Japan » Dave Jenkins

Patient Zero in the Next Economic Collapse

Apr 282011

Time will tell.

I’m fascinated by economic bubbles, probably because of my inherent contrarian personality and my hobby as a smug armchair economic quarterback. Everyone who reads this has been at least through two of them. Because of that, we’re all a bit wary of when and where the next one will pop, the same way that Japanese can feel very small aftershocks now. Personally, my money is (not) on China, and I think that this is patient zero: the high speed rail system. The China Railway ministry has 1.8T yuan in debt (about $285B). That’s a lot of red ink. The head minister reassures everyone that this is against assets of 3.3T yuan ($505B) so the overall debt-to-asset ratio is a “manageable” 56%, and may rise to 65%.

There are at least two assumptions in that statement, however:

The assets are truly worth 3.3T yuan (they’re only worth that much in a bubble economy, true value is likely lower)
A debt ratio of 60% is sustainable against the cash flow income of the trains (prices are very high, and are easily undermined by bus traffic, or could collapse when demand drops if/when the bubble collapses)

The other day, my friend asked me what is up with “the ChiComs”. First of all, I haven’t heard that term since I was doing government work 12 years ago; second of all, there is nothing communist about the Chinese government aside from the name of the party and that big picture of Chairman Mao downtown. They’re trying to run an economy, just like everyone else. China has a big problem on its hands: it has waaay too much foreign currency holdings in the banks. All of those investments that every US/Japanese/European company has made in China has brought in a big boatload of cash, but all of that money is dwarfed by the mega-craploads (a technical term) of money coming in from sales of all those Chinese manufactured goods (several of which are on your body at this very moment). So, what to do with all that money? Build. Build as much as you can for as long as you can.

Building brings several advantages:

Construction means infrastructure, which should aid the long-term growth and sustainability (economically, not environmentally)
Construction means housing, which anticipates the ever growing wave of urbanization. A lot of people are not worried about the ghost cities and empty shopping malls of China, thinking that the people will eventually come in. They’re wrong, I think. People will eventually come in, yes– but only after that bubble pops, and apartments go from US$150K down to $30K (about 3x the average worker’s income).
Construction means circulating all of that money in a fairly wide swath– paying all those construction workers, material providers, raw materials, etc. In a way, this is probably one of the best things you could do with that money in a command-driven economy. Bush tried something similar to get the US out of the 2001 drop. We know where that one went…
Construction keeps everyone busy and employed.

Aha! The driving purpose of all of this: keep people working, which means they’re not sitting around thinking up protest slogans or painting protest banners or marching downtown holding those protest banners and chanting those protest slogans. If anything, the PRC fears mass demonstrations the most. If anything, they know this bubble will pop, so they’re consciously trying to spread the wealth around as much as they can before it does. If they get a little infra out of it, all the better.

Which brings us back to our high speed rail friends. When everyone read how much track the Chinese Rail Ministry was building each year, they reacted one of two ways: (a) wow! That’s incredible– why can’t we build that much rail that quickly here? or (b) Something’s wrong– it’s impossible to finance/build that much rail that quickly. Personally, I have been in both columns: I’m a big big fan of high speed rail because I’ve personally experienced the convenience and speed of it, and I’m also an inherent skeptic. The Japanese, ever watchful of their larger neighbor and with a particular eye out for any corner-cutting (driven by overall caution but also some schadenfreude) , have always clearly been in the second camp: the Chinese Rail Ministry must be corner-cutting and fibbing on the books. They should know.

As it turns out, both look to be true: the Chinese Rail Ministry has been cutting corners on the quality of cement, which means slower trains and infrastructure lifespans of 10 years instead of 30, and they’ve been fibbing on the books. This is all being aired out, slowly and cautiously. After all, if those $285B in loans go sour, it could be the pin that pops the whole thing.

Quakebook

Japan, Social Media 1 Response »

Mar 292011

See the quakebook at http://quakebook.blogspot.com

Okay, it’s been two and a half weeks since the earthquake and tsunami, and I’ve been slack in not writing something here. First and foremost, Yumiko and I are fine. Her family is fine. All our friends that we’ve contacted (including Yumi’s friends in Sendai) are safe. We were in St Louis when it hit– and for that, I feel guilty.

I feel guilty for not being there, for not being able to help. I feel guilty for not “sticking it out” with all my friends in Tokyo and Chiba that are somehow putting one foot in front of the other and trying to make a normal life again. We didn’t evacuate Tokyo, we had left two weeks before it hit (as scheduled). I would like to think that we wouldn’t have evacuated, but then again, I see my friends who have moved their wives and children down to Western Japan or back to the US, and I honestly can’t say what I would have done.

