MAGASTORE will launch first on the iPhone

One of Japan’s most powerful companies, Dentsu, is trying to extend its control of traditional media to the mobile arena with a new application that will force users to pay for online magazines and maintain its dominance over their ad space.

For years the advertising behemoth has been sitting pretty, thanks to its near-monoploy over media buying and the commissions that go with it. Last week, Dentsu announced the launch of MAGASTORE, a downloadable app that will sell access to magazines on mobile phones.

In fiscal 2008, the digital publishing market was estimated at ¥46.4 billion (US$500 million), up ¥10.9 billion from the previous year. Of that, mobile publishing accounted for more than ¥40 billion, according to research by Impress Holdings. Digital comic books are selling especially well, thanks to improvements in cell phones, with larger screens, faster Web access and simpler billing systems.

MAGASTORE, a collaboration with mobile software provider YAPPA Corp., will begin as an application for the iPhone on the Softbank network this summer, and later be made available to other handsets and carriers. After downloading the application, users can purchase magazines and store them to read anytime. Users will pay ¥115 to for the application and then ¥115 to ¥600 per magazine.

YAPPA has made one-off solutions for magazines in the past, such as Shufuntomo’s éf magazine. But Dentsu’s bundled app will be cost-effective for publishers. They will get access to viewer data as well as an online settlement system and, according to the company, “a new advertising solution combining the characteristics of magazine contents and the technology of mobile advertising.”

Among the publishing houses that have signed up for MAGASTORE are Asahi Shimbun, Fusosha (Numero, Spa!), Condé Nast Japan (Vogue, GQ) and a host of niche publishers of titles about everything from skateboarding and kimono to salt-water fishing.

The control of content by powerful corporations remains solid in Japan, even in mobile, where providers like DoCoMo and KDDI strictly control who gets access to users’ menus. (The App Store model developed by Apple for the iPhone fits nicely with this strategy.) When it comes to the question of whether online content should be free or paid, Japan clearly veers toward the latter. Consumers don’t expect mobile content to be free, and by the same token are more willing to pay for it.

Although the list of participating publishers in MAGASTORE is by no means comprehensive at this stage, Dentsu’s intention seems clear: to control the mobile publishing market by controling the delivery system, its model in print and television for decades, and one that has served the company well, if not the consumer.

Inside Angel Farm Fukui (photos via Nikkei)

Imagine going to the latest Ginza flagship store of an up-and-coming brand flagged as the “new Uniqlo”. You have to wait, as there’s a line of consumers around the block, hungry to get a piece of the latest trend. Inside, it’s a minimalist space, with light techno music. Produce is stacked up to the ceilings in cool white units. Literally cool, that is – these units are refrigerated. And what they’re chilling isn’t clothes but the latest must-have item: designer lettuce.

A taste of what may be the future already exists in Chiba Prefecture, east of Tokyo, at an award-winning produce store called Green Flavor. It sells vegetables grown in a “plant factory” located upstairs in the same nondescript apartment building. The plant factory is operated by Mirai Co. Ltd. and its 37-year-old founder, Shigeharu Shimamura. He calls his firm an “agricultural software company”.

Plant factories are slowly spreading in Japan, with support from the government. Vegetables are produced indoors and under controlled conditions. Lighting, temperature, humidity, carbon dioxide and water are all measured constantly to ensure stable production. For example, lettuce can be cropped twenty times a year.

Because the produce is grown in a clean room, it can be eaten without washing. That’s potentially attractive to consumers who want safe foods and restaurants that need to guarantee quality. The factories eliminate the need for physical labor in the countryside, so may create new jobs for young people in cities, according to the government.

Ozu Corp., a maker of traditional Japanese paper known as washi, turned its unused Tokyo warehouses into plant factories in 2008 in response to consumer concerns about unsafe food. The brand is called Nihonbashi Vegetables, after the central-Tokyo location of the company’s headquarters, where it plans to open another plant factory.

Another manufacturer, Fairy Angel Inc., has its main plant factory in Fukui Prefecture and others in Kyoto and Chiba. The Fukui factory’s temperature is controlled to +25°C by day and +18°C by night and is capable of producing three million plants a year, according to the Nikkei. Many factories are starting to use LEDs instead of fluorescent lighting to lower costs.

"Green room" veggies can go direct to the shelves

Mirai, which consulted on the Ozu project, says it receives 100 inquiries a month about the “green room” concept, including many from the Middle East and Africa. The government provided financial support for plant factories as part of its New Economic Growth Strategy in September 2008, and has pledged more as part of the so-called “Green New Deal”. However, concerns remain.

Plant factories consumer high levels of artificial energy compared with natural farming methods, raising the price of the produce, as well as questions about the net cost to the environment. When grown naturally, vegetables are a vital element of the food chain. The implications of their widespread removal from the natural environment are also yet to be measured.

This article was compiled using information supplied by the Japan Foreign Press Center.

