[Shopify Merchant Interview Series]
Forty-six years since its founding. Sparkling accessories and small goods, and Hoppe-chan, a character symbolizing an entire generation. Sun Hoseki is an iconic brand that has shaped girls' culture across the decades.
But the company's path has not been a smooth one. After a period of rapid expansion, its finances faltered, and in 2021 it went through civil rehabilitation proceedings. The road back from a situation where the brand's very survival was in question was anything but easy.
This isn't simply a comeback story—it's a trajectory built by accumulating connections in step with the times. We asked Business Division Manager Kanzaki how Sun Hoseki has continued to change, and what it's aiming for now.
(Hitomi Kanzaki, Business Division Manager, Sun Hoseki Business Division, Mittomeruhen Co., Ltd.)
The Trajectory of a Girls' Culture Icon That Began With Catalog Mail Order
In the early 2000s, Sun Hoseki enjoyed enormous popularity among elementary and middle school students as "the place where I did my first shopping with my own allowance." Each catalog issue reached around 2 million copies in circulation, and annual sales were in the range of 5 billion yen. New customers kept flowing in through magazines like Ribon and Chao, and the brand became part of girls' culture.
But as the spread of the internet changed purchasing behavior, Sun Hoseki too was forced to shift from catalogs to e-commerce.
—— What led up to Sun Hoseki's current operating structure?
Hitomi Kanzaki (hereafter, Kanzaki) This year marks Sun Hoseki's 46th anniversary. I joined the company about 21 years ago, right at the height of the catalog mail-order era. Circulation of the bimonthly catalog reached 2 million copies, and annual sales were in the range of 4 to 5 billion yen.
At that time, Hoppe-chan, our current flagship character, hadn't been born yet. It was the peak of the catalog mail-order era, and new customers kept coming in every month through magazines like Ribon and Chao. We followed the trends while developing the kind of "yasukawa" (affordable and cute) products that define Sun Hoseki.
—— How did the shift from catalogs to e-commerce proceed after that?
Kanzaki As the internet spread, it gradually became harder to acquire new customers through analog mail order alone, so we shifted toward digital, set up an e-commerce division, and launched our official site.
Over time, we first built the site for PHS handsets. After that, we used custom-programmed mobile and PC sites along with an app. The fact that the site could only be modified by specialists became a real constraint for us after the civil rehabilitation, so we switched to Shopify in the fall two years ago.
Our goal was that going digital would let us hold down catalog shipping costs, and web orders eventually grew to account for 50% of sales. But at some point, the mail-order model itself—sending direct mail to children—stopped being profitable as a way of doing business.
The Birth of Hoppe-chan and the Side Effects of a Booming Trend
(Hoppe-chan, known for its distinctive pinched-cheek design)
Hoppe-chan became a massive boom among upper-grade elementary schoolers. But the "Sun Hoseki = childish" image it created, combined with rapid business expansion, ended up straining the organization.
Kanzaki Before Hoppe-chan was born 15 years ago, our largest user segment was around first-year middle schoolers. Customers would shop with Sun Hoseki for the first time in sixth grade, continue into their first year of middle school, and then drift away as they started preferring simpler things. We made catalogs aimed at middle schoolers to try to win back that churn.
In the middle of that trial and error, the "deco" (decoration) boom took off at Sun Hoseki, and out of our deco products came Hoppe-chan, a DIY character, which exploded into a huge boom among upper-grade elementary schoolers. At the same time, we also came to be seen as "Sun Hoseki = Hoppe-chan = childish," so we split off a separate catalog for middle and high schoolers, and launched a separate "Hoppe-chan Fan Club" catalog for Hoppe-chan itself.
—— That sounds like smooth sailing. What led from there to civil rehabilitation?
Kanzaki Because Hoppe-chan was doing so well, we spread the business too thin. At the time, we had close to 50 stores nationwide. We built our own factory in China, set up a licensing division in Tokyo, and also had a team building our e-commerce site. The company grew to about 250 employees, and our own factory to about 500.
