**********************************************************

Japan Internet Report No. 45 January/February 2000

**********************************************************

In this month's issue:

- Cell phone eclipses PC as e-commerce platform 

- New POCs continue to emerge in Japan

- Holiday online sales in Japan 

- TKAI opens new Japan office

- Japan Internet Report starts fifth year

- Interested in working with TKAI in the U.S.? 

**********************************************************

Cell phone eclipses PC as e-commerce platform 

The cellular telephone has now eclipsed the personal computer as a platform for direct sales of digital content to consumers in Japan. This is the theme of our new syndicated research report: Online Opportunities - Understanding Japan's Internet-enabled cellular telephone market.

This is a killer report - a 33-page, full-color document that provides unparalleled insight into Japan's exploding Internet-enabled mobile telephone sector. In addition to market and application overviews and analysis, it features more than three dozen shots of Japanese language cellular handset screens, accompanied by concise English language translations and commentary, plus numerous graphs and statistics, making it ideal for non-readers of Japanese. Our goal with this report is to answer the following questions:

- Why is the Internet-enabled mobile phone the fastest-growing consumer technology in Japan's history?

- What is the nature of the micropayment scheme that has made the cellular telephone more effective than the PC as an e-commerce platform for Japanese consumers?

- How many subscribers do the leading content providers have, and what kind of monthly revenues are they generating from their services?

- Which consumers pay for these pure digital content services? What are the most popular applications, both free and fee-for-service?

- What are the unique psychological and cultural factors driving this explosive market?

- What's next in Japan, and what are the implications for e-commerce throughout the rest of Asia? 

Take a look at the following URLs to see table of contents and sample pages, respectively:

http://order.tkai.com/skuOO-JWR-2000-PDF-SL.html
http://order.tkai.com/skuOO-JWR-2000_screenshot.html

The report can be purchased online with a credit card. Both PDF and print versions are available.

********************************************************** 

New POCs continue to emerge in Japan

New points of congregation (POC) continue to emerge as e-commerce depots in Japan. The POCs themselves have been around for years - what's new is their reconceptualization as ordering/distribution points for the new online/offline e-commerce hybrid model peculiar to Japan.

For example, Softbank subsidiary Softbank Commerce plans to team up with CarPoint and Nisseki Mitsubishi to sell car accessories and audio equipment online. Buyers will pick up orders at the most convenient of Nisseki's 13,000 gas stations across Japan. The partners plan to integrate the online and offline offers so that, for example, consumers who purchase tires online can arrange to have them installed by mechanics at Nisseki gas stations. The new venture is slated to start operations in May of this year, beginning with 200 gas stations primarily in the Tokyo metropolitan area.

In the meantime, the Ministry of Posts and Telecommunications (MPT), the government unit that runs the nation's postal service, plans this year to install 300 dedicated, simplified e-commerce terminals at post offices across the country. The devices will enable those with postal savings accounts to purchase gifts, travel tickets, and other merchandise. The MPT operates 24,600 post offices throughout Japan, and says it will develop a small version of the terminal so that it can be used at even the tiniest location. More than 80% of Japanese consumers have postal savings accounts, making the postal savings system the financial institution of choice in Japan, far exceeding banks, insurance companies, and securities companies.

Finally, no doubt you've read about the latest convenience store developments: 7-Eleven Japan's 7dream.com venture, and Sunkus's venture with Internet investment powerhouse Hikari Tsushin and others. The "conbini" model continues to gather momentum - at least in the press. Insiders involved with actual settlement say that Softbank's much-touted convenience store bookselling venture, e-Shopping! Books, is showing paltry sales...

What about train stations, which JIR touched on last September (www.jir.net/jir9_99.html). Experiments continue, but a compelling model has yet to emerge. 

Over lunch here in Tokyo the other day, the managing director of a major railway group confided to us that for the last 40 years, his company's strategy has literally been to "sit by the window, read the newspaper, and watch land prices go up." But that strategy fell out the window with the bursting of the bubble economy, and his group is now struggling to develop an effective way of integrating the Internet with the company's tremendous physical assets and POC infrastructure. That's a challenge fit for the new millennium...

**********************************************************

Holiday online sales in Japan 

All the actual results aren't yet in, but here's a sampling of December 1999 online sales forecasts from a collection of Japanese online merchants. What's noteworthy is that these numbers are up twofold to sixfold compared to 1998...

Company |------------| Sector |---------------| Forecast |



Sofmap ------- PCs, software, accessories -- 500 million yen

TwoTop ------- PCs, software, accessories -- 500 million yen

DK Shop ------ Consumer electronics --------  70 million yen

AVAC --------- Consumer electronics -------- 100 million yen

Terukuni ------Lighting --------------------  10 million yen 

Editor

To subscribe or unsubscribe to JIR, send any message to:

subscribejir@tkai.com 
unsubscribejir@tkai.com

Copyright 2002 by Ion Global