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Japan Internet Report No. 28 July 1998
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In this month's issue:
- Careers on-the-line in Japan
- Employment in Japan
- Interview with Terrie Lloyd of LINC Media
- Industry Briefs
- Food for thought about the Japan market
- Book of the Month
- eCOMMERCE @lert covers Japan
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Careers on-the-line in Japan
Employment-related services are a key part of the online scene in Japan today. A search
using the keyword "tenshoku" (career change) produced over 9,000 hits on a
leading Japanese search engine, and there are dozens of employment agencies, recruiters,
and temporary staff firms active on the Internet. Recruit's Web site alone
(www.recruit.co.jp) features six separate job and career services.
This month Terrie Lloyd provides some perspective on the employment-related online sector,
introducing Dai-Job, a first-of-its-kind, online Japanese language application designed to
help employers market directly to qualified prospects. Dai-Job is a clever application
that takes advantage of two key trends: 1) use of the Internet has been breaking down
traditional recruiting procedures in Japan for several years now, and 2) the recession and
dominance of U.S. firms in the IT and finance sectors is making employment with overseas
companies increasingly attractive to competent workers in Japan.
What's more, e-mail and the Web provide an intriguing combination of privacy, anonymity,
and intimacy that uniquely suits the Japanese communication style, making the Internet an
excellent forum for career-related discussion, research and marketing. It's another reason
we're so bullish on use of the Internet, not simply as a channel of commerce, but as a
tool for effective, direct communication with consumers and businesses in Japan.
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Employment in Japan
A number of JIR are readers have written concerning employment in Japan. One place to
start might be Asia-Net (www.asia-net.com), though I must caution that I have never known
anyone to successfully unsubscribe from their e-mail list :)
Another place to try is Computing Japan magazine (http://www.cjmag.co.jp), which in
addition to offering internships, is a source of information on jobs with other firms, and
a good starting point for Japan-related Web surfing.
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Interview with Terrie Lloyd of LINC Media
Some JIR readers know Terrie Lloyd as the publisher of Computing Japan magazine, but many
probably aren't aware that he has founded a string of successful businesses in Japan,
including LINC Computer, which had 120 employees and annual sales of U.S. $17 million when
he sold it to data-processing giant EDS in 1995. Terrie's next move was to launch LINC
Media, the publisher of Computing Japan magazine, in 1996. A 15-year resident of Japan,
Terrie has been shakin' and bakin' in the Big Mikan (Tokyo) since 1983.
You have a track record of anticipating trends in the Japan market, and your new Dai-Job
(http://www.dai-job.com/) service for Japanese nationals seeking employment with
foreign-affiliated firms is your latest venture. Why did you see employment services as a
compelling Web application in Japan?
Well, first off, Dai-Job is actually not an employment service, but rather a marketing
tool for companies who want to advertise jobs. So we're media, not recruiters.
The reason I started the project is because I'm a strong believer in "give 'em what
they want, and give 'em plenty of it." So, here we are in the middle of a recession
and the main Internet user group is technically literate males between 25 and 40. What
could be more customer compatible than a jobs site? Other than an adult site maybe (which
we're not interested in)...
Also, less facetiously, in the 15 years I've been running companies, I've always had
problems finding good staff. So I have had a strong personal interest in helping others
having the same trouble. That's why we spent a lot of time marketing the site so as to
create a strong registered user base, and it's also why we only charge JPY40,000 per month
(12 month contract) for 5 jobs.
How has Dai-Job performed compared with your expectations since its launch in March of
this year?
We expected 50,000 people to sign up by the end of the first year. We're halfway there
already after only 3 months. Now, this is actual sign-ups, not how many get the weekly
newsletter -- which is more like 60,000 people per week. A lot of people in this industry
get their statistics confused... we're quite upfront about the numbers we're REALLY doing.
Financially, we're still just getting started so we're not seeing big sales yet. But we're
matching the business plan, which is satisfying. And there are lots of discussions in the
pipe. It was a major advance for us to get Microsoft, Bay Networks, Dell, and Goldman
Sachs into the site these last few weeks.
How willing are Japanese nationals to actually submit their resumes online? Is this
relatively "automated" model viable in a business culture where discreet contact
between recruiters and the recruited is still the norm?
Most Japanese don't like public exposure, so we don't ask them to place their resumes
online at all. Instead, we list jobs and people interested in a particular job or group of
them can use our automated Resume Maker to send details to each individual company. LINC
doesn't know the contents of these resumes -- which ensures privacy to the individual.
Once we market the job, the person still goes through the normal recruiter channels for
interviews, etc. So we're not changing the process radically. Instead we're doing a better
job than newspapers do of reaching out to people.
Could you share any Dai-Job case studies/success stories with us?
