Japan Market Update - November 2007 Edition

Hi,

Baseball, boots, and donuts are hitting the popularity charts in Japan this fall.

Japanese baseball fans who follow U.S. baseball celebrated with the Boston Red Sox as Daisuke Matsuzaka, or Dice-K, helped lead the Sox to their series win over the Colorado Rockies. Dice-K showed his talent and proved worthy of the U.S. $103 million investment for his contract to play in the major league. This World Series made history, with Japanese players on both team rosters-Matsuzaka and Hideki Okajima on the Red Sox, and Kazuo Matsui on the Rockies. Last week, all eyes were on the final game of the Japan Series, which ended on November 1st with the Chunichi Dragons winning.

While in Japan last week, I visited Marui Department store at ITOCiA, a new shopping development next to the Yurakucho train station in central Tokyo. The fall fashion scene has come to life, the latest trend being boots of all sizes and lengths. Another apparent trend is Krispy Kremes. The craze has hit Japan. On both of my visits to ITOCiA, I was amazed to see people running in the door and racing downstairs to get in line for Krispy Kreme donuts. There were families, single women, and even men, buying the donuts for themselves and as gifts for friends and relatives. The lines were nearly two hours long! The Krispy Kreme craze shows the power that Japanese media has to influence the public and to establish credibility for a product.

The lines were nearly two hours long!

For more on latest trends, read below or visit PacRim Marketing Group's new podcast, Hawaii Podcast, now the top travel podcast on iTunes Japan, with more than 20,000 downloads per month. You can also visit Hawaii-Arukikata.com to see what's on the mind of Japanese interested in traveling to Hawaii, and to find out who is marketing to them.

Thanksgiving is almost here, already! And that means most of us are in the midst of planning for next year. PacRim and PRTech can assist you with both long and short-term planning and strategies for reaching the Japanese consumer. Let us know if we can help you.

Regards and Happy Thanksgiving,

Dave derdman@pacrimmarketing.com

*Japan Market News
----- Travel: Japan arrivals up for weddings and conventions
----- Travel: Race helps Guam sports tourism
----- Business: Japanese brands join Ala Moana Center
----- Business: Korea's Lotte brings burgers and doughnuts to Japan
----- Business: Wal-mart offers to take over Seiyu
----- Technology: Mobile travel bookings on the rise
----- Technology: Mobile phone users keeping carriers
----- Politics: Japan's adult age to be lowered
----- Society: Pampered pets on the rise
----- Fashion: Short boots spark hot trend
*Culture Corner
*Upcoming Magazine Deadlines
*Important Dates

Travel: Japan arrivals up for weddings and conventions

Hawaii visitor spending also up, but arrival numbers are down
Despite a 2.7 percent drop in arrivals compared to the same time last year, the number of Japanese honeymooners increased 40 percent over September 2006. To date, 133,226 Japanese have honeymooned in Hawaii, an 11.5 percent increase from the same time last year. Hawaii also saw a surge in Japanese business travelers - eight times more than last year - visiting the islands for corporate meetings. Japanese spending also remains the highest among all traveler groups at $275.70 per person per day, up 7.7 percent from the year prior.

(Sources: DBEDT; Pacific Business News)
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Travel: Race helps Guam sports tourism

Annual half-marathon drew more runners this year, especially from Japan
Japanese runners made up at least a fifth of the nearly 600 early birds that gathered at Ypao Beach Park for the second annual Ko'ko' Road Race. Japan's Tomoko Tamamushi placed first in the women's division, and a Japan team placed third out of 92 groups in a relay race that occurred simultaneously with the marathon. The seaside race has been a hit among Japanese runners, not only for the scenic course, but for the water station "entertainment" provided by jolly volunteers and locals who cheer on the runners with energetic Chamorro dances. Awards were presented in conjunction with the Guam Micronesia Island Fair, giving runners and tourists a chance to enjoy regional food, music, and arts and crafts. The Ko'ko' Road Race grew by 46 percent this year, and the Guam Visitors Bureau plans to continue promoting the marathon as a major cultural and tourism event.