Living in Japan, one cannot help but confront the older generation that put up with incredible hardships to make the modern miracle. These people endured starvation, bombings, privation, and said nothing, but simply picked up the pieces and worked harder to make an economic powerhouse out of ashes. My own father-in-law tells the story of when he was 8 years old in 1945, and he had to scour the woods near his house for grasses and edible roots to boil over an open pot. He ate grass. For several weeks. This same man went on to work incredible hours at a construction company and ended up retiring just a few years ago in relative comfort. He reminds us of this occasionally, and it pretty much shuts me up for any complaints I may have been entertaining in the back of my head.

Now, we’ve got a whole new generation of Japanese that will 頑張る (“gambaru” – to stick it out, hold on, endure) through their own phoenix-like period. The country is broke. The economy was already wobbly after years of stagnation. The population is in decline. Japanese efficiency is gradually being eclipsed by their Korean neighbors and the cheaper Chinese/Vietnamese/Indians. The government was never really that transparent nor reassuring, aside from Secretary Edano (who finally got some sleep). It will be a tough slog.

I am hopeful however. This is the first large-scale disaster that we’re really seeing unfold in real-time first-hand. My twitter feed has been both a curse and a blessing: a curse because I am not there and can do little but donate to the Japan Red Cross; a blessing because I’ve been witnessing my friends move through various stages of recovery:

In those early hours, it really was all about contacting each other. That’s it. The phone lines were jammed, cell phones turned off. If twitter or Facebook ever proved their worth, this was it. We couldn’t reach our parents for almost a full day, but ultimately, my father logged into Skype, and we were able to talk for 30 minutes (free!). I got twitter updates from all my friends, and the initial panic subsided.
The next few days was a scramble of aftershocks, sleepless anxiety, and the creeping uncertainty of the Fukushima nuclear plant. Here again, social networks proved their value if anything but to keep small bits of information rolling amongst my friends. The most fascinating bit was to see the first-person reactions against the western media– who were getting the situation completely wrong or couldn’t even be bothered to leave their hotel rooms. One more strike against old media, methinks.
Prayforjapan.jp showed a stream of tweets, several of which had me in tears at several points throughout the last three weeks. The selflessness and gratitude of survivors has been covered elsewhere, so I won’t list them out here again, except to say that it’s a shame that many of the best stories were never translated into English.
The adrenaline started to wear down, and my friends began to update the most inane little bits of update on twitter and facebook: “Leaving work, headed to the station now” followed 30 minutes later with “at the train station, walking home now”. It dawned on me that these updates served a couple of roles: it reassured us (friends and family) that these people were still alive, and it probably reassured the writer in some sort of Bill Murrayish baby steps baby steps one-foot-at-a-time way to get through the rolling blackouts and hoarded food.
After a few days, the lightness started to come back. The Kiwis and Aussies in Tokyo started sending twitpics of the pints they were drinking, the Japanese friends started to trade black humor about what the yakuza would do with no pachinko parlours. The rebirth was beginning.

Now, we’re actually starting to see something constructive come together. the Libyan revolt has since eclipsed the western news, and Japan still sweats the Fukushima plant, but these networks are starting to put things together themselves. I still cannot figure out where the money to rebuild will come from, but I know that Japan will be alright. This is an incredibly resilient place, an incredibly warm and resilient people. 日本は回復する！頑張ろ！

If you’d like to help, please donate to the Japan Red Cross. If you’d like to see these stories and find out more about the real time unfolding of this whole thing, check out the #Quakebook at http://quakebook.blogspot.com

Facebook’s Sakura Spring in Japan?

Japan, Network, Social Media, United States 1 Response »

Feb 222011

The highlight of Springtime for Japanese is “Sakura-mi“, where everyone takes an afternoon off, meanders to the local park with their co-workers, spreads out some blankets, and starts singing ballads while drinking sake and enjoying the pink cherry blossoms that cover every tree in sight. It’s a great time.

Facebook is rapidly approaching its Sakura-mi in Japan. Until now it was the dark horse behind the dominant Mixi.jp, and really only used by Japanese students and employees who had spent time in the U.S. or E.U. But now, with the movie The Social Network hitting it big in Tokyo, and Mixi dying a slow death from no new functionality and a poor user interface, the network effect that accelerates Facebook adoption is taking off. However, it’s not all sweet rice wine and kara-age. There are some snags.

Facebook has the following going for it in Japan:

The movie is pretty much like a 90-minute tutorial on how Facebook works, and that it’s okay (necessary) to use your real ID and not a fake alias. Japanese are finally getting used to that point.
Mixi always accepted and centered on people making aliases, which seems like a protection of privacy (a big point for Japanese), but ultimately prevented people from connecting with their real-world set of friends. Everyone had their real friends, and their Mixi avatar strange connection friends.
Facebook has its marketing act together: it’s a viable advertising channel which means that companies are looking at it seriously (which they never really did with Mixi).
Facebook has a workable API for others to utilize (e.g. Facebook login). Mixi never got that far in their product roadmap.

