Japan Market Update - February 2004 Edition

HAPPY VALENTINE'S DAY ,

The good news this Valentine's Day is the addition of extra air service by United Airlines from Tokyo to Hawaii, starting June 11th. The new service is a big confidence boost for the travel and tourism industry, indicating that demand has risen to the point where additional seats on airlines are necessary. This summer's Hawaii-bound travel market from Japan should be strong.

Further stimulating the market, Dentsu, Japan's largest advertising and marketing company, initiated their Hawaii advertising and marketing programs under Hawaii Tourism Japan (HTJ). HTJ created a new branding campaign for Hawaii and began rolling it out in late January with the launch of a new web site, transit advertising, publicity programs, and consumer and travel trade promotions. This new effort will revitalize the industry, help create a new concept for Hawaii in the minds of consumers, and help generate new enthusiasm for those selling travel to Hawaii.

To PacRim, Valentine's Day also brings an expanded team of Internet specialists, hired to assist our clients with all of their bilingual online sales and marketing needs. The team of ten specialists can assist you in many areas: Japanese language strategic web site development; Internet site optimization; content development; online commerce and market research; customer email support; as well as Japanese language e-mail marketing. Soon we will be launching streaming video marketing opportunities, as well as new approaches to M-commerce (Mobile commerce).

It's time to get online with a new marketing approach. Let us know how we can assist you in further expanding your business opportunities in Japan and Asia.

See below in the newsletter for some quirky Valentine's Day traditions in Japan!

Warmest Aloha,

Dave Erdman

*Japan Market News
-----Travel: Hawaii hotels packed for New Year's
-----Travel: Japanese arrivals fall back end-January
-----Travel: Tourism expected to rise in 2004
-----Travel: Hawaii a key travel trend in 2004
-----Retail: JTB ranks top-selling souvenirs
-----Retail: Department stores start babysitting service
-----Retail: Thrift shop culture thrives in Japan
-----Technology: Mobile commerce hits big in Japan
-----Technology: Soap-free laundering offers eco-friendly alternative
-----Restaurants: Starbucks coffee loses ground in Japan
-----Hotels: New Otani Hotel begins Hawaiian-style wedding
-----Business: Japanese consumers exhibited "un-miserly spending" in 2003
-----Business: Where's the beef? Restaurants run out of meat in Japan
-----Business: Tamagotchi 2.0 to debut in March
-----Society: Majority of Japanese men help at home
*Culture Corner
*Media of the Month
*Upcoming Magazine Deadlines
*Important Dates

TRAVEL: HAWAII HOTELS PACKED FOR NEW YEAR'S

Heavy mainland and Japanese traffic raised occupancy and room rates during holidays
Hotels statewide saw their best numbers for the year, as occupancy rose 6.5 percent from the same time last year to 87 percent, and room rates averaged 3.1 percent higher at $223 a night. During the seven-day period between Dec. 28, 2003 and Jan. 3, 2004, Oahu experienced the highest occupancy at 89.6 percent, while Maui finished a close second at 86.6 percent. Daily arrivals from Japan averaged 5,800 for the week, favorably contributing to the holiday traffic. Meanwhile popular vacation cities on the mainland had less success, as Los Angeles occupancy was 65.7 percent and Orlando occupancy was 80.5 percent. (Sources: DBEDT; Pacific Business News 1/9/04)Back to top

TRAVEL: JAPANESE ARRIVALS FALL BACK END-JANUARY

Despite a strong start for 2004, arrivals from Japan fall short of last year's levels
Latest figures released by the Department of Business, Economic Development and Tourism reveal that January arrivals from Japan finished at roughly 93 percent of 2003 levels. Bolstered by heavy holiday traffic, January arrivals over the first ten-day period nearly surpassed last year's numbers, but weaker showings in subsequent weeks undermined the earlier success. Hotel occupancy also slipped under the three-quarter mark toward the end of the month, although it has been higher statewide than the year prior. Kauai and Big Island hotels saw occupancy increase by 13 percent compared to last year. (Sources: DBEDT; Pacific Business News 1/30/04, 1/28/04) Back to top