For more of Five by Fifty’s consumer insights on “Part Time Greens”, contact us.

Time to reward yourself with that new 24-inch iMac?

Recession fatigue is starting to show in the United States, where consumers are rewarding themselves by “trading up” items that play an important role in their daily lives, according to Boston Consulting Group (reported by WWD). In fact, marketers interested in this trend need only look to Japan to see how an extended downturn can actually boost sales of high-quality daily necessities.

The top ten list of “trade-up” items for the U.S. is dominated by what most people would consider 21st Century home necessities. No. 1 is the personal computer, and household electronics like home entertainment (5), kitchen appliances (8) and washers and dryers (9) also feature. At No. 2 is fresh fruits and vegetables, reflecting wellness trends as well as the basic importance of food, with other entries being meat (4), sit-down restaurants (7) and fish and seafood (10). The other entries are bedding (3) and automobiles (6). With the exception of restaurants, the list clearly shows the items consumers will start spending on first will be things that improve their daily lives and personal space.

A prolongued period of low growth in Japan bred innovation in small-ticket items, as consumers recalibrated their spending patterns

The changes in spending by Japanese a decade ago reflected their different priorities, with more emphasis on fashion (which doesn’t make Boston’s U.S. Top 10) and personal computers (mobile phones were always more useful here). However, the shifts in demand were similarly focused on improving consumers’ daily lives and, in the process, contributed to world-leading innovation in everything from functional home electronics and B2C mobile commerce to beverage flavors and cigarette packaging.

Contact us for details of ethnographic research and innovation programs to help your business anticipate consumers’ changing priorities.

A shop specializing in selling used mobile phones in Tokyo's Shibuya district.

An old stereotype holds that Japanese only want what’s “new.” If a mobile phone got scratched, or was outdated by even a few months, it was easy enough to pick up a new one. Now, that doesn’t even apply to electronics, once a symbol of national pride.

A netbook computer on sale for 100 yen in Tokyo

Sales of cheaper appliances from China and Taiwan are reportedly climbing. In the highly competitive field of “netbooks,” compact, wireless-ready laptop computers, two afforable Taiwanese companies, Asustek Computers and Acer Inc hold a combined 79% share of the Japanese market. In campaigns timed to coincide with university students starting classes and new workers joining companies, electronic retailers are selling netbooks for as low as 1 yen, provided buyers sign up for a wireless internet service provider contract.

Retailers such as Yodobashi Camera in Tokyo have responded to falling sales by moving buying and selling second-hand appliances for the first time.

Sanyo's eneloop rechargeable battery.

Sanyo have scored a hit with their environmentally-friendly rechargeable battery line, eneloop, a portmanteau of “energy” and “loop.” The batteries were first launched in November, 2005. The batteries are sold fully charged, and can be recharged up to 1,000 times. Recent consumer consciousness of environmental issues, coupled with an expanded product line and successful ad campaign has boosted sales.

A recent eneloop television spot.

A current series of television ads for the batteries feature people holding up signs and and saying mottainai in various accents.  Mottainai means “what a waste” or “you shouldn’t waste that” in Japanese, but recently it is used to market environmentally-friendly products, and has become synonymous with the overall environmental movement and the increased awareness amongst Japanese consumers of the environmental impact of the products they use in daily life.

Eneloop batteries themselves are positioned as environmentally-friendly products, as they can be reused multiple times. However, newer products in the eneloop line enhance and emphasize the environmental benefits. Sanyo has introduced a new way to charge eneloop batteries with a solar charger, as well as offering reusable alternatives to normally disposable products

Another recent edition in line is the “eneloop kairo,” which is presented as an alternatve to the disposable “kairo,” a pouch that is placed in a pocket or under clothing and produces heat for several hours after opening, and thrown away after a single use. The kairo in the eneloop line are of course regargeable, a larger version running on an internal battery, and the smaller version which uses interchangeable eneloop batteries.  A similar product is a portable, cordless electric blanket.

The eneloop concept has been extended to transportation, with an power-assist bicycle that replenishes its power supply when the bicycle is coasting.

This battery charger works on solar power alone.

The rechargeable eneloop pocket warmer.

The Astalift series of cosmetics from Fujifilm.

2008 saw the release of a number of popular cosmetics lines targetting women in the 50-60 range. A craze for foods with high collagen content believed to have beautifying effects began in 2007, and in 2008 a number of collagen-based cosmetics went  on the market.

One popular brand is the Astalift series of lotions, creams, and cleansers developed by Fujifilm, who applied their techniques of nanotechnology and collagen used in their photographic film products. The brand launched at the end of 2007, and expanded in the spring of 2008. Television ads feature 56-year-old Japanese folk singer Miyuki Nakashima.

Television ads for Astalift feature 56-year-old Japanese folk singer Miyuki Nakashima.