Last week, one small software engineering company south of Tokyo bought a single ad for
one month and got 20 responses. They hired a sales manager a few days later. This is quite
typical. We are not generating a huge flood of resumes, but the ones our customers do get
are highly qualified. In other words, we do not have bored housewives, students, and
unqualified people responding to jobs. The reason for this is that we made a conscious
decision early on to market the site in locations where users matched our target
demographic. 40% of the membership are engineers (mainly software and networks), and 20%
are sales people. The average age of respondents is 31 years old.
I'd like to emphasize, however, that Dai-Job is not supposed to be an "instant
gratification" engine. Japanese people are typically scared of working for a foreign
company. So we're trying to set up a relationship with them and educate them about the
opportunities. This process can take months of receiving weekly information. And that
means we're really looking for advertisers who are interested in a long-term presence at
the site (like Microsoft and Dell for example) and who understand what we are trying to
achieve. The one-month deals don't really interest us.
We both know from experience that the original business model for an Internet-based
service is more likely than not to change, sometimes dramatically, based on actual
response to the initial service offering. Has that happened that with Dai-Job?
Well, it's only 3 months since we launched, so things are going pretty much according to
plan so far.
What's next for Terrie Lloyd?
Our company target is 100% growth in sales and profits for the next 3 years straight. So,
as you can imagine, I have a lot of irons in the fire! Next project for people who may be
reading this is a free weekly online newsletter for English-reading engineers (software
and hardware). The newsletter will cover topics in the local market, as well as
engineering ideas/trends/tips. If any of your readers are interested in getting this, they
can contact me at terrie@twics.com. We'll be launching in 3-4 weeks from now.
LINC Media: a Japanese full-spectrum Internet service company providing bilingual
equipment, software, and expertise needed to establish and maintain an Internet presence.
Call +81-3-3499-2399, Fax +81-3-3499-2199 or e-mail terrie@lincmedia.co.jp
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Industry Briefs
Why are we not surprised?
NTT's OCN service monopolizes the market for dedicated Internet connections, according to
a survey conducted by Tokyo-based MULTIMEDIA RESEARCH INSTITUTE. According to the survey,
OCN has a 61% share of the market, far outdistancing its nearest arrival, IIJ, which
controls a scant 6% of the sector. TOKYO INTERNET and ODN are in third and fourth place,
respectively, with 4% shares. NTT's global "OCN Economy" service rates, the
telephone giant's enormous marketing muscle, and control over the local telephone grid
give it overwhelming power in the market, say industry observers. OCN had only a 3% share
of the market in March 1997, illustrating the extreme rapidity with which it has come to
dominate the dedicated Internet access line sector, observers say.
BANDAI to leverage character-based toy success on Internet
Toy giant BANDAI, developer of the hit "Tamagocchi" electronic pet, will start a
new character-based Internet business at the end of this month in cooperation with
Tokyo-based software developer HI. BANDAI will create corporate "image
characters" and mascots on behalf of clients, and incorporate them into
"push"-type software. Once downloaded free of charge from client sites by
consumers, the characters will occasionally announce new client products or other
information in a cartoon-like manner on user desktops. BANDAI hopes to win one million
consumer users by the end of the year, and says it will develop similar software based on
its own characters as well.
Electronic book system experiment to be launched
A consortium led by 30 publishers, five retailers and a number of computer/communications
firms plans this fall to start experimenting with an electronic book system whereby image
data will be transmitted by satellite to pocket-book sized portable terminals, and the
content displayed on LCD screens. The system would eliminate inventory and returns, enable
book prices to be halved, and enable conventional book sales networks to be broadened to
convenience stores, kiosks and other non-traditional locations, according to the
organizers. Participants in the unusual venture include leading publishers SHOGAKUKAN,
KODANSHA and KADOKAWA, retailers MARUZEN and LAWSON, and HITACHI, NTT and SHARP. The group
hopes to develop a commercial business based on the system by fall 2000.
NTT DATA, ORIX, SOFTBANK to sell office-related products over Internet
NTT DATA COMMUNICATIONS, ORIX and SOFTBANK announced July 23 that they will cooperatively
establish a new corporation, NTT DATA OFFICE MART, that will sell office and related
products over the Internet. The new firm, which will be 51%-owned by NTT DATA, will be
capitalized at 400 million yen ($2.8 mil) and will start services on an experimental basis
in August, with plans to offer full-fledged commercial services from October. The three
firms foresee first year sales of 200 million yen ($1.4 mil) and annual sales of 12
billion yen ($84.5 mil) five years from now. The new company will sell PCs, stationery,
furniture, and supplies, according to a spokesman.
NIFTY to get with the program some more, kind of
Tokyo-based NIFTY, operator of Nifty-Serve, Japan's largest commercial online service,
will step up its Internet-related operations. Currently the company offers most of its
content in text-only format, but has decided to start converting this content to HTML
format in order to achieve more compelling presentations on the World Wide Web. It will
start the conversion on an experimental basis in some of the thousands of online user
"forums" it hosts, and make it possible for users to enter certain forums from
ordinary Web pages. NIFTY is trying to shed its image as a staid commercial online service
provider and recast itself as an Internet-savvy ISP/"portal" service, say
industry watchers.