From there, we had no choice but to scale the business down, and there were about three rounds of restructuring before we reached civil rehabilitation. Our directly operated stores closed one after another, and even the last one remaining, in Harajuku, ended up closing under the impact of COVID. Internally, there was even a period when the atmosphere was almost "it's Hoppe-chan's fault" for how the business started to falter.
Civil Rehabilitation and a Fresh Start: Pursuing a Visible Comeback Through Gachapon
Kanzaki Starting two to three years before the civil rehabilitation, our bank and consultants got involved and we worked on turning things around. When we actually went through civil rehabilitation, the management team changed, and we started over under a new structure. Previously, we had to get the former president's approval for everything, but under the new structure, more decisions could be made on the ground.
In our first year after civil rehabilitation, our top priority was improving mail order, which accounted for 75-80% of sales. But we also heard a lot of "did Sun Hoseki go under?", so we decided, "Let's put Hoppe-chan out into arenas beyond Sun Hoseki itself and create a visible, tangible comeback." One of those moves was expanding into gachapon (capsule toy) machines.
—— So the gachapon expansion was the first step in your comeback.
Kanzaki That's right. We started sales activities without really knowing what we were doing, and nothing was getting decided—we were completely in the fog. But as we picked up interest from a few business partners, voices started spreading on social media: "I spotted a Sun Hoseki gachapon," "that's nostalgic," "it's still around?", "where can I buy it?"
Wholesalers who saw that reaction reached out saying they wanted to use Hoppe-chan, and by August last year we were able to start rolling out "Hoppe-chan, Again" corners in stores.
(The "Hoppe-chan, Again" corner)
—— With the organization scaled down, what made this expansion possible?
Kanzaki After civil rehabilitation, we had a staff of just over ten, and we had to bring the company back with very limited resources. That meant we needed to increase our allies. Receiving so much support through our post-rehabilitation crowdfunding campaign made me feel we couldn't give up. I had been a Sun Hoseki user myself, so I started running with the feeling of "I want to bring energy back to Sun Hoseki and Hoppe-chan."
Licensees who saw that, along with wholesalers and staff at the stores that became our sales channels, all cheered us on. So many of them had originally been users themselves—some acted as sales agents for us, and others told us they wanted to run alongside us because they wanted to help bring the brand back too. That's what led to the in-store corners. We first introduced the corner into about 200 stores, and as word spread, we now have Hoppe-chan corners set up in around 600 stores.
—— So the business shifted from something that was mainly B2C, like catalog mail order, into something new.
Kanzaki B2B has thinner margins compared to B2C. We started it thinking of it as little more than a grassroots effort and advertising expense, but it spread far more than we expected.
If it were only Sun Hoseki putting the message out, I don't think we'd even reach a few percent of the market. But say we're at 5%—by doing this through B2B, that expands to 10%, then 20%. And fans who saw that have gone on to expand it further, to 30%, 40%. As a result, I feel like the warmth from outside is flowing back into Sun Hoseki.
A New Shape for Sun Hoseki, With Licensing as Its Weapon
—— So in this fresh start, messaging from fans and outside partners became a major driving force.
Kanzaki Yes, we had a huge number of people cheering us on through social media too. Last summer, when I strongly wanted to build on that momentum and not let "Hoppe-chan, Again" fail, various opportunities came our way. That's when I thought, "we need to accelerate our social media," and I started running it myself at first. Through that, I got a feel for things like "this channel works for us, this one doesn't."
Sun Hoseki was originally a licensor of characters and brands, and in a typical licensing business, the usual flow is to supply artwork that manufacturers then use to make products. But I wanted to make Sun Hoseki into something we build together with our customers. Around that time, the wife of the agency representative who was working with us was also a Sun Hoseki fan. As we talked through how to build momentum, I wanted to involve fans directly and turn it into a movement called "Hoppe-chan, Again."
