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| Japan Internet Report No. 10 November 1996 ********************************************************** In this month's issue: - Interview with Russel Cheng of Bates Interactive Asia - Industry news briefs - Signs of the times - Acronym of the month award ********************************************************** We had the chance for an online dialogue last month with Russel Cheng, General Manager of Bates Interactive Asia. Excerpts follow. - You were a pioneer in using the Japanese language Web to market on behalf of foreign companies. Please tell us what you can about that experience andwhat you learned from it. I started using the Internet in Japan from late-1993. I learned how to use Lynx since that was all that was available on Twics at the time. Because I had used bulletin board systems for about 10 years, I quickly picked it up,although, I have to admit, Lynx was confusing at first. I convinced mycompany, Bates Japan Advertising, to pay for my Net surfing habit. By 1994, a close friend of mine, Mark Schrimsher, helped me to put together a Web page demo for one of Bates Japan's car clients. I demonstrated andproposed a Web site before year-end 1994 to the client. It may have beenbefore its time since I ended up educating what the Internet was rather than what the Internet's Web could do for them. Needless to say, it was quite frustrating since I had already been convinced this was going to revolutionize the way companies would communicate, let alone advertise to consumers. I still have that original proposal and HTML files, just to remind me where this all started and who helped me get there. On a whim, I flew to Hong Kong to meet the Bates Asia president to try toconvince him that there was a valid business opportunity in Web marketing, as well as using the Internet to communicate with our 18 offices in Asia (Bates has 185 offices in 65 countries). He didn't quite understand everything I had to say, but understood the potential of the Internet and its effect on existing and new clients. By early 1995, Bates Asia's regional president invited me to speak and rub shoulders with regional management at a managing director's meeting. That would be a pivotal meeting since one account director said he had a client that would be interested in doing something on the Net. It also helped me solidify my role as Internet pioneer for the agency, which would eventually lay the foundation for Bates Interactive Asia, the company. Nokia Asia Pacific was our first client to take the plunge. Within two months of proposing the website, we launched the website with much fanfare in Asia. The website was in English only at the time. It was the first European mobile phone company with an Asian-based website for the Asian market. In the meantime, I also led a team of PR people from the agency and outside parties to help publicize our efforts in the Asian regional press as well as Japanese press. There was some activity by this time in the Internet community in Japan as there were a few Japanese-language Internet magazines starting up. We contacted them and were able to get articles and a few interviews. This PR lead to an increased awareness in the agency, and soon afterwards, I was meeting with more Japanese clients for the agency. Because we had done a Nokia Asia website, Nokia Japan soon were speaking with us about doing a Japanese-language website for them. Our PR was paying off in Japan since the number of viewers coming into the Nokia Asia website were mostly from Japan. It was a logical progression that we work with Nokia Japan to put them on the Web too. The work that we did in Tokyo for Nokia Asia and Nokia Japan, got Bates noticed in the rest of Asia as well. I ended up meeting many clients in Hong Kong, Singapore and Malaysia. We even got calls from our Sri Lanka offices and India offices to look into websites for their clients. We began working with our interactive offices in New York, London and Sydney on ways to work together on a global client. It seems many Asian countries were watching events in Japan and the Japanese Internet market was beginning to take root. I learned much from my experiences of building an interactive agency for Bates. Educating those around me along with clients was the first and foremost task. Surrounding myself with the smartest and most talented people was the next. I also learned that I had to present myself and our products in a way that most advertisers and marketers could understand since this was all so complicated and new. I also learned that Japanese companies were slow toadapt to this new media, but when they did, they grabbed hold of it with two hands and ran with it and now embrace it as a marketing communication tool. - What prompted your move to Singapore and switch to coverage of all of Asia rather than just Japan? I was asked to transfer from Tokyo to Singapore the end of 1995. This was to establish the physical office of Bates Interactive Asia and to be closer to our Nokia Asia Pac client who was moving their headquarters to Singapore (from Hong Kong) in 1996. It was also the galvanizing of the efforts I put into action back in 1994 for Bates. I was appointed General Manager of Bates Interactive Asia, covering the 18 countries we do advertising in. The intention was to use our successes in Japan as a showcase of the quality of work we could do for other clients in Asia. Two days before I left Tokyo, we also won a website project from Heineken Japan. Thus began a number of flights back and forth from Singapore to Japan. In fact, I travel to many other countries in Asia to meet with Bates agency staff and agency clients to sell them on this new media. But Japan is where the Internet has taken root the most and now seems to be bearing fruit. It's an exciting time and even more exciting to still be apart of it. More on that later. - How do you see the Internet evolving in Asia (outside of Japan) and where do some of the opportunities lie for U.S. companies? The Internet is growing