Two New Books Cover e-Japan

On the Bookshelves

The Net as a business story has been a hot topic in Japanese books, magazines, and business papers only since last autumn, but now it's officially white hot. One book now attracting a lot of attention is Akira Kamoshida's The Financial e-business Revolution: The Internet Changes Japan's Financial Market.

The reason this particular book warrants attention is the author's bona fides: Kamoshida, 42, has completed the London Business School International Executive Program, has an MBA, and since 1990 has been employed by a major think tank, where he specializes in corporate strategy and formation of inter-sectoral and international consortia.

The book is organized into fives: there are five ways that e-business will change conceptualization by businesses in Japan, five finance-sector strategies based on American precedents, and five recommendations of hands-on approaches. The precedents would be familiar to most J@pan Inc. readers, but what merits notice is that the changes are a powerful drive toward conforming to American business models and systems.

Japanese firms for the next few years will be trying hard to catch up, meaning they will be looking for overseas sources of knowledge and technology and Net-related services. This translates into more opportunities to do business with Japanese firms. Further, although a modest language barrier will remain, there certainly will be more chances to do business with Japanese end-users of goods and services because of the powerful market-opening potential of the Net. Between the lines of every paragraph is the message that catching up to America, which drove Japanese industry during the 1960s, is once again a key to the future.

Conceptual shift No. 1 is to move away from simplistic promotion of sales to education of customers. The origins and functions of Net community sites like Silicon Investor, Third Age Media, and Women.com, and of financial portal sites like Motley Fool and Yahoo Finance, are brought in as examples of what is to come. It remains to be seen, however, how quickly the Japanese take to open exchange of ideas, as they tend to be less open than Americans in communicating with total strangers. Since independent investment newsletters and advisors are not a strongly developed part of the Japanese financial community, there would be considerable value to community sites, discussion lists, and chat rooms, but it is unlikely in the reviewer's opinion that they will develop very quickly relative to Internet use in general.

Shift No. 2 is from being a sales agent to providing "shopping support." CarsDirect.com is introduced as an example, and the present underdeveloped Japanese approach to selling cars directly is cited in contrast. [See Roadmap 2000: Japan's Online Auto Market] Kamoshida does not, however, discuss the impact on margins and prices of this shift. Anecdotal evidence suggests that "the customer is king" is an alien concept in Japan, and only recently were consumers given protection through product liability laws.

The third shift is already evident in scattered news reports, but is particularly tough in Japan. Moving from stand-alone selling to syndicate selling, whereby a company sells even products of competitors, will be accepted but by no means embraced, because of strong company and corporate group loyalties developed over many years. Alliance marketing (e.g., the Star Alliance of United and other airlines) is now being driven not by marketing considerations, but by IT.

The other changes in conceptualization are toward a new price mechanism, with consumers and customers deciding prices (e.g., the Priceline method), and a mobilizing of users to develop new products.

Financial sector changes that are the most important to Kamoshida are the strategy of financial portals as a way to create investor communities; Net banking; provision of personal investment advice and private banking services; information gateways and one-stop shopping; and navigation support as a means of expanding the range of financial services marketed to a given customer.

Recommendations by the author are echoed in today's news reports: tie-ups with companies in business sectors other than a company's own; a review of fundamental aspects of customer relations; accumulation of information on customers; accumulation of information on the market; and changes in corporate culture.

Kamoshida's book implies three things: (1) intense pressure is bearing on the Japanese to "catch up" while (2) it and current realities are creating innumerable opportunities in the short- and medium-term for non-Japanese companies to do business with the Japanese, and (3) business in Japan is being forced through a paradigm change.
-- Aaron Cohen

BIT VALLEY beat
Author: Hisashi Arai
Publisher: Nikkei BP
ISBN: 4-931466-14-1
Price: ¥1,600
Language: Japanese only

When the publishers at Nikkei BP attended the Bit Style party in fall 1999, they decided that was it -- the Bit Valley movement would make up for the "lost 10 years" in Japan. And they immediately decided to put out this book, which translates roughly as Bit Valley Beat: Young E-Ventures Save Japan.

Author Hisashi Arai, writer and editor at the publishing giant Nikkei BP, is widely regarded as a cutting-edge technology journalist.

The book begins with what's been happening in Bit Valley -- the Bit Valley Association, the ever-growing Bit Style parties, Masayoshi Son's captivating speech at the February party -- and with analysis of many ventures in Japan. Chapters 2 through 7 feature interviews with 43 Bit Valley companies.

In Chapter 8 there are interviews with Net companies in the US, who give advice on how to survive as an Internet startup. Chapter 9 covers the Bit Valley imitations cropping up all over Japan: "It's Bit River" in Kansai, "Mid Valley" in Tokai, et cetera. The final chapter is dedicated to venture companies wanting to go public, with Taro Ikeda, a famous CPA who makes frequent appearances on the popular Bit Valley mailing list Café, offering advice on how to go public.

For all the advice, however, the book comes across more as a survey of the Bit Valley scene than as a how-to. More than that, it's a sign of the times. -- Kyoko Fujimoto