TRAVEL: TOURISM EXPECTED TO RISE IN 2004

Strong marketing campaigns and improved Japanese economy should improve tourism, especially in Hawaii
A recent survey conducted by the Japan Association of Travel Agents predicts increased Japanese travel to Hawaii during the first quarter, between January and March. The Japan Travel Bureau Foundation also revealed similar projections, citing an improved economy and the anticipated strengthening of the yen. The Summer Olympic Games in Athens is also expected to fuel international travel from Japan. JTB forecasts a bullish 26.5 percent increase from 2003 in overall outbound travel, projecting 17 million Japanese will travel abroad. Hawaii tourism officials expect a record year as well, predicting strong domestic and Japanese arrivals to result in an $11 billion tourism year. Five separate agencies are rolling out Hawaii branding campaigns, extensively marketing golf, the arts, and island culture to both business and leisure travelers. (Sources: http://www.bizjournals.com 1/4/04; Pacific Business News 1/6/04) Back to top

TRAVEL: HAWAII A KEY TRAVEL TREND IN 2004

Among popular travel themes this year, culture, nature and sports at the top
Hawaii will be a popular destination for Japanese families young and old this year, according to a recent trend report by Travel Journal International. In 2003, 1.3 million Japanese tourists traveled to the islands, dominating a fifth of all Hawaii visitors. Senior and middle-aged travelers are especially likely to choose Hawaii this year for its heavily promoted arts and neighbor islands opportunities, in addition to increasingly popular hiking and trekking activities. Another boom expected to influence travel is Major League Baseball. Former Seibu Lion infielder Kazuo Matsui's debut as a New York Met is expected to spur interest in mainland travel, as well as boost MLB package tours on the mainland. (Source: Travel Journal International 1/11/04; DBEDT) Back to top

RETAIL: JTB RANKS TOP-SELLING SOUVENIRS

Hawaiian chocolates reign as most popular "omiyage" for Japanese tourists returning home
Hawaiian Host's chocolate-covered macadamia nuts prevailed as the most popular souvenir among Japanese travelers using JTB Traveland's Omiyage Omakase, a catalog-shopping program that allows home delivery of international merchandise. The ubiquitous, brown tiki-design box has become a classic among gift-givers in Japan, and sells for about $10 a box. Runner-ups were Italian Baci chocolates and Tengu-brand beef jerky. In the beverage department, Kauai's Hawaiian Sunset Pink Beer ranked second, behind Italy's Chianti wine. Despite the three-bottle limit imposed upon returning Japanese travelers at airport customs, Omakase shoppers can purchase up to 24 bottles of alcoholic beverages and have them delivered home. (Sources: JTB Traveland; Pacific Business News 01/06/04; Travel Journal International 12/21/03) Back to top

RETAIL: DEPARTMENT STORES START BABYSITTING SERVICE

Fee-based childcare aims to attract shoppers with young children, and gives kids a safe haven
Just in time for the store's semi-annual sale event, a Takashimaya department store in Tokyo opened an indoor play and craft area for tots between the ages of one and eight. "Kids Land" is fully insured, staffed by 15 sitters, and can accommodate up to 100 children. For 500 yen an hour (approximately $5), Takashimaya hopes to attract busy parents to an unruffled, worry-free shopping experience. Childcare services are gaining popularity throughout stores in Japan where the shopping industry awaits an upturn in consumer spending, and competes for business in an increasingly stale retail climate. Some Seibu department stores have also followed suit by opening kid's corners, while stores with limited space such as Printemps and Lumine in Ginza organize temporary childcare centers during high-traffic events and holidays. To make shopping more convenient for mothers, most major department stores also have private breastfeeding quarters, changing stations, and nurseries equipped with cots or cribs. The next step for stores may be to offer pet-sitting service, as Takashimaya already does for 300 yen an hour (approx. $4) at its high-end pet shop. (Sources: Tokyo Shinbun Shopper 1/9/04; Yomiuri Online 4/29/03; http://www.tamagawa-sc.com) Back to top

