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| Japan Internet Report No. 21 November 1997 ********************************************************** In this month's issue: - Update on number of Internet users in Japan - More on travel - Push technologies hitting Japan - Online shopping gets a boost - Interview with Todd Newfield of Factcomm - Industry briefs - Review of PointCast Network's Japan version - URL ubiquity in Japan - New subscriber rundown ********************************************************** Update on number of Internet users in Japan How many Internet users are there in Japan these days? Recent surveys by Nikkei, the New Media Development Association, and IDC Japan show 7.89 million, eight million + and ten million, respectively. Sounds like everyone agrees that there are close to, if not more than, eight million users in Japan today. While definitions of "user" vary, findings by these three firms support our contention that the size of Japan's Internet user population is second only to the U.S. ********************************************************** More on travel Travel applications have been on my mind over this last month, since we're preparing to give a November 14 travel industry seminar on effective offshore marketing to Japan via the Internet. I think its significant that the Japan Association of Travel Agents (JATA) has chosen "Online into the New Century" as the theme for its next Congress to be held in Tokyo later this month (see http://www.jata-net.or.jp). I'm hoping some JIR subscribers might attend and e-mail us some impressions to be shared with other readers in the next issue. One interesting new service that launched recently is the cleverly-named Tabi Navi by the same folks who operate the Hole-In-One search engine. Tabi Navi <http://www.tabinavi.com> is essentially a well-done Japanese language interface for the Internet Travel Network <http://www.itn.com>, and the first comprehensive, localized international airline reservation search engine with a localized interface in Japan. ********************************************************** Push technologies hitting Japan Applications based on push technologies are becoming available in Japan. PointCast has launched its Japan version (see Rick Noelle's review in this issue of JIR), and Daiwa Research Institute is getting ready to offer a new service whereby subscribers can register threshold prices for stocks of interest, and thereafter notifications are "pushed" to them when prices exceed those thresholds. Very clever application. ********************************************************** Online shopping gets a boost JCB, Japan's largest credit card company with over 35 million members nationwide, has finally decided to endorse the SET 1.0 protocol. In fact, the company is going to set up its own Internet mall (see Industry Briefs). Its about time, since thousands of consumers in Japan have already been using JCB cards to buy millions of dollars of merchandise from U.S. vendors! JCB had officially frowned upon the Internet purchasing activity, but can't ignore it anymore. Can't stop progress... ********************************************************** Interview with Todd Newfield. This month we enjoyed an online chat with Todd Newfield, President and CEO of Tokyo-based Fact Communications. - Please give JIR readers a brief account of the Todd Newfield story to date, including how you came to Japan, your current activities, and so forth. I wound up in a Japanese Securities company in 1986 after grad school. I kept hearing though, "yeah, yeah, we know how to raise capital here, but how do we get the Japanese to buy our damn products?" This obvious need for marketing talent and the disappointing level of information technology at work motivated me to switch into high-tech marketing. Major career change. It was right when Ben Johnson lost his Olympic Gold for doping. As a Canadian I took a lot of flack at work for this, so I used it as an excuse to get out. I then joined a major Japanese sales promotion and catalog merchandiser. Talk about grassroots marketing. I planned and managed sales and trade promotions for everything from cars to liquor and stamina drinks. Launched Parliament Lights for Philip Morris and ran the first telepromotions here for brands like Lark and Toyota. It was great. Then I set up Fact Communications in 1993 to plan and manage these interactive media campaigns and database driven promotions for a number of agencies and brands here. Our move into the Internet was in 1995 when we planned and launched the Cybernet Cafe in Harajuku. Produced a very cool 3D multi-user chat space for the Web. And have since then kept expanding our content, and our Web technology products. - What is the most interesting application of Japanese language Internet technology you've seen to date? Again OZ CYBER CITY, the first 3D chat space in Japanese on the web was definitely the most interesting, although the business model was naive. Generated over 7 million dollars worth of free pub, but avatar-based shopping in cyberspace did not take off. Now our own Zo Dynamic Webware is pretty interesting. Its a really high-level Internet-specific language we have created which enables any HTML competent producer to create some pretty amazing stuff. We use it to create dynamic Web sites which target and personalize content based on visitor profiles and actions when they visit a site. Time Magazine Japan, Global OnLine, British Insurance Group, Shiseido, NTT are some of our clients who now run their sites on ZO. - You've been asked to head up the ACCJ's Electronic Commerce subcommittee. Could you tell us a bit about this group's aims and how you see yourself leading it? The advent of electronic commerce (EC) as a viable means of marketing and transacting goods and services over the Internet or digital networks will affect everybody, everywhere. Borderless and potentially very efficient, it has the potential to revolutionize the way business is done in every industry and every corner of the globe. This committee seeks to be at the forefront of this dynamic and exciting time in history by focusing on the issues that are most relevant especially here in Japan. Specifically, we serve as a forum for business and government to exchange ideas, information, and network on matters relating to Electronic Commerce. We also establish liaisons and promote intercourse with Japanese business, government, and organizations, which are involved in Electronic Commerce issues. We have some interesting seminars coming up as well on both infrastructure and content topics. If some