In this interview series, we invited people to reflect on their life while looking back on their history with Rakuten. With health consciousness on the rise due to the pandemic, we spoke with Ryo Nagahama of F Ryukyu Inc., which operates the multi award-winning supplement specialty store “seedcoms” on Rakuten Ichiba. From the innovative measures taken by the company, we got a sense of his ambition to shake up the Japanese supplement market.
The difficulty and joy of making a sale.
What I first learned from the Rakuten Eagles victory sale.
Rakuten: Rakuten celebrates its 25th anniversary this year. What were you doing at the time?
Ryo Nagahama: I was in elementary school. I think there were products to supplement nutrition, but "supplements" was not a common term, and it was not something I was familiar with.
Rakuten: Do you remember the first thing you bought from an online store?
Ryo Nagahama: I think it was Mother's Day about 10 years ago.
Rakuten: We are glad that you used our site for such a special occasion!
Ryo Nagahama: When I shopped online, it was always to buy a gift for a special occasion. In Okinawa, shipping costs are very high, so I probably didn't buy much for myself.
Rakuten: You’ve been working with Rakuten for about 10 years. What was the first product you listed on Rakuten?
Ryo Nagahama: Our store first opened in 2011, and at the time, although I had not joined the company yet, we were selling our Rose Supplement and Placenta products. They have always been popular long sellers. We still sell them today, having adapted them to the latest trends through product renewals.
Rakuten: When did you join the company?
Ryo Nagahama: It was around 2013, about a year after we opened the store. From what I have heard, we opened our store on Rakuten Ichiba before we created our own website. Rakuten Ichiba has the largest market share in Japan's online sales market, so it was almost as if we established our company to sell our products on Rakuten Ichiba (laughs). We felt that we had to try and sell our product somehow ¬— there really was no other place to sell our products.
Rakuten: 2013 was the year the Tohoku Rakuten Golden Eagles won their first baseball championship here in Japan.
Ryo Nagahama: I will never forget that year. Without really knowing what we were doing, we took advantage of the championship victory sale. Or rather I should say, we were engulfed in the torrent. I have fond memories of how our company, with four staff members at the time, responded to orders while eating pizza through the night. We also put out ads, and our sales, which had not been so good until then, suddenly shot up by more than 100 times.
Rakuten: Such a sudden increase must have been very difficult to deal with!
Ryo Nagahama: We were understaffed, shipping was delayed, and we received some terrible reviews, such as payment forms arriving before the product, even though payment was made at a convenience store. However, through the experience, I really felt the power of e-commerce firsthand. In fact, the "fun" outweighed the "hard work."
Rakuten: Is there anything else that still stands out in your memory?
Ryo Nagahama: The victory sale started almost the moment the Rakuten Eagles won. After preparing the web page, we were watching the game with our hearts in our throats every time Ma-kun (Masahiro Tanaka) threw a pitch. We were actually working while watching the baseball game. After the championship was over, when orders peaked, I remember clicking through the list of orders and looking at the bar graph of sales — a joy that has not changed. I believe that many of our customers became repeat customers because of the sale.
The turning point that built a relationship of trust with customers
Rakuten: Looking back from the victory sale to now, how do you feel?
Ryo Nagahama: There were several major turning points for us. The first was the victory sale. Based on our initial experience with the sale, we thought that our products would sell as long as we advertised. We started putting almost all of our profits into advertising, but sales didn’t go up at all. That made me think about the nature of supplement products themselves. To be honest, my image of supplements was they were a little suspicious; cheap to start off with, but expensive later on. In order to break through this stereotype, I decided to sell products for less than 100 yen, including shipping, with no consideration of the profit margin. Gradually, sales increased and we began to acquire repeat customers, but unfortunately, there were many people who said that the products were “cheap and bad." This also led to a negative image of us as a company that only sells cheap products.
Rakuten: How did you get rid of this image?