RETAIL: THRIFT SHOP CULTURE THRIVES IN JAPAN

From low-end to high-end, antique to last-season, online or on the streets, a surge of recycle shops prove that even in Japan, one man's junk is another man's treasure
Japan's consumer culture is often labeled as notoriously fickle and fad-driven, with a ferocious appetite for everything new and blunt dismissal of anything passŽ. But a shabby chic subculture, combined with environmental awareness and hard economic times has pushed second-hand stores to the mainstream. In Tokyo alone, for instance, there are currently 108 shops that specialize in used furniture. Treasure Factory, Japan's third-largest, highly profitable recycle store chain, sells refurbished household appliances and furniture. Owner Eigo Nosaka, 27, most recently opened his 13th store and is planning an IPO for 2005. Nosaka attributes his business success to a surplus of high-quality goods to resell, a keen sense of value as opposed to cost, and a passion for turning junk to joy. Another symbol of thrift exists quietly in an affluent residential quarter of Setagaya, where Tokyo's upper crust and globe-trotting stewardesses make a pretty yen selling their brand new (or nearly new) hand bags, shoes, and clothing to Sakura Umemura, owner of Kana2. As a result, her 650-sqft. store brims with designer products, mostly rare finds from Paris, London, and Milan. Umemura's hardest job is dolling up the mannequins in her store window, because her goods don't stay on display for more than a few days. It looks that Japan's second-hand market will be bristling with activity for some time to come. (Sources: Terrie's Take 1/18/04; http://www.oikura.co.jp; http://www.treasure-f.com) Back to top

TECHNOLOGY: MOBILE COMMERCE HITS BIG IN JAPAN

As web retailers tap into the 79-million-user mobile market, shopping-by-cellphone gives new meaning to the term "online shopping"
Japanese shoppers are making another technological leap forward as shopping via the mobile web makes even online shopping from home a thing of the past. "More people at present shop online via personal computers, but mobile shopping is growing at a much faster pace," said Netprice President Teruhide Sato. By 2007, the mobile commerce market is predicted to expand 500 percent to 1.78 trillion yen (approximately $16.7 billion). Netprice tripled its mobile retail business in a year, up to 3 billion yen (approx. $28 million) by October 2003. Netprice -- which boasts 400,000 transactions per month, mainly by female users between ages 25 and 35 -- sells its products on an economy of scale. Unlike at auctions where products rise in value based on bids, Netprice discounts the cost based on its popularity. Mobile subscriptions are also expanding beyond downloaded music, as publishers offer special edition e-books penned by popular authors. Shinchosha, a major publisher, now has 25,000 subscribers who can download select chapters from their mobile site each day for merely a dollar a month. Some challenges facing mobile marketers are the bandwidth limitations within a wireless network, and the branding necessary to stand out in an easily saturated market. Third-generation mobile phones with higher data capacity will make transactions faster and easier, but gaining the loyalty of the younger, trend-seeking customers may become the biggest challenge of all. (Source: The Japan Times 12/30/03) Back to top

TECHNOLOGY: SOAP-FREE LAUNDERING OFFERS ECO-FRIENDLY ALTERNATIVE

Water-laundered clothes and soapless washing machine save water, environment, and the Japanese conscience
A washing machine with a "detergent-free" cycle, and undergarments that can be washed clean with just water, are the newest trends in an increasingly ecologically-minded consumer market. Sanyo Electric Co. developed the world's first soap-free washing machine in August 2001, reporting steady sales of an averaged 20,000 units per month. In February, apparel manufacturer Gunze Co. will introduce a line of undergarments constructed of a 100% cotton fabric that requires no detergent to break down organic stains and dirt resulting from everyday wear. According to Gunze, laundering a load of "Eco-Magic" garments saves up to 19 gallons of water per wash cycle. Sanyo reported that 75 percent of customers who purchased the washing machine chose the model precisely for its detergent-free and water conservation features. (Sources: http://www.asahi.com 01/21/03; Gunze Press Release 9/16/03; Sanyo Press Release 4/25/02)Back to top

RESTAURANTS: STARBUCKS COFFEE LOSES GROUND IN JAPAN

Analysts say the boom is over, as Starbucks Japan reports losses in an overloaded market
Startling reports last fall showed that Starbucks Japan suffered losses of 454 million yen (approximately $3.87 million) compared with a profit of 735 million yen (approx. $6.76 million) only a year earlier. Although chairman Howard Schultz remains bullish about Asia operations and Starbucks Japan's stock price has recovered from last year's all-time low of 10,500 yen (approx. $93.75), experts agree that the Seattle-based chain has cannibalized its own success by expanding too much, too soon. Meanwhile older coffee house establishments such as Japan's own Doutor -- which had 1,222 stores as of last March -- are regaining their ground by attracting patrons to their less expensive, no-frills, and smoker-friendly cafŽs. Doutor's bottom line rose 4.3 percent in the first quarter of 2003. American coffeemakers Tully's and Seattle's Best have also penetrated the Japanese market, with a combined 90 stores nationwide. Amidst its financial woes, Starbucks -- which operates over 7,500 stores worldwide -- opened its 500th store in Japan last November. (Sources: Honolulu Advertiser 11/1/03; http://www.jinvestor.com 1/19/03; http://www.siamfuture.com 10/9/03; http://www.tullys.com; http://www.seattlesbest.com; Starbucks Press Release 11/11/03) Back to top

