Recession Can't Stop Japan's Online Shoppers
A rise in the number of stay-at-home shoppers in Japan means the online shopping industry outstrips sales at department stores and convenience stores
It never rains but it pours for Japan's department store operators, once the driving force behind Japan's bubble-era consumerism. This summer already-flagging sales plunged further as recession-hit consumers cut back on spending. Nature didn't help out, either, as poor weather hurt sales.
Yet, even when the recession eases and the weather improves, don't expect a big bounce in sales. These days, Japan's recession-hit shoppers increasingly prefer to shop without ever leaving home.
The numbers are startling. Using data from the Japan Direct Marketing Assn. and Nomura Research Institute (NRI), the Nikkei daily estimates online shopping sales in Japan rose 22% to $67.2 billion. That's despite Japan's deepest recession in the postwar era savaging consumer confidence following the collapse of Lehman Brothers last fall.
If catalog shopping is also included, the figure rises to over $86 billion—or more than is spent in Japan's department stores or ubiquitous convenience stores. Noritaka Kobayashi, senior consultant at Nomura Research Institute in Tokyo, says that while the growth will likely slow due to the recession, the consumer e-commerce market will continue to outstrip other forms of shopping. Excluding eating out and other forms of consumption that can't be easily conducted online, Kobayashi reckons $2.2 trillion of consumption could be made from computers and cell phones. "A growing number of people are simply avoiding the trouble of visiting stores," he says. "This market has a big growth potential."
Sugomori: "Chicks in the Nest"
What explains Japanese consumers' shift to shopping online? In the last year, as the global recession pounded the Japanese economy, pundits began using the term sugomori ("chicks in the nest") to describe people who stay home to keep outside expenses to a minimum. Shopping online is not only often cheaper, especially when compared with expensive department stores, but it also saves on transportation and eating out while shopping.
Other reasons for the rapid expansion of online shopping in Japan are perhaps more compelling—and Japan-specific. One factor is undoubtedly the widespread use of high-speed Internet. Fast broadband connections are the norm in Japan, while high-speed Internet-enabled mobile phones are long established. NTT DoCoMo's (DCM) 3G service is now in its 10th year of operation. The upshot: Japanese young and old are comfortable and experienced online.
According to the Internal Affairs & Communications Ministry, the mobile-commerce market in 2007 was worth $7.8 billion, a 29% increase from the previous year. The NRI, meanwhile, estimates mobile phones account for about 20% of online shopping and that share will increase to 24.5% by 2013. "Sooner or later it will be half," says Kobayashi. He adds that many teenagers buy games, books, or accessories via mobile phone but never use a PC for e-commerce.
Superior Delivery Service
It helps that workers in Japan typically take long commutes, often in crowded trains. That leaves plenty of time to text, read the news, play games, or shop using a mobile phone.
Marketers are also getting savvier at appealing to mobile shoppers. While eBay (EBAY) isn't a big player in Japan, Rakuten, Amazon Japan, and Yahoo Japan are among Japan's most visited Web sites and are huge conduits for online shopping. Small players, meanwhile, are finding creative ways to woo Net-based shoppers. One example: In March, dozens of young women swarmed to the Tokyo Girls Collection fashion show. At the show, held in Tokyo's youthful Shibuya district, audience members could order what they saw on the runway using their mobile phones, via a dedicated retail site. In a single night, the show sold $615,000 worth of clothes.
Meticulous home-delivery service is another factor boosting online shopping. Delivery companies such as Yamato Transport, Sagawa Express, and JP Express are famously reliable. The companies usually offer to deliver within a two-hour time slot selected by the customer and are rarely late. They are also remarkably fast. Yamato, for instance, has a tieup with Amazon (AMZN) and other mail-order companies by which it offers next-morning delivery for orders made by midnight the previous day. And if the customer prefers, deliveries can be made to one of Japan's 50,000 convenience stores. For only a small extra fee, delivery firms will deliver frozen or chilled products, leading to the rapid expansion of online purchasing of fresh produce, such as freshly caught crab from Hokkaido or pineapple from subtropical Okinawa.
Payment options have evolved to meet customer needs and soothe fraud concerns. For consumers who don't want to input credit-card numbers over the Internet, Yamato and others offer a pay-on-delivery service. "These finely tuned delivery services are boosting the mail-order business," says Masao Ueda, chief researcher at the Distribution Economics Institute of Japan.
By Hiroko Tashiro
Japan's 'Idea Products'
In Japan they are called aidea shohin ("idea products" ), unusual gadgets that would be convenient to own but not practical enough for most retailers to sell in Japanese stores. Although some people might call them pointless, these idea products are popular among Japanese consumers shopping online or via catalogs and TV. And that's a big business: According to the daily Nikkei, home shopping grew 10% last year, to $86 billion. That's bigger than the sales at either convenience stores or department stores. Here are some examples of the latest idea products.
Mattress with a Built-In Fan
Manufacturer: Kuchofuku
Price: $300
http://www.9229.co.jp or http://www.rakuten.co.jp/pc2b
A good night's sleep during the Japanese summer often means using the air conditioner. The Fumin is a low-cost, more environmentally sound alternative. Produced by a clothing maker Kuchofuku, the $300 Fumin ("wind-sleep") includes a built-in fan at the foot of the mattress. Running it eight hours every day costs less only 30¢ a month.
Computer-Heated Lunch Box
Manufacturer: Thanko
Price: $20
http://www.thanko.jp
Many Japanese workers take a prepared bento ("lunchbox") with them to the office. Typically steamed rice and side dishes, bento can be economical and appetizing. One challenge, though, is keeping the food, warm. Thanko, an innovative gadget shop in Akihabara, Tokyo's premier electronics district, may have the answer: A heated lunchbox that plugs into a PC's USB port.
