TOKYO -- With its smoothness and easy grip, Mitsubishi Pencil's ballpoint pens are winning fans across Asia, where the written word is often composed of intricate characters.
Mitsubishi Pencil, which was founded in 1887 and is not affiliated with conglomerate Mitsubishi group, is seeing revenue from its Asian operations grow, thanks to the popularity of its products in the region.
On its official microblogging account, Mitsubishi Pencil said it often gets enthusiastic comments from Chinese customers. "The new Mitsubishi pen I bought is so cool!" said one recent comment. The company boasts more than 40,000 followers on the site.
The Jetstream ballpoint pen is a particular hit, with annual unit sales topping 100 million worldwide. Mitsubishi Pencil sells Jetstream products in some 60 countries and regions, and the brand is popular with students and others in Asia.
Jetstream pens feature quick-drying ink and a smooth writing feel. In the U.S. and Europe, people tend to prefer bold point sizes, a company spokesman said, while those in Asia who write with Chinese characters, including the Japanese, opt for finer point sizes because characters often are made up of many strokes. Mitsubishi Pencil has thus focused on Asian markets whose writing culture is similar to that of Japan, and the strategy is paying off.
Let it flow
The company's pretax profit rose 54% on the year to 10 billion yen ($97.2 million) in the year ended December, a record high. By region, its domestic sales grew 3% from a year earlier, while overseas sales climbed more than 20% overall; sales in Asia outside Japan jumped 32%. The region already accounts for 40% of Mitsubishi Pencil's sales from abroad.
The strong growth in Asia is attributable to the company's gradual shift, starting in the late 1990s, from a sales agent system to direct oversight of marketing activities. Agents often lacked deep product knowledge, making it difficult for the company to launch effective sales and marketing campaigns. By handling these aspects of the business itself, the company can send people from the head office in Japan to specific markets as needed. "That way, we can get information about trade shows and promotional campaigns by local stationery stores," said Nobuyuki Nagasawa, a member of Mitsubishi Pencil's board of directors.
In 1998, the company set up a sales and marketing unit in Taiwan that helped it quickly grab the top share in that market. In 2004, it began selling its high-quality pens directly in Hong Kong, and in South Korea the following year. The strategy has worked well, with Mitsubishi Pencil posting strong sales of retractable Jetstream pens in these markets, starting in 2006. Asian consumers have long been accustomed to cheap, locally produced ballpoint pens, but, "They had had enough of them and wanted something new," said Mitsubishi Pencil President Eiichiro Suhara.
The company sells a wide range of pens priced from 100 yen to more than 1,000 yen apiece. In general, pen makers in Asia price their products for, say, 40-60 yen each. Mitsubishi Pencil's are premium writing instruments by comparison, but the company does not try to compete with local rivals on price, instead focusing on expanding its market share by stressing the quality of its products. In 2012, it opened a specialist shop in Thailand, broadening its distribution network and giving a further boost to sales.
The Tokyo-based pen and pencil maker plans to keep its production mostly in Japan to ensure quality, a spokesman said. This approach also helps protect its trade and technology secrets.
Japan's pen and pencil market was estimated at 120 billion yen around 1990, but it has since fallen to around 80 billion yen, according to the most recent data from Yano Research Institute. Even so, Suhara said the domestic market is significant because hit products in Japan have cachet with customers elsewhere in the region. South Korean wholesalers ask for best-selling pens in Japan, he said, and some of them actually visit stationery stores in Japan.
Mitsubishi Pencil holds about 30% of the domestic market for ballpoint pens, vying fiercely for the top spot with its main rival, Pilot. As such, it attracts a lot of attention from stationery firms in Asia. The company has also benefited from its focus on functionality, which has raised its market capitalization to about 90 billion yen.
Challenges lie ahead: The company needs to find ways to continue expanding sales in Asia. "We want to consider setting up shop in India and other countries where populations are expected to grow," said Suhara.
Another challenge is product development, specifically, finding a follow-up to the Jetstream line. The company does have other popular products, such as Kuru Toga mechanical pencil, whose lead rotates continuously to keep the point sharp. But it needs a broader line of products in order to beat rivals, including Pilot and Societe Bic of France. Enter the Jetstream Prime, released last autumn in Japan. These are high-end pens and carry price tags to match, at 3,000-5,000 yen. Although the company has only enough inventory for the domestic market at the moment, it hopes to sell them overseas in the future. "We will allocate sufficient funds for R&D and develop a variety of new products," said Suhara.