Japan Market Update - August 2007 Edition

Hi ,

Thankfully, Hawaii was spared yesterday by Hurricane Flossie and its potential wrath as it ran up against the Big Island and then proceeded to weaken. This was a turn of good fortune for the residents and businesses here in Hawaii, and especially for the visitor industry. Government visitor industry officials did an excellent job keeping citizens apprised of the situation and initiating emergency preparation and plans.

In Japan this week, OBON-an annual Buddhist event for commemorating one's ancestors-is being observed. OBON is one of Japan's three major holiday seasons and many businesses close to allow employees to visit their hometowns and celebrate with family. The good news for our clients is that many Japanese citizens opt to travel at this time, and Hawaii, Guam, and Micronesia are preferred destinations. This year's extreme heat and humidity in Japan are inspiring more Japanese to escape the city and head for cooler weather and beaches.

Noted vacationing in Hawaii on August 8 by Nikkei news was Fast Retailing Group founder, Tadashi Yanai, also the firm's Chairman and President. Fast Retailing is the company that runs the popular UNIQLO store chain in Japan which has been bidding on acquiring Barneys from Jones Apparel Group to support the Japan firm's global expansion strategy. From Hawaii, he instructed staff not to initiate other offers after Dubai-based investment firm Istithmar raised its offer for Barneys to $942 million. See article below for UNIQLO strategy.

Also last week in Hawaii, PacRim Marketing Group co-sponsored the Guam Investment Conference event hosted by Hawaii-based Chaney Brooks, a leading Pacific Rim real estate and brokerage company with an office in Guam. The conference featured Lt. Governor Michael Cruz, Guam government officials, and Hawaii firms with investment and business interests in Guam. Because of Hawaii's close ties with Guam, Cruz was encouraged to come to Hawaii for the conference after a trip to Washington to discuss the unprecedented changes occurring there and business opportunities for U.S. and Hawaii companies. Change is in motion in Guam since the military announced a buildup on the island, a part of the redistribution of U.S. forces throughout the world. Potentially $15 Billion dollars will be spent in Guam over a ten year period, with $10 billion to support the transfer of 40,000 active duty personnel plus dependents from Okinawa to Guam. To learn more about this situation, as well as opportunities and challenges, contact me or click: Chaney Brooks Website to see transcripts of the program.

PacRim and our partners in the Pacfic Rim and Japan are looking forward to assisting you with consulting, business opportunity evaluation, or marketing work in Guam, Micronesia, Continental US, and here in Hawaii.

Warmest regards,
Dave Erdman
derdman@pacrimmarketing.com

*Japan Market News
-----Travel: JAL, ANA square off with better lounges
-----Travel: "Vow renewal" campaigns target Japan's Boomers
-----Business: Japan ATMs to accept foreign cards
-----Business: Mitsukoshi and Isetan plan merger
-----Business: Indoor golf cafes may find new niche
-----Business: Beer biz supports alternative fuel
-----Fashion: Uniqlo plans global expansion
-----Politics: Future uncertain for Japan's PM
-----Fashion: Japan soccer great one of Vanity Fair's "Best-Dressed"
-----Technology: Majority of Japan's population wired to Internet
*Culture Corner
*Media of the Month
*Upcoming Magazine Deadlines
*Important Dates

TRAVEL: JAL, ANA SQUARE OFF WITH BETTER LOUNGES

Coveted first-class passengers to experience exceptional ground service
First and business class passengers on Japan Airlines and All Nippon Airways can look forward to some serious pampering traveling in and out of Narita Airport, thanks to brand new lounges fit for royalty. The latest opening, JAL's international departure lounge at Narita, boasts a full-service bar, breakfast, lunch, and dinner served free of charge to high-flying customers. The largest in the country, JAL's 43,000-sqft. lounge also provides massage services, and a playroom for children. ANA opened its lounge last summer, fully equipped with free Internet access and shower rooms. And unlike the rest, ANA welcomes arriving passengers as well, giving business travelers a place to refresh before heading to meetings. While airlines struggle with fare wars and rising operational costs, JAL and ANA are looking to increase their competitive edge through high-end services.

