How Micro-Retail Shops Are Changing Japan – Nokisaki

Japan has a long history of small shopping streets and tiny markets. In fact, despite the population density, American-style mall culture never took off here. The back streets of even the most crowded downtown office districts are filled with little specialty stores and vegetable stands.

Akiko Nishiura, the CEO and founder of Nokisaki, wants to see that culture spread even further in Japan, and her company is helping small merchants find physical spaces for pop-up shops, vegetable stands and food trucks. Nokisaki is connecting these small merchants, who need just a little bit of space, with commercial landlords who have a little bit of free space and are looking for some additional foot-traffic.

It’s an interesting business model, and Akiko and I discuss how it will work outside of Japan or even outside of Japan's big cities.

She also explains how Nokisaki survived a crisis that would have bankrupted almost any other startup — at least any other startup outside Japan.

It’s a great discussion, and I think you’ll enjoy it.

Show Notes

Why parking is different (and difficult) in Japan How a new alliance is developing between big-brand stores and tiny retailers Why it's so difficult for Japanese moms to return to work after having kids How the Japanese market reacts to new challenges How a security risk shut down her company How Japanese retail culture differs from the West How Nokisaki will out-maneuver her much better-funded competitors

Links from the Founder

The Nokisaki Homepage

Nokisaki Parking Nokisaki Business Nokisaki Parking on Facebook Nokisaki Business on Facebook

Friend Akiko on Facebook

[shareaholic app="share_buttons" id="7994466"] Leave a comment Transcript Disrupting Japan, episode 94. Welcome to Disrupting Japan, straight talk from Japan’s most successful entrepreneurs. I’m Tim Romero and thanks for joining me.

Napoleon supposedly once called England a nation of shop keepers. And while the comment was undoubtedly meant as an insult in the context it was offered, there’s something to be said in favor of being a nation of shop keepers particularly in this age of e-commerce, Rakuten, Amazon stores, and drop shipping.

In fact, Japan, more so than the U.S. has a culture of tiny little neighborhood shops that have never been pushed out completely by big box stores, shopping malls, and chain stores even in the big cities. Well, today we’re going to sit down and talk with someone who’s accelerating that trend by making it easier for small shop keepers to pop up all over Tokyo.

Akiko Nishiura, CEO of Nokisaki, connects commercial landlords with just a little extra space to small merchants who are looking for, well, just a little space. And in their spare time, the company is also trying to solve Japan’s horrible parking problems. The discussion of the company in the market alone would make this episode worth listening to.

Akiko also shares a story of something that would have forced almost any Western startup into bankruptcy but due to the unique and frankly somewhat extreme notion of Japanese customer loyalty, it resulted in only a minor interruption of Nokisaki’s rapid growth. But you know, Akiko tells that story much better than I can. So let’s hear from our sponsor and get right to the interview.

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[Interview] Tim: I’m sitting here with Akiko Nishiura, the founder and CEO of Nokisaki.

Akiko: Yes.

Tim: Thanks for sitting down with us.

Akiko: Thank you, Tim.

Tim: Now, Nokisaki is a parking space sharing and space sharing startup but I think you can explain it much better than I can. So tell me a bit about what Nokisaki is.

Akiko: Okay. Tim, have you ever heard the word “nokisaki” and do you know the exact meaning of nokisaki?

Tim: I have to admit I didn’t know it until I looked it up.

Akiko: Right. But Nokisaki means tiny space under the roof like when you hide from the rain, for example, just a small space. We do business using that space. We are doing some special in-service but we are dealing with for example some unused space or space which are not being dealt in a traditional real estate market. We are offering a marketplace for a landlord of such spaces and those who want to use such spaces.

Tim: Okay. Spaces is a very general term. Specifically, Nokisaki focuses on parking on the one hand and on pop-up stores on the other hand?

Akiko: Right, pop-up stores. Yes.

Tim: Tell me about your customers. Let’s do parking first. About how many spaces do you have in the system? How many users every month?

Akiko: Currently, we have 4,000 parking lot listed in our website and the number of registered users is more than 130,000.