Keywords in this market niche are “moisture” and “elasticity,” with popular products claiming to restore moisture to skin, and elasticity in the skin around the mouth.

Shiseido’s Elixir Prior brand, launched in November, targets women in their 60s. Rather than boasting “anti-aging” properties, advertising for Elixir Prior focuses of “aging beautifully” and promotes an image of active older women. Kanebo’s new line of Chicca foundation and eye shadow is designed to suit the complexion and skin tones of women in their 60s.

The Elixir Prior brand from Shiseido promotes an image of active older women in its advertising.

Analog turntables are making something of a comeback in Japan.

It may be the era of digital photography and mobile phone MP3 players, but that has not stopped consumers from turning to the days of yore for their electronic fix. Japan is clearly headed in a new direction – it is gearing up to shut off analog and go digital in 2011 – but there is still a niche of music-lovers who turn to record players for their special sound and a good dose of nostalgia.

Record players are no longer mainstream, but an older generation still exists who look fondly on their vinyl collections, as well as a sizeable group of younger Japanese who look to play their electronic music specifically on record players.

The result has been an emergence of specialized services for this “secret” consumer niche. Since April 21, Nippon Precision Jewel Industry Co. , of Shinonsen-cho in Hyogo prefecture has been offering to do repairs for record needles. This is a service that appears to be in demand, since in addition the company takes orders for over two thousand types of needles, including diamonds.

Nippong Precision is the only company making record needles in Japan.

For now, Nippon Precision has the industry to itself – it is the only company in Japan that takes orders for record needles. That may change, however, as consumers demand more services for their collections.

Natalie Meyer

The next edition of the Tokyo Girls Collection is scheduled for March 15th.

Japan’s “Gothic Lolita” fashions, which blend Victorian, punk, and leather fetish and bondage influences, have captured attention around the world and influenced red carpet outfits at the Emmy Awards. However, this is hardly what the majority of young Japanese women are wearing.

AneCan is the top fashion magazine with women in their 20s.

Many OLs (female office workers) in their mid 20s to early 30s closely follow “ane-kei”, literally “older sister style.” The style is feminine, cute and casual, with a sexy edge. Pastel pink tops, short denim skirts and a great pair of heels are the type of ensemble that can be found in the magazine AneCan, a fashion bible currently celebrating its first anniversary.

The latest trends in the style will be unveiled on March 15, at the 6th Tokyo Girls Collection. The current Japan Fashion Week in Tokyo is showing fashions for the 2008-9 Autumn/Fall season in a preview six months in advance for press and industry insiders, with limited effect to the average consumer. However, TGC is all about instant sartorial gratification.

Designs for the just beginning spring/summer season will be featured in the event. An expected 24,000 visitors will register their mobile phone e-mail addresses, and less than two minutes after outfits appear on the catwalk, photos of them will be beamed to the audience, along with convenient links to buy the whole outfit and have it sent to home within a few days. Now that is instant fashion.

An antique camera fair drew analog fans.

Japanese camera makers are known for being at the forefront of digital imaging technology. The Fuji Film company has been following global trends by gradually rebranding themselves as “Fuji Digital Imaging,” to align themselves with the filmless photo age. However, both amateur and professional photographers have their hearts in quite another place. A recent used camera fair was held in a Tokyo department store, bringing dozens of antique camera dealers together with thousands of camera fans over the course of a week.

A large number of the visitors to the fair were retired men who previously worked as professional photographers or journalists and are unwilling to make the switch to digital. Many of the other shutterbugs in search of vintage gear were hobbyists, but in Japan people take their hobbies seriously. “Well, anyone can use a digital camera,” said a vintage camera fan at the fair while looking over Swedish cameras from the 1960s, meaning that a hobby that is too easy to do is not really a hobby.

While this is bad news for digital camera manufactures, film makers can rest assured that they will have a market in Japan for some time to come.

We Love Robots! written in Japanese calligraphy.

The word “robot” first appeared in the Czechoslovakian writer Karel Čapek’s 1921 play, R.U.R., an anti-capitalist allegory in which robots are brought in to replace factory workers, but ultimately rise up and revolt against the human bosses. From that terrifying beginning up through movies such as 2001 and Terminator, robots have been portrayed in Western media as heartless enemies of mankind.

Not so in Japan, where comics and anime such as Doraemon have demonstrated that a boy’s best friend is his robot. Perhaps that is why the Japanese are ready to welcome robots into their lives. Tokyo recently hosted the International Robot Exhibition, where presented industrial factory robots alongside mechanical office receptionists, as well as The Great Robot Exhibition, where Honda unveiled the latest generation of Asimo.

Asimo is a humanoid robot ready to become a part of the family, able to offer physical assistance to the elderly, run errands for mom and dad, and practice soccer with junior. At the entrance to The Great Robot Expo was a large hanging scroll. It read, in beautifully flowing traditional Japanese calligraphy: “We love robots!”