(Sources: GVB; travelvision.jp 10/22/07)
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Business: Japanese brands join Ala Moana Center

Five Japanese retailers jump aboard Ala Moana's Nordstrom expansion
While Ala Moana Center remains a popular shopping destination for Japanese visitors, the presence of Japanese retailers has been relatively thin. But recent renovations at the mall have made small- and medium-sized retail spaces (approx. 900 to 2,500 sqft.) available to businesses ready to give Hawaii's robust shopping climate a shot. Popular Japanese eyewear brand Paris Miki debuted at AMC earlier this year, making Hawaii its 19th international location. Joining Gymboree and Janie and Jake in the fine children's wear category, Japan's leading juvenile brand Miki House will offer clothes and home accessories. Miki House operates 180 stores within Japan, as well as 20 locations abroad including Paris, Milano, Korea, and Taiwan. Other retailers include women's fashion accessories store Ash & Diamonds, which specializes in leather products adorned with Swarovski crystals; couples' silver jewelry store "The Kiss"; and upscale fashion boutique Le Grand Marqet.

(Source: honoluluadvertiser.com 9/20/07; mikihouse.com; paris-miki.co.jp; amc press release)
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Business: Korea's Lotte brings burgers and donuts to Japan

Burger chain enjoys brisk sales, hour-long wait for Krispy Kreme
Third time is the charm for U.S. fast-food chain Burger King, which reopened in Japan after two failed attempts in the last two decades. While price wars with McDonald's had hampered its success in the past, Burger King is reporting brisk sales since its June debut. Behind this recent success is Lotte, a Korea-based conglomerate that operates most notably confectionery brands and Lotteria, its own franchise of fast-food hamburger chains. Lotte joined forces with Revamp, a management consulting firm, to secure rights to franchise Burger King in Japan. The joint-venture group also opened Japan's first Krispy Kreme. Both brands debuted in Shinjuku, to hundreds of anxious customers. Burger King opened its second store in Ikebukuro, Tokyo, within two weeks, with plans to roll out over 50 restaurants within the next three years. Nearly a year after its debut, Krispy Kreme opened its second outlet at the new and upscale Ikebukuro shopping complex, ITOCiA, and is still enjoying great popularity, with about an hour wait on busy days to enter the store. Krispy Kreme Doughnut Japan Corporation, which operates independently of the U.S. parent, plans to open about 40 stores in Tokyo.

(Sources: japanmarketingnews.com 12/17/06, ja.wikipedia.org, krispykreme.jp)
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Business: Wal-Mart offers to take over Seiyu

Wal-mart stocks drop, Seiyu surges as retailer announces $800 million buy-out plan
Wal-Mart Stores Inc. said it would spend up to $878 million to buy out minority shareholders in Japan's no.3 retailer Seiyu, to try to turn around the money-losing chain. Since 2002, Wal-Mart has pumped more than $1 billion in Seiyu hoping to gain solid ground in the world's second largest retail market, but has yet to see anything more than temporary upswings in sales amid tough competition. Wal-Mart's plan was criticized by shareholders and U.S. investors, but the company says acquiring the rest of Seiyu would make it easier to improve operations. "It really does give Wal-Mart the opportunity to do whatever they want to do with Seiyu," said Roy Larke, editor of Japan Consuming, an industry newsletter. In other words, the ownership would allow Wal-Mart to avoid - or at least bypass - Japan's notoriously complex supply chain.