Tim: I guess we should explain for our foreign listeners that parking in Tokyo is really different than it is in the rest of the world. Before you buy a car in Tokyo, you have to prove that you have a place to park it.

Akiko: Exactly. Is it unique in Japan -- I mean, worldwide?

Tim: I’ve never heard of it in the U.S.

Akiko: No?

Tim: Even in crowded places like New York or San Francisco. In Japan, that leads to this interesting situation where there is -- I mean parking is hard to find in Tokyo but there is a lot of unused space here because everyone has to buy parking.

Akiko: In Japan, the most popular parking service is called Coined Operated Parking Lot.

Tim: Just parking meters, basically?

Akiko: Yes, parking meters. But the problem that the other drivers facing is that you don’t know whether you can park your car until you get there. You don’t know if it’s vacant or not. You have to spend 30 minutes or an hour to find a vacant parking lot. Our service is solving such problems that the drivers are facing. You can book a parking lot before you arrive.

Tim: Is the reservation for an entire day or can you pull out a phone when you get there and say, “Okay. What parking is available right now?”

Akiko: You can book parking lot via our website and you can use it per day.

Tim: On the other side, the pop-up store site, what kind of people are using Nokisaki to create pop-up stores?

Akiko: Our major uses are business users. I mean they are selling these or they are promoting some services.

Tim: in the U.S. for example, pop-up stores are usually major brands taking advantage of a space that’s going to be available for only a few months and using it as more of a marketing than a sales promotion. In Japan, is it the same?

Akiko: One of our users are such kind of major brands but most of our users are kind of individual merchants or small to mid-sized companies and they are for example, selling vegetables or selling clothes or shoes.

Tim: Okay. So it’s not big brands using it. It’s individual merchants or individual people out selling, farmers selling their own crops, people selling their own handmade goods and things like that?

Akiko: Exactly.

Tim: Looking at the website, I notice that there is space available inside some very large retail stores here.

Akiko: Yes.

Tim: Tsutaya & BookOff, how does that work? Why are they leasing out little parts of their store?

Akiko: Yes. Very interesting because for example, Tsutaya or a drugstore chain, the customers visiting that stores are huge like more than 1,000 customers come in and so it’s very attractive space for those who want to showcase their products. So they list their unused space in our website. They can attract new customers, for example, one of our clients selling vegetables in the storefront of drugstore. Someone who see that they are selling vegetables on the street and they come in remind that, “Oh, I have to buy a shampoo,” then they get in the shop, buy some products. They can earn some extra money through renting their unused space but at the same time, they can attract new customers through our business, through our service.

Tim: In the example of say, Tsutaya, which is a large video rental chain, what kind of tenants are they using Nokisaki to attract?

Akiko: Food trucks mainly.

Tim: Food trucks?

Akiko: Yes, because many customers of Tsutaya are 20s or 30s, young people. So the food trucks will fit to the needs of those customers.

Tim: That’s really interesting and that does make a lot of sense for building up traffic and building up almost kind of a sense of community and a place to hang out. How did that deal come about? Did you approach Tsutaya with the idea of, “Hey, maybe we can get some new foot traffic in?” Did you approach them with the idea of food trucks or did they come to you? How did that happen?

Akiko: We are doing many ways. We knock the door of those major clients. We do presentation to convince them but at the same time they receive some request from those individual food truck owners but usually they reject those request because it’s really hard for them to deal with small retailers directly.

Tim: Well, I’d also imagine though that large retail chains in any country are very, very conscious and careful about their space. Not only internal shelf space, what goes where but the areas in front of their stores. How did you convince them to open it up like this?

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Akiko: Well, for example, a national chain store that the legal issues were so complicated so it took more than one year to close the contract between us but nowadays, it takes less.

Tim: That makes sense. The first one was the difficult sale and after that you had a reference?

Akiko: Yes, yes. Exactly.

Tim: Now, I want to talk about the overall sharing economy here in Japan a bit later. But before we do that, I want to ask you a bit about you.

Akiko: Yes. Okay.

Tim: You had a very successful career going at Sony,