Japan Market Update - July 2005 Edition

Hi ,

Hope you had a great 4th of July holiday!

This week's Nikkei Weekly reported that the Japan Tankan survey taken in June had a bright view on Japan's business and economic outlook. The Tankan measures corporate sentiment--which improved for three months through June. The improvement was attributed to IT sectors, non-manufacturers, and small manufacturers.

Personal consumption in Japan is on the rise, supported by increasing wages and employment. Overall, it looks like Japan's economy is moving into a growth phase as corporate performance begins to filter through household incomes. Areas to watch: rising oil prices and uncertainties with U.S. and China trade. Here in the U.S., the strengthening dollar could reduce tourists' purchasing power, but might be offset by Japan's strengthening economy and consumer confidence.

Our report this month focuses on positive tourism news in Hawaii and Guam and on the increase in high speed broadband usage in Japan. In addition, important summer and fall Japanese holidays are noted on the calendar below.

On July 26, Tim Clark, former Hawaii resident, speaker, and author of Saying YES to Japan! will speak at a luncheon about opportunities in the multi-trillion dollar services industry in Japan. The luncheon, co-sponsored by PacRim Marketing and the Honolulu Japanese Chamber of Commerce, will be held at the Japanese Cultural Center in Moiliili.

Click for information: http://www.pacrimmarketing.com/news/current/494.html
Registration/RSVP:http://www.pacrimmarketing.com/et_timclark14/index.html

Hope you or an associate can join us. Reservations are necessary and the room is filling up fast.

*Japan Market News
-----Travel: Guam on track for improvement
-----Travel: Japanese satisfaction with Hawaii food down
-----Travel: June best month yet
-----Travel: Summer bookings solid for Hawaii, Guam
-----Economy: Japan retail sales up
-----Business: Japanese convenience store to open in U.S.
-----Business: Men going gaa-gaa over ganache
-----Fashion: Uniforms out, aloha shirts in
-----Beauty: Flawless skin is top priority
-----Technology: Sharp rise in high-speed Internet users
*Culture Corner
*Media of the Month
*Upcoming Magazine Deadlines
*Important Dates

TRAVEL: GUAM ON TRACK FOR IMPROVEMENT

Guam on track for improvement in infrastructure, attracts more tourists
Despite Japan Airlines' plans to cut unprofitable Guam routes, the resort destination is moving along with infrastructure improvements largely meant to accommodate a resurgence of Japanese tourists in the popular Tumons area, a major road improvement near completion. In addition, the DFS Galleria Guam is undergoing a $30 million renovation, and a new shopping center is under construction next to the Royal Orchid Guam Hotel. The Guam Visitors Bureau and local government are also joining forces to improve public safety. Warning signs are planned along coastline roads, as are regulations for signage depicting adult sexual content. And in a move to reduce pedestrian accidents, government may also prohibit right-hand turns at a red light. As of the end of May, about 395,000 Japanese visited Guam, up 7 percent from last year, and well on its way to reaching the 1.05 million visitors the state plans to welcome this year. During a June tourism seminar, incoming GVB General Manager Gerald Perez praised travel agencies' efforts to bring Japanese travelers back to the island after a decade of stagnancy. He also reiterated GVB's ongoing strategies to promote the island to a variety of target markets including families, seniors, weddings, and honeymooners.
(Source: J-Wing Travel 6/6/05)
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TRAVEL: JAPANESE SATISFACTION WITH HAWAII FOOD DOWN

High expectations and a labor crunch may be to blame for unhappy guests
A recent state survey commissioned by the Hawaii Tourism Authority showed more than 21 percent of Japanese tourists rated their overall Hawaii experience "below average," compared to 19 percent last year, and they were most critical of the food. Top complaints included a lack of quality food and service. Ryokichi Tamaki, senior vice president of marketing for Jalpak Hawaii, cites the Ship's Tavern at the Sheraton Moana Surfrider as an example of a high-end restaurant favored by Japanese visitors that closed during the '90s. Tamaki adds that Japanese travelers would probably be critical of any destination -- not just Hawaii -- due to the level of service and food quality they have grown to expect in their home country. But that is not to say that Japanese tourists do not dine at the casual restaurants booming in the Honolulu area. In fact,The Cheesecake Factory incorporated a Japanese menu, and on nights when Jake Shimabukuro plays at Chai's Island Bistro, owner-chef Chai Chaowasaree says 80 percent of the customers are Japanese. In short, Japanese tourists research their destination well and go to places that are talked about. Whether or not the dining experience is satisfying, however, is a separate issue.
(Source: Pacific Business News 5/30/05)
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TRAVEL: JUNE BEST MONTH YET

