{"id":26919,"date":"2017-11-15T23:00:13","date_gmt":"2017-11-16T04:00:13","guid":{"rendered":"https:\/\/digital.hbs.edu\/platform-rctom\/submission\/raksul-japanese-uber-for-printing\/"},"modified":"2017-11-15T23:00:13","modified_gmt":"2017-11-16T04:00:13","slug":"raksul-japanese-uber-for-printing","status":"publish","type":"hck-submission","link":"https:\/\/d3.harvard.edu\/platform-rctom\/submission\/raksul-japanese-uber-for-printing\/","title":{"rendered":"Raksul, Japanese Uber for Printing"},"content":{"rendered":"

The Decline of Printing Business <\/strong><\/p>\n

The global printing business was shaken dramatically by the arrival of the internet and digital content. Customers changed the way they consume information, diverging from paper-based media to online or digital media. US daily newspaper weekday circulation dropped by 34% over 10 years from 2006 to 2016 [1]. Demand for printing fell, many companies struggled; for example, the newspaper group McClatchy, who publishes 30 newspapers, has struggled through a strategic transition, as digital publishing pushes out print [2]. From January 2014 to January 2017, the stock price dropped over 74% from $26.56 per share to $6.9 per share [3].<\/p>\n

 <\/p>\n

The Hidden Opportunity:\u00a0 Japan<\/strong><\/p>\n

While the world printing market is declining, in August 2016 a Japanese online printing services startup, Raksul, attracted \u00a52.1 billion, equivalent to US$20.2 million [4], of investment from Fidelity and other investors [5]. By May 2017, Raksul was the 5th<\/sup> largest startup in Japan by funding [6], with a total funding amount of $71,800,000 [7].<\/p>\n

Understanding the digitization trend among the printing industry, Raksul reacted to the trend differently by identifying the right target market and utilizing technology to adapt to the printing needs of its customers.<\/p>\n

Raksul\u2019s successes are built on two factors. Firstly, the Japanese culture was still largely dependent on paper. The target market of Raksul, Japanese SMEs, which accounted for 99.7% of all Japanese companies [8], still require bulk printing for brochures and business cards. According to Matsumoto, the printing industry in Japan is worth \u00a56 trillion or $50.5 billion [9]. Second, Raksul\u2019s utilization of technology changed the printing process from traditional printing to an online printing model called \u2018Web-to-Print\u2019. The Web-to-Print system allows customers to order printing products online and receive products by delivery, providing customers more convenience with less price.<\/p>\n

Through digitization, Raksul restructured the supply chain of the printing business to provide more efficient printing services at minimal costs.<\/p>\n

 <\/p>\n

Platform Business Model<\/strong><\/p>\n

Instead of operating as a single, capital-intensive printing house, Raksul created an online network of local printing houses and acted as an agent which assigns the jobs it receives from the customers via its online portal to each printing partner. Jobs are assigned based on expertise, pricing, and location of the printing house for maximum efficiency. Raksul then marks up its profits to the end customers.<\/p>\n

Optimization<\/strong><\/p>\n

Standardization<\/u><\/p>\n

To minimize material costs, Raksul set a standard for each type of printing job. Regular-size business cards, for example, is set at 91mm x 55mm with 220gsm thickness [10]. With standardization, Raksul no longer has to carry large inventories and can negotiate better prices from paper suppliers due to the bulk orders.<\/p>\n

To support standardization, Raksul integrated design services into its platform, allowing customers to access over 2000 free design templates [12] which can easily be customized to match customers\u2019 needs.<\/p>\n

Gang Run Software<\/u><\/p>\n

Gang Run Printing is a process where printers combine multiple jobs to be printed on the same sheet of paper. This process helps to significantly reduce prices by dividing the production costs across several jobs [11]. Raksul\u2019s software can optimize combinations of different types of printing jobs from different clients and collate them together in one sheet of paper, minimizing empty space.<\/p>\n

\"\"<\/a><\/p>\n

 <\/p>\n

 <\/p>\n

Lead Time and Pricing<\/u><\/p>\n

Customers can choose the delivery time for the job. Raksul can offer to deliver in as soon as one business day or more than 7 days. The longer the lead time, the lower the price. Price differences between one-day and seven business days delivery can be as high as 67% for certain printing jobs [12]. More lead time means more opportunity for Raksul to optimize costs by doing Gang Run or aggregate delivery routes and schedules. The increased efficiency gained from the technology is transferred directly to the customers in the form of discounts.<\/p>\n