(Source: yomiuri.co.jp 7/20/07)
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TRAVEL: "VOW RENEWAL" CAMPAIGNS TARGET JAPAN'S BOOMERS

Travel packages feature popular honeymoon spots of yesteryear
Travel agency giant Nihon Travel aims to attract Japan's happily-married baby boomer couples with "second honeymoon" tour packages featuring popular destinations from 30 years ago, such as San Francisco, Los Angeles, Hawaii, and Guam. Dubbed the "Revival Honeymoon" package, Nihon Travel plans to market heavily between October and April. The agency is adding a touch of nostalgic fun to their vow renewal packages, such as a complimentary "pineapple boat" - a halved pineapple filled with fresh fruit - reportedly was a popular item a generation ago. A standard Hawaii package features the Kauai Marriott Resort & Beach Club, priced between 345,000 yen (approx. $2,900) and 414,000 yen ($3,500). Nihon Travel also notes a growing trend of destination wedding couples giving the vow renewal as a gift to their boomer parents, suggesting a creative way for destination wedding parties to make their nuptials abroad extra-special.

(Source: Travel Vision 7/24/07)
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BUSINESS: JAPAN ATMS TO ACCEPT FOREIGN CARDS

7-Eleven convenience stores nationwide to make cash accessible for foreign visitors
Holders of VISA, Mastercard, American Express, JCB, and China Unionpay cash or credit cards now have easier access to their cash, thanks to more than 12,000 foreign-accessible ATMs that went into effect nationwide in July. Tourists in Japan have been limited to ATMs at select foreign-owned banks for withdrawing yen, or queuing up at post offices, hotel front desks, and banks for currency exchange. The "Seven Bank" machines, located at most 7-Eleven convenience stores across the country, will operate in English, Korean, Chinese, and Portuguese.

(Source: Associated Foreign Press 7/11/07)
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BUSINESS: MITSUKOSHI AND ISETAN PLAN MERGER

Alliance would create nation's largest department store operator
In a move to weather declining sales in the department stores market, Mitsukoshi Ltd., the operator of Japan's fourth-largest department store, and fifth-ranked Isetan Co., are planning to merge in coming years. The merger would combine Mitsukoshi's solid customer base among the nation's affluent, with Isetan's stronghold of Japan's younger fashion market. Department store sales have been on the decline for 10 consecutive years through 2006 with the emergence of large shopping centers, specialty shops, and a growing mail-order and online-shopping market. The Mitsukoshi-Isetan merger would be the largest M&A among department stores, but certainly not the first - in similar "survival mode" measures, department store giants Daimaru Inc. and Matsuzakaya Holdings Co. are scheduled to establish the holding company J. Front Retailing Co. in September. In October, the Kansai region's largest retailers - Hankyu Department Stores Inc. and Hanshin Department Stores Ltd. are set to create H2O Retailing Corp. Mitsukoshi, Japan's oldest department store, operates 15 stores across the country, including its flagship in Nihonbashi. Isetan operates seven department stores, with the Shinjuku outlet at its core.

(Source: Mainichi Daily News 7/26/07; asahi.com 7/26/07)
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BUSINESS: INDOOR GOLF CAFES MAY FIND NEW NICHE

A dying trend no more, cafes offer relaxing oasis to boomers and their kids
Boomer golfers are a generation accustomed to the leisure of all-expense-paid plays with clients and business partners. But with such privileges gone post-retirement, and faced with crowded hitting grounds and training centers, many boomer golfers are feeling displaced. To their rescue, however, are mom-and-pop golf cafes, which have been making a quiet comeback after peaking in popularity during the mid-80s. Many of these coffee shops are specifically targeting the boomer population - called "dankon sedai" in Japanese - with updated decor and menus cool enough for boomer children - called "dankon junior." And to fill a niche for boomers, many cafes are beginning to install golf simulators and large video screens. The "indoor golf cafe" concept has already caught on in Northern Europe, oft considered to be at the forefront of senior lifestyle and business. In Japan, golf cafes are expected to appeal to boomers and their children - especially daughters - with a "father-daughter golf date" theme in mind.

