Japan Market Update - January 2005 Edition

Happy New Year ,

All of us at PacRim Marketing hope that you had a fruitful and memorable "Year of the Monkey" and wish you a prosperous and healthy "Year of the Rooster." If you don't know what the Year of the Rooster is all about, click here.

In 2004, we continued to see the expansion of technology in all industries, especially in travel, tourism and retail. For U.S. overseas travel destinations, the yen rate ended in a very positive situation as noted below. We have seen some strengthening of the dollar in the last few days, since the opening of business for this year; however, predictions maintain that they yen will continue to be strong in 2005--good news for retailers and destinations in the U.S. and its territories.

Below, we have noted some of the highlights of 2004 in Japan, including "hit products" and major trends that affected consumers' interests and spending.

Due to the tragic earthquake and resulting tsunami in the coastal areas in the Indian Ocean, Japanese and Asian travel patterns to the affected beach destinations may be temporarily diverted to other beach destinations, such as Bali, Micronesia, Australia, and Hawaii. Editorial and travel features, including broadcast as well as print, may move to cover these destinations as the devastated destinations rebuild. Our hearts and prayers go out to all the victims families of the tragedy, and those survivors who need all of our help, prayers, and support to move forward with their lives.

PacRim has many products, services and solutions for reaching the Japanese consumers and trade for 2005. I would welcome the opportunity to review your current strategy to see if we can assist with any of our services. Feel free to contact me at 808-949-4592 x833 (Toll Free 1-800-338-4502 x833) to explore your Japanese marketing strategies/opportunities.

My best wishes to all of your for a successful 2005!

Warmest regards,
Dave Erdman
derdman@pacrimmarketing.com

*Japan Market News
-----Travel: Japan's baby boomers looking forward to a break
-----Business: Japan's 2004 hit products
-----Business: Back to basics -- Japan's consumer trends of 2004
-----Business: Yen may climb to 90
-----Fashion: Uniqlo targets U.S. market
-----Fashion: World's largest Chanel boutique opens in Ginza
-----Technology: Women lead the way in Internet usage
-----Technology: E-paper to revolutionize ads and displays
*Culture Corner
*Media of the Month
*Upcoming Magazine Deadlines
*Important Dates

TRAVEL: JAPAN'S BABY BOOMERS LOOKING FORWARD TO A BREAK

Overseas travel ranks as top priority among Japan's boomers facing retirement
The first wave of Japan's baby boomers is expected to face mass retirement in 2007, after which many are hoping to bank on their newfound time and money to travel abroad. A survey by Hakuhodo Inc., Japan's largest public relations and marketing company, showed 80.3 percent of boomers are looking forward to traveling overseas, 10 points more popular than domestic travel. The statistics should prove a positive indicator for the travel industry, which has already enjoyed an influx of middle-aged travelers this year. The 50s-and-above age group fueled demand for overseas travel this year by 35 percent. One interesting twist: a surprising 46 percent of boomer wives indicated they prefer to travel without their husbands.
(Sources: www.globalaging.org; Travel Journal International 11/13/04)
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BUSINESS: JAPAN'S 2004 HIT PRODUCTS

Despite a mediocre economic recovery, local products and imported images marked Japan's trends
Reality shows may have saturated the U.S. airwaves, but in Japan, two media "phenomena" spurred a cultural frenzy that ultimately fueled billions of yen into the nation's coffers. The Korean hit TV drama "Winter Sonata" triggered Korea fever -- lead actor Bae Yong-Joon became Japan's favorite heartthrob, while demand for Korean food, culture, and language classes skyrocketed. Next came the Athens Oympics, which sparked a sales frenzy for flat-panel TVs and DVD recorders. As for products, the "Iemon" green tea, "shochu" liquor, and Kao brand's Asience shampoo (made just for Asians) were instant hits. "Anti-aging" was a key buzzword this year, as products and services aimed at helping baby boomers and near-boomers look younger topped trend rankings. Asics Corp.'s Shapewalker walking shoes were a hit among middle-aged men, while Coenzyme Q10, a substance said to fight signs of aging, was used in various cosmetics and nutrient supplements for women.
(Source: The Nikkei Weekly 12/13/04)
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BUSINESS: BACK TO BASICS -- JAPAN'S CONSUMER TRENDS OF 2004

