By Mike Rogers, MarketingJapan, Universal Vision Ltd., and Smart Research 
& James Santagata, Principal Consultant, SiliconEdge

TV as a Mirror of Society

I met the boss of the biggest international television network in the world the other day. He is a Canadian. He travels all over the world and, because he is in the TV business, he told me that one of his favorite things to do in every country was to judge by TV commercials what things were important to that particular society. 

Japan's TV commercials? Insurance for this or that; home sales; automobiles; financial instruments and plans; candy, cosmetics, fast food... Companies like Zurich, Sekisui, Kanebo.... Japanese commercials that soft sell and are emotive commercials.

I think that's right. 

He also told me that he was "astounded" by just how many over the counter drug medication commercials there were on US TV all the time. US TV commercials? Drugs, Cholesterol, Machismo ("my ding-a-ling is bigger than yours" commercials); fast food; commercials to make your dick hard, make it soft, put you to sleep, keep you awake, lower blood pressure, lose weight; not to mention commercials galore for people with extreme anxiety and panic attacks.

Oh, and don't forget the side effects disclaimers! Cholesterol, etc.

By Kirk Spitzer, Special for USA TODAY

Some top hotels and high-end department stores admitted serving cheaper alternatives instead of the pricey items ordered from menus.

STORY HIGHLIGHTS

• Some restaurants admit mislabeling menu items
• Prized Shiba prawns from Tokyo Bay were just shrimp from India
• Some companies have received the ultimate penalty in Japan: public shaming

TOKYO — This is a city where people spend hours in line for the trendiest bowl of ramen, drop $100 on a gift box of fruit or entertain clients several nights a week at chic restaurants.

So the news that prestigious restaurants have been swapping cheap substitutes for pricey menu items has created a major scandal that threatens to taint Japan's coveted worldwide reputation for exquisite cuisine.

"This is a foodie nation," says Jeff Kingston, professor of Asian Studies at Temple University's campus in Tokyo.

"People are proud of all the Michelin stars, and they generally eat very well, so the scandal has provoked outrage," he says. "People believe that this is simply a scam to improve the bottom line by selling cheap food as expensive cuisine."

Some of Japan's top hotels and high-end department stores in Tokyo, Sapporo and elsewhere admitted to a shocking transgression of ethics. The bait-and-switch was accidental, malefactors say, but at some spots it's alleged to have gone on for years.

People who ordered prized Shiba prawns, a rare and expensive delicacy from Tokyo Bay, were sometimes served bulk shrimp caught off India.

Wagyu beef refers to a special breed of cattle in Japan that is sometimes massaged by hand and fed beer to give its meat a highly marbled look and fattier content.

Some who ordered it got Australian beef. Organic vegetables from small Japanese specialty farms were actually shipped in from China.

The scandal has riled Japan's Consumer Affairs Agency, which says it will prosecute any business that intentionally misled diners. The agency said it will head off damage to Japan's reputation by proposing tougher penalties for food labeling violations, perhaps even jail time.

Japan's luxury Okura hotel chain executives bow their heads at a news conference Nov. 7 in Tokyo to apologize after the hotel served meals made with ingredients falsely labeled as being of top-end quality, such as Pacific white shrimp advertised as the much pricier Shiba variety.(Photo: Getty Images)


Some have received the ultimate penalty in Japan: public shaming.
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In Shinzo Abe’s Japan, diamond rings and logo handbags will cost more -- to buy and to sell.

Tiffany & Co. (TIF) and Harry Winston stores will follow Louis Vuitton in raising some prices to offset the yen’s 11 percent slide since Prime Minister Abe took office Dec. 26 with a promise to tame the currency’s strength and revive Japan’s exporters.

The increases, including the biggest ever at Vuitton Japan, may curb demand in the second-biggest market for personal luxury goods. Brands that don’t have Vuitton’s star wattage face a decision: Boosting prices may dent sales, while leaving them unchanged will cut millions of dollars out of profit.

“People who can afford to pay 500,000 yen ($5,200) for a Bulgari watch won’t care if the price is raised to 520,000 yen,” said Mikihiko Yamato, deputy head of research for JI Asia inTokyo. “But if a lower-end brand bag had a price hike of, say, 5,000 yen, some people might give up on buying it.” The Roman jeweler is one of about 60 brands owned by Paris-based LVMH Moet Hennessy Louis Vuitton SA (MC), the world’s biggest luxury goods maker.

Japan’s economy has been mired in deflation for the last 15 years, prompting luxury goods makers to divert their attention to emerging markets offering rapid growth, such as China. Still, close to 10 percent of all personal luxury goods sold in the world were taken home by Japan’s shoppers in 2012, according to consultancy Bain & Co. Sales rose 8 percent to about 20 billion euros ($26 billion) last year and were little changed in yen terms, according to the consultancy.

“Japan is still a very profitable region,” said Erwan Rambourg, a Hong Kong-based consumer analyst with HSBC Holdings Plc (HSBA). “Staff costs and rents are not increasing much whilst sales productivity in Tokyo is still very high.”

The prices of vegetables produced in Fukushima Prefecture at Tokyo Metropolitan Central Wholesale markets have collapsed in fiscal 2012, two years after the outbreak of the crisis at the Fukushima No. 1 nuclear plant, a Mainichi Shimbun investigation shows.

