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GOICHI ITOKAZU: FINDING TRUE ‘PARADISE’
A Challenge Okinawa’s Sole Department Store Carries On

Located in the heart of Asia, the island of Okinawa once flourished through trade and exchange under Ryukyu Kingdom from the 15th and 19th centuries. Having absorbed marine culture and added arrangements to its lifestyle, commerce, traditions and entertainment, the people on this tropical island has built a unique worldview and has attracted many tourists.

On a prime location of Naha city, a capital of the prefecture, there stands Okinawa’s only department store Ryubo in which the spirit of Ryukyu inherited from ancient times resides. Taking a cue from Okinawa’s origin and predecessors, Mr. Goichi Itokazu, a chairman of Ryubo Holdings with 30 years of retail and management experience, is currently leading a major upgrade that will transform the traditional department store into a uniquely branded Resort department store. Here, he shares his vision and value about businesses and his passion for Okinawa’s better future.

(Photo: Ryubo Department Store on the prime location right in front of the Okinawa prefectural office.)

“The creativity and uniqueness” matters to Mr. Itokazu. It was 2013 when he was appointed as president of Ryubo Holdings after spending almost 25 years in the affiliated company of convenience store business, Okinawa Family Mart. Some welcomed him with unkind remarks by saying how a convenience store guy could handle this holding company. But wait a minute. Okinawa Family Mart, which is an area franchisee led by Ryubo, has been generating nearly 60 to 70% of the whole group’s revenue. The confidence and passion roused Mr. Itokazu to action. He started to strengthen the Ryubo brand not only with better products and services but with aforementioned creativity and uniqueness.

“What we needed was a new branding that verbalizes the image of Ryubo Department Store. So, I asked for the help of an expert.” says Mr. Itokazu. “When I conveyed the expert the images that I had in my mind such as Okinawa’s gentleness, openness and holiday-like atmosphere, I was told that there are appropriate words for that: ‘Rakuen Department’ in Japanese and ‘Resort Department’ in English. Rakuen literally means paradise in Japanese but these kanji-letters can be also recognized as same as both traditional and simplified Chinese character. Without hesitation I said I like that idea and that’s how our new brand was born.” he explained.

(Photo: Ryubo Department Store on the prime location right in front of the Okinawa prefectural office.)

■ Transformation Ongoing

The actual shop and the connected cafe, “Resort Department Store” and “Rakuen Cafe” opened on the second floor of the Ryubo Department Store in July 2018. With the concept of “Good items from Okinawa, from Japan, from around the world, and items good for your body,” they sell a wide selection of items consumers can only find in Ryubo. “We are currently refining it more and more” says Mr. Itokazu enthusiastically. His target is to makeover the whole Ryubo Department Store into Resort Department Store in the future. “It’s not easy of course. We will focus on establishing and raising awareness of the brand ‘Resort or Rakuen’ first, then the next step will be the expansion of the brand and network to the world” he says. 

(Photo: Ryubo’s Resort Department Store with specially selected items.)

■ “Gain the spark of joy and light again”

Founded in 1948, under U.S. rule shortly after the world war II, the Ryubo Group started as Ryukyu Trade & Commercial Co., Ltd. It gradually attracted both the locals and the U.S. citizens in Okinawa by selling imported goods from around the world. And Ryubo has become synonymous with imported goods. Over the last 70 years of operation Ryubo has grown to be an integrated retail and distribution business company in Okinawa with the department store, supermarkets and the Okinawa Family Mart all in one umbrella. Having captured relatively high-end customers, their sales reached 11.6 million yen (about US$10.7billion) in the fiscal year ended February 2018. And in terms of the department store industry, Ryubo remains to be the sole department store in Okinawa after Yamagataya and Okinawa Mitsukoshi closed in 1999 and 2014 respectively.

”Ryubo where I visited in my childhood was a glittering and sparkling department store.” Mr. Itokazu recalls his feeling of excitement and joy. Then he looked up and pointed at the framed picture of Mr. Tatsuhiko Miyazato, a founder of Ryubo, hung on the wall of his office. “In the past, merchandisers traveled abroad and bought their own. They were literally true buyers. Moreover Mr. Miyazato was also friendly with the U.S. military and had some connections. I’ve heard that he was on a military aircraft and went overseas to purchase foreign goods.”