Dentsu survey shows Japanese consumers' shift towards mainstream, essential value
Last year, Japan's advertising and marketing leader Dentsu Inc. revealed "vibrancy" as a term to embody Japan's consumer trends in a year of economic uncertainty. In 2004, as the outlook improved, the nation's consumerism transformed and embraced the basics; mainstream values such as nostalgia, emotions, health, and the environment became the underlying motif. Although difficult to qualify such abstract ideas, Dentsu's report identified eight significant consumer trends in 2004: "new directions for old products," "seeking emotional catharsis," "the return of 'gorgeous,'" "Japan-Asian styles," "LOHAS (Lifestyles of Health and Sustainability)," "wary emergence," "adult self-expression," and "vibrant nostalgia." Dentsu also ranked the year's hit products:

1. Widescreen flat panel televisions
2. Japanese players in the U.S. Major Leagues
3. "Crying Out for Love, from the Center of the World" (Sekai no Chushin de, Ai o Sakebu -- novel, movie, TV drama)
4. HDD-equipped DVD players
5. Black vinegar ("kurosu")
6. Brine products
7. Soymilk ("toh-nyu") boom
8. Bae Yong Joon (South Korean actor in popular Korean drama "Winter Sonata"), dubbed "Yong-sama"
9. "The Last Samurai"
10. Packet fixed-rate communications fees for mobile phones

(Source: Dentsu Consumer Research Data)
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BUSINESS: YEN MAY CLIMB TO 90

Currency experts predict yen's longest winning streak since 1971

Japan's longest economic expansion in over a decade is fueling a rising currency that may reach the low-90s, according to strategists and traders at banks including Bank of Tokyo and Deutsche Bank. The predicted average rate is 100.37 yen, with both Lehman Brothers Holding Inc. and BNP Paribas SA forecasting the lowest rate of 90 yen. An economist with Nomura Holdings, Japan's largest securities firm, forecasted the highest rate of 115 yen. Analysts who predict a rising yen generally point to the fact that foreign investment is picking up in Japan, and that the economy will continue to strengthen through 2005. Additionally, contrary to earlier speculation that the Japanese government would intervene once the yen hits 100, many analysts now expect the government will wait until the yen strengthens to as much as 95 per dollar. The yen climbed about 4 percent against the dollar in 2004, closing at 103.77 for the last trading day of the year.
(Source: The Japan Times 1/3/05)
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FASHION: UNIQLO TARGETS U.S. MARKET

Casual fashion chain opens its largest store yet in Osaka, and prepares to go global
Fashion retailing giant Uniqlo opened its 637th store in Osaka, a five-story behemoth in the fashionable Shinsaibashi shopping district, and seen as a "launching pad" for its first U.S. store. A full-length glass fa�ade offers an unobstructed view of the open floor plan and colorful merchandise. Mannequins are more tasteful and less creepy than ever before -- they're smiling, and were made especially for Uniqlo. Uniqlo hired Fumito Kitamura, the first Japanese to work the displays at Barneys New York, to lead the store's "visual merchandising," or layout. The store carries 70 percent more merchandise -- about 500 varieties -- compared to the average Uniqlo outlet, and employs 250 people. Perfecting such large-scale logistics is considered part of Uniqlo management's preparation to compete in the U.S. market against Gap Inc.
(Source: The Nikkei Weekly 12/13/04)
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FASHION: WORLD'S LARGEST CHANEL BOUTIQUE OPENS IN GINZA

Glitz, glamour, and gourmet occupy an entire building in Tokyo's ritziest shopping district
IChanel fans flocked to the December 4th opening of the brand's largest store in the world. The 10-story Ginza building is equipped with its own parking lot -- a rare Tokyo luxury -- exclusive furniture, and a multipurpose hall for art exhibitions and mini-concerts. The 10th floor houses Beige Tokyo, the much-anticipated restaurant run jointly by Chanel and world-famous chef Alain Ducasse. The restaurant is Chanel's first non-fashion venue, and a testing ground to see whether $220 prix-fixe dinners with a Chanel backdrop will fly with Japanese patrons. The boutique itself features the Paris-Tokyo collection, a more down-to-earth line of Chanel wear compared to its European counterparts. Also available are cosmetics, limited edition Ginza-exclusive Chanel goods, and a VIP salon on a private floor.
(Source: The Nikkei Weekly 12/13/04)
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TECHNOLOGY: WOMEN LEAD THE WAY IN INTERNET USAGE

