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Rakuten Kobo Keeps People Reading During Pandemic

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Kobo offers more than six million book titles and partners with brick-and-mortar booksellers globally.

You might think a reader’s experience with a book is solely the responsibility of the author. But Rakuten Kobo takes some of this duty upon its shoulders while it provides e-books and audio books, Vice President of Global Supply Chain Iain Lynch says.

“We are focused on making sure that we provide the very best digital experience that we can,” he declares. This passion has driven the company to listen closely to its digital book customers through methods such as surveys, focus groups and customer care interactions.

Based in Toronto, Kobo also offers e-readers, apps and accessories. Lynch notes that the company started operations in 2009 within Canada’s biggest bookseller, Indigo, before being acquired by electronic commerce and online retail firm Rakuten in 2011. 

In addition, “Rakuten gave us the strength and power to start expanding globally,” Lynch continues. “After 2012, we started going after markets in the rest of the world.”

Today, Kobo offers its customers more than six million book titles to choose from and operates with the strategy of partnering with the best brick-and-mortar print booksellers globally. “We leverage their market share and customer base for our digital experience,” Lynch describes. 

The firm’s acquisitions have included the Tolino e-reader from Deutsche Telekom in 2017. “That helped us partner with the Tolino alliance, which is a strong platform within Germany,” Lynch explains. “It allows us to make sure we’re providing the best experience to our readers, globally.”

Business Evolution

Like many, Kobo has felt the effects of COVID-19. “It is not something that a lot of people planned for,” Lynch notes. The company coped by using a robust planning process to ensure it maintained an ample supply of products during both upswings and downturns in sales. 

  As part of this process, Kobo leveraged its historical data and worked closely with its retail partners. The company also studied customer feedback and worked closely with its key vendors, namely Eink for its screens, Sigma Worldwide LLC for its e-reader accessories and Netronix Inc for its e-readers.

Kobo also changed the way it has worked with its vendors during the pandemic. Previously, its team paid in-person visits to their facilities, but when COVID-19 made that impossible, it switched over to conference calls.

Even though Kobo is not physically close to its vendors, it still maintains “open, transparent communication,” Lynch says, noting that the company is developing an 18-month forecast with its suppliers to anticipate future issues. “We have an upcoming launch soon so we’re making sure we’re meeting with them.” 

Kobo also worked closely with its warehouses and analyzed its global sales to ensure the company allocated its inventory to those that needed it the most. “We have three main 3PL warehouses globally: one located in Canada managed by Ingram Micro Canada, one in the Netherlands managed by DSV and one in Hong Kong managed by Kerry Logistics. Then, we worked with our carrier, DB Schenker, to ensure we got priority space and flights to get product shipping as it was coming off the assembly lines,” he recalls. “It was a team effort from all parties to ensure product consistently flowed and arrived on time, and required consistent and constant communication to ensure everything moved accordingly.” 

“Given this occurred across time zones and continents, it meant lots of Zoom conference calls,” Lynch continues. 

Sources of Comfort

Thanks to COVID-19, readers are devoting more time to e-books. “Depending on the country, we’ve seen 80 to more than 200 percent increases in reading activity compared to numbers before the pandemic,” Kobo CEO Michael Tamblyn reports.

He notes that Kobo also is seeing second-quarter year-over-year increases in unit sales that range from 35 to 130 percent depending on the market. “Digital has proven to be an especially resilient source of sales for authors and publishers while also providing comfort, education and entertainment for readers during this especially challenging time,” Tamblyn says.

What makes this increase particularly noteworthy is the fact that the increase in e-book sales is being driven by readers in their 50s, 60s, and 70s. “We might be in the midst of the first and only technological revolution being driven by people ages 45 and older rather than 35 and younger,” Kobo said in its white paper, “How the Best Readers in the World Read.” 

“These are the same people who make the print book business hum, and as the most dedicated readers, they’re also the ones most likely to see the benefits of reading digitally,” Kobo added. Its current customer base is largely female, with women comprising 75 percent of its business. However, men of ages 65 and older make up the strongest portion of their share of the market.

Lynch sees a strong future for Kobo as the company looks for new opportunities. “[We’ll see if] there are any new markets that will work for us and continue to push on innovations,” he predicts.

For example, digital formats are expanding into audio, he says. “We’ll look to provide the best digital experience of our region,” he says. “Audio makes it possible for book lovers to enjoy even more of their favorite books during more parts of their day – while commuting, doing work around the house, and more.”

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