Ryo Nagahama: The turning point was the Rakuten Rankings, around 2016. Although I thought it would be impossible, my e--commerce consultant said, "Let's aim for the No. 1 ranking." And we actually achieved it! That became a new catalyst for the store.
Rakuten: And in 2018, you won the Rakuten Shop of the Year award.
Ryo Nagahama: That was also a really big moment for the store. I think that winning that award increased the credibility of our store, not only for our customers but also for other companies. I think we are now gradually gaining recognition as a store that sells good products at low prices.
Rakuten: Currently, you have about 150 items listed on your store.
Ryo Nagahama: We have increased the number of products to meet the needs of our customers across multiple different age groups. Recent products that have been especially popular include Ao Jure, Ajiwai Enzyme and Ginger Bijin. These original products are not available on other stores, and come in paste form, meaning elderly people and children who have difficulty taking capsules can easily use these products.
Rakuten: What’s your impression of your customers on Rakuten Ichiba?
Ryo Nagahama: Some of them are even more knowledgeable about supplements than we are. On one occasion, we received a phone call and used the customer’s advice as an opportunity to improve our products. We also have one customer who has been sending us flower postcards every year triggered by a phone conversation we had 10 years ago. We received a postcard this year as well, and our staff always look forward to it.
Rakuten: What a wonderful customer! What do you usually value in your daily work?
Ryo Nagahama: We believe that the feeling people have when they receive their product is an important factor in the value we deliver. We want to deliver not only products but also feelings. Every month, we enclose postcards that we’ve crafted, and some of our customers look forward to receiving them. We never imagined that online shopping could create such a strong connection with our customers.
I want to break the "expensive" and " suspicious" stereotype surrounding supplements in Japan.
Rakuten: What are your goals for the future?
Ryo Nagahama: More than anything, I would like to see supplements become so widespread that they become a part of daily life for many people in Japan. In Japan, there is no culture of paying for supplements, and only one-third of the population takes supplements on a regular basis. I think the price is one of the reasons behind the lack of penetration. So we are aiming to gain a foothold in the market. We continue to sell only online and we don't put much effort into TV or other media. Our mission is to increase the number of supplement users by offering inexpensive, high-quality products and making supplements easy to buy.
Rakuten: Do you think of it as returning advertising costs to customers?
Ryo Nagahama: That’s exactly right. Of course, we want our customers to be happy, but supplements do not have an immediate effect, so our first priority is to keep them coming back. When I go to the U.S., I sell our product by the lot, and for American consumers, supplements are part of their daily lives. I want to change the culture in Japan by breaking down the stereotype of supplements being expensive and suspicious. My wife once said to me, supplements are like skin lotion. We tend to use expensive products a little at a time with great care, but if you don't use them continuously and in the right amount, it is difficult to feel the effects. I think the same is true of supplements. It is important to get people to take them on a daily basis without worrying about the price.
Rakuten: Is there anything that you and Rakuten could try together to help grow the supplements community?
Ryo Nagahama: Ryo Nagahama: We were recently approached by a hotel operated by Rakuten (Rakuten STAY) to display supplements from our store in the hotel. We are grateful for these kinds of opportunities to have people try our supplements.
Rakuten: Any final thoughts on the business?
Ryo Nagahama: I feel that the demand for supplements has been increasing since COVID-19. Now drugstores and 100-yen stores also sell supplements. We want people to notice the quality of our products after trying and comparing various products. Even if the price is the same, our store has built up a proven track record. Among our employees too, we recognize that we are not just a company that sells products at a discount, and we have a bright future ahead.
Nagahama Ryo. Born in 1986 in Okinawa Prefecture, Japan. After working as a physical therapist, he joined F Ryukyu in 2012, where he poured his heart and soul into selling products on Rakuten with four colleagues. In 2022, he became director of the company.
Wild Plant Enzymes, a blend of some 80 wild herbs, vegetables and fruits, were a massive hit at the victory sale. The product offers highly concentrated nutrition and has been supported by customers who are concerned about health and beauty. To date, the product has topped numerous rankings.
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