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Japan Internet Report No. 63 December 2001
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In this issue:
- Cat videos won't solve FOMA problems
- Master list of Marketing Mistakes
- Japanese e-commerce by the numbers
- Welcome to the family
Cat videos won't solve FOMA problems
FOMA, a world-leading, third-generation cellular telephone service recently launched by NTT DoCoMo, is getting poor marks from Japanese consumers.
The problem is more fundamental than the well-publicized software glitches and handset recalls. For a better clue to the source of DoCoMo's woes, we turn to a recent full-page ad in the Asahi Shimbun for the company's imotion (full-motion video) service.
The text in the ad includes this snappy copy: "In addition to i-mode content, enjoy the thrill of full-motion imagery in the palm of your hand."
What strikes me, though, are the sample video frame images featured next to the N2002N handset advertised. They show, well...a cat. A reasonably cute but otherwise unremarkable cat, doing nothing more interesting then peaking around from behind a chair leg.
Let me see if I have this advertising message straight: After spending somewhere around U.S. $500 for the world's most advanced commercially available cellular telephone, I can use it to... watch full motion video imagery of my cat?
And based on DoCoMo's FOMA packet rates, I can expect to spend approximately U.S. $1.25 for the extraordinarily compelling experience of viewing 12 seconds of full motion cat video footage?
If the company can't come up with more attractive applications than cat videos, imotion is going to continue to founder. Current imotion offers include news and television program clips, but even DoCoMo's own content providers have their doubts. According to one, "it costs 160 yen in packet fees just to see one 12-15 second video clip. At those rates the service is unlikely to catch on."
Says another, "DoCoMo launched imotion in typical technology-driven fashion, in spite of seeing no substantial market demand for this kind of service..."
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Master list of Marketing Mistakes
Japan Internet Report currently has just under 4,000 subscribers, and we're pleased that they sound off as often as they do.
Readers frequently pose questions along the lines of the following: "Given the number of companies you see entering the Japanese market, what are some of the most common mistakes I should know about?"
Since it's tough to respond individually to this kind of inquiry, we are taking this opportunity to offer our Master List of Marketing Mistakes.
Mistake #1: Believing you know what to do
Prior to engaging us here in Tokyo, one company had already spent well over U.S. $1 million building something that addresses the wrong audience in the wrong way.
You'll have plenty of challenges without going in with your eyes closed. And when times are tough, the tendency is to focus on tactical initiatives and spend money only on things that you can "touch." This can be a very costly mistake and can even jeopardize your long term prospects in the market. You may want to limit the scope according to your budget, but don't enter the market without a professional opportunity assessment and/or concept and planning phase. In other words, "make sure your ladder is leaning against the right wall before you start climbing."
Mistake #2: Believing that English will suffice
This is so obvious that I almost left it off the Master List of Marketing Mistakes, but some people still don't seem to get it. In Japan, only 5% of the population reads English comfortably, and even those people understand better when the content is in Japanese. Moreover, a 1998 (don't worry, it's still relevant) study by Forrester found that 1) people are likely to spend twice as much time at Web sites presented in their own language, and 2) they are three times more likely to buy from such sites.
Mistake #3: Believing that "translation" will do the trick
This is probably the most common misconception, and perhaps the leading cause of failed international online efforts. Understand the difference between internationalization, localization, globalization, and translation. Then of course, there's <transcreation>. As those readers who speak and read Japanese can attest, it's impossible to gain mastery of the language without understanding the culture. Humor, idioms, icons, and images are just a few things that can't simply be "translated" into Japanese. They must be <transcreated> - crafted anew in the target language to convey the intent of the original text, yet be compelling enough to spur the reader to action within a completely different cultural milieu.
Mistake #4: Assuming that double-byte technical hurdles are easily cleared
It's not that easy...and usually takes more time than you think it will. Our own experience helping clients falls in line with a survey from Forrester that reveals the two greatest hurdles to be 1) software incompatibility, and 2) establishing multilingual content management processes. Even if the core applications selected are double-byte enabled, the way you use them can literally make or break the Japanese characters.
