JIN-300 -- The Japanese Bridal Industry Courts the Shanghai Market

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T H E J @ P A N I N C N E W S L E T T E R

Commentary on the Week's Business, Technology and Cultural News

Issue No. 300
Saturday December 4, 2004
TOKYO

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CONTENTS

@@ VIEWPOINT: The Japanese Bridal Industry Courts the Shanghai Market

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@@ VIEWPOINT: The Japanese Bridal Industry Courts the Shanghai Market

The Japanese bridal industry is wooing the Shanghai market. Japanese
wedding planning and production agencies, whizzes at wowing guests and
providing meticulous service, see potential in Shanghai, where an
increasing number of couples, with incomes buoyed by China's booming
economy, want elaborate wedding receptions. Shanghai represents potential
growth for an industry that has peaked in Japan owing to the falling birth
rate and the new preference for no-frills weddings.

Watanabe Wedding, a large Tokyo-based agency, set up a Shanghai office
in the luxurious Garden Hotel. Next it built in the hotel a wedding hall
with a "virgin road," a rarity in China. The agency offers the ring
exchange, the change of costume during the reception, the presentation of
bouquets to the parents--in short, the series of mini rites that make up a
Japanese wedding.

A reception for 100 people costs from 1 to 1.3 million yen, a princely sum
in China. However, in Shanghai a growing number of Chinese employed by
foreign companies earn from several thousand to upwards of ten thousand
yuan (1 yuan equals about 13 yen). Watanabe Wedding sees further market
potential in the fact that the first generation of parents who were born
and raised during the age of the one-child-per-couple policy are loosening
their purse strings to pay for their own children's weddings.

"We will introduce the trendiest wedding in the world to Shanghai," said
Masahiko Shimazaki, a Watanabe spokesman, at a news conference.
Between 90,000 and 100,000 couples wed each year in Shanghai. More and
more newlyweds are holding receptions for friends at restaurants. However,
these usually consist of a meal only. What's more, Chinese hotels, unlike
their Japanese counterparts, focus on the provision of service to
businesspeople and tourists and have largely ignored the bridal market.

Watanabe was no newcomer to Shanghai. Back in 1993 the company had taken
advantage of China's lower labor costs by building in Shanghai a garment
factory to manufacture wedding dresses for the Japanese market. Watanabe
made the decision to enter the Shanghai market, says Shimazaki, after
observing "the absence of a wedding production company to cater to the
increase in high-end customers fostered by the burgeoning economy."

Meanwhile, Recruit launched through a local publisher a Shanghai edition
of "Zekushi," its wedding information magazine. The Shanghai version
promotes the Japanese-style wedding along with providing information not
only about reception halls, cuisine, and honeymoon destinations but also
about popular photo studios, dresses and rings in China. The Shanghai
print run is 60,000 copies, about the same number as that of the Tokyo
metropolitan area edition.

According to a 2003 Recruit survey of 800 married couples in Shanghai, 30
percent of grooms had annual incomes of more than 50,000 yuan, and 20
percent spent more than 40,000 yuan, the equivalent of a year's salary, on
their wedding receptions. Says a recruit spokesperson: "A growing number
of hotels are seriously entering the bridal business. Competition to
provide the best service will intensify. We anticipate more advertising
revenues."

About 800,000 couples tie the knot in Japan every year. That number will
drop by half in 15 to 20 years. There is also a new preference for
no-frill weddings. "The shakeout in the industry is inevitable," says a
Watanabe spokesperson. Perhaps just as inevitable is the wedding agencies'
entry to the Chinese market, where the estimated 10 million annual
weddings bring spending worth 250 billion yuan. Thus China will become a
main battleground for Japanese service industries as well as
manufacturers.

One problem with putting on Japanese-style weddings in Shanghai is the
lack of human resources to provide quality service. Shibyua-based bridal
company Tokyo Hanakomachi, which opened a Shanghai office in September,
holds mock weddings in which restaurant or hotel employees plays the roles
of MC, bride, groom and guests as a way to indoctrinate them in
Japanese-style nuptials.

Japanese wedding receptions are noted for long testimonial speeches by
bosses and friends. Guests often tune out these boilerplate encomiums as
they imbibe and chat away, much as patrons in karaoke bars often ignore
the crooner and clap mechanically when he finishes. It will be interesting
to see if the wedding production agencies attempt to transplant the
Japanese custom of speechmaking to Shanghai or if they will eschew the
panegyrics and let the party roll.

----------
For an in-depth profile of Masahiro Hirose, a maverick shaking up the
Japanese wedding industry, see "Marriage Maestro Wed to Innovation" in the
January '05 issue of J@pan.inc magazine.

-- Burritt Sabin

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EDITOR
Written and edited by Burritt Sabin (editors2@japaninc.com)

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