Hawaii arrivals bank another record month
The state is well on its way to achieving its goal of 7.2 million visitor arrivals this year. The mid-year mark stood at around 3.8 million as of the end of last month. June became a knockout month for Hawaii tourism, bringing in over 761,000 visitors, up almost 18 percent from the same time last year. It also exceeded this year's record month of March, which brought in almost 726,000 visitors. An influx of domestic passengers has been especially notable, with over 20,000 arrivals daily. Post-Golden Week, June was also a strong month for Japan arrivals, with daily averages ranging between 5,000 and 6,000 on most days.
(Source: DBEDT, Pacific Business News 6/27/05)
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TRAVEL: SUMMER BOOKINGS SOLID FOR HAWAII, GUAM

Rooms tight, but bookings better than last summer
Major Japanese travel wholesalers have reported strong summer bookings for June - August package tours servicing Hawaii, Guam, Saipan, North America, and Europe. But many agents reported difficulty securing rooms in Hawaii during the summer travel months. Hotel renovations, scheduled conventions, and an influx of mainland visitors are apparently contributing to the room crunch. As a result, most wholesalers are expanding the categories of hotels they typically book, reserving more lower-end accommodations. Other wholesalers are beginning to promote off-peak travel when rooms are more readily available. A recent trend has shown Japanese choosing to avoid the summer holiday travel season, which may explain why bookings are already strong for the month of September.
(Source: Travel Journal International 6/27/05)
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ECONOMY: JAPAN RETAIL SALES UP

Consumer confidence another marker for improving economy
The month of May was a stellar month for Japan's economy, when wages rose and unemployment fell to a seven-year low. To add to the formula, retail sales rose 2.7 percent from the same time last year, compared with a forecast of 1.8 percent. Domestic consumption, which accounts for 55 percent of Japan's gross domestic product, is helping offset the effects of weak exports. Consumer confidence also improved for the third straight month in May, attributable to better jobs and wage conditions. And despite a rise in gasoline prices, sales of big-ticket items such as cars rose 7.5 percent in May from the previous year, following a 10.7 increase in April. For the most part Japan's economists predict consumption will remain stable in coming months.
(Source: Reuters 6/28/05)
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BUSINESS: JAPANESE CONVENIENCE STORE TO OPEN IN U.S.

FamilyMart plans to woo customers with upscale convenience
Japan's third-largest convenience store operator, FamilyMart Co., announced plans to open 200 stores in the U.S. over the next four years. The first store will open July 20 in West Hollywood, California, under the store's nickname "Famima," while two more stores in the Los Angeles-area are scheduled to open by year-end. The slightly "upscale" marts will offer traditional Japanese convenience store staples such as musubi (rice balls) and bento box meals, in addition to services such as wireless Internet access, a copy center, and an eat-in area. The Japanese are not novices at operating successful, profitable convenience stores. Seven-Eleven Japan Co. Ltd., which runs over 10,000 stores in Japan and Hawaii, is known to have revolutionized the way convenience stores operate. Some financial analysts in Japan have voiced skepticism over whether the concept would succeed in the U.S., citing the poor image of urban convenience stores in the U.S. as being run-down or dingy, and whether FamilyMart can sustain an efficient supply-chain operation in a foreign country. Meanwhile, FamilyMart believes American customers will catch on with the store's concept of a clean, convenient, multi-purpose, and uniquely Japanese shopping experience.
(Source: Japan Times 2/11/05; Forbes.com 6/21/05)
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BUSINESS: MEN GOING GAA-GAA OVER GANACHE

Exclusive desserts sold online show Japanese men have quite the sweet tooth
When Japanese Internet auctioneer DeNA Co. began featuring home deliveries of exclusive pastries and cakes from famous patisseries, the company figured about 90 percent of its customers would be women. It turns out nearly half of the buyers are men. Perhaps the average Japanese male wants to eat his cake, too, but is influenced by the belief that a sweet tooth is not macho, explains a DeNA marketing manager. But thanks to men in their 30s, who account for the bulk of customers, the pastry-and-cake leg of the Bidders Web site has become an unexpected hit, with nearly a million page-views a month. Men may opt for anonymity when craving fancy desserts, but they are not shy about buying cream puffs, says convenience store operator Seven-Eleven Japan. Men account for up to 80 percent of customers who purchase cream puffs and eclairs at their stores. Confection maker Glico Dairy Products Co., which sells a bitter-chocolate "Men's Pocky" among its line of ubiquitous chocolate-covered pretzel sticks, agrees that male customers contribute greatly to sales. Case in point, a jumbo-sized custard pudding made with darker caramel and fattier cream than usual -- and marketed with men in mind -- has allegedly earned nearly 1 billion yen (approx. $9.5 million) in eight months. In all cases, most of the male customers are in their 20s and 30s, which might explain why diet teas are such a hit among guys in their 40s and 50s.
(Source: Kyodo News 6/24/05)
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FASHION: UNIFORMS OUT, ALOHA SHIRTS IN

