E-commerce making Tokyo's famed fish markets obsolete
By the time Tokyo’s new auction site is up and running, it may be time to question if it is needed at all.
Even as the Tokyo government wrangles with the issue of moving the Tsukiji wholesale market to a new – and possibly polluted – location, innovative companies are forming more direct purchasing and marketing channels that bypass Tokyo’s central market.
Despite a strong tradition of Japanese consumers buying fish from markets in person, Japanese seafood sellers are taking advantage of the internet to match buyer and seller, use air links and refrigerated parcel delivery services, and, by cutting out the layers of middlemen, return a larger share of the consumer price to fishermen.
A seafood trading website called SCSS debuted in 2009 as a collaboration between Osaka-based Syunzai Ltd., a seafood dealer that also operates food sales websites, and Tokyo-based Mitsuiwa Corp., an IT development company. Delivery is arranged using the airline ANA and nationwide refrigerated and frozen parcel delivery is provided by Yamato Transport Co., Ltd.
The service connects buyers directly to about 1,500 fishing cooperatives and local brokers at ports, who are the sellers. The approximately 100 registered purchasers are retailers, foodservice distributors and brokers. SCSS operates as a trading platform, rather than actually taking ownership of the product.
The company makes its money from membership fees – it costs about JPY 100,000 (USD 898, EUR 804) to join, plus JPY 10,500 (USD 94, EUR 84) monthly, and from a two percent commission from sellers and an 11.5 percent from buyers. The most popular use of the site is in finding a home for non-target small-quantity bycatch for which the seller may have no sales channel.
Fishermen take digital photos or movies of the actual fish as they are landed and post them to the site. Buyers can view and bid on these in real-time. There are designated pickup locations for the parcel service at ports around Japan. The product arrives fresher than that which goes through the auction channel. As the sales are recorded electronically, traceability is ensured. The site processes payments, so buyers make a single payment to the site operator, even when they deal with multiple sellers.
Another service in a similar vein is Chihou Sousei Network Co. (CSN), headed by Ryohei Nomoto. The company air-freights freshly caught fish from across Japan to its processing facility on the grounds of Tokyo’s Haneda Airport, and distributes the produce either within Tokyo or again by air. About 40 percent of the product is sent overseas.
By locating on the airport grounds – it is the only fish processor to do so – the company can achieve same-day turnaround. And by boosting the freshness and shipping range of fish from distant ports, the company can get higher prices that are in part passed on to the fishermen. Nomoto also opened a fish shop in the fashionable Ginza area of Tokyo to retail fresh fish.
The business model is different from that of SCSS in that the company takes possession of, and processes, the fish. But it is similar in cutting out the multi-layered auction system.
A third company using IT to deliver fresher fish is the Tokyo-based Foodison group, which operates several group companies, including business-to-business sales company Uopoche and retailer Sakana Bacca.
Uopoche buys directly from fishermen, sealing deals even while they are at sea over social network sites like Line, and sells the air-shipped products to restaurants, mainly in Tokyo. Group company Sakana Bacca is a chain of fish shops – currently six stores and an online shop – retailing fresh fish, and offering hints on how to prepare unusual species. The have demonstrations and a cooking school to teach how to cut up and prepare various kinds of fish, something that many modern Japanese women no longer know how to do. They also do custom orders and catering.