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.

Your message here? (AP Photo via The Daily Beast)

Without wanting to minimize the seriousness of the health issues at hand, the reality is that people around the world are considering how to protect themselves. The prospect of having to wear a face mask if Swine Flu continues to spread may be no big deal in Japan and Asian countries that experienced SARS in 2003. However, for consumers elsewhere unused to such things, the face mask poses a serious fashion dilemma.

The result is the mask becoming a canvas for personal expression. Individuals in affected areas who want to be victims of neither health nor fashion have begun to get creative and decorate their masks, as this photo gallery from The Daily Beast shows.

Mint Designs' cheeky chimp face mask

Some manufacturers like Kimberly Clark already put out limited numbers of colorful masks decorated with Disney cartoon characters for children. Japanese brand Mint Designs has fashioned a cheeky monkey-style mask, and artist Yoriko Yoshida was recently inspired to create a set of beautiful, witty and sometimes faintly morbid face mask illustrations.

Mt. Fuji face mask by Yoriko Yoshida

What’s next? The face mask covers the most important area of the body for communication, and the natural target of the eyes of others. So if face masks do become de rigueur in some places for a while (and it’s far too early to say that they will), the blank white space will become a unique marketing opportunity for the right brand with the right design and the right message.

Contact us to find out more.

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.

Oxford Circus, after it receives the Shibuya Treatment

London’s city planners are borrowing a very simple principle of Japanese pedestrian management – the “scramble” – to try and replicate Tokyo’s Shibuya Crossing in the West End. It will be a sociological as well as logistical innovation for the European city.

London has started consultations on a major regeneration of Oxford Circus, the juncture of Oxford St. and Regent St., according to the Evening Standard. The scheme would stop all traffic at the crossing for 30 seconds at a time to allow pedestrians to cross diagonally as well as perpendicularly, cutting in front of each other in all directions.

In Shibuya, the phenomenon of thousands of people intersecting uninterrupted by traffic is a major tourist attraction in its own right. It’s one of dozens of such diagonal pedestrian crossings in Tokyo and other major cites that streamline consumer paths between key retail areas and transport links. Thousand gather at these intersections as they wait to cross, providing marketers with a captive audience for advertising hoardings and outdoor TVs replaying commercials.

“The parallels between Shibuya and the West End are stark: [both are] important fashion and entertainment areas,” said Danny Chalkley, Westminster Council’s cabinet member for environment and transport.

However, the new crossing will also be a sociological test of citizens’ expectations of personal space. It remains to be seen how frayed Londoners will cope with the multi-directional onslaught of barging pedestrians, something tolerant Tokyoites are well used to.

If approved, work will be complete by spring 2011, in time for the 2012 Olympics.

Oxford Circus today

Shibuya Crossing

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.

Bandai has scored a hit with this toy that allows kids to make sushi at home.

Toys that allow children to try their hands at making real food – from chocolate snacks and ice cream to bread and sushi rolls – have achieved remarkable success in Japan. By the end of 2008, toy manufacturer Bandai had sold 150,000 units of its sushi roll set for kids, “Norimaki Makki”, launched the previous summer.

On the marketing side, this and other products were developed out of a clever strategic cooperation between companies from various sectors. Toy manufacturers, food distributors and supermarkets have worked together not only on product development, but also creating sales promotion campaigns for example online and in stores as the products drive sales of both the toys themselves and the required ingredients. The success of the sushi roll set in particular is remarkable not only for the fact that this is the first time that a toy that utilizes no cute cartoon characters has turned into a major hit among young girls. It is also a manifestation of a broader trend of Japanese parents looking for ways spend more quality time with their children.

This shift has been widely cited as one of the key factors driving the success of Nintendo’s Wii game console. However, food toys offer parents several more benefits. Whereas with the Wii, parents are likely to take a beating at the hands of their kids, activities like making sushi rolls put mothers in the driver seat and allow them to teach their daughters practical cooking skills as well as lessons about the value of food.

With the current economic situation likely to continue well into 2009, the market is likely to see more products that offer consumers multiple benefits and at the same time help manufacturers drive sales. For the toy sector, it is interesting to note that products released so far have been exclusively targeted at mothers and daughters, so manufacturers are not doubt looking at similar toys for fathers and sons.

In the video game Like a Dragon 3, characters eat ramen to gain strength.

Instant noodle manufacturer Ace Cook is promoting its new product through as tie up with the popular Sega video game “Like a Dragon 3″ (sold in North America as “Yakuza 3″). In the video game, players eat ramen noodles to gain strength before battling opponents.  Ace Cook’s new product is named after a fictitious ramen restaurant that appears in the game. Although the shop does not actually exist, a special section on the Ace Cook website features a map, menu, and reviews.

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.