Diversification has been key to Japan’s largest independent dealer’s growth.
Above: Otsuka Shokai President Yuji Otsuka greets visitors at the company’s 60th Anniversary appreciation party.
Otsuka Shokai, the largest independent office machine dealer in Japan, held its 60th Anniversary appreciation party at the Imperial Hotel in Tokyo on August 24. Unfortunately, because of the COVID-19 pandemic, the company was unable to celebrate its anniversary last year. Five hundred people representing 300 business partners attended the celebration. Ricoh President Yoshinori Yamashita and NEC President Takayuki Morita delivered congratulatory speeches on behalf of the guests.
Otsuka Shokai was founded as a reseller of office technology in Akihabara, Tokyo, on July 17, 1961 by Minoru Otsuka (1922-2019), father of current president Yuji Otsuka. In the late 1960s, the company expanded its offerings to include copiers and photosensitive paper. In 1968 the company began selling Ricoh copiers. In 1970, the company added computers to its product offerings, and in 1976 partnered with NEC and together they captured a large share of NEC personal computer sales. Its experience in the computer business led to diversifying into software development. In 1999, Otsuka Shokai introduced “Tano Mail,” its office supply communication business, resulting in more dramatic growth. Expanding its offerings with IT services soon followed. In 2001, Yuji Otsuka succeeded his father as president & CEO.
For the fiscal year ending December 2021, Otsuka Shokai had net sales of 851,894 million yen (approximately 7.4 billion U.S. dollars at the exchange rate of December 31, 2021, <115 yen = $1>), operating income of 55,827 million yen (approximately 485 million U.S. dollars for the same period), ordinary profit of 57,567 million yen (roughly 500 million U.S. dollars for the same period), net income of 39,927 million yen (approximately 347 million U.S. dollars for the same period).
President Yuji Otsuka recalled the company’s first year in business was when he was in second grade. “There was one desk and one telephone in the 20 square meter space. The office felt spacious with no employees. Even though my mother was watching the phone, the only calls were the wrong ones.”
According to Otsuka, Otsuka Shokai grew by initially focusing on territories that it could reach in a short period of time. This business model allowed the small growing company to provide substantial services within a limited region and enhanced its reputation for providing excellent service. The result was an expanding customer base and strong profit margins. In addition, computer sales and dealer acquisitions allowed Otsuka Shokai to expand its footprint across Japan. Today, its IT business includes web services, with users increasing yearly. As of 2021, the company had 3.4 million users.
Otsuka Shokai’s current sales strategy is “All Otsuka,” which means staying close to customers through its sales representatives or website, which links the company’s inbound and outbound call centers to solve customer problems efficiently.
Otsuka Shokai by the Numbers
· The company has 9,171 employees.
· Eighty percent of Otsuka Shokai’s customers are small and medium-sized companies with annual sales of less than 1 billion yen (approximately 8.7 million U.S. dollars).
· Nearly 50% of sales come from large and medium-sized enterprise customers with annual sales of 10 billion yen (about 87 million U.S. dollars).
· The annual sales volume of the primary products sold by Otsuka Shokai in the fiscal year ending December 2021 was 37,039 MFPs, 24,606 servers, and 1,449,698 personal computers.