Japan Market Update - January 2006 Edition

Hi Ernest,

I hope 2006 - the Year of the Dog - has met your expectations so far with regard to business planning and goals.

This edition of the Japan Market Update will put a "wrap" on the past year in Japan, taking a quick look back at the highlights and trends in the travel market, economy, politics, and consumer behavior. In 2006, we will continue to explore the impact of these highlights and trends and report on how they affect business opportunities for you.

Currently, the outbound Japanese market continues to provide business opportunities in the Pacific Islands, including Guam and Hawaii, as well as on the Continental U.S. Now is a good time to review your existing marketing plans to ensure that you capitalize on these opportunities.

For assistance in developing ideas and programs to expand your share of the Japanese market, please contact us at PacRim Marketing Group.

*Japan Market Update Special Report: Japan 2005 Top Trends & Headlines
-----Travel
-----Technology & Internet
-----Society
-----Politics
-----Fashion & Beauty
*Culture Corner
*Media of the Month
*Upcoming Magazine Deadlines
*Important Dates

TRAVEL

Japanese tourists arrived in record numbers to Guamand Hawaii in 2005, despite multiple route cancellations by major carrier Japan Airlines. The popularity of charter flights departing Tokyo's regional Haneda Airport helped Guam surpass its one million mark in Japanese visitor arrivals in October 2005, one month earlier than in the previous year. And although Japan arrivals to Hawaii were below year-before levels for the latter half of 2005, those numbers jumped in December, largely due to the Honolulu Marathon and a chemistry convention, to about 4.8 percent higher than in 2004. Several factors contributed to the travel climate this year: a weak dollar in early 2005; higher winter and summer bonuses, and; the Asian tsunami and earthquake, which influenced many resort-bound travelers to divert their travel plans to the Pacific region. South Korea was also among the top travel destinations in early 2005, boosted by a full-scale Korean boom ignited by the popularity of Korean actors among Japanese women (see Society section). Package travel to China was also grew hugely popular, thanks to an increased interest of Chinese history and culture among Japanese travelers. Ironically, both destinations became hotbeds for anti-Japanese sentiment following political dispute between Korea and Japan over the Dokdo islets, and public outcry in China over allegations that Japan is continuing to downplay wartime atrocities. Travel to Korea and China from Japan plummeted as the backlash affected the safety of Japanese tourists. Tension in both regions has eased since, and the Japan Association of Travel Agents expects the travel climate to recover by early 2006. Another big travel trend in 2005 was the rising baby boomer market, a generation that is set to reach retirement en masse in 2007. Already, some 80 percent of boomers enjoyed at least one resort activity over the past year, with a majority agreeing that "stress release and change of pace" were their top priority when traveling.
(Sources; Travel Journal International, Pacific Business News; www.nikkei.net; JATA)
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TECHNOLOGY & INTERNET

Free speech reached new heights in 2005 as blogs (short for web logs) turned mainstream around the world, creating open forums for commentary, opinion, real-time news, and social networking. As of October 2005, Japan's Ministry of Internal Affairs and Communications reported over 4.73 Japanese-language blogs on the Internet. 2005 was also the year of the Apple iPod and iTunes, which dominated both Japan's digital player and online music industries with an almost 60 percent market share. Since its launch in August 2005, Japan's own iTunes store now features over a million songs, 1,000 music videos, and 25,000 Podcasts. The iPod economy is flourishing with over 1,000 accessories made specifically for iPod. One-third of 2006 model cars sold in Japan will offer iPod integration with their car stereos. Cashless shopping made a monumental leap this year with the advent of e-money (electronic money). Although in the works in recent years, 2005 marked the first year for contactless smart cards to reach mainstream usage. Leading the e-money race are Edy (by bitWallet) and Suica (Sony), with their combined number of smart cards and suitable cell phones reaching about 18 million in June 2005 -- equivalent to almost 7 percent of the number of credit cards issued in Japan. An estimated 30,000 stores across Japan now accept Edy, which is run by Japan's largest e-money firm, bitWallet. Other services that accept e-money are railways, taxis, convenience stores, and thousands of restaurants that are promoting e-money usage with added discounts. NTT DoComo was also the first to take "osaifu keitai," or wallet phones, to the market, while competitors Vodafone and KDDI are quickly following suit with their own e-money-enabled phones. The e-money phenomenon is still tangled in a web of available brands and services -- debit or prepay, Edy or Suica -- but is expected to reach fruition over the next few years. On the home front in 2005, flat-panel TVs were still in high demand even a year after the 2004 Summer Olympic Games, during which the living room staple marked gangbuster sales. While most consumers followed the rule of thumb for buying large (30 inches and above) plasma TVs and smaller, more vivid, liquid crystal displays (LCDs), a combination of consumer demand and technological advances are driving LCDs to the size and caliber of the ever-popular plasma TV. Consequently, top brands such as Sony, Sharp, and Toshiba are slashing prices on LCDs, bringing them to closer competition with plasma TVs. In fact Sony, which holds a 20 to 25 percent share in both the plasma TV and LCD markets, preempted the high-definition LCD boom for 2006 by announcing plans to drop plasma TV production altogether. Meanwhile Sharp leads the LCD race with a 46.8 percent market share.
(Sources: BCN Ranking, itpro.nikkeibp.co.jp 10-19/05; www.apple.com 12/7/05)
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SOCIETY

