The Worldfolio sits down with Norimasa Kitazawa, President of Pigeon Corporation, to talk about some of its leading childcare and nursing products, the impact of e-commerce on its business, and the company’s international expansion strategy.
With an average birth rate of about 1.4 babies per woman, experts believe that the Japanese population will decrease to 100 million by 2050. Regardless of this fact, Pigeon’s sales have kept growing. What is your company’s strategy to counter Japan’s shrinking domestic market?
International expansion has become increasingly strategic for the development of Pigeon Corporation. Our overseas efforts have provided us with a variety of advantages: Firstly, augmenting our foreign revenue has allowed us to offset Japan’s gradually shrinking market. Secondly, international exposure has enabled us to develop new ideas for our customers. By systematically and empirically monitoring local market trends, our R&D departments have fostered innovative technologies tailored to the needs of our consumers. Our ability to formulate specialized solutions has multiplied our product development capacity and allowed us to create synergies between our regional R&D laboratories. For example, our Moisturizing lotion with peach-leaf extract was originally introduced in Japan, but after careful analysis, we decided to release it in China and it instantly became a best-seller. More recently, our Turkish factory developed an electric breast pump. After pursuing its development, we launched it in China successfully and it has the potential to be adopted by various international markets.
The administration of Prime Minister Shinzo Abe has increased the presence of females in the work force in what has been labelled as “Women-omics.” What are your thoughts on this and how do you think it will affect your company?
The scarcity of day-care facilities is a trouble that all mothers, and fathers, face. To tackle this issue, we are offering an array of solutions, such as in-company child-minding facilities and day-care centres. At Pigeon Corporation, our objective is to provide services to facilitate and promote the presence of women in the workforce. In Japan, women can take around a year of maternity leave with a guaranteed professional position upon return. Nevertheless, we want to do everything that is in our power to provide women around the world with the tools they need in order to pursue a fulfilling professional career, while knowing that their babies are receiving the best care possible.
Could you give us some information on the evolution of your corporate philosophy and how it has shaped your name and logo?
Since pigeons are traditionally seen as a symbol for peace, our founder thought it to be consistent with our message to convey our desire for babies to grow happily in a peaceful and prosperous world.
Our logo takes the shape of two hearts joining together, which represents the bond between a mother and the baby she's carrying in her tummy. This double heart is meant to share our commitment to embodying love through Pigeon’s products and services. We cannot replace a mother or a father, but we can and want to deliver love to many people. We believe that this is our mission.
In certain regions, your products are two-to-three times above traditional market prices. What competitive advantage do your products have that justify the difference in price?
Our strategy has never been, and will never be, to produce low-cost items. That would be contrary to our founding philosophy, which is to bring to families the best products they need. Over the years, we have developed a brand recognized for reliability and quality, which is exactly what families want when nurturing what is dearest to them: their kids.
In addition to our branding efforts, word-of-mouth has played a significant role in our expansion. As our customers shared amongst each other the merits our items procured, our brand grew in countries where we had yet to expand. For example, when we established our distribution in China in 1996, the local market was well aware of our brand and our products were already highly evaluated; we didn't feel that we were new comers.
What regions show the highest growth potential for your company?
Due to the growing purchasing power of its middle class, China has a lot of potential. The same observation can be made when analyzing the emerging economies of India and South East Asia. As the birth rate of these Asian counties is expected to exponentially increase, we are determined to strengthen our presence in these areas while maintaining our Singaporean stronghold.
In Europe, where we are recognized as “Lansinoh”, our activities posed solid performances, especially in Germany and in the UK. Nevertheless, we would like to increase our presence in other large European countries, such as France. At last, the USA boasts stable fundamentals and we look forward to further penetrating it.
In recent years, we have seen that E-commerce has altered the purchasing behavior of international consumers. How are these new channels affecting your company?
E-commerce has allowed us to nurture a closer relationship with our customers by installing direct communication channels. It has also expanded our reach, simplified our logistical operations and guaranteed the sourceability and veracity of our products. In China, about 46% of our sales already come from E-commerce and we expect this ratio to further expand.
Furthermore, E-commerce allows us to introduce new products and immediately test the market’s response. For example, the breast pump we previously mentioned was originally manufactured and developed in Turkey. When it was introduced online, we observed that it received high-ratings from our Chinese customers. Consequently, we began selling it through direct sales channels in China.
Could you tell us more about your technological capabilities and your R&D efforts?
We are currently introducing several products that will bring great value to our customers. By embracing IoT technologies, we are able to develop connected devices that analyze our customer’s data to best match his or hers physical requirements. Furthermore, we have invested in the creation of smartphone applications in order to seamlessly facilitate user-interface and product utilization. For example, the controlling features of our Electric Breast Pump are directly available from one’s smartphone. It allows the user to choose the best-match suction rhythm from pre-programmed variations, therefore allowing for maximum comfort adapted to breast conditions.
For the future, we plan to tackle issues linked to delivery, such as low birth weight. The number of prematurely born babies has never been greater than it is today and as such, we have made it our mission to provide adequate solutions so that all babies, premature or healthy, are safe.
In addition, we continuously strive to improve the features and characteristics of our existing products. For example, we are currently researching means to ensure that our nursing bottles do not provoke “Nipple Confusion” to babies. “Nipple Confusion” is a phenomenon where babies become too accustomed to sucking from a nursing bottle and then struggle to re-adjust to natural breasts, vice versa. To address this issue, we added in the latest version of our nursing bottles a truly natural feeling to mimic the mother’s nipple.
In 2015, we introduced our proprietary baby strollers. In just half a decade, we were able to grow our domestic market share to about 20%.By virtue of our technological capabilities; our strollers are better adapted to cope with uneven surfaces, hence, bringing comfort to both babies and parents. We achieved this technological prowess thanks to the unique design of our wheels. Our swift success in the stroller-market is a symbol of Pigeon’s competitive advantage: technology.
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In May 2019, you were appointed as the new President of Pigeon. What are your ambitions for the company and what are you hoping to accomplish?
My ambition is to strengthen our existing businesses and translate this performance into real numbers. However, above our financial performance, what is dearest to me is to continue spreading the unique message of Pigeon Corporation: “love and compassion,” and to contribute to the betterment of society for the sake of all babies in the world. If my presidency allows me to enrich the lives of our customers by nurturing their babies, then I will consider it a success.
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