(Source: Reuters Japan 10/24/07; japanconsuming.com 10/07)
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Technology: Mobile travel bookings on the rise

Convenience and last-minute deals among top reasons for reservations via mobile phone
While nearly half of Japanese travelers booked their most recent travels online, a poll by Yahoo Japan's research arm showed that up to a third made reservations via mobile sites. The survey of over 3,600 mobile phone users also showed that consumers chose "low prices" as the most important factor when booking by mobile phone, followed by "easy to search" and "capable of booking any time." In other findings, 31.7 percent of men in the survey said they booked on the day of departure, while 32.5 percent of women said they made their bookings more than a month in advance. Yahoo Japan attributes the disparity to the fact that more men use mobile sites to book business travel, while more women reserve well in advance for leisure travel. The survey also showed that 45.9 percent of users accessed mobile travel sites from home, while a close ratio of users did so while at school, work or on public transportation (42.1 percent), suggesting mobile Net surfers peruse downtime when phone calls are prohibited, to search for deals and information on the Internet.

(Source: Travel Journal International10/24/07)
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Technology: Mobile phone users keeping carriers

Many users holding out for better deals before making big switch
A year after the much talked-about "mobile number portability" (MNP) took effect in Japan, have mobile users switched in pursuit of better deals? Not exactly, suggests a poll by japan.internet.com and NTT's "goo Research," which showed that less than 4 percent of those surveyed took advantage of MNP and changed carriers within the last year, undermining the 17.67 percent of mobile users in a 2006 survey, who said they wanted to change carriers once the new policy took effect. While MNP seemed to give mobile phone users more freedom of choice, it turned out that Japanese mobile phone users were less willing to give up their mobile email address, which could not be transferred between carriers. That is not to say, however, that mobile users are committed to their carriers. Most recently, major players Softbank and KDDI (under the brand name "au") have launched aggressive marketing blitzes to win new accounts. Notably, Softbank launched a free mobile-to-mobile calling plan and up to 50,000 yen (approx. $460) in cash back bonuses for new introductions - a gutsy and expensive move to hopefully cast a wide net of new Softbank subscribers.

(Source: internet.japan.com 10/27/07; field report)
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Politics: Japan's adult age to be lowered

Legal "age of majority" will change from 20 to 18
After decades of public and political debate surrounding Japan's legal age to vote, the government announced plans to lower the age of majority to 18 next year. The bills designed to revise the Civil Code still need to pass, but it is assumed they will not meet major objections. The Japanese government hopes increasing the voting populace will get the younger generation more involved in public opinion, a much-needed facet in today's Japanese society in light of hot-button issues such as social security problems and a dwindling child population. The shift is also aimed to crack down on Japan's rising juvenile crime by allowing younger offenders to be tried as adults and thus facing stricter penalties. The drinking and smoking age is slated to remain at 20, however, as will the age of marriage (18 for men; 16 for women), and the legal driving age of 18. As a member of the world's G8 Summit, Japan is the only nation with a high voting age of 20. In 1989, even after the United Nations introduced the age of 18 as a convention for adulthood, Japan resisted to ratify its century-old Civil Code that deemed the age of 20 as the legal age of adulthood.

(Sources: rikkyo.ac.jp, Mainichi Daily News 11/2/07)
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Society: Pampered pets on the rise

Boomers, childless population fuel demand for pets and their care
A French bulldog trotting in Burberry booties and a matching raincoat is a sight to behold for most, but in affluent sections of Tokyo it's becoming more a norm than a rarity. And in every part of Japan, more baby boomers, empty nesters, childless families, and singles are not only becoming pet owners, but are dedicating serious amounts of money to pamper them. According to the Pet Food Manufacturers Association of Japan, pet ownership (cats and dogs) has risen by about 40 percent in the last decade, fueling an estimated $10 billion industry. Within the last ten years, Japan's pet industry saw shifts in demand for gourmet pet food, doggy day care, and pet hotels (not kennels) as in the U.S. But recently, more "human-like" services have become popular for pets in Japan, such as specialty massages called "reflexology" specifically for reducing stress, and even pet-sitting at department stores and amusement parks such as Disneyland. These services also charge "human" prices. A reflexology treatment for a small-size dog averages $30 for 30 minutes, comparable to a standard human spa service. At Tokyo Disneyland, the Pet Club accommodates cats and dogs for $30 while their owners hit the park. And with one in three Japanese households owning at least one pet, this trend is likely to continue growing.

