Case Study: Candy Japan grows its subscription business with Recurly
It was a confluence of sorts. After spending two years in Tokyo as an exchange student, Bemmu Sepponen fell in love with the unique culture of Japan, which is both fashionable and eccentric. And he had always been intrigued by subscription-based services and their continuous revenue streams.
Somehow, he wanted to bring these interests together. In 2010, Bemmu moved to Tokushima, a small city on the island of Shikoku, and started researching subscription-based businesses. Less than a year later, he formed Candy Japan.
“Japan has a huge variety of different sweets,” says Bemmu, originally from Finland. “Some are really strange, like pieces of wasabi-flavored seaweed or do-it-yourself kits for making sushi-shaped treats.”
Candy Japan started as an experiment. Bemmu had experience running a small online shop, but didn’t want to hassle with inventory control or complex logistics. Instead of allowing customers to order a variety of specific items, he envisioned Candy Japan as a one-product business. The product, however, is always different, and comes as a surprise to subscribers.
“Subscribers receive Japanese candy twice per month, but they don’t know what is coming until it arrives,” Bemmu says. “Everyone likes surprises.”
Except when it comes to billing and payments. Candy Japan initially relied on PayPal to facilitate customer billing, but it was clunky and lacked advanced integration capabilities, especially for an overseas merchant.
“I’ve had to refuse money from people because my system simply wasn’t up to the task yet,” Bemmu explains. “I needed a way to accept credit cards directly on the site without redirecting to PayPal. But for a non-U.S. merchant, the options are quite limited.”
He did find one option: Recurly. The subscription billing software has bolstered Candy Japan’s business, helping it grow from a handful of subscribers to more than 320 in less than two years.
Bemmu researched a variety of subscription billing services but settled on Recurly because of its established payment gateways, easy integration with backend systems, advanced reporting capabilities and effortless administration.
Running a Finland-registered business from Japan, Bemmu had difficulty finding a payment processor that would support Candy Japan. But Recurly’s established partnerships with a number of leading payment processors led him to WireCard, which approved Candy Japan in part because of its use of Recurly.
“Recurly’s partner list and documentation helped me find and integrate with a payment gateway,” Bemmu says. “And I’ve had no trouble integrating Recurly with my backend systems.”
This integration has eliminated many of Candy Japan’s manual processes. When customers subscribe to the service, they are automatically added to the company’s shipping list. The backend system also tallies how much candy to send based on each subscriber’s payment status and creates shipping labels.
“I no longer have to keep track of every customer, the shipping list or how much to ship,” Bemmu explains. “It’s all very easy.”
So is business tracking. With Recurly, Candy Japan has up-to-the-minute data on each subscription, including account information and payment status. Bemmu can also see metrics related to past and projected revenue, subscription volume and customer retention.
Recurly is also helping with customer communications, automatically sending payment verifications and notices of payment failure, with helpful instructions for how to update credit card numbers or resolve billing issues.
“Recurly has helped streamline and legitimize Candy Japan,” Bemmu says. “I don’t need to do anything manually when it comes to billing or payments.”
This means he has more time to focus on unique products. Candy Japan subscribers recently received a Moko Moko Mokoretto, which includes a kit for assembling a small, plastic toilet. Candy powder is placed in the toilet bowl, begins to bubble when mixed with water and is consumed with a straw.
“It’s possibly the strangest candy we have sent so far,” says Bemmu.