One of Japan's highlights of 2005 was the World Expo in Aichi, the first world fair of the century, and a showcase for innovative technologies that largely advocated environmental awareness and global harmony. Participated by 120 countries, several international organizations, and sponsored by hundreds of corporations, the expo featured scientific and historic marvels such as a frozen Siberian mammoth excavated from the Russian republic of Sakha, as well as demonstrated next-generation transit systems such as the magnetically levitated, linear motor car called "Linimo," which transported visitors from the expo entrance to the pavilion grounds. Despite a dismal opening weekend marred by bad weather and bad press, the expo ended its six-month run with a final tally of 22 million visitors, or 1.5 times the target of 15 million. Japan's increasingly active role in perpetuating environmental awareness explains why LOHAS became one of the most talked-about movements of 2005. Short for Lifestyles of Health and Sustainability, LOHAS is a new consumer culture that promotes eco-friendliness, social justice, sustainable living, and health through complementary and alternative medicine. It is a $227 billion market segment in the U.S. alone, but is widely permeating Japan's consumer trends, from organic produce and "slow food" (as opposed to fast food) events, to new magazines centered around the LOHAS lifestyle, and new home development (environmentally friendly homes). In 2002, dreamy and beautiful South Korean actors entered the living rooms -- and lives -- of millions of Japanese viewers, gripping them with tales of love, betrayal, and reconciliation in the hugely popular drama series, "Winter Sonata." In the years following, it became apparent that the fictional drama had far-reaching effects on the Japanese population, sparking a frenzy over everything Korean, from travel and language, to food and art. The travel industry in particular experienced a surge in Korea-bound travel, while agencies rushed to create hundreds of Korea package tours, and airlines scrambled to increase flights to major South Korean cities. Picturesque Nami island, where much of "Winter Sonata" was shot, has been turned into a must-see attraction for hard-core fans. While the Korean Boom itself lost some steam towards the end of 2005, the popularity of Korean actors remain high.
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POLITICS

Japan's political climate reached a feverish pitch in summer 2005, as lawmakers battled over Prime Minister Junichiro Koizumi's controversial postal reform agenda. When his reform bill was rejected, Koizumi swiftly dismissed the cabinet and ordered an emergency election, asking the public to decide on the fate of the issue. Koizumi's landslide victory propelled the reform bill to move forward, although analysts are now concerned how successfully it will be fulfilled as the Prime Minister's term draws to a close in September 2006. Under Koizumi's bill to privatize the postal system, Japan Post would be split into four business units, with the financial arms -- savings and life insurance -- expected to create the biggest, private financial network in the world with $3 trillion in holdings. Koizumi's forceful push towards victory in the summer election also spawned one of the biggest buzzwords of 2005 -- "Koizumi Gekijo" (Koizumi Theater) -- referring to the drama that spiraled around what seemed like the Prime Minister's one-man achievement during his landslide victory. In fact "Koizumi Gekijo" was lauded as a grand-prize winner for the annual Ryuko-Go Taisho (Catchphrases of the Year) awards, an event hosted for the past 22 years by almanac publisher Jiyuukokuminsha. Meanwhile Koizumi dodged some of the political heat by dressing down for the nation's first Cool Biz campaign, an effort to cut greenhouse gas emission by wearing light clothes and turning off the air conditioner. Koizumi raised eyebrows when he attended official events wearing short-sleeved dress shirts, while many bureaucrats stuck to the comfort of their woolen suits and ties. In typical Koizumi fashion, he brushed off criticism by other top brass officials who commented his fashion statement was taken too far and that he looked "too casual."
(Sources: www.jiyu.co.jp; Japan Ministry of the Environment)
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FASHION & BEAUTY