—— Concretely, how did that spread?
Kanzaki I really wanted to convey our feelings, so I wanted to create something emotional. But if the rights holder itself made it, there was a fear of what might happen if something went wrong, so we asked influencers to produce the videos instead.
They make and publish their own videos, and sometimes they've stirred up controversy, but they've also managed to settle it down. They're people with a track record of fighting through all kinds of challenges. Through a good connection, I met someone like that, shared my feelings with her, and asked, "Won't you help bring Hoppe-chan back with us?"—and she agreed.
From there, user-generated content started coming in naturally, and users began posting on their own initiative. In the end, I think borrowing outside expertise, experience, and planning ability let us get past the fears that come with being the rights holder.
(Hoppe-chan, Again: a fresh start built together with fans)
Hoppe-chan's 15th Anniversary! Official Sun Hoseki Video
—— Hearing all this, it's almost fair to say Sun Hoseki isn't leaning on old brand equity so much as acting like an up-and-coming brand.
Kanzaki Having the Sun Hoseki brand name and recognition sometimes means people say "just leave it all to you," but the reality is that we're moving forward together, involving the people who have been fans of ours for a long time. It's all about the connections.
—— With fans from the mail-order era supporting you, you're repositioning your intellectual property, your real strength, back at the core.
Kanzaki That's right. In an era overflowing with affordable, cute products, honestly, it's hard to compete with brands riding the cutting edge of trends. To survive by building the brand, we needed to transform the business. So after civil rehabilitation, we started with gachapon, went through the "Hoppe-chan, Again" corner rollout, and stopped treating mail order—which had been Sun Hoseki's core business for 44 years—as our core. The one thing we had that could beat the competition was Hoppe-chan.
Running our own pop-up business in-house is also quite unusual and I think it's a real strength. I believe we need to combine merchandise sales and events to build the brand.
Making Speed of Decision-Making the Next Weapon
—— I imagine the accumulation of major decisions after civil rehabilitation has led to where you are now. Is there anything you've particularly kept in mind?
Kanzaki Part of it is that we had no choice but to do things this way, and I think that has ended up fitting well with the current era. With limited resources, there are things we simply can't get through unless we keep making decisions quickly, watching the situation and the market as we go.
At typical licensing companies, even when a licensing-out proposal comes in, it often takes a long time to actually get moving. But because we're small, we're set up to act right away. Right now, Sun Hoseki might look like it has made a comeback from the outside, but I think we still have one more step to go. Rather than waiting for things to build momentum, we want to be the ones building it.
(Sun Hoseki's business turnaround, driven by a small team)
Taking On the "Kidult" Generation: Animation and Overseas Expansion
—— News about a Hoppe-chan animated series has also been revealed.
Kanzaki The animated series was actually decided on quickly after we found a sponsor through civil rehabilitation. A kind of movement formed around our crowdfunding campaign—"let's all support Sun Hoseki together"—and we hit our funding goal quickly. People in the industry saw that energy, and that's what led to the decision.
Timed to the milestone of "Hoppe-chan's 15th anniversary," the series focuses on "Hoppe-chan fans who are now adults." Of course, we're also making sure it's a work that today's Hoppe-chan generation can enjoy without feeling out of place.
—— Hoppe-chan's cute character design seems like it could do well overseas too. Do you have plans for overseas expansion?
Kanzaki We are thinking about overseas expansion, but production is the biggest wall. For a brief period when we were mass-producing at our factory in China, we could make several hundred thousand units a month, but—maybe I'm being too particular—the faces just weren't cute. So we went back to handmade production in Japan.
Before civil rehabilitation, our production team had about 30 people at its peak, but after rehabilitation it dropped to three. That naturally limits how much we can produce each month. Going overseas essentially means we'd need mass production, but there's a limit to how far handmade, one-by-one production like Hoppe-chan's can go. So rather than a character that appeals broadly to many people, we need to reach the fans who truly love it. There are also cultural differences between Asia and the West that we need to think through.