Security-Enhanced Personalized Stamp
Manufacturer: Mitsubishi Pencil
Price: $220
http://www.mpuni.co.jp/product/category/stamps/dialbank/index.html
Westerners usually sign contracts or other important documents in ink, but Japanese traditionally prefer an engraved stamp called a hanko. One concern, though, is that the stamped signature, usually the owner's name, can be easily forged. Mitsubishi Pencil's Dial Bank Seal alleviates the risk of fraud by adding a two-digit dial that creates a series of marks around the printed name, making it difficult for an unauthorized person to copy someone's stamp. It also wards against theft by requiring a code to be entered before use.
Safety Socks
Manufacturer: Pearl Star
Price: $17
http://corporation-pearlstar.com/
Developed by Pearl Star, an original socks maker, and Hiroshima University, Tento Boshi ("Fall Prevention") socks help keep you on your feet by encouraging the toes to point upwards. The socks won an outstanding performance award in a 2007 competition sponsored by the Japan Rehabilitation Engineering Assn.
Tap-Controlled Touch Screen Camera
Manufacturer: Olympus
Price: $461
http://www.olympusamerica.com/cpg_section/product.asp?product=1448
Camera maker Olympus markets its tap-controlled Stylus Tough-8000 camera as a tool for extreme conditions. Shockproof, waterproof, and freezeproof, it is "virtually indestructible," the maker claims. In Japan, though, where it is sold as the mju-TOUGH 8000, its tap-control system (the camera's functions are controlled by tapping or tipping the camera body) is winning plaudits for enabling people with long nails to use the camera easily.
Rain Poncho for Bicycles
Manufacturer: Asahi
Price: $20
http://www.rakuten.co.jp/cyclemall/
A recent change in the law means that Japanese police are taking sterner action against cyclists who use umbrellas while cycling. Asahi's Rain Poncho, which is designed to cover the bike's front basket as well as the rider, may be the answer.
Curved Chopsticks
Manufacturer: H Partners
Price: $9
http://www.h-partners.jp
At a properly set Japanese table, a chopstick rest is used to keep your chopsticks clean. Ukihashi chopsticks, with their distinctive curvature, stay clean while resting directly on the table.
Talking Piggy Bank
Manufacturer: ToyBox
Price: $36
http://www.toybox-jp.com/commodity/img/img08a9b0452_1.jpg
Toymaker ToyBox's speaking piggy bank tells you what coin you have put in and how much you've saved. The box is 15 cm wide and 20 cm high. There are three colors: white, black, and red.
Water-Proof Cloths
Manufacturer: Takashimaya
Price: $30
Furoshiki, square pieces of cloth used for wrapping everyday items, aren't exactly cutting-edge. They date from the 17th century, when Japanese bathers would use them to carry their change of clothes. Still, after renewed interest from younger people in recent years, department store operator Takashimaya has developed a modern, water-repellent version.
Pedometer with a Safety Alarm
Manufacturer: Tanita
Price: $49
http://www.tanita.co.jp/products/models/fb728.html
This is for someone who wants to exercise but is worried about unwanted advances from strangers. Tanita's Stylish Walker pedometer includes a built-in siren. If you want to frighten someone away, just pull the cord, and the alarm goes off.
Earphone Alarm
Manufacturer: Honda Tsushin Kogyo
Price:$11
http://www.konna.jp/shop/goods/A012.htm
The Anshinkun-2 is a light, small timer that you wear like an earphone. With this gadget, you won't miss your stop on the train even if you're napping. Simply set the alarm for the time you want to get off, and the Anshinkun-2 will wake you up before the train leaves the station.
Long-Distance Pet Feeder
Operator: NTT DoCoMo
Price: $215
http://www.konna.jp/shop/goods/A122.htm
Forgotten to feed Fido? By using NTT Docomo's third-generation FOMA mobile phone and its Pet Phone feature, you can provide nourishment for your dog even when you're on the road. First call home on your mobile phone. Ten seconds later you receive live footage of your pet at home. Then push one button to release food from the Pet Phone food unit into the dog's bowl.
Earless Eyeglasses
Manufacturer: Uemura
Price: $20
http://www2.wbs.ne.jp/~uemura/page151.html
The frames of these Coloring Sonotokini eyeglasses rest on your temples, not your ears. According to Uemura, that makes them ideal to wear while coloring your hair.
Vibrating Alarm Pillow
Manufacturer: Funabashi Bussan
Price: $85
http://www.konna.jp/shop/goods/A168.htm
An ordinary alarm clock rouses the whole room. Funabashi Bussan, a maker of auto accessories and health products, has an answer for those who don't want to wake their loved one on the other side of the bed. The company's Mezamashi Bururun is a vibrating pillow only wakes the person sleeping on it.
Hands-Free Umbrella
Manufacturer: Dplus
Price: $32
http://store.shopping.yahoo.co.jp/d-plus/dokodemo-sasube-gr.html
This simple device is especially popular with Japanese women who like to protect their skins from the summer sun, while cycling or pushing a baby stroller.
No-Frills Shampoo Dispenser
Manufacturer: Sanki
Price:$19
http://www.sanki-web.net/index.html/tsumekae.html
This lets you use refills for shampoo, conditioner or body soap rather than buying new bottles. Sanki is originally a backstreet factory in Tokyo making metal parts. At home, the 57-year-old factory owner, Masayuki Abe, grew tired of refilling shampoo bottles for his family and so spent three years to come up with his product as an alternative. Since its release last December, it has sold more than 30,000 sets in eight months. "While our main business has been slow due to the economic climate, this side business is unexpectedly covering the losses," he says.