Japan's first Cool Biz campaign crossed over into the fashion industry, affecting not only men's summer fashion (aloha shirts were "in"), but boosting nationwide retail sales. The final tally is yet to be published, but according to Japan's Environment Ministry, consumer spending was estimated to rise by at least 10 billion yen ($74.25 million) for 2005. The successful campaign prompted plans to roll out Cool Biz fashion for 2006, kicked off by a fashion show in which notable Japanese celebrities, politicians, businessmen, and athletes donned short-sleeved business attire. As for the campaign's impact on the environment, Teichiku Data Bank, one of Japan's leading think-tanks, reported 37.1 percent of surveyed corporations implemented the Cool Biz concept of raising the thermostat in their offices. In turn, the Environment Ministry calculates that the action decreased carbon dioxide emission by about 460,000 tons, equivalent to a typical month's worth of CO2 emission by one million Japanese households. The Cool Biz success also shored up the implementation of "Warm Biz" for the first time in 2005, making sweaters and layering items "must-haves" of the season. While outerwear gained new appreciation for the sake of saving the environment, dietary supplements became the "it" thing of 2005 for creating beauty from within. The most popular supplements in Japan last year were alpha lipoic acid (an antioxidant) and Coenzyme Q10 -- both which claim to have anti-aging properties. Topical Coenzyme Q10, in the form of skin creams, were also hugely popular.
(Sources: www. Rakuten.co.jp; Japan Ministry of the Environment)

What's Your Blood Type - Part Three in a Series

In Japan, it is widely believed that one's blood type is an indicator of one's personality. This belief is said to have begun in 1916 when some doctors in Japan made a medical report stating that people with Type A blood were generally mild-tempered and intellectual, while people with Type B blood were just the opposite.

To this day, one's blood type continues to be used as a personality-type indicator. The majority of the Japanese population becomes aware of their own blood type upon entering the educational system, where they are required to submit to a physical examination. The results of this simple evaluation live with them for the rest of their lives, showing up as questions on school and job applications in the future.

The most common blood type in Japan is type A and in America, it is Type O. However, many Japanese are amazed to learn that a large number of Americans do not know their own blood types. What's yours?

Type O
People with Type O blood are said to set the mood for a group and to take on the role of creating harmony among its members. Their image is one of taking it easy, of being peaceful and carefree. They are also thought to be big-hearted and benevolent, and they tend to spend money on others generously. O Types are generally "loved by all," but they also, surprisingly, have a stubborn and strong-willed side, as well, and tend to secretly have their own opinions on things. On the other hand, they have the flexible, adaptable side of readily accepting new things. They are easily influenced by other people or by what they see on TV. They seem to appear level-headed and trustworthy, but they often slip and make big blunders inadvertently. But that is also a point that makes O Types lovable.

Not a Type O? See our next Japan Market Update for Type AB.

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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!

Don't let this important opportunity pass you by. If you are interested in finding out more about advertising in this publication please contact Lynelle Lingaton at llingaton@pacrimmarketing.com

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Click here for our Media Request Form or contact us.

Space Deadlines:

NOW! Aloha Express Quarterly February 2006
NOW! Chikyu no Arukikata Big Island Resort
NOW! Chikyu no Arukikata Excellent Hawaii Mook
NOW! Chikyu no Arukikata Oahu Resort
NOW! Chikyu no Arukikata Saipan Guidebook
NOW! Chikyu no Arukikata Los Angeles Guidebook
NOW! Chikyu no Arukikata West Coast Guidebook
2/1 ALoha Express Quarterly April 2006
2/1 Chikyu no Arukikata Hawaii Guidebook I
2/1 Chikyu no Arukikata New York Guidebook

Material Deadlines:

NOW! Aloha Express Quarterly Spring
NOW! Chikyu no Arukikata Excellent Hawaii Mook
2/1 Chikyu no Arukikata Oahu Resort
2/1 Chikyu no Arukikata Saipan Guidebook
2/1 Chikyu no Arukikata Los Angeles Guidebook
2/1 Chikyu no Arukikata West Coast Guidebook
2/1 Chikyu no Arukikata West Coast 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

12/23 Tennou Tanjoubi -- Emperor's Birthday
12/31 Omisoka -- New Year's Eve
1/1 Ganjitsu -- New Year's Day
1/2 Furikae Kyuujitsu -- New Year's Holiday Observed
1/2-1/10 New Year's Holidays (many businesses closed)
1/9 Seijin no Hi -- Coming of Age Day
2/11 Kenkoku Kinenbi -- National Foundation Day

Click here to see all Japanese holidays for 2006.
Click here to see all US holidays for 2006.

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