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