In a sense Ryubo was more global than it is today. Mr. Itokazu realized that what he has been trying now is to gain the spark of joy and light of “Ryubo of imported goods” again. But this time, there is a difference. “We are not only providing the selected imported goods from all over the world but providing high-quality products from Okinawa and good Japanese products, as well.” he added. 

■ Making a strategic move

Mr. Itokazu takes the quality of items and products seriously. One example is the Great Taste that they acquired the rights of for the general distribution in Japan last December 2018. Great Taste is one of the UK’s most trusted accreditation scheme and an acknowledged benchmark for fine food and drink. The black and white logo means a guarantee that the product passed the rigorous evaluation process and awarded as truly great taste regardless of packaging or branding. A sales team of Ryubo in Tokyo is now approaching other department stores and luxury food retailers to promote the products. And they will be sold all over Japan soon according to Mr. Itokazu, adding the possibility of selling in the Asian market if successful in Japan.

There is another business Ryubo eyes for monetization. It will be the first time for them to use their own Rakuen-brand in the water business. Originated from central Taiwan’s natural water, the “Natural Mineral Water” and “Hypotonic Water (Oral Rehydration Solution)” will be scheduled to launch at the end of this year. The former is for the resort hotel amenity while the latter is targeted for sports gyms and is also planned to be expanded overseas in Taiwan, Thailand and other Asian countries.

■ “It’s not always Tokyo where new innovation is born”

The uniqueness of Ryubo can be seen in the business collaboration with Taiwan’s famous retail bookshop chains Eslite Group and also with the art deco department store of Hayashi in the Tainan area. “It’s not always Tokyo where new innovation is born in retail industry” says Mr. Itokazu who pays close attention to Taiwan which is just 400 miles south west away from Okinawa. “Eslite is a very good department store and to my surprise 70 to 80 percent of its products are created in Taiwan. Both Eslite and Hayashi are so creative and original. That’s what I was looking for and I was very excited when I first saw these two stores.”

The idea of nurturing and developing the creative products together with partners was what Mr. Itokazu always longed for and he found the perfect match to Ryubo. His love at first sight has steadily grown into a stronger relationship. Following the Ryubo’s Pop-up store debut at Eslite in 2017 and 2018, Hayashi’s Pop-up event was held at Ryubo this year in July, 2019. It is expected that the business collaboration with two of Taiwan’s independent department stores will further refine the merchandising of Ryubo. 

(Photo: One of Eslite’s sophisticated stores in Taipei)

■ Confronting challenges

Although Ryubo is pursuing creativity and uniqueness, there are also challenges. One of them is the amount of merchandise. The Resort Department Store currently offers about 500 items in total but that’s not enough considering some items need to be replaced or discontinued depending on sales volumes. “Only 20% of all items is the top sellers. If the number of items is small sales will not increase, right?” Mr. Itokazu stressed that they need to increase the numbers of merchandise. It also turned out that the process takes considerable time when importing the first-time products to Japan from overseas. Mr. Itokazu, however, said that the team will take time to find and launch long-lived merchandise without rushing.

Merchandising itself is another challenge. In other words, connoisseurs are needed to strengthen their purchasing power of quality goods. They have contracted with external merchandisers to handle buying. At the same time, Ryubo is giving some of their young employees the hands-on training expecting that they shall play a leading role in the near future as real buyers.

■ “As time goes on, I feel like I can do it”

Mr. Itokazu now has confidence about the business style of selling things from Okinawa to mainland Japan, to Asia and the world, making Ryubo a marketing source. For him the market is not only in Japan but in the world. “We are not there yet but I could see the outline of what I imagined when I launched the Resort brand about three years ago. As time goes on, I feel like I can do it. All that is left is how much you will expand the merchandise besides business negotiations and judgement.” says the 60-year-old leader who likes to start things small and accelerate it when you gain confidence. And guess what? The result of changing the company’s direction outward brought them an unexpected effect. Luckily it made HR division much easier to hire competent employees.