(Sources: m-m.co.jp; trendsinjapan.com 10/07, jppfma.org; field report)
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Fashion: Short boots spark hot trend

"Booties" fly off shelves, following a year of gangbuster long boots sales
Boots are everywhere this season - high-heels, Uggs, bikers, military, thigh-high dominatrix-styles - you name it, and someone's wearing them on the streets of Tokyo. But while long boots are still the signature look for the cooler months, female footwear selling like hotcakes is in fact the short boot - called "booties." These ankle boots made their big break in the fall, while summer temperatures waned but the cooler weather hadn't quite kicked in. Mitsukoshi department stores in Ginza reported at least two lines of ankle boots sold out within the month of September. Across the street at Takashimaya, sales for long boots dipped 20 percent from last year, but short boots sales went up by 23 percent. Meanwhile booties sales at Matsuya doubled from last year. Fashion experts credit ankle boots' popularity on the slimming effect created by the wide openings, making these peds a perfect match for this year's trendiest looks: tunics, dresses, and leggings. Department stores were reportedly unsure whether ankle boots would even take off this year, but were pleasantly surprised by the popular sales.

(Sources: field report; business-i.jp 10/3/07)
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Shichi-go-san - Wishing all the children good health

Image : Courtesy of a Japanese Illustrator, Fumi Watanabe

In most cultures there is an event or holiday celebrating children, marking their good health and growth. In Japan, there are three such holidays- "Girls Day," "Children's Day," and "Shichi-Go-San," which literally means "Seven, Five, and Three."

"Shichi-Go-San" is celebrated on November 15. On "Shichi-Go-San" day, girls wear beautiful, traditional kimonos and hair styles and heavy make-up. Families go to shrines to thank "Kami-sama," or God, and parents take pictures of their children and buy them candies. The bag of candies is usually decorated with a turtle and a crane-symbols for longevity.

The current tradition comes from the Edo period, but its origin dates back even further to the Heian period that lasted 400 years from A.D. 794-when children's mortality rates were high due to poverty and disease and parents celebrated the critical growth years. Odd numbers such as seven, five, and three were believed to bring good luck; and November 15 on the traditional Japanese calendar was thought to be the luckiest day, when all demons were home and didn't torture citizens. After age seven, children became citizens of their village and separated from the ones who hadn't reached age seven (called God's children).

The celebration for seven-year-olds is only for girls and is called "Obitoki-no-Iwai," or celebration of using the Obi-belt. To mark their age, girls seven and older switched to using Obi-belts rather than strings to tie their kimonos.

The five-year-old celebration is for boys only and is called "Hakamagi-no-Iwai," meaning wearing trousers-like kimono pants. At the age of five, boys were thought to be developing intelligence with heart. This event became only for boys after the Edo period (A.D. 1603~1687).

Japanese children's heads were shaved until the age of three, after which parents put wigs on them and celebrated their growth. That was the origin of "Kamioki-no-Iwai" or the day they were allowed to grow their hair. After the celebration, girls grew their hair and never cut it unless their husbands passed away before they did.

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Space Deadlines:

11/13 Chikyu No Arukikata Excellent Hawaii
11/17 Aloha Express Quarterly February Issue
12/14 Chikyu No Arukikata Diving Resort

Material Deadlines:
12/17 Aloha Express Quarterly (February issue)
12/21 Chikyu No Arukikata Excellent Hawaii 2008

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

November 23 Kinrou Kansha no Hi - Labor Thanksgiving Day
December 31 Oomisoka - New Year's Eve
January 1 Gantan/Ganjitsu - New Year's Day
January 14 Seijin no Hi - Coming of Age Day

Visit www.pacrimmarketing.com/info/japanholidays07.html to see all Japanese holidays for 2007.
Visit www.pacrimmarketing.com/info/usholidays07.html to see all US holidays for 2007.

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