In this interview series, we invited people to reflect on their life while looking back on their history with Rakuten. Katsuhisa Yagi, founder of Chocolate Design Inc., launched a chocolate specialty store during the dawn of online shopping and has grown together with Rakuten Ichiba. We asked him about his past history and hopes for the future.
It began with a 6.5 square meter factory built in my parents' house.
Rakuten: You opened a store on Rakuten Ichiba in 2000, the same year your company was founded. What was the first product you listed?
Katsuhisa Yagi:
Chocolate. I was originally a pastry chef, and I wanted to open my own store but I didn’t think it would be possible with my busy workd schedule until I happened to hear about Rakuten Ichiba on TV. It dawned on me that with a little investment, opening a store online could be feasible and that was one of the reasons why I decided to open my own shop.
At the time, I only had a small production facility and was limited in what I could make, but I was confident in my ability to make delicious chocolate. I also wanted to offer products that were not available in most confectionery shops in town.
Rakuten: Product development must have been an exploratory process. How did you go about it?
Katsuhisa Yagi: I rented a 6.5 square meter plot of land on my parents' property, built a prefabricated hut and started development through trial and error. I was working for a major confectionery manufacturer during the day, so I spent my nights making chocolate. It took me about two months to complete the project.
Rakuten: How did you feel when you opened your own store?
Katsuhisa Yagi: Actually, before I started selling my chocolate on Rakuten Ichiba, I tried out another auction site, and the 10 sets I had prepared sold out immediately. Since the products sold well on Rakuten Ichiba from the beginning, I thought this could be a viable business at a relatively early stage. However, for a while after opening the store, it was very physically demanding. The more products I sold, the harder it was getting. I worked as an office worker during the day and then made and packed products at my parents' house from around 7:00 p.m. I did everything by myself, including shipping and preparing for the next day's shipment. This continued for about six months before sales grew to a certain level and I decided to quit my day job and concentrate on Rakuten Ichiba.
Rakuten: So, you became completely independent by concentrating on Rakuten Ichiba. What were you thinking about first when you started managing the store?
Katsuhisa Yagi: Since I was starting off with no brand power, at first I just concentrated on making my customers happy and increasing my fan base. I really put my heart and soul into the products and communicated with each and every one of my customers, because I was running an online store where I couldn’t interact with them in person. Through repeated email exchanges, I was able to get a sense of their personalities, and as I developed a closer relationship with regular customers, their feedback really encouraged me. They told me things like, "I can't buy authentic chocolates like this in my neighborhood," or "My family was delighted when I gave them this chocolate."
Tailoring the service to each customer's needs:
"1 to 1 customer service"
Rakuten: After four or five years in business, did sales gradually increase?
Katsuhisa Yagi: One of my fondest memories from the time is of the e-commerce consultant who was assigned to me around 2004. He was a very passionate person who called me every day. At the time, I honestly thought, "What is he doing ringing when we are so busy?" (laughs). But he made various suggestions, such as making a trial product or setting up an event for a particular occasion. When I put the suggestions into practice, sales actually increased, and I felt I could trust him.
Rakuten: Are there any episodes from those days that still influence your thinking today?
Katsuhisa Yagi: At night, when I was talking to my e-commerce consultant on the phone one time, I casually referred to a customer as a "Kyaku" (meaning "customer" in a casual way in Japanese). Straight away he corrected me, saying, "Mr. Yagi, they are ‘Okyakusama,’ (meaning "customer" in a polite way in Japanese) not ‘Kyaku.’" That's when I realized. Without knowing it, the gap between myself and my customers had grown and I thought back to when I was packing products with all my heart in my 6.5 square meter factory. It is exactly because we are an online store where we cannot see the customer's face that we must value customer service. His words brought me back to my senses. To me, they may be one of 100 customers, but to them, I am the one and only store that they have chosen for themselves. Since then, I set "1 to 1 customer service" as the company's code of conduct, something I still cherish to this day, to be attentive to the feelings of each and every customer.
Through Fairtrade I want to make the people
who eat chocolate and the people who grow cocoa happy.
Rakuten: Have there been any large turning points along the way?
Katsuhisa Yagi: There was one in 2006. That was when I learned that in some countries, poor children were harvesting cocoa beans, the raw material for chocolate. These children have to work to support their families and have never eaten chocolate. I want to change this reality, even if only a little, from the creator's side. I want to contribute to a system that makes both the people who eat chocolate and the people from cocoa-producing countries happier. So, in 2007, I introduced Fairtrade chocolate.
Rakuten: It must have been difficult to make such a large change.
Katsuhisa Yagi: Yes. When I wanted to switch from conventional chocolate to Fairtrade certified chocolate, I had to raise the price of the entire product line because the price for procuring Fairtrade cocoa was three to five times higher. I was concerned about how much our customers would accept the change, but when I communicated the reasoning behind it and my thoughts to customers through newsletters and other channels, I received many encouraging comments, which convinced me I was on the right path. From then on, I began to use more and more Fairtrade chocolate, and now almost all of my cocoa is Fairtrade.
Rakuten: In 2008, you also held a charity event on Rakuten Auction.
Katsuhisa Yagi: The goal was to build a school for children in cocoa-producing countries by selling the surplus, broken or chipped products that are inevitably produced in the chocolate production process as B-grade discount products, and collecting 90% of the winning bids. Starting in 2008 I held 390 auctions in seven years, and when the school was finally completed in May 2015, I was truly overwhelmed with emotion. This experience of going on a journey together with my customers to complete a single project was one of the most significant events in my life. I think one of the key factors that enabled us to sustain the project for seven years was that we were able to successfully create a model in which neither the company nor our customers suffered any losses.
Rakuten: I feel that your philosophy and your attitude of taking good care of your customers has led to your popularity. What is another challenge you would like to take on in the future?
Katsuhisa Yagi: To make the world happier through chocolate. That is what we are aiming for. To achieve this, one of our goals is to use 1,000 tons of Fairtrade chocolate per year. Currently, we have reached the point where we use more than 100 tons, and we would like to clear 1,000 tons. We will continue to work closely with Rakuten and hope to bring our wonderful chocolate to more customers.
Katsuhisa Yagi was born in Yokohama in 1976. After graduating from a confectionery school, he trained in France and worked for a major Japanese confectionery manufacturer. At the age of 23, he decided to start his own business and opened VANILLABEANS on Rakuten Ichiba in April 2000. In 2014, he opened his first physical store VANILLABEANS Minato-mirai in Yokohama, and operates several stores mainly in the Yokohama area. Currently, the company is pursuing new possibilities for cocoa, including the introduction of the first cocoa roastery in Japan.
This is a memorable product that I exhibited for the first time after spending two months developing the product in a factory built in my parents' house. From production to packaging, shipping and next-day inventory arrangements, I did it all by myself. This was the origin of VANILLABEANS.
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