HOTELS: NEW OTANI HOTEL BEGINS HAWAIIAN-STYLE WEDDING

The New Otani in Makuhari marries booming wedding business with ever-popular Hawaiian flair
Japanese newlyweds pump close to 900 million dollars into the Hawaiian economy every year, opting to tie the knot in a tropical setting rather than at a banquet hall in Japan. The New Otani Makuhari, however, hopes to cash in on the "island wedding" trend by offering a wedding experience closer to home, Hawaiian style. For a basic wedding package costing 150 million yen (approximately $14,000), Japanese couples can be wed by a Hawaiian priest and entertain 50 guests with hula dancers, Hawaiian musicians, and a luau-inspired feast. A more authentic wedding in Hawaii would cost about half as much, but New Otani representatives say a homeland nuptial allows more family and friends to attend the special occasion. (Sources: Travel Journal International 1/18/04; The Honolulu Advertiser 9/26/01; http://www.makowedding.com) Back to top

BUSINESS: JAPANESE CONSUMERS EXHIBITED "UN-MISERLY SPENDING" IN 2003

A consumer trend report by advertising giant Hakuhodo observes free-spirit spending habits last year
While the Japanese economy carefully mends itself, consumer spending was less conservative in 2003, according to a report issued by Hakuhodo's research and development team. Based on the research of last year's "hit products" -- including flat-screen TVs, hot spring facilities, low-calorie beer, and micro fiber -- the report unveiled the following six characteristics of consumer spending:

1. Investment in change: Free spending when it will make life better
2. The hyper-personal: Focus on deeply individual interests
3. The different dimension next door: Giving up pipe dreams for thrills closer to home
4. Value shifting: Looking for break-out value in everyday products
5. Perception busters: Innovative concepts that turned convention on its head
6. Super-narrow focus: Single-function products that really stick to their knitting

But despite a seemingly healthy spending pattern, Hakuhodo also reported a drop in last month's consumer confidence index, the lowest January rating in ten years. For the complete consumer trend report in English, go to http://www.hakuhodo.co.jp/english/news/e/20031210.html. (Sources: Travel Journal International 1/18/04; Hakuhodo Press Release; http://www.athill.com 1/23/04) Back to top

BUSINESS: WHERE'S THE BEEF? RESTAURANTS RUN OUT OF MEAT IN JAPAN

Following the government's ban on U.S. beef, top restaurant chains are forced to take gyu-don off their menu
Washington's mad-cow incident has had a staggering effect on Japanese consumers of gyu-don -- a popular dish consisting of thin-sliced beef over a bowl of rice -- as restaurants are quickly running out of beef. Restaurant-goers are now offered ton-don -- pork bowl -- instead. Two of the nation's biggest gyu-don restaurant operators in Japan have completely exhausted their supply, while the top chain -- Yoshinoya D & C Co. -- is expected to deplete its stock by mid-February. Yoshinoya, which also operates 86 stores in the West Coast, was able to temporarily sustain their supply with beef from Australia and New Zealand. Soon after the mad-cow discovery, restaurants initially pushed the chicken bowl to the top of the menu. Though not eliminated, chicken dishes have been scaled back due to another health scare, a bird flu outbreak affecting East Asian countries including Japan. (Sources: News on Japan 2/5/04; Yoshinoya Press Release 1/15/04) Back to top

BUSINESS: TAMAGOTCHI 2.0 TO DEBUT IN MARCH

"Your Tamagotchi and my Tamagotchi sitting in a tree..." They talk, play, and mate; the hottest virtual pets of the '90s make a comeback
Japanese toymaker Bandai Co. announced that "Tamagotchi Plus" -- an upgraded version of the original, egg-shaped gadget -- will be sold nationwide starting March 20th. The pocket-sized digital pet took the toy industry by storm in the mid-'90s, recording 40 million sales and igniting scores of hand-held games and Tamagotchi look-alikes around the world. Targeting women in their teens and 20s, as well as families, Bandai expects to emulate their original success by selling 20 million Tamagotchi Plus within the first year. Programmed with infrared, the new pets can communicate with each other, play games, send gifts, and go on virtual "dates." Human owners will still be responsible for nurturing them, but can eventually arrange marriages between male and female pets. Tamagotchi will be widely available at toy retailers, supermarkets, and online at http://lalabitmarket.channel.or.jp/51309.html/. (Sources: Bandai Press Release 2/3/04; http://www.cnn.com 2/5/03) Back to top