of your readers want to get involved they can contact me. todd@factcomm.co.jp - What do you see in store for the Japanese Internet down the road and what kind of opportunities does it present for foreign companies? By the year 2000, Japan will be second only to the U.S. in the number of Internet users and the transaction volume of goods and services over the Net. Foreign companies will no longer be hindered by the structural barriers to do business here - i.e. no need to set up a shop or distribution infrastructure to compete. Japanese companies will have to respond, and hypergrowth in Japanese Internet commerce will take place. Through the Internet, business to consumer transactions will explode especially in insurance, travel, investments, and other information intensive industries. If you have ever talked with a Japanese insurance salesperson here - you'll definitely understand why buying over the Net make a lot more SENSE. Foreign companies will find many new opportunities here. B to B over the next two years will finally take-off too - and we will see auctions, request for bid sites, and even large intermediary catalog sites for comparative shopping and logistic support - start to appear on the Net. This will indeed strengthen foreign company's ability to bid on projects and sell to Japanese business. Individuals will find new freedom of expression through the Internet, and this will shock many Japanese corporations used to controlling all aspects of their corporate and brand image. No agency controls what appears in this medium - and that's a first for Japan. ---------------------------------------------------------- Todd NewfieldPresident / Fact Communications Inc. www.factcomm.co.jp todd@factcomm.co.jp / Tel 03-3719-8366 Fax 03-3719-5506 ------------------------------------------------------------ Interactive Marketing Solutions for a Digital World ---------------------------------------------------------- ********************************************************** Industry briefs First major ISP casualty ASCII will completely withdraw from the Internet connectivity service provider (ISP) business. The company currently operates ASCII Internet Exchange (AIX), a fee-for-service ISP with 55,000 subscribers, and ASCII Internet Freeway (AIF), a free advertising-supported ISP with approximately 260,000 subscribers. It will cancel AIF service on December 24 and AIX service on January 24. A company spokesman said the ISP business is becoming increasingly unprofitable for independent firms like ASCII in the face of competition from major players such as NTT and FUJITSU. ASCII will become the first ISP with more than 200,000 subscribers to quit the business, say industry watchers. The company will encourage its subscribers to switch to an Internet service offered by MATSUSHITA ELECTRIC. JCB finally gets with the program Tokyo-based JCB, Japan's largest consumer credit card firm, will endorse the SET 1.0 protocol cooperatively established by VISA INTERNATIONAL and MASTERCARD, and start its own Internet mall in mid- December. The company hopes by next summer to have as many as 1,000 online shops using its own settlement system based on SET 1.0. FUJITSU will handle the payment gateway, with VERIFONE and CYBERTRUST handling the electronic wallet and verification functions, respectively. JCB has approximately 35 million cardholders in Japan and boasts the largest number of merchants and the highest transaction volume of any credit company. New estimate of number of online users Japan has 7.89 million users of the Internet and various commercial online services, according to a study implemented by the New Media Development Association. The non-profit organization, whose membership consists of ISPs and commercial online service providers, found that online users are steadily migrating from commercial online services to ISPs, and that the number of new commercial online services that started up in 1996 was only 1/3 the number in 1990, the peak year for such startups. The survey also found, however, that the torrid pace of new entries into the ISP market has begun to slow, the result of intense price and service competition. Buy a car, get free Internet access NISSAN MOTOR CO. will start providing three years of free Internet access services to new car purchasers. The company will start the program on an experimental basis in February 1998 and plans to extend the offer to cover all car models in 2000. The company's strategy is to use e-mail to follow up with purchasers, rather than costly direct mail or telephone contacts. The offer will initially be limited to three car models and portions of the Tokyo Metropolitan Area. New car purchasers will receive a CD-ROM that will automatically take the user to a NISSAN access point and from there to the Internet. Online banking experiment to start up ASAHI BANK will on November 18 start experimenting with an Internet-based service that will let users make bank-to-bank and other funds transfers online. The new service will be available 20 hours a day, from 8am to 4am the next morning with plans to move to 24 hour operations in June 1998. If successful, ASAHI BANK will become the first Japanese bank to offer 24 hour Internet services. If the experiments go well, the bank may move toward a "virtual branch" concept that would enable customers to conduct nearly all their bank business via the Internet, according to a company spokesman. Another boost for online shopping SEINO TRANSPORTATION, Japan's largest trucking industry firm, and NEC have cooperatively developed Web Shipping Support System, a system whereby orders generated via the Internet are transmitted directly to SEINO and fulfilled immediately, with consumers able to check delivery status in real-time online. The company claims the new system is the first in Japan that automatically provides order delivery status online in real-time. The system will go into use October 23 on NEC's VMALL, an Internet mall with 60 stores. SEINO hopes the new system will help improve its standing in the personal parcel delivery sector, where YAMATO TRANSPORT is the market leader.
NOTE: Some JIR industry briefs appear later in Computing Japan magazine under modified titles. JIR is co-sponsored by Digitized Information, Inc. of Tokyo, a leader in providing daily English language coverage of electronics industry developments in Japan. For more information on monitoring electronics industry developments in Japan, or to receive a free e-mail sample of service offerings, please contact Digitized Information at diginfo@gol.com |
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