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Sunday, Nov. 18, 2001

Booksellers looking for competitive edge online

E-commerce ventures have been flourishing in Japan, and they are expected to bring dramatic changes to the nation's traditional book distribution business.

Online bookstores allow customers to order books through Web sites and have them delivered to their homes or nearby convenience stores. Payment can also be made via the Internet using a credit card, making the process quick and easy.

Readers of foreign books in Japan, who often bemoan a lack of choice, are among the most avid users of Internet book-ordering services. Many book sites boast more than 1 million foreign titles and offer discount prices.

Japan's book market is estimated to be worth 1.2 trillion yen annually, of which online book sales are said to account for a mere sliver -- 5 billion yen to 6 billion yen.

Big players enter market

Seeing the potential for growth in Internet book sales, most of the nation's major bookshops, publishers, distributors and printers have launched online services. Because online bookstores are easy to set up, an increasing number of firms from other industries have entered the lucrative online book-retail market. Currently over 100 companies are said to be selling books via Japanese Web sites.

Overseas players are also entering the fray. In November 2000, Amazon.com Inc., the world's most visible e-commerce venture, launched its Japanese-language Internet site.

"The weeding-out process in online bookselling is already over," said Shinji Hirako, head of the information resource navigation division at Maruzen Co.

Now is a time for cyberspace bookstores to introduce services that will set them apart from their competitors, he said.

"Currently, online bookshops look alike," he said. "A site cannot survive unless it beefs up its content with recommendations of interesting books."

Maruzen set up an online bookstore in December 1995, making it the first Japanese bookseller to do so. The company plans to step up its online activities with the launch of new services in January.

The improvements will include immediate release of passwords online. Maruzen now issues membership passwords by mail, a process that takes two or three days. "That time lag has made our potential customers turn their eyes to other sites," said Hirako.

There will also be more options for book delivery. Customers who do not want books sent to their home will be able to pick up their orders at convenience stores. They will also be able to pay in cash if they don't want to reveal credit card details online.

Currently, Maruzen's book-ordering Web site is available only in Japanese, but the company is considering launching an English version.

Database service offered

Kinokuniya Co. also operates its own online bookstore. The company's Book Web is said to be the largest such site, with annual online sales of about 1.5 billion yen, a sales figure equivalent to that of a major bookshop. The site also recently started selling magazines.

"People visit our site to use it as a database," said Sumiyo Kabashima of Kinokuniya's Internet business section. Book Web makes it possible to see a book's table of contents and many people seem to check this before actually purchasing a book, she said.

Early this year, Kinokuniya also launched a site to sell electronic books in English.

Because it is very expensive to establish and maintain such Web sites, the lion's share of the online book-retail market will be restricted to those players that have strong financial backing, said Maruzen's Hirako.

Factors that determine success or failure in online bookselling include the ease of book searches, the level of information provided about books, convenience, and how fast ordered books reach the customer, he said.

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