* * * * * * * * * T E R R I E 'S T A K E * * * * * * *
A weekly roundup of news & information from Terrie Lloyd.
General Edition Sunday, March 11, 2007 Issue No. 412
- What's new
- Candidate roundup/Vacancies
- Upcoming events
- News credits
SUBSCRIBE to, UNSUBSCRIBE from Terrie's Take at:
------------- Daijob Go Global Career Fair ----------------
Are you are a bilingual professional looking for a new
challenge? If so, the Daijob Go Global Career Fair is
the perfect place for you to explore your opportunities!
There are many companies from a variety of industries
participating, so attending this event will provide you
education on what the current job market holds for you!
Date & Time: Thursday, 15th March 2007, 6.00-8.30 pm
Location: Toranomon Pastoral Hotel, 6F
+++ WHAT'S NEW
Japan is rightfully known as the land of vending machines.
It's hard to say why there are so many, given that there
are already plenty of little specialty shops down every
alley. But perhaps one reason why there are no fewer is the
simple fact that this relatively law-abiding society
doesn't see vending machines as fair game for vandalism and
stealing. Else where would you buy your toys, rice,
cigarettes, flowers, beer, and adult entertainment?
Whatever the reason, the vending machine is an integral
part of Japanese life. The Japan Vending Machine
Manufacturer's Association reckons that there are about
5.5m machines in use around the country -- roughly one for
every 23 people. Most common are the 2.22m soft drink
machines, serving hot and cold beverages year-round and
reputedly consuming about 0.5% of all the power sold by
Japan's 10 power utilities in 2005! That's 4.67 gigawatts
Probably the next most common form of vending, but far less
demanding on the power grid, is the ubiquitous Gashapon or
Gacha Gacha machine. If you don't have kids, you may not
recognize the name, but think back to any visit to a
convenience store or supermarket here and recall those
squat plastic vending machines for kids toys out front. The
toys are vended in capsules costing JPY100-JPY500 each and
are usually plastic figurines from favorite TV shows and
Bandai controls about 60% of the gashapon market, with more
than 350,000 machines and sells an incredible 130m capsules
a year -- that's a lot of Chinese factory workers' output,
since most of the figures are handpainted. The runner up,
Yujin, a subsidiary of KK Takara-Tomy (just plain Tomy in
English), has a network of 120,000 machines and sells about
85m capsule figures a year. Over the last few years, both
companies have been exporting the gashapon phenomenon
overseas, with great success. Riding on the current wave of
interest in Japanese manga and anime, Tomy Yujin apparently
has machines in more than 15,000 retail outlets in the USA
While the gashapon business would appear to be saturated,
a young American named Brian Tannura has managed to crack
the market for a new segment called "flat vending", i.e., the
dispensing of stickers and character cards. In the 2006 Winter
edition of Japan Inc., we cover a story of Tannura's rather naiive
entry into this obscure market and document how he has
managed to parlay some initial missteps into a network of more
than 1,000 vending machines, selling millions of licenced
character cards a year.
--------------- Bilingual IT Help Desk --------------------
We at BiOS (a Division of LINC Media, Inc.) have recently
expanded our IT Help Desk to increase support for foreign
companies in Japan, both large and small.
We'd like to invite you to join up too.
Our Help Desk Department is located in the heart of Tokyo,
and is staffed by experienced, bilingual IT engineers with
an intimate knowledge of both the global technology and the
local culture. Our rates are market-competitive and our
priorities lie in customer satisfaction and quality of
The thing about Tannura's story that provides inspiration
is that he got to where he is by observing consumer habits,
then taking some old fashioned personal risks to try out
solutions and test the market. For example, in deciding to
make his vending machines more profitable, he researched
different machine makers and found a Canadian machine
with six dispensing slots as opposed to the two- or
four-slot machines being considered by a Japanese
distributor. As it turns out, the additional slots have
been the deciding factor in making the machines and the
entire vending network profitable.
