The Happinet Group is the largest intermediate distributor in Japan for toys and DVD/CD titles and it holds roughly 60% of the market for operation and sales of capsule toy vending machines. Of particular note is the fact that we handle about 80% of the domestic toy distribution of BANDAI Co., Ltd., the largest toy manufacturer in Japan. Further, we are the only company in Japan that handles home-use game console models from all manufacturers marketed in Japan.
With the declining birth rate in Japan, every toy manufacturer and retailer is seeking ways to improve business efficiency and offer better products and services. By leveraging a wealth of information gathered as the industry's largest intermediate distributor-and by harnessing marketing power that makes full use of this information-Happinet is building and maintaining strong ties with manufacturers and retailers.
Happinet Group links manufacturers with retailers. We have in place an optimal distribution system in which the three areas of sales support, logistics, and information work in unison. We run three Logistics Centers in Japan that serve as bases for our logistics operations and that have a combined total floor area of 76,835 m2. By making full use of these centers and of our distribution system, we can conduct highly accurate, real-time stock control and we can ensure prompt and appropriate shipping that is unrivalled by any other distributor.
Happinet Group purchases products from about 700 suppliers and sells those products to about 1,500 retail companies. Being positioned between these suppliers and retailers, we are able to relay information back and forth between the manufacturing side and the selling side. This helps these companies not only to sell existing products, but also to develop new ones. Happinet Group strives to be an essential player in the industry-one that can help to achieve win-win results for all parties involved.
In order to appeal to customers, products such as toys, audio-visual software, and game software need to be new and up to date. The key to increasing profits is to maintain an appropriate amount of stock while anticipating market trends. Maintaining adequate stock, though, requires a company to have a high degree of creditworthiness and financial power. Happinet Group takes pride in meeting both of those criteria, being the largest intermediate distributor in the industry and a member of the BANDAI NAMCO Group.
The amount of earnings gained from sales of toys, video/music software, and game software and devices varies greatly from product to product and from title to title. For this reason, a company risks its very survival if it relies only on a single genre or hit product. Because Happinet's business is diversified across a number of different segments-toys, video/music software, video games (software and hardware), and amusement-we can boast of having a stable foundation for earnings.