(Photo: Resort Department Store planning an extensive lineup)

■ From “resort” to “international business resort”

Okinawa hit a record high in tourist arrivals of about 10 million in 2018 of which one third came from overseas such as Taiwan, Mainland China, and Korea. The more tourists the island draws, the more the air traffic congestion increases. In order to ease it, the second runway is now under construction and is scheduled to begin operation in March 2020. Among low cost carriers, Peach Aviation has reported that they are considering the Vietnam-Okinawa route after next year following the Bangkok-Okinawa route which opened in 2017. To accommodate the large number of tourists, foreign brand hotels have also been expanding their presence in the region. Hawaii’s luxury resort “Halekulani” opened its first door outside of the Hawaiian Islands in July this year. “Four Seasons Hotels and Resorts” has also announced its debut plan to develop a finest resort and private residences in the western coast of the island, which is expected to complete approximately four years from now.

“You need some international brands to attract high-end travelers who are familiar with those brands. It will serve as a portal to the Okinawa and eventually upscale the status of Okinawa.” says Mr. Itokazu. He is particularly interested in direct flights from Europe. “I’m not sure if it’s three years or ten years later, but I’m pretty much certain that the direct flights from Europe will be connected in the future. If that happens it will make Okinawa an international resort all at once. We need to be well prepared.”

According to the 2017 estimate of Okinawa Convention and Visitors Bureau (OCVB), 17.4 million tourists will visit Okinawa in 2030 of which half will be international tourists.

(Photo: A stunning view from Halekulani Okinawa)

■ Potential to become Asia’s business hub

“By adding a certain amount of foreign capital, Okinawa’s status can be simply changed from ‘resort’ to ‘international resort’. But that’s still not enough.” says Mr. Itokazu. “The bottom line is Okinawa has a potential to become an ‘international business resort’. For example, for those who do business for Asia from the U.S., having branch in Tokyo and doing business in Shanghai or Beijing doesn’t make sense to me. They should use Okinawa as their branch instead as it can offer better environment and geographical advantage especially for foreigners. You will know it when you come here.”

In fact, the island can offer the life style with beautiful beaches and ocean, and is accessible to most major Asian cities within 2 hours. Mr. Itokazu’s idea is to create a special economic zone like Shenzhen, China where gained the position as one of the innovative hubs in the world. “If there is a place like that in Okinawa, we can attract many startups and young innovators with entrepreneurial visions from around the world. But the government and the private sector must work together because the big support from local authorities is essential.” says Mr. Itokazu.

■ “more hours should be incorporated
in the school curriculum for English education”

In advocating the creation of an international business resort in Okinawa and a business hub for startups and entrepreneurs, an improvement to the means of communication skills in English is terribly needed. The reality is that Uchina-guchi (Okinawa language) is being promoted considerably by the local government over English education. Mr. Itokazu says “That’s fine but Okinawa should further expedite English education. Start it at the age of elementary school student and most of people after a certain generation could speak English fluently in the end.” Some people disagree with the idea of extended English education over Japanese language. But his opinion differs. “I think it’s totally opposite. If you learn different language, you will be more sensitive to your own language and it will be even polished up, too. I think more hours should be incorporated in the school curriculum for English education.” Mr. Itokazu appeals to the local government to take the initiative in reforming its English education system in elementary schools. To make Okinawa bilingual city, a breakthrough is much awaited.

■ “Instead, Okinawa should bring
talented young foreign resources to the island”

In general, the third generation in Okinawa who was born after the reversion to Japan has less language skills and they tend to take an easy way out because it’s comfortable to live there according to Mr. Itokazu. “I’ve been motivating them to come out, go abroad and gain experience, however it made no success so far.” he deplored. He knew It’s time for him to change his strategy. “Forget about pressuring them going out of comfort zone. Instead, Okinawa should bring talented young foreign resources to the island. Let the young locals work with such people so that they will get ‘Wow! Great!’ kind of inspiration. Then they will definitely be interested in the person’s country, start to think they want to visit the country, and eventually they may want to work in his or her country. Let’s get help from foreign workers.” 

Ryubo also employs foreigners from Mainland China, Taiwan, South Korea and is planning to expand to Russia. Showing the effect in practice may be the quickest way to move the administration of Okinawa after all is said and done. 

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Kumi Kubota
Bangkok-based Japanese writer, editor and translator with 20 years’ experience in business news provider services and corporate management. Former editor and president of NNA Philippines, former president of NNA Europe, Hong Kong, Singapore and Australia.