National "CoolBiz" campaign endorsed by department store staff
Shortly after Japanese government's top brass ordered citizens to dress down for summer, the staff at Ginza's Printemps department stores heeded the advice, Hawaiian style. The store did not enforce it, but nevertheless declared four days in May and June "Aloha Shirt Day," when its employees -- on the floors and back-office -- donned Hawaiian prints in exchange for the usual suit or uniform. For the store, staff dressed in Aloha gear spells a win-win situation; it not only supports the CoolBiz campaign and its commitment to end global warming, but serves as a backdrop for the "Hawaiian motif" merchandise (available in some shape or form in each department) that the store expects will be this summer's hot-ticket items. Due to the success of the Aloha Shirt Day program and the favorable responses from customers, Printemps plans to extend the Aloha attire option to its employees throughout the summer.
(Source: Tokyo Shimbun Shopper 5/27/05)
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BEAUTY: FLAWLESS SKIN IS TOP PRIORITY

For most Japanese women, cosmetics crucial to achieving beautiful skin
Beauty is from within? Not exactly, answered 84.4 percent of women in their 20s to 40s in an Internet survey, who chose "skin beauty" as the pinnacle of feminine beauty, followed by "maintaining health" at 69.4 percent. When asked how they achieved or maintained their ideal skin, 74.6 percent answered "cosmetics," followed by "getting a good amount of sleep" (52.6 percent), "preventing constipation" (51.9 percent), and "a balanced diet" (50.8 percent). In a similar survey of 105 female models, healthy skin also ranked top for signifying feminine beauty. But unlike the average Japanese woman, models chose sleep as the utmost priority (70.5 percent) in skincare. Diet (61.0 percent) and regularity (51.4 percent) were also more important than cosmetics (43.8 percent). Cereal-maker Kellogg Co., who sponsored the survey, says models appear to see cosmetics as a quick fix compared to the health benefits of good sleep and food.
(Source: Mainichi Shimbun 6/28/05)
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TECHNOLOGY: SHARP RISE IN HIGH-SPEED INTERNET USERS

Broadband simmers as fiber-optic usage surges
Internet users in Japan increased by 6.8 percent compared to last year, totaling 70.07 million, according to Web think-tank Impress Co. More than 30 million of those users are broadband (DSL or ADSL) subscribers, emphasizing the infiltration of high-speed Internet access a large span of Japanese households. Broadband subscriptions are, however, reaching a plateau in exchange for a surge in higher-speed fiber-optic (FTTH) users. FTTH currently comprises of 2.5 million users, although FTTH users are expected to outnumber ADSL users by 2006. According to the Ministry of Internal Affairs and Communications, close to half of all Internet subscribers are considering switching to higher-speed fiber-optic (FTTH) service. A survey by Impress also revealed that 82.8 percent of the population are able to access the Internet through at least one mode of communication (i.e. mobile phone, home or office PC), compared to last year's 78.1 percent. The trend for 2004 and 2005 has definitely been the "blog," which has reached a recognition rate of 72.5 percent. Survey participants also said they shopped less at stores due to their usage of online shopping (46.5percent).
(Sources: Nikkei News 6/08/05; Reuters 6/28/05)
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We need CULTURE CORNER

Culture Corner!!!

(Sources: Japan-Zone.com, BaseballGuru.com, Pacific University Matsushita Center for Learning; 6/30/05)
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This Chikyu no Arukikata Guidebook Series continues to be the most popular travel guidebook series in Japan. The Japanese typically purchase one to two guidebooks prior to traveling. The Chikyu no Arukikata series offers travelers information ranging from dining and shopping to accommodations and sightseeing. This comprehensive book not only provides readers with a unique insight on their travel destination, but also with information on how to have a stress free vacation.

Now is the time to make space reservations in two upcoming Chikyu no Arukikata guidebooks targeting winter travelers. Hawaii Guidebook II will feature information on Maui, Kauai, and the Big Island and provide some information on Oahu, while the Guam Guidebook will focus on information and activities on Guam.

If you are interested in finding out more information and/or would a personal tour of the site, please contact Joy Ishiara at 1-800-338-4502 (toll-free) or at 949-4592 x811 or Lynelle Lingaton at x803.

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Click here for our Media Request Form or contact us.

Space Deadlines:

NOW!	Aloha Express September
NOW!	Nouveau Hawaii
NOW!	Chikyu no Arukikata Kauai Resort
8/15/05	Chikyu no Arukikata Guam Guidebook
8/15/05	Chikyu no Arukikata Hawaii Mook

Material Deadlines:

7/15/05	Aloha Express September
7/29/05	Nouveau Hawaii
8/5/05	Chikyu no Arukikata Kauai Resort
9/2/05	Chikyu no Arukikata Guam Guidebook

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

7/7 Tanabata -- Star Festival
7/18 Umi no Hi -- Marine Day
8/13-8/16 Obon Season
9/19 Keirou no Hi -- Respect for the Elderly Day
9/23 Shuubun no Hi-- Automnal Equinox Day

Click here to see entire 2005 year.

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