Hitachi releases color-capable electronic paper, thinner than LCD and plasma
In Tom Cruise's sci-fi thriller "Minority Report," a futuristic city brims with continuos, streaming displays, from billboard ads to newspapers. But that part of the future is not so far off, as Hitachi is perfecting the technology behind e-paper. By next year, Hitachi plans to commercialize a 7-inch color display that can show high-resolution images for up to seven months on a single battery supply. The still images can be changed wirelessly. E-paper cannot be rolled up or bent (yet), but is anticipated to revolutionize poster displays at shopping malls, public facilities, offices, homes, and on trains. Streaming video is not yet possible on e-paper, but that technology is expected to become available within the next few years.
(Source: The Nikkei Weekly 12/20/04)
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Fukubukuro

'Tis the time of year again in Japan, when storefronts crowd with bulging shopping bags called "fukubukuro" -- or lucky bags -- filled with goods. The grab bags are deemed "lucky" because they're quite a deal; typically, they contain items worth three times the bag's price tag. Better yet, the occasional bag contains items of much higher value, giving meaning to the word "fuku" (luck), a word heavily associated with New Year's celebrations. The obvious drawback is that you don't know what you're getting -- after all, the bag might contain 10,000 yen's worth of junk you don't like. But that's no matter to the throngs of shoppers who flock to department stores on the day after New Year's (think "day after Thanksgiving" by American standards) for a chance to snag a good deal. The fukuburo has essentially been a means for businesses to clear their inventory. Whether they be groceries, sundries, cosmetics, clothes, toys, or jewelry, odds and ends are filled into bags and sealed shut so that shoppers can't peak. In recent years, fukubukuro have become more creative, including not just goods but services such as massages and professional make-up sessions. Some fukubukuro are all about hype, such as the "15 million yen" bag sold at Takashimaya department store that supposedly contains double that value in jewelry, clothing, and cosmetics. The one lucky bag usually does sell, but the hype will at least draw in more customers.

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Do you know why it is important to reach the Japanese visitor market during their Golden Week?

Many Japan offices are closed during this week, and therefore, Japanese take this opportunity to travel. Golden Week is a popular traveling period from April 29 - May 5. Now is a great time to promote your company's products and services as many Japanese are preparing their vacation agendas.

Aloha Express Quarterly's April issue will reach Japan just before Golden Week. Aloha Express contains the most up-to-date information about Hawaii and it is used as a news source for Japanese media. Over 800,000 copies of Aloha Express are printed each year. Aloha Express Quarterly continues to be the only editorial-focused, quarterly publication devoted exclusively to Hawaii. Take advantage of this opportunity to customize your Japanese advertisements for this peak travel season.

If you are interested in finding out more about this publication, please contact Lynelle Lingaton, .
llingaton@pacrimmarketing.com

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Click here for our Media Request Form or contact us.

Space Deadlines:

01/10/05 Nouveau - March 2005
02/01/05 Aloha Express - April 2005
02/01/05 Chikyu no Arukikata: Saipan Guidebook - April 2005
02/15/05 Chikyu no Arukikata: Hawaii Guidebook I - May 2005
02/15/05 Chikyu no Arukikata: Family - May 2005
03/01/05 Chikyu no Arukikata:Guam Mook - June 2005
03/01/05 Chikyu no Arukikata: USA America - June 2005
03/05/05 Chikyu no Arukikata: Honolulu Mook - June 2005
03/28/05 JAL Guide - July 2005

Material Deadlines:

02/10/05 Nouveau - March 2005
02/15/05 Aloha Express - April 2005
02/15/05 Chikyu no Arukikata: Saipan Guidebook - April 2005
03/01/05 Chikyu no Arukikata: Hawaii Guidebook I - May 2005
04/01/05 Chikyu no Arukikata: Family - May 2005
04/01/05 Chikyu no Arukikata:Guam Mook - June 2005
04/01/05 Chikyu no Arukikata: USA America - June 2005
04/01/05 Chikyu no Arukikata: Honolulu Mook - June 2005
04/29/05 JAL Guide - July 2005

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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Upcoming Holidays in Japan

01/10/05 Seijin no Hi - Coming Of Age Day
02/11/05 Kenkoku Kinenbi - National Foundation Day
02/14/05 Valentine's Day
03/03/05 Hina Matsuri - Girl's Day
03/14/05 White Day
03/21/05 Shunbun no HI - Vernal Equinox Day

Click here to see entire 2005 year.

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