Number of mobile telephones in use passes 40 million mark
The number of mobile telephones in use in Japan surpassed the 40 million mark in June,
according to carrier statistics. Cellular service providers added 779,700 users in June,
the second lowest month-to-month increase of the year. PHS sales continued to slump for
the ninth consecutive month, with carriers losing 84,000 subscribers, the biggest single
monthly loss to date. Nevertheless, the mobile telephone industry as a whole now has a
record 40,645,600 subscribers for a general population penetration rate of 32.2%,
according to the statistics.
IMAGAWA SECURITIES to offer free real-time stock quotes through AOL JAPAN
AOL JAPAN and IMAGAWA SECURITIES have teamed up to provide AOL JAPAN members with IMAGAWA
Web Broker on-line trading accounts access to real-time stock quotes at no charge.
Starting July 6, real-time price and volume data, as well as daily, weekly, and monthly
charts, will be available through AOL JAPAN for all listed stocks on the Tokyo, Osaka, and
Nagoya exchanges, and all OTC stocks. In May, IMAGAWA halved its commissions on trades of
U.S. stocks and began providing access to AOL's data and news on U.S. stocks.
SOFTBANK acquires operating rights from E*TRADE GROUP for an online securities business in
South Korea
SOFTBANK has acquired operating rights from E*TRADE GROUP of the U.S. for an online
securities business in South Korea. The two signed a licensing deal on June 30, but the
details have yet to be worked out. SOFTBANK is planning to set up a subsidiary in South
Korea and then get an online trading operation running in 1999. SOFTBANK President
Masayoshi Son, who is an economic adviser to South Korean President Kim Dae-Jung, believes
business opportunities for foreign companies in South Korea will increase. The latest move
suggests SOFTBANK may later venture into the same market in China and other Asian
countries.
ASAHI BANK to launch Internet banking operation, with no fee until next March
ASAHI BANK will launch a 24-hour Internet banking operation on the Web and offer the
service for no charge until March 1999. Customers will initially be able to make
bank-to-bank transfer payments and check their account balances, and in the future will be
able to open up time deposit accounts and investment trust accounts, as well as apply for
mortgages. The bank has been conducting limited trials of the service with 1,000
participants since June 1997, and aims to become Japan's leading Internet bank by signing
up 10,000 online customers.
SUMITOMO BANK, others to offer direct account debiting for Internet shoppers
SUMITOMO BANK, SANWA BANK and FUJI BANK plan by April 1999 to offer a new service whereby
Internet shoppers can have payments to merchants deducted directly from their bank
accounts. Anyone with an account at either of the three banks will be able to make use of
the service simply by registering beforehand, according to the companies. The three banks
will use the SECE electronic transaction security protocol developed by NEC, HITACHI and
FUJITSU. Cooperation among the six companies is designed to make SECE the industry
standard for such direct bank account debit services, say industry watchers.
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Food for thought about the Japan market
Q: Isn't the Japanese "lifetime employment" system extremely inefficient?
A (from "Blindside" reviewed below): "Westerners... consider the system
inefficient because subpar workers cannot easily be fired. But remember that the aim of
Japanese industrial policy is to maximize the economy's total output of useful goods and
services. Seen from this point of view, to give employers the power to fire subpar
performers does no good because these people will probably be subpar no matter where they
work.
If the nation is going to maximize its gross national product, such workers necessarily
must be employed somewhere - thus employers as a group cannot hope that all their
employees will be above-average. For each corporation to strive to play the hire-and-fire
game in an endless effort to try to improve its staff quality merely generates gratuitous
transaction costs. Such costs are often much larger than people realize: in the American
aerospace industry, for instance, it was estimated a few years ago to cost about $57,000
to replace a typical junior engineer. In light of labor turnover rates in Silicon Valley
that sometimes approach 50 percent a year, the Japanese electronics industry clearly
enjoys a sizable advantage in its low labor-market transaction costs."
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Book of the Month
This month's choice is "Blindside: Why Japan Is Still on Track to Overtake the U.S.
by the Year 2000" by Eamonn Fingleton. An absolutely incredible book - a must-read
for anyone serious about understanding the Japanese economy. In spite of the
sensationalist "Year 2000" tag, Fingleton is right on the mark with most of his
analysis. Read some good detailed reviews at:
http://www.amazon.com/exec/obidos/ASIN/0395633168/tkai
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eCOMMERCE @lert covers Japan
eCOMMERCE @lert, a new paper/online magazine from Ziff-Davis, has a feature article on the
Japanese Internet that may be of interest to JIR readers. I know the guy they interviewed
pretty well, and while I don't always agree with him, I have to admit he made a couple of
good points. See it at:
http://www.cobb.com/eca/98e/eca98e3.htm
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Tim Clark
Editor
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Japanese e-business specialists
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Tel. (503) 235-4433 Fax (503) 235-4422
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