Tannura started out in Japan as a Nova teacher, but soon
chucked that in to start importing gumball machines from
the States. After several years of learning the business
and how consumers think, he moved on to sticker machines
from Canada and established his own route in Osaka.
Tannura learned early how to leverage his unique products.
He used commissioned sales people to help him persuade
property owners to take machines. He quickly managed to get
50 machines placed.
As anyone in the consumer products market will tell you, it
doesn't take long for the established players to notice a
newcomer, and it wasn't long before Tannura was on the
radar screen of several vending machine companies. One of
these was Photo-Me Japan, operated by Nippon Auto-Photo,
with approximately 5,000 photo booths placed nationwide.
Tannura wasn't sure whether to entrust his baby to a
partner of Photo-Me's size, but decided to take a punt and
did a test run of 10 sticker machines with them. The test was
a great success and Photo-Me placed orders for hundreds of
Moving forward, Tannura reckons his biggest near-term
challenge is how to convince future partners that flat
vending is a valid retail category. While gashapon
companies license figurines and stationery in huge volumes,
for some strange reason they don't seem to have thought
there is a market in doing stickers. Indeed the
flat-vending sticker machine business didn't exist before
Tannura showed up. Because of this, Tannura is blessed
with both an opportunity and a challenge.
The opportunity is that even today, he is the only serious
player in the market with a 6-slot coin mechanism robust
enough to take repeated hammering of excited kids.
This protects him from short-lived Chinese knock-offs.
The challenge is that there is very little supply of the
characters that he needs to get the kids excited over in
the first place. Because of this, he needs to create his
own inventory, leading to high prices because the print
runs are smaller. Each time he places an order of a
million or more cards it represents substantial personal
But these are all familiar problems to a successful
entrepreneur and Tannura seems to relish the challenge.
He recently moved his family up from Osaka to Tokyo --
mainly because the capital city is also the capital of toy
companies and he wants to be closer to the gashapon
players. He spends most days negotiating new contracts
with both distributors and character licensees -- pushing
towards his personal goal of 10,000 installed units
nationwide. All good honest hard work for a kid from
If you are a character licensing company, you might want
to consider contacting Tannura. If nothing else, he is a
friendly fellow with some great stories!
*** This week's FEEDBACK section is about our Divorce
Surge column from last week. If you're thinking of getting
divorced in Japan, maybe you should read it!
...The information janitors/
========== Logistics: The So-Fast Corporation =============
Tour 1: So Fast Logistics Warehouse Tour
Do you have parcels going missing? Products keep getting
damaged? Packaging not suitable? Then check out So Fast's
cutting edge packaging machinery and logistics solutions.
Remove the mystery from distribution in Japan. See for
yourself how it is done and rest easy in the knowledge
that your products will receive the treatment your
Tour 2: So Fast Group Call Center
So Fast Group company, Landscape Corp, operates one of
Japan's most comprehensive call centers, with a database
of more than 95 million individuals and 7.5 million
Does Japan know about your product? Landscape can help.
Come have a look and see how your message can be delivered
politely and efficiently. Landscape takes telemarketing
to a new level with its 30-strong calling staff, backed up
by the largest consumer database in Japan.
http://www.japaninc.com/sofast for more details.
- IRCJ ends on high note
- Toxic bacteria in Japan
- Edy faces stiff competition
- SME IT market worth US$41bn
- 2007 IPOs suffer
-> IRCJ ends on high note
With a resurgent Nikkei, it's hard to remember back to
2002-2003 and the impending sense of doom that the
Japanese government and big business had about a coming
meltdown in the economy. The concern about a shakeout
causing massive unemployment led to the founding of the
Industrial Revitalization Corporation of Japan (IRCJ), a
government-run turn-around fund which was mandated to go
save big companies (i.e., big employers) and fix them.
