Business

Bandai's Global Expansion: Triple Growth in Capsule Toy Stores Across Asia, Europe, and the US

In a recent, ambitious move, Bandai Co., the esteemed Japanese toymaker, announced plans to expand its international footprint by opening more than 80 new stores. These stores, centered around the sale of anime characters, collectible cat figurines, and a variety of miniature goods encased in plastic capsules, are set to proliferate throughout Asia, Europe, and the United States, kicking off this month. This expansion is poised to effectively triple the number of Bandai’s specialty shops, with the current count at 43 locations worldwide.

The company’s strategy focuses particularly on the North American market, which is a clear attempt to tap into the fervor surrounding capsule toys, or gashapon, both domestically and internationally. With the recent influx of tourists to Japan, areas featuring the characteristic stacks of gashapon machines have seen a surge in popularity, attracting both children and adults eager to experience the excitement of turning the knob and receiving a random, delightful trinket.

According to the latest figures provided by the Japan Gacha Gacha Association, the capsule toy market experienced an impressive 36% increase, surpassing ¥61 billion (about $402 million) in revenue for the year 2022 alone. This significant growth has not gone unnoticed by Bandai, who recognizes the flourishing market for what it is: an opportunity ripe for the taking.

Ryota Katano, deputy general manager of the vending division at Bandai, encapsulated the company's global vision, commenting, “We wanted to go abroad not only to establish a new business model overseas but also to contribute to the recognition and development of Japanese entertainment culture globally.” This statement reflects Bandai’s commitment not just to commercial success but to its role as a cultural ambassador as well.

Gashapon machines enjoy a storied legacy, tracing their origins back to candy dispensers in the United States in the late 1800s. Nevertheless, it is the Japanese toymakers who have skillfully honed the concept into a massively successful enterprise. Referred to as gashapon due to the distinctive 'gasha' and 'pon' sounds they emit upon delivering a capsule, these machines have become omnipresent across Japan. They are conveniently situated in arcades, shopping malls, airports, supermarkets, and train stations.

The widespread appeal of these whimsical vending machines is so robust that Bandai not only dominates the domestic market but also leads in total sales among competitors. Katsuhiko Onoo, the representative director of the Gacha Gacha organization and author of "The Economics of Gacha Gacha," shed light on the dynamics driving the current trend. According to him, women are at the forefront, accounting for about 70% of the market. Moreover, he anticipates the 2022 sales figures to eventually hit the ¥100 billion threshold.

A particular shift has been observed with vending machines positioned at store entrances, now commonly featuring items targeted towards a female demographic, including Disney and Miffy products. This strategic placement highlights the changing patterns of consumption within the gashapon marketplace.

Analysts like Tomoaki Kawasaki, a senior analyst at Iwai Cosmo Securities Co., forecast a sustained expansion of the capsule-toy craze, both within Japan and internationally. Japanese anime's soaring popularity oversees signals promising prospects for anime-related capsules. Kawasaki elaborates, pointing out that overseas tourists, having developed a fondness for these captivating machines during their visits to Japan, are likely to continue their collections once back in their home countries.

The variety and accessibility of gashapon machines allow for an array of engagement; some users casually browse the machines looking for something that catches their eye, while others are on a mission to obtain a specific character or item. These capsules are typically affordable, often just a few hundred yen, but “premium” alternatives have surfaced, sometimes demanding prices as high as ¥2,000. Integral to the gashapon experience is the element of surprise — each machine offers around five different variations, and part of the allure lies in the mystery of which particular item will emerge.

Onoo believes in the emotional significance of gashapon, stating, “When someone feels lonely, they can find joy in these machines. They bring happiness to people, and I hope that can spread everywhere.” This sentiment captures the essence of gashapon's appeal — a simple yet profound source of delight in everyday life.

A testament to Bandai’s dominance and cultural influence, the world’s largest capsule toy store resides in Tokyo’s active Ikebukuro district — boasting about 3,000 gashapon machines. On one of the floors of a bustling mall, this store attracts myriad visitors. The allure is evident as tourists from various locales, both Japanese and international, meticulously comb through rows of machines, mesmerized by the seemingly endless array of collectibles.

One such visitor, Stephen Kennedy, a 35-year-old from Nova Scotia, Canada, made a purposeful trip to the mega store. Kennedy shared his experience: “I spent about 20 bucks trying to get Pochita from Chainsaw Man,” he said, showing off the manga series keychain attached to his backpack. The Chainsaw Man machine, one of the more coveted “premium” spots, charges ¥800 per try, sitting among other high-stakes options like a ¥1,000 tree frog toy. Kennedy insists that such machines would be met with enthusiasm in his homeland as well.

But as with any ambitious international venture, Bandai will undoubtedly encounter fresh challenges in this expansion. Kawasaki from Iwai Cosmo provides insight, suggesting that implementing cashless payment options for the gashapon machines could prove beneficial. Furthermore, he notes the importance of tailoring the capsule offerings to align with the diverse tastes and preferences of the global consumer base, acknowledging that not every capsule will appeal to every customer.

As the company strives to broaden its global reach and capitalize on the international affection for Japanese pop culture and collectibles, it will need to navigate the intricacies of various markets, ensuring that its treasured gashapon machines offer an enchanting cross-cultural experience. The success of this expansion could very well hinge on Bandai’s capacity to understand and cater to the eclectic and evolving demands of consumers around the world, just as it has mastered the art within Japan.

Looking ahead, given the power of modern franchises and characters in entertainment culture today, Bandai’s vision goes beyond just selling toys — it is about exporting a slice of Japanese joy that has the potential to resonate with people of all ages and backgrounds. With the groundwork laid and growth opportunities identified, Bandai is poised to deliver a tangible bit of happiness through its vast array of gashapon offerings, touching lives and sparking joy in corners far beyond the borders of Japan.

In closing—and in keeping with the cultural significance and corporate responsibility Bandai has shouldered—it stands to reason that the company's international efforts will not only serve its bottom line but also spearhead a new wave of global appreciation for Japanese entertainment and the simple pleasures it brings. The success of these ventures depends greatly on Bandai’s ability to foster connections and bring the magic of gashapon to the world stage.

For more information on Bandai's ventures and Japanese capsule toy culture, visit Bloomberg.

It is clear that the world is ready for more gashapon magic, and with Bandai's planned expansion, it seems the joy of little surprises in plastic orbs will soon be a global delight. As the heart of Japanese entertainment beats stronger and its reach extends further, the world awaits with anticipation the joy, excitement, and novelty that Bandai will bring to new markets and new enthusiasts across the globe.

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