Okinawa returned to the Japanese government in 1972, 50 years ago. While the prefecture continues to rank last in per capita income, local business leader Itokazu Gōichi (chairman of Ryūbō Holdings, the operator of Okinawa’s only department store) asserts that a return is good for Okinawa’s economy. He talked about how the economy has developed, as well as his company’s experience and future prospects.
Turn right from the Kenchomae Station exit in the center of Naha, take Yui Rail Okinawa Urban Monorail 12 minutes from Naha Airport, and the white 10-story Ryūbō Department Store will come into view.
Ryūbō Department Store is located in a prime location in the center of Naha, opposite the Okinawa Prefectural Office and Naha City Hall.
Leading department stores such as Mitsukoshi or Yamagata previously had branches in Okinawa, but these operators have been closing stores nationwide, and Okinawa is no exception. Today, the only remaining department store in the county is Longfang Department Store.
In addition to the department store, parent company Ryūbō Holdings is also active in other retail businesses, including the convenience store chain Okinawa Family Mart and the Ryūbō Store supermarket.
The group dates back to 1948, when the Ryukyu Trade and Commerce Corporation was established to trade goods with Japan and foreign countries. Later, the business expanded to supermarkets and department stores, growing into a conglomerate with annual sales exceeding 100 billion yen. Kazuo Ito, president of Ryūbō Holdings, was a leading figure in Okinawa’s business community, and was the CEO of FamilyMart’s US subsidiary.
We asked the chairman for his thoughts on the changing economy in Okinawa and how Ryubo has been doing in the decades since it returned to the Japanese government.
Return brings prosperity
“Opinions are divided as to whether the return to Japanese rule is a good thing. Some believe that if Okinawa remained under US administration, it would have become more global. But objectively, I believe that Okinawa has become more prosperous because of the return. “
For Kazuo Ito, the benefits are obvious, starting with free movement between Okinawa and the main island. Previously, travel between the two required a Japanese travel document issued by the U.S. Civil Administration of the Ryukyu Islands, the U.S. governing body that rules Okinawa, but since 1972, the document is no longer required.
“The moment Okinawa returned to Japanese rule, there was a surge in business travel to the native islands,” Ito said. Stressing that the increase in two-way traffic has had a positive impact on Okinawa’s economy, he noted that many people also travel to Okinawa to impart their knowledge and skills.
At the same time, among the 47 prefectures in Japan, Okinawa has the lowest per capita income and many poor households. Kazuma Ito admits that this is indeed a problem. “I don’t agree that per capita income growth is lagging, Okinawa is still at the bottom of the ranking, which means Okinawa’s economy isn’t growing. Living standards have improved a lot compared to 50 years ago.”
Based on his impressions of growing up in Okinawa, Ito said that there were more poor families at that time than today. In 1972, the prefecture’s per capita annual income was 440,000 yen, equivalent to 59.5% of the national total. Today, the income of Okinawa residents is 2.4 million yen, accounting for 74.8% of the per capita national income.
The performance of Ryūbō department store directly reflects the improvement of local living standards. Sales were 4 billion yen in 1972, but peaked at 18.17 billion yen in 2019, a fourfold increase in 50 years. “In the retail industry, we deal directly with our customers. If they can’t afford it, our business will suffer. The fact that the company has experienced continued growth since its return is proof that Okinawa’s economy has become stronger.”
Leverage Saison Group’s proprietary technology
A driver of the department store’s success was a business partnership with Saison Group, the parent company of the Seibu department store at the time, thanks to personal connections.
“Shortly after the return, Tsutsumi Seiji, who was the head of the Saison Group at the time, came to Okinawa. Tsutsumi and Tatsuhiko Miyazato, the then CEO of Ryūbō, were alumni of the University of Tokyo, and Tsutsumi, who wanted to help Okinawa’s economy, enthusiastically proposed a business relationship.”
The late Imperial Palace Tatsuhiko, who nurtured Ryubo to become one of Okinawa’s major businesses.
“This arrangement enables Ryūbō to stock a wide range of merchandise from its home island. Saison Group also has a number of employees who share their knowledge of major department stores in Tokyo with our staff. In this way, we gain a wider range of merchandise available Sales, but also personal relationships with Saisong Group employees.” Although the partnership was later disbanded, the knowledge gained contributed greatly to Ryūbo’s success.
Build a Niche Business
Many local businesses, not just Ryūbo, have benefited from the post-return economic development. But according to Kazuo Ito, Okinawa still lags behind in many ways, one of which is the desire to maintain skills.
“People here tend to lack initiative and make no effort to improve their skills. Instead, people tend to sit passively and wait for the knowledge to be instilled. They don’t absorb majors unless they learn and improve so they can excel Knowledge. That’s where Okinawa is weak, and unless that changes, the prefecture’s per capita income will always be at the lowest level.”
The COVID-19 pandemic, which has kept tourists away in large numbers, is also a blow. Itokazu emphasizes that in order to survive and thrive, Ryūbō needs to learn skills and know-how, and develop indigenous capabilities. It also needs a unique selling point, and what Ito is envisioning is a niche strategy.
“Going forward, we will actively seek out and stock niche products from overseas. This is not a profitable approach for large department stores, but I think Ryūbō needs to develop expertise in this area. Even if they may be profitable Base market, we can also make a profit by offering a lot of these products. It’s really going to attract people who like this kind of stuff. Also, we won’t have competition because other businesses don’t deal in that kind of product. If we just sell popular We’re going to face price competition and we’re not going to be able to beat the bigger stores.”
Ryūbō employs a business strategy of selling a variety of niche products from around the world, with the hope that it will still be in business 30 or 50 years from now. Ito Kazuo believes that Okinawa is very good at exploiting niches in the market.
“Since the Ryukyu Kingdom era, Okinawa has been doing this kind of thing, [established in the fifteenth century in what is now Okinawa Prefecture]The kingdom’s survival strategy was to trade extensively with its neighbors on the Asian continent, collecting goods from across the region and profiting by acting as a staging point for subsequent trade. “
Itokazu believes the same idea applies to Ryūbō. In fact, prior to 1972, Ryūbō buyers would fly to other countries on US military planes and bring back a variety of goods not available in Japan, making Ryūbō a must-buy destination for those looking to acquire imported goods.
While Ryūbō stopped selling imported goods after it resumed, Itokazu is keen to revive the business and has been doing so by hiring more buyers. He hopes Ryūbō will soon be selling niche products from around the world.
“My ambition is to buy goods from abroad and sell them exclusively here, and attract local customers looking for unique products to Ryūbō department store. I want to make imports the name of the game for our store again and continue to help Okinawa’s economy grow.”
(Originally published in Japanese. Banner photo: Composite photo of Itokazu Gōichi, Chairman of Ryūbō Holdings, and the sign on top of the Ryūbō Department Store. Itokazu is also President of Ryūbō Industry, which runs the department store. All photos © Fushimi Manabu .)
