Bits and bytes take a great big bite of Japan's market
By Hau Boon Lai, The Straits Times, 17 September 2000
Japan, often criticised for being slow in taking advantage of the IT
revolution, is experiencing belatedly an Internet and electronic
boom. The Sunday Times wraps up the last of a four-part series with a
look at what's in store for Japan's consumer scene as its tech-savvy
people embrace the digital age.
TOKYO—A quiet revolution took place about a month ago. A subway
train operator rescinded its ban on mobile phones on its vehicles
instituted earlier this year because commuters were displeased with
it.
An official appeal to uphold the ban—that pacemakers would stop
when a mobile phone is in use nearby—fell on deaf ears in a
society known for its partiality to authority.
Japanese people are buying mobile phones, or keitai, by the busloads
and they want to use them wherever they are.
It is a parable of the times Japan is in. The electronic revolution
has already taken place here.
Computers the size of a palmtop and keitai which look more like little
toys than communication devices are selling like the proverbial
hotcakes.
With its Internet access capability, the mobile phone, especially, is
making its presence felt in popular culture and becoming as much a
part of one's clothing as the shirt.
Take Ms Hitomi Shibata for instance. To the 25-year-old office clerk,
life can be divided into pre-keitai days and now.
She is one of the 60 million keitai owners in Japan, many of whom
confess that they cannot imagine a life without it or imagine being
uncontactable 24 hours a day.
Their numbers exceeded the land-line telephones earlier this year, a
development which received little fanfare but has great implications
for Japan's future as a hub for e-commerce.
More than 10 million keitai phone users are hooked up to the
Internet. Telecom giant NTT DoCoMo has a stranglehold on this
particular niche of the market, with some 80 per cent of subscribers
of its i-Mode function.
By March this year, there were some 29 million Internet users. It has
been estimated that since then, some 45,000 new personal computer
users and 75,000 new mobile phone subscribers access the Internet
every day.
Both PCs and keitai are flying off the shelves.
It is no exaggeration to say that there is a mobile phone sales booth
at every street corner, and off it too.
A survey by advertising giant Dentsu found that PCs ranked top among
women as their
E-commerce is making big strides—one in five Japanese make at
least one purchase through the Internet each month.
Any company worth its salt is making a stab at it, beautifying their
sites with cartoon characters to attract the attention of users and
buyers.
Thousands of companies have set up websites which conform to the
i-Mode web page requirements. Research is going on over how orders for
goods can be made through the keitai Internet page.
The PC penetration rate is still considered low by American standards,
with Japan's 20 per cent to the US' 41 per cent but in
today's parlance, this is seen as a sign that the boom will go on
for some time.
The PC and mobile phone booms are also fuelling the advance of related
products and industries. Even companies dealing with the ringing tunes
for keitai have sprouted.
Sales of products like mini-printers, Internet music download
software, Sony's memory stick and digital cameras have seen
increases of up to 300 per cent, thanks to the desire to send
pictures, download music and print out the pictures received.
People like her are giving the telecom industry a big fillip in an
economy gripped by a malaise for the past decade from which it has yet
to recover.
Each e-mail sent through the keitai costs just two to four yen (three
to six Singapore cents), but Ms Shibata sends more than 100 e-mails a
month. She also receives just as many e-mail replies.
She also logs on regularly to the Internet, checking out the latest
websites available.
New entrants like entertainment giant Yoshimoto have worked on
providing as much value as possible within the small frames of mobile
phones, like its own cartoon characters for users' downloading.
Giving an example of how data communication can make money for many,
Merrill Lynch's Ota noted that NTT DoCoMo charges 9 per cent in
commission for any transaction done over the i-Mode.
He argued that many websites will be able to attract advertising
revenue, and push data communication into the profitable
stratosphere—soon.
The government has also been playing a vital role in the current
boom. An ambitious five-year plan announced recently envisages all
public schools to be linked to the Internet by next year and PCs in
every classroom by the year 2005.
Laws governing e-commerce are also being fine-tuned, and liberal tax
incentives given to Internet start-up ventures.
The results are already being felt, and seen.
In Shibuya's so-called Bit Valley, a loose association of
Internet-based ventures operating in the fashionable district, young,
jeans-clad millionaire entrepreneurs are fast rising in numbers,
focusing attention on the electronic revolution.
Prime Minister Yoshiro Mori's recent trip to India's Silicon
Valley in Bangalore was in part due to a high demand for IT sector
workers in Japan, where the demand for them is fast outstripping
supply.
Keio Railways may be doing the Japanese economy a clear
service. Before long, commuters may be utilising their time on the
company's trains to complete their purchases over their mobile
phones.
The buys may be of physical goods or original and cute cartoon
characters.
Whatever they are, Japan would have taken one more step towards
realising the potential of e-commerce.
In our surveys, commuters were strongly of the opinion that they
should be allowed to use their keitai even when they are travelling on
the trains,
said a spokesman for Keio Railway Co in announcing the
rescinding of the ban.
must-buy
and came after cars for men.
One can hardly find anyone carrying a pager these days,
noted
Mr Kiyohisa Ota, Merrill Lynch Japan's telecom analyst.
Voice communication is reaching saturation point. The future for
Japan is data communication,
he predicted. And Japan is in a good
position to benefit from such a development, with its mobile phone
Internet technology.
My keitai bills are about 10,000 yen a month, but it's worth
it,
said frequent mobile phone user Ms Shibata.