Mobilizing Japan's $37 Trillion "Hidden Assets"! BuySell Tackles Global Challenges Through Reuse (Part 1)

This series presents dialogues between startup entrepreneurs, executives, investors, CMOs, and others with Dentsu Inc. employees who support startups, exploring how they overcame challenges during their company or business growth.

The guest for this commemorative first installment is Mr. Kyohei Iwata, President and CEO of BuySell Technologies (hereafter BuySell), a rapidly growing company in the reuse industry. What strategies did BuySell employ to develop the market, and what barriers did it overcome? Business Producer Fumiaki Takatsuka conducted the interview.

A Startup Dominating the Reuse Market, Listed on the Tokyo Stock Exchange Mothers Market

Takatsuka: First, could you briefly explain BuySell's business again?

Iwata: We are a reuse company operating services like the comprehensive reuse platform "BuySell." We primarily attract customers online without physical stores, offering a service where specialized appraisal staff visit customers' homes. Founded in 2001, we achieved a listing on the Tokyo Stock Exchange Mothers market in 2019. We boast one of Japan's largest scales, particularly in kimono purchasing.

Takatsuka: As you mentioned, Buycell is strongly associated with kimonos. What sets you apart from other companies?

Iwata: We believe our uniqueness lies in three main areas.

First is "what we handle." In the reuse business, it's crucial to strongly emphasize specific categories. In Baisel's case, we actively purchase items like "kimonos, stamps, and old coins" – items often owned in large quantities but difficult for customers to bring to physical stores.

Next is our "target audience." While many services target broad demographics, we focus our marketing specifically on the senior demographic.

Finally, our "channel strategy." While options include physical stores, cardboard box shipping, and C2C platforms, our distinctive feature is focusing on the "last mile" – home visits – an area often neglected by traditional buying services.

Takatsuka: In the reuse industry, where companies adopting a "broad reach" strategy tend to be strong, I felt your company's strength lies in choosing a highly focused strategy.

Connecting "hidden assets" lying dormant across Japan to those who need them

Takatsuka: I'd like to delve deeper into Buycell's strategy, but first, could you give us an overview of the overall reuse market situation?

Iwata: The reuse market is growing globally. Even as GDP declines due to population decline, it continues to show steady, upward growth—not just a passing trend. There aren't many industries like that right now.

Takatsuka: What factors are driving the growth of the reuse market?

Iwata: In Japan, a strong preference for new goods persisted since the high-growth era. However, influenced by the SDGs movement, consumer values are shifting from "ownership" to "usage." The "E" in the recently spotlighted "ESG investment" stands for Environment, right? Beyond just "Social," there's an accelerating global movement focused on improving the environment on a planetary scale. It's undeniable that the concept of "connecting" – valuing and using what we already have, and passing on unwanted items to those who need them – is permeating society.

Takatsuka: I see. So the reuse market aligns with these new societal values and possesses the potential to continue growing regardless of population decline.

Iwata: Exactly. The market itself is large and has growth potential. On the other hand, the reuse market has low barriers to entry, so domestically, it was a highly competitive landscape with numerous players vying for position. For example, if this were an industry dominated by a specific top player, startups would have no chance of winning no matter what. But in the reuse market, there is no outstanding player yet. We saw an opportunity there and believed we could create new value for society.

Takatsuka: That's a very interesting perspective. What kind of change does BuySell aim to bring to Japanese society through its reuse business?

Iwata: It's about returning "hidden assets" to the secondary market. While Japan's reuse market is projected to reach approximately ¥3 trillion in 2022 (※1), reports estimate that unused items sitting in ordinary households—these "hidden assets"—amount to roughly ¥37 trillion (※2). From our daily visits to customers' homes, we're convinced there's actually far more out there (laughs).

Essentially, Japan's entire landmass is overflowing with unused items. Wouldn't it be fantastic if we could deliver these to people who need them? We wouldn't need to make new things, run factories for that purpose, or discard and incinerate old items. We believe mobilizing these "hidden assets" can solve various problems facing the planet.

※1 Reference: Recycle Tsushin
※2 Reference: Everyone's Hidden Assets Investigation Committee

Maximizing Hospitality and Compliance to Unlock "Hidden Assets"

 

Takatsuka: What you just described aligns perfectly with your company's mission: "To be a bridge connecting what is precious, transcending people and time." What specific approaches does Buycell take to realize this mission?

Iwata: We define "hidden assets" as "the asset value of unused items that haven't been utilized for over a year." Essentially, these are things people have forgotten they even own or haven't recognized the value of. You wouldn't think to sell something you've forgotten you have or don't perceive as valuable, right?

That's why Baisel proactively reaches out from the appraisal request stage, asking, "Do you have any of these items lying around?" beyond just kimonos and stamps. By doing this, we can mobilize "hidden assets" that typically don't enter the market.

Takatsuka: Earlier, you mentioned the reuse market has low barriers to entry. Doesn't that mean many competitors are copying Baisel's business model?

Iwata: That's correct. The home-visit appraisal business, which unearths "hidden assets," holds significant potential. However, the hurdles for appraisal are very high—getting people to let us into their homes for home visits, or selling items with sentimental value. Our "secret sauce" lies in scaling this nationwide.

Takatsuka: Could you please share that "secret sauce"? (laughs)

Iwata: Sorry, I say "secret sauce," but it's actually something we've made public (laughs). The method is simple: it all comes down to maximizing hospitality and compliance to build trust with our customers.

Don't chase short-term profits. Don't cut corners. Prioritize customer satisfaction above all else. It sounds like common sense, but actually instilling this at a high level across all staff is surprisingly difficult. Saying "prioritize customer satisfaction" is easy, but pursuing it inevitably incurs costs, making it tough to sustain as a corporation.

Takatsuka: It certainly seems that the larger the scale, the harder it becomes to control those aspects.

Iwata: That's right. From a marketing perspective, scale is a crucial factor. For example, with a locally focused resale service, advertising costs can be kept low by relying solely on flyers. But expanding nationwide means advertising costs become enormous, so you have to increase the results per visit to make it profitable.

Takatsuka: Your approach to understanding the market and the strategy you developed for it are truly outstanding. You joined Baisel as a director in 2016 and became CEO in 2017. Was this exceptional business model already firmly established back then?

Iwata: I was confident in the business's high potential from the start. But there were various hurdles to overcome along the way, like marketing and organizational engagement...

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After Mr. Iwata became CEO, what challenges did Baisel face, and how did it overcome them to achieve its current rapid growth? Stay tuned for Part 2, where we delve into the core of this growth!