Mistake #5: Thinking that double-byte technical hurdles are insurmountable
On the other hand, some people think that the conversion to double-byte is insurmountable and don't make a sufficient effort to understand the steps to success. It's not impossible. Many companies successfully operate in Japanese online. It takes planning and care to do it, but it is definitely feasible. There is significantly more available in the way of tools, information, experience, and expertise than there was even a year ago. You'll save yourself a great deal of time, money, and frustration if you 1) build from the beginning an internationalized site or application, and 2) have people with double-byte experience help you with the right processes and tools to avoid costly pitfalls.
Mistake #6 Thinking it's only about language and technology
Compelling and culturally-appropriate product or service offers are crucial; hot sellers in your home market may fall flat in Japan. Other critical considerations include import restrictions, local law, and social customs, among many others. Local-language content and a robust infrastructure then become starting points for playing the bigger game.
For more help sorting it all out, call me in Japan at 813.5777.3810. In the U.S., contact Steve Kemper at 503.235.4433 x 100 or <steve.kemper@us.ion-global.com>.
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Japan e-commerce by the numbers
Merry Christmas from Nomura Research Institute! They tell us that Japan's e-commerce market will expand roughly six fold to 6.14 trillion yen (U.S. $4.8 bil) by 2006. The big winners will be business-to-consumer (growing 5.8 times from 940 billion yen in 2001 to 5.5 trillion yen), consumer-to-consumer (ballooning from 110 billion yen to 640 billion yen), and electronic learning (19 billion yen in 2001 to 100 billion yen). We can thank the ISP price wars in large part for this rosy outlook. Time spent online - and therefore money spent online - is expected to go north as ISP charges continue south.
Entertainment Plus (www.eplus.co.jp) sold about U.S. $30 million worth of tickets over the Internet last year, and expects this number to reach about U.S. $64 million this year. Meanwhile, entertainment magazine publisher Pia and convenience store operator Lawson expect online ticket sales in 2001 to reach U.S. $40 million and U.S. $24 million, respectively.
NTT DoCoMo servers receive approximately 950 million e-mail messages every day, but about 760 million are addressed to accounts that don't exist. In other words, 80% of i-mode mail volume is spam, sent out primarily by programs that automatically generate e-mail addresses. Industry insiders estimate that 90 percent of this spam consists of invitations to join "dating clubs." So it's not hard to imagine that most of the 190 million or so e-mail messages that are actually received by i-mode users every day are also "dating clubs" solicitations. Sex continues to sell, no matter the medium...
Nissan Motor plans to save 60 million yen annually by procuring stationery, cleaning supplies, and other "maintenance, repair and operation" (MRO) materials online. The company started the effort in October and has already brought 120 group firms and directly-managed car dealerships into the new online purchasing network.
Nearly one-fourth of all households in Japan will have high-speed (128Kbps or greater) Internet connections by the end of 2002, according to the Ministry of Public Management, Home Affairs, and Posts and Telecommunications. The number of cable Internet users has already reached 1.2 million, outstripping the number of cable television subscribers, according to newspaper reports. Meanwhile, on the home front I'm torn between 1) going for new cable connectivity now, and 2) waiting for Usen (www.usen.co.jp) to expand its $39-per-month, 100Mbps fiber-optic-based Internet connectivity service to my neck of the Meguro woods...
Matsushita Electric Industrial is proud to be the first in the world with a new bidet toilet seat that can measure your body fat ratio. But the fun doesn't stop there. The unit will also track your height, weight and - especially handy - gender, all during a "routine sitting." You may want to pass if you do your reading on the throne - a buzzer sounds automatically (to alert family members of a possible emergency) if the seat is in "continuous use" for 30 minutes or more...
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Welcome to the family
This month we welcome new readers from locations including Japan, the U.S., Germany, China, the UK, and Singapore, working for organizations such as Bain & Company, Cisco, Oracle, and the U.S. Postal Service, to name a few. Welcome to the family!
Wishing you and yours the greatest love and happiness this holiday season and in the coming year, I remain,
As ever,
Tim Clark
Editor
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Copyright 2002 by Ion Global. All rights reserved.
Tim Clark
Strategy Director, Japan
Voice 813.5777.3810 Fax 813.5777.3817
Ion Global <http://www.ion-global.com>
strategic e-business integration
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