SOCIETY: MAJORITY OF JAPANESE MEN HELPS AT HOME

Are Japanese men dead-beat dads? Many think so, as a survey reveals that 40% of moms expect no help from their spouses, although a majority of men do help out with the kids
"Nothing in particular," was the largest response among 2,000 women, when asked what duties they wanted their husbands to share at home. Only 12 percent of the surveyed group -- moms with young children --expected their husbands to play with the children. Conducted by toymaker Bandai Co., the survey did not reveal the reason for such low expectations, but did show that dads were possibly exhibiting "under-promise, overachieve" behavior. Fifty-two percent of dads indeed helped out by bathing the kids, and only 12 percent did absolutely nothing. Even so, 68 percent of moms turn to their own mothers and their friends for moral support and child-rearing advice. Dads, at 19 percent, are third in line. (Sources: Kyodo News 1/22/04; http://www.bandai.co.jp surveys 12/02, 9/03) Back to top

VALENTINE'S DAY & WHITE DAY

Valentine's Day in Japan is celebrated in a very unique way. It is a day where the women give the men gifts, usually chocolate.

The gifts are divided into two types: giri choco (obligatory chocolate) usually given to male co-workers and their bosses and honmei choco for that "someone special."

Naturally, since Japan has this sense of giri or obligation, confectioners of Japan created "White Day" in 1980 to ease the feeling of guilt from men who received gifts on Valentine's Day. Therefore on March 14th, exactly one month after Valentine's Day, men have a chance to return the favor by giving the women who gave them gifts a more expensive gift. Some say various gifts have meaning, such as if a man gives a woman handkerchiefs, it means "I don't love you, so dry your tears with the handkerchief by yourself." If a man gives a woman cookies, it means "Let's remain friends." If a man gives a woman marshmallows, it means "I love you."

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CHIKYU NO ARUKIKATA HAWAII GUIDEBOOK

The most common question we receive is, "What is the most popular guidebook you represent?" The Chikyu no Arukikata (Globetrotter) Hawaii Guidebook--part of Japan's leading, most recognized travel series--reaches a wide Japanese readership, whether you are targeting women in their 20s, families in their 40s, or retired travelers in their 60s. The next annual issue will be released in May, and the deadline to reserve a space is quickly approaching. Prices start as low as $1,200 for a coupon advertisement. Click here for more details about the most popular Japanese travel guidebook for Hawaii!

Call Toby Tamaye now at 949-4592 ext. 814 and ask for more information! Or click here for a summary or here for pricing.

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Plan now for Summer 2004!! Click here for our Media Request Form or contact us.

Space Deadlines:

02/15/04 EM Publishing - Seven Money Hawaii Issue 2004
02/15/04 Chikyu no Arukikata - Hawaii Guidebook 2004
03/05/04 Chikyu no Arukikata - June Mook 2004
03/19/04 Chikyu no Arukikata - Guam Mook 2004
04/15/04 Chikyu no Arukikata - Neighbor Island Guidebook 2004
05/01/04 Aloha Express - July 2004

Material Deadlines:

02/15/04 Aloha Express - April 2004 Quarterly
03/01/04 EM Publishing - Seven Money Hawaii Issue 2004
03/15/04 Chikyu no Arukikata - Hawaii Guidebook 2004
04/01/04 Chikyu no Arukikata - June Mook 2004
05/15/04 Chikyu no Arukikata - Neighbor Island Guidebook 2004
05/15/04 Chikyu no Arukikata - Guam Mook 2004

It is not too late to call us (808-949-4592 or Toll Free 1-800-338-4502) to find out more about these upcoming media releases as we strive to find the best media available for you.

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02/11/04 Kenkoku Kinenbi -- National Foundation Day
02/14/04 Valentine's Day
03/03/04 Hina Matsuri (Momo no Sekku) -- Girl's Day
03/14/04 White Day
04/29/04 Green Day (Environmental Awareness Day)
04/29/04 Golden Week Begins (until May 5)
05/03/04 Kenpou Kinenbi -- Constitution Memorial Day
05/04/04 Kokumin no Kyujitsu -- National Holiday
05/05/04 Kodomo no Hi -- Children's Day/Boy's Day
05/09/04 Haha no Hi -- Mother's Day

Click here to see entire 2004 year.

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