(Source: Trendy Magazine online 06/07)
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BUSINESS: BEER BIZ SUPPORTS ALTERNATIVE FUEL

Kirin to build ethanol plant, convert beer byproduct to fuel
Kirin Brewery Co. Ltd,. Japan's no.2 beer maker, will spend 300 million yen (approx. $2.5 million) to renovate an existing brewery for the production of ethanol. The company says it will use byproducts such as spent yeast and wheat hull to extract ethanol, an alternative fuel source. Kirin's government-backed "green" fuel project is not the first of its kind - rival breweries Asahi and Sapporo both have ethanol plants of their own, using sugar cane and waste wood. The brewing company will partner with Mitsubishi Corp., Japan's top trading firm, and Japan Chemical Engineering & Machinery Co. for the beer-to-ethanol project. In the U.S., cars in select cities are already running on bio-fuel converted from brew, courtesy of Miller Brewing Co., which uses beer byproducts to yield ethanol.

(Sources: Reuters 6/19/07; topix.net 2/17/07; Nikkei.net 7/27/07)
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FASHION: UNIQLO PLANS GLOBAL EXPANSION

Stores open in Manhattan, London; Barney's takeover also in the works
Japan's popular casual wear chain, Uniqlo - often called The Gap of Japan - outpaced a $825 million bid by a Dubai company to acquire luxury retail chain Barneys from New York-based Jones Apparel Group Inc. Fast Retailing Co., owner of Uniqlo, offered $900 million in cash, with business eyes focused on penetrating the luxury market with the Uniqlo brand. Uniqlo, which opened its first store in Hiroshima in 1984, found its niche in the low-priced, casual wear market after Japan's economic bubble burst in the 90s, and the attainability of designer brands waned in favor of good bargains. Today, it has nearly 750 stores in Japan, with another 41 stores overseas including a mammoth U.S. flagship in New York City's SoHo district, and a second U.K. store planned on London's fashionable Oxford Street.

(Source: Associated Press 7/31/07)
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POLITICS: FUTURE UNCERTAIN FOR JAPAN'S PM

Upper House election defeat may pressure Shinzo Abe to step down
Prime Minister Shinzo Abe expressed both regret and defiance after his ruling party suffered a crushing defeat in an upper house election, losing its majority in the chamber for the first time since 1998. The conservative and pro-military Abe had won high approval ratings when he took office last November, but his popularity nose-dived below the critical 30 percent line in some polls, following pension record blunders by the Social Insurance Agency, financial scandals involving LDP lawmakers, and unpopular remarks made by a prominent Cabinet member. Abe's Liberal Democratic Party coalition still holds a comfortable majority in the lower house, which has greater legislative power and the final say on the state budget and the election of a prime minister. However, losing control in the upper house will make it difficult for Abe's administration to push its main legislative agenda - a bill to extend Japan's dispatch of the Self-Defense Forces to help U.S.-led antiterrorism activities in the Indian ocean beyond its current legal limit of November.

(Source: Kyodo News 7/30/07)
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FASHION: JAPAN SOCCER GREAT ONE OF VANITY FAIR'S "BEST DRESSED"

Recently retired Hidetoshi Nakata named to list among world's top celebrities
Known for his trend-setting crew-cut hairstyle and freakishly good looks, former midfielder Hidetoshi Nakata joined the ranks of George Clooney as one of Vanity Fair magazine's 10 best-dressed men of 2007. The elite list also includes rock icon Lenny Kravitz and the newly elected president of France, Nicolas Sarkozy. Not new to being recognized as one of Japan's highest sports profiles as well as a fashion icon, Nakata also graced the cover of Time magazine, alongside baseball phenom Ichiro Suzuki, in an "Asian Heroes" issue. Calvin Klein designer Italo Zucceli said of Nakata, "He plays with fashion like all [athletes] now, but in a cooler, more sophisticated way than many others."