Commentators at the time said that the IRCJ was a
boondoggle and had little chance of success. We disagreed,
mainly because we'd been given a look at the quality of
people that the IRCJ was hiring in. We found it to have
some of the best private turn-around specialists in the
country -- people being called upon by the government to
help their country in its hour of need. And it worked. The
IRCJ has just announced that it will shutter its doors a
year earlier than scheduled, after having assisted in the
turn-around of 41 companies around Japan. Clients included
Kanebo, Daiei, and Misawa Homes. The IRCJ made JPY1trn of
investments and as of March 31st this year, had earned
back profits of JPY30bn-JPY50bn. This money will go back to
the government. Not a bad result. (Source: TT commentary
from nikkei.co.jp, Mar 10, 2007)
-> Toxic bacteria in Japan
The National Institute of Infectious Diseases (NIID) has
warned that a highly virulent strain of enteritis bacteria
called clostridium difficile has been found in Japan. The
bacteria is quite lethal and in a study of 12 Canadian
hospitals in 2004, 117 out of 1,703 patients died from the
bacteria. It is not known how the bacteria travel, although
a common element between cases seems to be that the
sufferers were treated with antibiotics and subsequently
developed enteritis. (Source: TT commentary from
japantimes.co.jp, Mar 10, 2007)
-> Edy faces stiff competition
According to an article from cardtechnology.com,
contactless payment service Edy is now faces strong
competition from a number of other players. The Edy service
is run by a company called BitWallet, and was established
in 2001 by Sony, NTT DoCoMO, and several other firms. It
was the first successful contactless payment system in the
market. One reason why BitWallet is under pressure is that
DoCoMo has decided to go out and load its own contactless
prepaid cash service, called iD, on all phones now sold by
the firm -- millions a year. Further, railway operator JR
East is tying up its contactless ticket and e-cash service,
Suica, with 100+ subway, bus and other transit operators in
Tokyo. The article also says that 12,000-store Seven-Eleven
will launch a new payment service called Nanaco, later this
year. ***Ed: BitWallet says it's confident of its future in
the market, if only because right now more than 90% of
payments made by consumers in Japan are done with cash.
Through its 49,000 registered merchants, Edy did 15m
transactions in just February 2007 alone. (Source: TT
commentary from cardtechnology.com, Mar 9, 2007)
-> SME IT market worth US$41bn
According to New York based Access Market International
(AMI), Japanese SME firms employing 1-999 employees
collectively spent about US$41bn IT products and services
in 2006, up 7% from 2005. The top sectors invested in by
the SMEs were security and storage, markets worth US$954m
and US$1.8bn respectively. The AMI numbers came out of a
set of surveys conducted by the company direct with SMEs in
Japan. (Source: TT commentary from tmcnet.com, Mar 7, 2007)
-> 2007 IPOs suffer
Whether it's the lack of sexiness of the offerings or just
the general skittishness of investors we don't know.
However, 10 of the 27 IPOs done so far this year are
underwater [prices lower than the opening price]. The
puzzling thing is that many of the companies going public
are of reasonable quality. One recent example is that of
IT firm Soliton Systems, a solid profit earner with some
good products and IP. The company debuted last Friday on
the JASDAQ at JPY1,973 a share, up from the IPO price of
JPY1,850. But then suddenly the stock slipped back to end
the opening day at just JPY1,585. (Source: TT commentary
from nikkei.co.jp, Mar 10, 2007)
NOTE: Broken links
Many online news sources remove their articles after just a
few days of posting them, thus breaking our links -- we
apologize for the inconvenience.
---------------------- M&A Advisory -----------------------
The Japan Inc. Advisory team is highly experienced in
helping foreign entrepreneurs both sell and buy companies
in Japan. Our experience includes:
- Fund-raising for venture businesses
- Selling companies for owners looking to leave Japan
- Sourcing buy-out targets for foreign firms entering Japan
- Assisting with joint venture and takeover negotiations
- General management advice
We have a dedicated, experienced team that
specializes in smaller deals that other investment
specialists are not interested in. Email
email@example.com for a free and confidential
+++ CANDIDATE ROUND UP/VACANCIES
=> LINC Japan Ltd., an affiliate of the LINC Media group,
is actively marketing the following positions for market
entry customers setting up in Japan.
