Japan hot bath chain Gokurakuyu said to eye China unit spinoff

November 28, 2019 11:10
Gokurakuyu is said to be enthused by the response from Chinese customers to its product and service offerings. Photo: www.gokurakuyu.cn

Gokurakuyu, a Japan-based firm involved in hot bath business, is planning to spin off its Chinese operation, according to reports.

The Japanese bathhouse chain expanded into China in 2011. It now has eight outlets in the country, covering major cities like Shanghai, Hangzhou, Wuxi and Wuhan. New shops will be added in Chengdu and at the Disney theme park in Shanghai.

The company intends to list its China business after hiving it off, as per Japanese media reports.

Gokurakuyu was founded in 1980. Most of its shops are in downtown areas in big cities. Each facility is like a giant hot bath theme park, with food court, playground, library, video game zone and beauty salon inside.

There is something for everyone and a family can spend hours inside those facilities. It now runs over 40 shops in Japan, and was listed on the Tokyo Stock Exchange in 2011.

Business has been developing steadily. Last year, revenue and operating profit rose 15 percent and 11 percent to 16 billion yen and 1.7 billion yen respectively. Japan and China markets contribute 72 percent 28 percent of its revenue respectively.

Gokurakuyu has a market capitalization of around 9.7 billion yen currently.

The company’s mainland outlets have also been very popular. The Pudong shop in Shanghai is the most profitable one, receiving up to 6,000 customers daily at its peak, generating revenue of over 100 million yuan a year.

The ticket price for adult and child costs 158 yuan and 68 yuan respectively. Adding the expenditure o food and other services, it's said that a customer spends around 300 yuan on average.

Joining the Singles’ Day online shopping festival on leading e-commerce site Taobao for the first time this year, Gokurakuyu sold over 20,000 tickets at a special price of 118 yuan, a reflection of the large demand for affordable relaxation products and services.

This article appeared in the Hong Kong Economic Journal on Nov 27

Translation by Julie Zhu

[Chinese version 中文版]

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Hong Kong Economic Journal columnist