(Sources: en.wikipedia.org; japantoday.com 8/1/07)
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TECHNOLOGY: MAJORITY OF JAPAN'S POPULATION WIRED TO INTERNET

Users switch between PC and mobile Web, at home, at work, or on-the-go
According to a 2007 report released by the Ministry of Internal Affairs and Communications, 68.5 percent of Japan's population is connected to the Internet as of 2006, up 2.6 percent from the year prior. Of the 87.5 million Internet users in Japan, about 80 million use PC terminals to connect to the Internet, and 70 million use their mobile phones. Some 60 million users utilize both PC and mobile phones, emphasizing the Internet's high level of accessibility, and ever-growing potential for targeted marketing. Japan also ranks high among global Internet users; last year's figures put the world's Internet population at 710 million, with the U.S. dominating about 20 percent. Japan ranks third, behind China, and above Germany, U.K., Korea, France, Canada, Italy, and India. Canadians, however, logged on the longest at 39.6 hours per month, followed by Internet users in Israel, Korea, and the U.S. (31.6 hours).

(Source: Travel Journal International 7/25/07; itmedia.co.jp 5/5/06, 3/7/07)
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Kyaraben:


"Kyaraben" is short for character bento, which are lunchboxes (bento) that depict the face or image of a cartoon character, superhero, or animal using various lunch ingredients. "Kyaraben" are generally made by mothers who want to give their young children a lunch that is not just tasty, but fun to eat and fun to look at. This type of lunchbox is now enjoying a surge of popularity, with moms giving it high marks as a way to get their children interested in food. The lunches are a common topic of conversation among kids during lunch break, as well as moms who share tips with each other. Creative lunchbox making is not a new phenomenon, as in the past, mothers would decorate the white rice in their children's lunches with seaweed and furikake to draw pictures and designs. But today, it has evolved into something much more. It is not unusual for women to spend hours creating a lunchbox masterpiece and then post pictures of their best works on their online blogs. Many books featuring lunchbox designs, recipes, and how-tos have been published and are being sold all over Japan. The art of "kyaraben" has become so popular that ambitious moms are now able to compete in the inaugural "character bento" competitions held in Tokyo.

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Chikyu no Arukikata- Waikiki Mook

Hawaii's enticing retail environment and its high contention as a "shopping mecca" lures Japanese travelers to choose Waikiki and Oahu as a vacation destination. Targeting the young female shopper aged 18-35, the Chikyu no Arukikata Waikiki Mook, formerly known as the Hawaii Mook, is the shopping "Bible" - filled with the most up-to-date and detailed information on shopping and dining in Waikiki and Oahu. With nearly 200 pages dedicated to shopping, the reader gets a complete guide of shopping on Oahu, including an easily detachable Insert Booklet filled with maps and a coupon section.

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

Click here for our Media Request Form or contact us.

Space Deadlines:

8/1 Chikyu no Arukikata Honolulu Mook 2008
8/1 Chikyu no Arukikata Guam Guidebook
9/1 Aloha Express Yearbook

Material Deadlines:

9/1 Honolulu Mook 2008
9/1 Globetrotter Guam Guidebook
9/10 Aloha Express Yearbook

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

08/13-8/16 Obon Season
09/17 Keiro no Hi- Respect for the Elderly Day
09/23 Shuubun no Hi- Autumnal Equinox Day (observed)
09/24 Shuubun no Hi- Autumnal Equinox Day (actual)
10/08 Taiiku no Hi - Sports Day

Click here to see all Japanese holidays for 2007.
Click here to see all US holidays for 2007.

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