 <\/p>\n

Going Forward <\/strong><\/p>\n

Raksul long-term plan is to scale the platform to other countries with strong paper culture such as Taiwan and Northeast Asia[14].<\/p>\n

My recommendation to Raksul would be to expand printing product categories from just office stationery to paper-based packaging in the short-term and to plastic-based packaging in long-term. With digitization and the internet, the Japanese may replace brochures or name cards entirely with digital products. However, digitization creates more e-commerce transactions, meaning that more packaging materials will be required to deliver products.<\/p>\n

 <\/p>\n

Future Limitations<\/strong><\/p>\n

Although Asia represents a sizable market for Raksul\u2019s expansion, it is unlikely that the company can expand the model to the USA or European countries who have moved towards a paperless society. Should Raksul stick to its printing business model or should it do something else to utilize its existing technology?<\/p>\n

 <\/p>\n

 <\/p>\n

[1] Michael Barthel., \u201cNewspapers Fact Sheet\u201d Pew Research Center (June 2017), Pew Research Center, http:\/\/www.journalism.org\/fact-sheet\/newspapers\/, accessed November 2017.<\/p>\n

[2] CreditRiskMonitor, \u201cSpotting Bankruptcy Risk In the Printing and Publishing Industries,\u201d https:\/\/www.creditriskmonitor.com\/blog\/spotting-bankruptcy-risk-printing-and-publishing-industries, accessed November 2017.<\/p>\n

[3] Yahoo Finance, \u201cCenveo, Inc. (CVO),\u201d https:\/\/finance.yahoo.com\/quote\/CVO, accessed November 2017.<\/p>\n

[4] Peter Rothenberg, \u201cRaksul makes paper sexy again with $20m in fresh funding,\u201d Tech in Asia, August 4, 2016, [https:\/\/www.techinasia.com\/raksul-funding-20m], accessed November 2017.<\/p>\n

[5] Takahiko Hyuga, \u201cFidelity Invests in Japanese Startup RakSul Before IPO,\u201d Bloomberg, August 2016, [https:\/\/www.bloomberg.com\/news\/articles\/2016-08-03\/fidelity-invests-in-japanese-printing-startup-raksul-before-ipo], accessed November 2017<\/p>\n

[6] Kristie Wong, \u201cTop 5 Startups in Japan by Funding \u2013 2017,\u201d btrax (blog), May 15, 2017, [http:\/\/blog.btrax.com\/en\/2017\/05\/15\/top-5-startups-in-japan-by-funding-2017], accessed November 2017.<\/p>\n

[7] Crunchbase, \u201cRaksul,\u201d https:\/\/www.crunchbase.com\/organization\/raksul, accessed November 2017.<\/p>\n

[8] Ministry of Economy, Trade and Industry, \u201cWhite Paper on Small and Medium Enterprises in Japan 2016,\u201d http:\/\/www.chusho.meti.go.jp\/pamflet\/hakusyo\/H28\/download\/2016hakushopanflet_eng.pdf accessed September 2017.<\/p>\n

[9]\u00a0 Tech in Asia, https:\/\/www.techinasia.com\/raksul-series-c, accessed November 2017.<\/p>\n

[10] Ruksul, \u201cSteps to create a quote,\u201d https:\/\/raksul.com\/contact\/estimate\/, accessed November 2017.<\/p>\n

[11] Print Dirt Cheap, https:\/\/www.printdirtcheap.com\/en\/cheap-gang-run-printing.html, accessed November 2017.<\/p>\n

[12] Tech in Asia, https:\/\/raksul.com\/beginners\/, accessed November 2017.<\/p>\n

Source: Print Dirt Cheap, \u201cWhat is Gang Run Printing,\u201d https:\/\/www.printdirtcheap.com\/images\/contentimages\/images\/Cheap_Gang_Run_Compare.png, accessed November 2017.<\/p>\n

[14] Tech in Asia https:\/\/www.techinasia.com\/raksul-series-c, accessed November 2017.<\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

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