Right now, we want to prioritize Japan, where there's both a Heisei-retro boom and "kidult" consumption, while still thinking about going overseas.
(Hoppe-chan, handmade one piece at a time)
The Official Site as a Base for Sharing Information
—— Could you tell us how you currently position your e-commerce site, and your plans going forward?
Kanzaki Honestly, mail order (e-commerce) is something we struggle with a lot. Fundamentally, I don't think the e-commerce function necessarily has to live on our official site. But since licensing is our core business, we decided we needed an official site rather than a merchandise-focused marketplace, and we chose Shopify because it prioritized ease of building and making changes. It's less a place to generate profit and more something close to social media—closer to a fan service.
—— Besides your own site, do you also run marketplaces or other channels?
Kanzaki Yes. As part of our grassroots efforts, we have storefronts on Rakuten, Amazon, Yahoo!, au PAY Market, and Qoo10. We also recently launched a TikTok Shop. Since our in-house team appears in videos and acts as influencers themselves, we're exploring various approaches, hoping that if we sell things ourselves, we might be able to create a new wave.
—— How has your experience running Shopify been?
Kanzaki Honestly, everything about it has been a huge help. The site analytics in the admin dashboard are also really easy to understand. For the initial build, we had someone who was familiar with Shopify and could move fast with AI handle it, and after that we've been running it ourselves—installing apps and researching as we go. True to its reputation as "a Shopify that even amateurs can tinker with," even I can find my way around it. We handle updates and swaps in-house too. There's still a lot we haven't gotten to, so honestly, there's still plenty of room to grow.
—— Your official site has also adopted our app "RuffRuff 予約販売" along with other apps in the RuffRuff series. Did you set those up yourself?
Kanzaki I communicated what I wanted the apps to accomplish, and had our in-house e-commerce staff install the RuffRuff apps.
We wanted to set up pre-orders and purchase limits for situations like when production can't keep up, when we strategically want to generate buzz, or when we want to bring sales forward. RuffRuff Order Limits in particular is extremely convenient. Previously, we had to program purchase limits into our warehouse-side system, which was time-consuming and incredibly cumbersome. Being able to avoid that with a Shopify app has been a huge help.
We couldn't build that kind of setup on our site before Shopify, so it's a real relief that it's easy to implement on Shopify. The flow is: say what we want to do first, then make it happen with an app.
(Sun Hoseki official online store)
Brand Management Starts With Fans
—— What do you think will be required of e-commerce and brand operators going forward?
Kanzaki I'd say brand management really does start with fans.
If it's a worldview an artist is putting forward, it might be fine to just express what you personally want to express. But the reason Hoppe-chan has lasted 15 years is largely because so many people out there have loved and supported it. When you want to be a character loved across two or three generations of parents and children, nothing can begin unless fans' hearts are moved.
It's not that we stay humble simply because we're in the rebuilding period after civil rehabilitation, and it's not that we're "letting people use us" now that we've found success either. That said, pure fan service alone won't generate profit.
We approach it with the sense that we're building momentum together with everyone who believes in Hoppe-chan's power, aiming for a good outcome on both sides.
(The Sun Hoseki Business Division team)
The vision Sun Hoseki is drawing after civil rehabilitation goes beyond simple merchandise sales or character business. Carrying forward a history of capturing girls' hearts across the decades, it is walking alongside its fans and reweaving a new business built around its intellectual property.
Not a flashy comeback story, but a steady accumulation of connections, pushed forward by fans. Crowdfunding, social media, gachapon, wholesale expansion, and an animated series—running through all of it is the perspective that everything starts with fans.
It doesn't have to be the mainstream path. That's exactly what makes it possible to stand out. Ahead of where Sun Hoseki is headed, a new form of culture is emerging—one where characters like Hoppe-chan connect people across generations and borders through cuteness itself.