* Storage Support Engineer, bilingual, hardware -- JPY15m+
* Call Center Tech Support, bilingual, services -- JPY8m
* HR support junior manager, bilingual, services -- JPY6-8m
* IT sales trainee, bilingual -- JPY4-5m
* Freelance market entry consultants, bilingual -- Neg.
* PA for foreign senior manager, bilingual -- JPY5-6m
Interested Japanese or foreign candidates may e-mail
resumes to: firstname.lastname@example.org.
+++ UPCOMING EVENTS/ANNOUNCEMENTS
------------------- ICA Event - Mar 22 --------------------
Speaker: Masakatsu Kojima,
Director of Product and Engineering, HTC
Topic: Global Trends in Mobile Technology
Details: Complete event details at http://www.icajapan.jp/
Date: Thursday, March 22, 2007
Time: 6:30 Doors open, Buffet Dinner and Open Bar included
Cost: 3,000 yen (members), 5,500 yen (non-members)
Open to all- NEW LOCATION- Ristorante Conca d'Oro
IT events announcements are priced at JPY50,000 per week.
For more information, contact sales at japaninc.com
In this section we run comments and corrections submitted
by readers. We encourage you to spot our mistakes and
amplify our points, by email, to email@example.com.
-> TT411 -- Divorce surge. We commented on the likely surge
of divorces to hit Japan after the laws on sharing an
ex-husband's pension change in April.
*** Our reader says: Nice article on child support in your
recent newsletter. It's amazing how even the lawyers for
some reason do not suggest attempting obvious and more
harmonious solutions. They need some education in basic
psychology and human nature.
I would offer one contradictory comment I got from a
Japanese father a few years ago. He said that it is
definitely possible to enforce child support collection if
the paying parent/father works for a reputable company, as
this father did. Although, it is such a paperwork nightmare
and child support payments are so low, that many collecting
parents/mothers just don't find it worth it. (Which he was
hoping would be the case for him.) I suppose it would
require a lawyer for help.....
Oddly, he also told me that while the divorce/mediation was
going on, and they were living separately, support payments
to the non-income earner/mother were in fact higher and
easier for her to collect, than later.
Finally, about your comment on our not seeing social
re-engineering in our lifetime, I think there are
possibilities. International pressure may grow enough that
Japan has to sign the Hague Convention, at which time the
whole family law house of cards may come tumbling down.
Over the next 5 to 10 years, a lot of attitudes could
change. Also, the increasingly successful efforts of women
to make child support collectible may help. Eventually, the
men may ask what they are paying for, and push for laws to
help them ensure contact with their children. So I am all
for stronger efforts to bring Japan into line on
collectibility of child support.
Further, from April, as men realize the financial liability
of having a marriage that will not last, men may choose
more carefully and work harder to create better marriages.
The rigid expectations of breadwinner vs child rearer may
change, and then the men will eventually want more contact
and change the laws. Of course a pessimist might claim that
this will just lower the marriage rate and the birthrate
will plummet further. But I prefer to be an optimist and
think that within a few generations we may see changing
...The information janitors/
SUBSCRIBERS: 25,036 as of March 11, 2007
- Show quoted text -
(We purge our list regularly.)
+++ ABOUT US
Written by: Terrie Lloyd (firstname.lastname@example.org)
HELP: E-mail Terrieemail@example.com
with the word 'help' in the subject or body (don't include
the quotes), and you will get back a message with
Send letters (Feedback, Inquiries & Information) to the
editor to firstname.lastname@example.org.
For more information on advertising in this newsletter,
Get Terrie's Take by giving your name and email address at
http://www.japaninc.com/newsletters/free_sign_up, or go
straight to Mailman at:
Copyright 2007 Japan Inc. Communications Inc.
_____________Japan Inc is worth every penny!__________
Don't forget you can get deeper analysis on Japan's
hottest new businesses and technology from the
quarterly edition of J@pan Inc. 1-year subscription
JPY3,600(Japan). It's so cost effective you can even get
your company to pay for it!
Go to: www.japaninc.com/mgz_subscriptions for details.