MDSI was launched in Hong Kong last year by leading Japanese stationery manufacturer Designphil and stationery distributor Merchandising Solution. Its brand, QIPS (Quest for Innovative Personal Style), offers unique Japanese stationery design to cater to a growing demand for designer and lifestyle products.
After opening its first store in West Kowloon last July, MDSI followed with a second store, five months later, in Tsim Sha Tsui, and plans to open several more in the coming years.
Company Managing Director Masashi Takemura has been in the stationery business for 30 years, opening the first Seibu LOFT store in Tokyo in 1987. He is also one of the founders and Executive Director of Citysuper (HK) Ltd. In Six Questions, Mr Takemura talks about MDSI’s game plan in Hong Kong.
Why did you choose Hong Kong to set up the company?
One of the main reasons is because I have 20 years of experience doing business in Hong Kong. We chose Hong Kong to start our overseas business because Hong Kong is an international city, where we can find many expatriates from around the world and people from all walks of life. Since our vision is to make QIPS a global brand, Hong Kong is the closest metropolitan city to Tokyo to do test marketing.
What has the response been to date?
The response has been very good. Instead of opening in the middle of the city, where rents are crazy, we opened our first store in Olympia City (West Kowloon) to test market response. We built the fundamentals at our test store, including how to export, do repeat orders, and segment merchandise categories. Then we proceeded to open our second store in Tsim Sha Tsui. Sales turnover there was more than double our expectations.
What’s unique about QIPS?
Our mission is to introduce uniquely designed Japanese stationery to the Hong Kong market. But this is only the first step. Our vision is to be a global company. Our target is the middle class, young professionals, the higher-end market, 20- to 30-year-old businesswomen.
How has Japan become a leader in the stationery industry?
The recession in the late 1990s led to the closure of such department stores as Seibu and Sogo, and there was a trend towards specialty stores. The corporate gift market shrank, with the total volume of the stationery market cut by less than half. There was no market for corporate gifts, so they suffered, including our parent company. They started to consider how to create unique products.
Stationery manufacturers began adding design elements to their products to convince people to buy. That was during early 2000, when Japanese companies were coming out with unique and colourful designs. In response, retailers saw a niche for creating specialty stationery stores.
What are some of the key trends in the stationery industry?
Because of the current global downturn, people look for “small happiness,” and stationery is one of them. Buying cute items is a way of bringing a small measure of happiness, but represents big business for companies such as mine.
In response to this trend, the industry came up with such items as decorative masking tape. Many magazines featured this unique stationery trend, which helped create a hot market. It’s now popular to use these coloured masking tapes on greeting and business cards and even to decorate toilets. The market has become so big that 10 books have been published in Japan on how to use these decorative tapes.
Another trend has to do with writing instruments. With new developments in technology, there are so many different types of Japanese pens available on the market that a rating system has been introduced. One type of pen, called Jetstream, uses gel-based ink, allowing for smoother writing compared to traditional oil-based ink.
Another trend is the erasable ball-point pen. But because the ink fades under temperatures of more than 40 degrees, one must not use it to sign important documents. There is so much unique technology coming out of the Japanese writing instrument industry that we want to introduce to the Hong Kong market.
What’s ahead for QIPS?
We plan to have five stores in Hong Kong in the next three years, with one or two more outlets opening this year. Our goal is to have 100 shops globally in 10 years. Right now, I’m focused on training staff in Hong Kong, in case I need to be based elsewhere in the near future. Because once we’ve established the brand, we plan to aggressively expand through franchising.
Our vision is to become a global player. To do that, it’s best not to go straight to the Chinese mainland because it’s not yet ready for a brand concept. I’ve seen that for myself in Shanghai. Daily necessities and general merchandise stores do well there, but not specialty stores. So it’s not the right time.
The next step after Hong Kong is to go to another metropolitan city, such as London, New York or Milan. Once our brand identity has been established in those places, it will be easier to enter the China market. This is our long-term plan, but our more immediate goal is finding our next retail space, in Causeway Bay.