The Japanese government on April 1, 2012 introduced stringent food safety regulations, setting a radioactive cesium limit of 100 becquerels per kilogram. Despite the new regulations, Fukushima vegetables have taken the brunt of radiation rumors, prices declining even further than they did in fiscal 2011, the first year of the nuclear crisis.

The Mainichi tracked price increase and decrease rates (annual transactions divided by total quantity) of vegetables at the Tokyo wholesale markets by classifying vegetables in four categories -- nationwide, eastern Japan, western Japan and Fukushima -- against the base figures of fiscal 2009.

In fiscal 2011, the prices of vegetables in the first three categories jumped around 4 percent over fiscal 2009, but those of Fukushima vegetables dropped 5 percent. In fiscal 2012, the prices of vegetables in the nationwide category dipped 0.2 percent from fiscal 2009 but the prices of vegetables from Fukushima Prefecture plunged 18.7 percent.

According to 2010 Agriculture, Forestry and Fisheries Ministry statistics and other sources, over 20 percent of all vegetables shipped from Fukushima Prefecture were traded at the Tokyo wholesale markets.

A vegetable dealer in Tokyo says, ''There are no takers (for Fukushima vegetables) even now.

by Todd Crowell 04/05/2013

TOKYO – The weather here is turning warmer, the cherry trees are blossoming and the waiting rooms in clinics that specialize in nose and eye problems are filling up with people suffering from runny noses, sneezing and bloodshot eyes.

Tokyo is known for many things: the Imperial Palace gardens, cherry trees in the springtime, super-crowded commuter trains. But it has a more dubious distinction. It is also the world capital for allergies, especially for hay fever, known to the Japanese as pollen sickness.

Of course this is no secret to the bulk of the people living here, especially the estimated six or seven million who are prone to pollen allergies (based on general rule that 15- 20 percent of the Japanese population suffers from hay fever).

Tokyoites know that by the time the plum trees start to blossom in March, it's time to stock up on antihistamine tablets, eye drops, herbal medicines and face masks. Those most susceptible to pollen sometimes also avail themselves of allergy shots and other more exotic remedies.

One might wonder, why Tokyo? The answer goes back to just before World War II, and just after its end. In those hardscrabble years, people denuded the forests of the nearby mountains to repair burned out homes, keep warm and cook food.

In the 1950s and 1960s the Japanese government undertook a successful reforestation program, planting millions of cedars, a cheap, fast-growing native tree and a prodigious pollen producer. Unlike the US, where ragweed is the main pollen source, most of Japan's suffering is caused by cedar and cypress trees.

It was expected that these trees would be cut to produce timber, but Japan has found it more economical to import lumber from the US and Canada, so they have been left standing. Now 40 to 50 years old, they have reached their pollen producing peak, pumping literally tons of the irritant into the atmosphere.

Amazon.com Inc.'s sales in Japan surged 18.6% on the year to 7.8 billion dollars in the year ended Dec. 31, making the U.S. giant the top Internet retailer here.

Amazon.com's country-based sales were made public for the first time through an annual report filed with the U.S. Securities and Exchange Commission.

The Japanese sales tally, totaling roughly 730 billion yen based on the current exchange rate, would put Amazon.com at No. 10 or so among brick-and-mortar and online retailers here, lifting it past consumer electronics seller Edion Corp.'s (2730) projected 720 billion yen for the year ending March 31.

Rakuten Inc. (4755) is the largest Japanese online retailer, with its virtual mall, travel-booking business and other Internet-based services ringing up sales of 285.8 billion yen for the year ended Dec. 31.

But its revenue comes primarily from commissions from virtual mall tenants and other sources, while Amazon.com procures a wide range of products and sells them to consumers.

Participating stores in Rakuten's virtual mall have combined sales of roughly 1.3 trillion yen.

Amazon.com, which made its Japanese debut in 2000, does not release its total online sales including those from independent sellers in its Amazon Marketplace. If these sales are included, the U.S. firm may likely come close to Rakuten in total sales.

Japan's online retail market is expected to grow 15.9% to roughly 10.2 trillion yen in fiscal 2012, according to the Nomura Research Institute (4307).

The attitudes and behavior of Japanese consumers are shifting dramatically, presenting opportunities and challenges for companies in the world’s second-largest retail market.

After decades of behaving differently, Japanese consumers suddenly look a lot like their counterparts in Europe and the United States. Celebrated for their willingness to pay for quality and convenience and usually uninterested in cheaper products, Japanese consumers are now flocking to discount and online retailers. Sales of relatively affordable private-label foods have increased dramatically, and many consumers, despite small living spaces, are buying in bulk. Instead of eating out, people are entertaining at home. Workers are even packing their own lunches, sparking the nickname bento-danshi, or “box-lunch man.”

This fundamental shift in the attitudes and behavior of Japanese consumers seems likely to persist, irrespective of any economic recovery. That’s because the change stems not just from the recent downturn but also from deep-seated factors ranging from the digital revolution to the emergence of a less materialistic younger generation. An examination of the strategies of leading Japanese and multinational companies, along with interviews with more than two dozen executives of the most significant retail and consumer industry players, shows how consumers are changing and why (view our video interview with three of these executives, below). It also suggests the kinds of moves—such as rethinking relationships with customers and becoming more flexible about sales channels—that businesses must take to seize the opportunities created by Japan’s new normal.