faster in Asia than in the US, according to the last Net Wizards survey I saw earlier this year. In January 1995, I went to Hong Kong thinking I could find some English-language Internet magazines. I found none. In March, I found one magazine in Hong Kong. By June, there were racks and books dedicated to it. In Singapore there are only three Internet service providers. When I recruited for employees, I received many responses, but many had less than one year experience in doing anything Net-related. Nevertheless, the Internet and the Web is growing very quickly in Asia. Japan has a much better infrastructure for the Net than all of Asia. The ferocious competition in the Internet connectivity business is only going to benefit the consumers with lower prices, albeit some lower quality services may arise. I see opportunities for many US companies using the Internet. The first thing to do is find a partner in the region if they don't know the market here that well. Another thing to strongly consider is the languages. If you are targeting Japanese, it better be in Japanese. If Hong Kong or China are your market, you better do it in simplified and complex Chinese characters.Cultural awareness, not to mention that phone lines are hard to come by in some countries, are really important considerations. Lastly, you have to have a commitment for the long haul since decisions aren't made that quick in Asia or Japan for that matter. Specifically, I see markets for networking companies to help business to business communication happen quicker than it is. I also see distribution and logistics solutions on the Net in Asia, especially some of the smaller countries. - Japan is naturally of high interest to U.S. marketers, but could they be blindsided by ignoring Internet growth in the rest of Asia? Internet growth in Japan is booming, no doubt about it. The percentage of growth may be lower than in some Asian countries, but overall, the market is one big piece of the pie. My opinion is that there will be a few pockets of Internet development in the rest of Asia, such as Korea and Taiwan, thatwill become large Internet-related markets. But in general terms, I think Japan is as good a launching point for Asia for US companies with good products and services. - Will you be moving back to Japan soon? That's a possibility. I keep looking back at Japan, visit every two months,and think that the Internet market is just constantly growing. It's so exciting! More importantly, doing business on the Internet has made me realize that face to face communication is very important. And that is the Japanese style. P.S. Since the last time we chatted, our Nokia Asia Pacific website has won four awards-Singapore Best of the Web silver award (trophy, $6,000 and certificate), ShockWave Corporate Site of the Week October 9 to 16, WebWeek Boss Animation of the Day (for our Nokia 9000 simulation) and the Singapore Internet Community (Sintercom) for Best of Asia Pacific. We had a re-design and then a re-launch in September, and it was nice to be well received (http://nokia-asia.com/). Russel ChengGeneral Manager, Bates Interactive Asia (Singapore)Tel 65-297-9088 Fax 65-297-9033 Email russel@bates-asia.comhttp://bates-asia.com/ ********************************************************** Industry news briefs MEDIABANK to offer new subscribers free Internet access for three months In is a bid to survive increasingly intense competition in the Internet connectivity services sector, MEDIABANK will offer three months of free access to subscribers who sign up between November 1 and January 15. Newsubscribers will be required to pay a sign-up fee of 1,980 yen ($17.52), but monthly charges will be waived for three months. Those who cancel their subscriptions after the initial three-month period, however, may be subject to penalty charges. The company, which was established jointly by SOFTBANK and NTT DATA COMMUNICATIONS, currently has 15,000 subscribers and plans to boost this number to 100,000. Internet users prefer to go online from home, says survey Nearly 57% of Japan's Internet users go online from home rather than from the office, according to a recent survey by search engine provider CYBERSPACE JAPAN of Tokyo. The most recent of four online surveys conducted by CYBERSPACE found a growing number of women and older users online, with more than half responding that they started using the Internet less than six months ago. Approximately 70% of the respondents said they use Internet almost daily, and women accounted for just under 10% of all survey participants, according to the company. NTT announces low OCN rates NTT announced October 9 proposed rates for its new Open Computer Network (OCN), the comprehensive Internet connectivity service the telephone giant is expected to make available from early December. The new rate schedule, which must be approved by the MPT, proposes a monthly fee of 37,000 yen ($333) for a 128Kbps dedicated line, significantly below what is available today from independent connectivity providers. NTT also says it will offer individual dialup connectivity at 2,300 yen ($21) per month for up to 15 hours of access. The company says it will provide 10 yen ($0.09) per three minute dialup access from anywhere in Japan by April of 1998. TELEWAY JAPAN becomes first long distance NCC to offer Internet access TELEWAY JAPAN began offering Internet access services on an experimental basis October 14, becoming the first long distance new common carrier (NCC) in Japan to provide an on-ramp to the global computer grid. The company is offering LAN-to-Internet connections via dedicated lines for corporate customers, and dialup connectivity to individual users in a service menu that will compete head-on with rival NTT's OCN services. TELEWAY JAPAN will offer the services on an experimental basis until March of next year; it may then offer full-fledged commercial services after gauging response. ********************************************************** |
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