Company history

Kitanotatsujin began in May 2002 in Osaka as Hokkaido.co.jp, and moved its head office to Sapporo four months later. Its founder, Kinoshita Katsuhisa, had come from Recruit, where he worked on business planning in the early years of the commercial internet, and the idea he left with was narrow and practical: Hokkaido melons, crab and potatoes that failed the cosmetic standards of the gift trade were perfectly good food that nobody could sell at a gift-trade price. Sold online as wakeari — “with a reason” — they could move cheaply, and search-engine traffic kept the cost of finding buyers near zero.

The model worked and then, predictably, stopped working. When the company opened its Hokkaido Wakeari Ichiba site in July 2007 the concept was still unusual enough to win mail-order awards and press coverage, but nothing in it could be protected. Competitors adopted the same word and the same category of goods, and a business whose only edge was traffic acquisition found itself bidding against them for that traffic. Within five years of founding, Kinoshita had concluded that a business built on reselling what other people made could not hold a margin for long.

His answer was to give up the easy side of the trade. In July 2007 the company launched Kaiteki Oligo, a food-grade oligosaccharide made from Hokkaido sugar beet and sold for digestive health — its first product designed in-house. The name followed the strategy: in March 2009 the firm dropped the geographic, e-commerce-sounding Hokkaido.co.jp and became Kitanotatsujin Corporation. In February 2011 it sold its three Hokkaido produce sites for $125,345 (¥10m), booking a small disposal gain and leaving the founding business entirely. Standalone revenue that year was still only about ¥739 million.

The company listed on the Sapporo Stock Exchange’s Ambitious market in May 2012, ten years after founding, with a catalogue of roughly five products of which Kaiteki Oligo supplied most of the revenue. Such extreme concentration was rare among listed consumer companies, and it was deliberate. Rather than shelving many items in one storefront, Kitanotatsujin built a dedicated site for each product — its own landing page, its own copy, its own conversion funnel — and released a new product only once or twice a year, on Kinoshita’s rule that nothing ships unless it is startlingly good. It moved up to the Sapporo main board in March 2013, listed on the Tokyo Stock Exchange’s Second Section in November 2014, and was designated to the First Section a year later.

The second pillar arrived in cosmetics. Eyekirara, an eye cream given its own site in November 2015, grew into a ¥700 million-a-year product; Hyalo Deep Patch (2016), a microneedle patch for the eye area, took a then-novel technology into a mass skincare product and had cumulated some ¥4.2 billion in sales by 2019. From February 2017 the company pushed its advertising onto Twitter, Facebook and Instagram, and — decisively — brought ad operations in-house, cutting agency fees and completing a vertically integrated D2C loop that ran from product design through media buying without an outside party in it.

The financial result was unusual for a company of its size. Revenue rose from ¥5.29 billion in the year to February 2018 to ¥10.09 billion two years later, with operating profit reaching ¥2.92 billion — an operating margin of 28.9%. Three stock splits in 2017–2018 and consecutive sharp dividend increases drew retail investors; average pay was lifted from ¥3.57 million at listing to ¥5.46 million by 2018; and Kinoshita was ranked first in Toyo Keizai Online’s 2019 survey of executives as judged by the market. A separate victory came in court: a 2018 suit against rival Hagukumi Plus over comparative advertising ended in 2022 with the Intellectual Property High Court awarding $519,906 (¥68m) in damages.

The first decline since listing came in the year to February 2021: revenue down 8.1% to ¥9.27 billion, operating profit down 30.4% to ¥2.03 billion. The cause was inside the machine that had produced the margins. Optimizing every campaign toward measured efficiency had pushed the company to run the same proven creatives again and again, and audiences simply tired of them — the conversion rate on each individual ad stayed respectable while the ability to reach anyone new quietly decayed.

Acquisitions did not offset it. The cosmetics maker SALONMOON, bought in 2021, brought the company to consolidated reporting and revenue of ¥9.51 billion in the year to February 2022, but the added overhead landed on top of a still-weakening core: operating profit for the year to February 2023 collapsed 75.5% to ¥510 million. Kinoshita’s own diagnosis was blunt — the company, he said, had lost the ability to create anything from zero.

The rebuild that began in 2023, which Kinoshita named Team X, inverted the rule the company had lived by: widen the range of ad creative even at the cost of a lower conversion rate on each one. Around that sat slower, less glamorous work — resetting KPIs, basic training, building a shared vocabulary across the marketing organization. The recovery was abrupt: consolidated revenue for the year to February 2024 rose 49.2% to ¥14.67 billion and operating profit 184% to ¥1.45 billion, a rebound Kinoshita described in his 2024 book Team X as going from the bottom of the pit to thirteen times the profit.

What followed was subtraction. In July 2024 the company sold its entire stake in FM NORTH WAVE, the Hokkaido radio station it had acquired, exiting broadcasting and ending the diversification drift of the preceding years. Revenue fell to ¥11.83 billion in the year to February 2025 on the deconsolidation, but operating profit held at ¥1.68 billion — the point of the exercise. In April 2026 it bought the beauty-appliance business now called Colorcon Direct, adding a third category alongside health foods and cosmetics under its 2028 medium-term plan.

Kinoshita has been president throughout, twenty-three years without a succession — the source of the company’s ability to swap out its business model quickly, and its most obvious unresolved risk. His personal visibility as an author, from The Law of Minimum Revenue, Maximum Profit (2021) onward, has itself become part of the brand. Whether that can be institutionalized, and whether a model built on a few concentrated products can be widened without losing the density that made it profitable, is the open question of the next plan.