However, Facebook may run into some bumps:

When we all signed up for Facebook 3-4 years ago, the Facebook viruses and scams weren’t as advanced as they are now. I see my Japanese friends signing into Facebook for the first time, but many of them are falling victim to the same scams and dupes that tricked my young nieces when she first joined up. In short, Japanese users are still a bit naive.
The “real identity” thing is a big lump for Japanese users to swallow. If they use their real ID, that means that all those people from High School and old jobs and college can now really find them. Americans went through that phase, but admit it– if you could do it over again, would you really “friend” all those random people that you happened to graduate at the same time from some school 15 years ago?
On-gaeshi. I’ve described this before as a benefit for short texting like twitter, but I still see it as a small hindrance for Japanese. Friending one person in a group obligates them to friend all people in that group, and anytime they get a friend request, they feel they MUST return the favor. It almost puts a compulsory feel to the network effect, and it creates a slight anxiety for users.
Lack of shopping benefits: there’s no deal at Starbucks or Takashimaya or Mitsukoshi for participating in a given Facebook promotion, because those large companies are still way behind on the Social Media thing.
Work environment: Japanese office workers are pretty much sitting shoulder to shoulder on long bench tables, with the section chief at the end of each row, and the bucho sitting behind him (furthest from the front door, of course). There are no cubicles, no offices, no privacy. There’s no way office workers can screw off on Facebook during work time.

I’m sure Facebook will eventually roll through the country. I am also relatively confident in predicting that penetration will never be as high as it is here in the US.

Groupon’s Army of Bottomfeeders

Good or Bad, Network, Social Media, ecommerce, mobile 7 Responses »

Feb 102011

Marge needs a smart phone first...

Groupon, the group discount site that has spread rapidly thanks to social networks, has seen explosive growth over the last few months. the company has run extensive TV campaigns in Japan and Europe, as well as even buying some tasteless Super Bowl time last week. Many of my friends are Groupon users, some are Groupon junkies (I can tell by their constant Facebook bragging/recruiting). But what about the retailers that are offering these Groupon discounts? Is it catnip to build buzz, or carrion that invites the vultures?

A common understanding in merchandising is that offering discount products brings in the discount buyers. Unless your business is All-A-Dollar or Try-N-Save, these are not necessarily the customers you want: discount goods by their very nature have little or no margin, and discount buyers will complain, require service, and generally gum up the fulfillment chain just as much as any other customer (if not more so in some cases). The business slang for them is ‘bottomfeeders’. Insinuate whatever you want to from that. (Please note that I am not calling my good friends ‘bottomfeeders’, they are wonderful people with a savvy sense of finding deals. I am just relaying the merchandising term.)

So, when would a merchant want to deploy a Groupon strategy? Here are some points to consider:

Groupon or other clearance discounting is a GOOD IDEA if:

You have a perishable or seasonable product that otherwise will be worthless in a matter of weeks (but not too perishable– a gift food company in Japan is getting sued for using Groupon to send out rancid meats and fish to hundreds of subscribers).
You can run the math, and assuming that Groupon clears out all product, you still cover enough margin to support fulfillment
Margin doesn’t matter on this one, because the word-of-mouth provides a great marketing opportunity.

Aha! That last one is the siren song for many merchants that decide to go with Groupon. They figure that if they give away 400 teddy bears or free cocktails or back massages or whatever, the word will spread and their marketing campaign will be off to a running start. I have no doubt the Groupon salespeople only reinforce this belief. I would submit that it’s based on some faulty assumptions and likely to get many small businesses in trouble. Here’s my take on the dangers.

Groupon is NOT A GOOD IDEA for any combinantion of the following factors:

Your business requires the same fulfillment costs no matter who the customer is or how much they pay. Restaurants fit in this category: a dinner for two requires the same amount of cooking, serving, and cleanup for a couple baying the full $60 as it does for the people using the $25 Groupon. Unless your restaurant is 80% empty, this is a bad idea. And if it is 80% empty, I would guess the problems are somewhere else…
The word-of-mouth factor that Groupon supposedly provides is not sustainable or exploitable. Groupon will bring in a flash mob of a couple hundred customers, and a decent fraction of those customers will brag about the deal on Facebook. However, unless the merchant has a way to exploit and continue that buzz, the flash mob is exactly that: a flash (and gone).
The flash mob is usually trying to recruit others to participate in the deal– they’re actively telling other bottomfeeders that there is a low-margin item/service for sale at your business. This will result in bringing in more bottomfeeders as well as possibly damaging your brand.

Discounting is a hard drug to kick. Groupon is a strong one: used carefully, it can be a kick of adrenaline; used indiscriminately, it’s a quick dose of crack.

Yahoo Japan to use Google Search Engine

Japan, Network, ecommerce No Responses »

Dec 022010

FTC says search engine alliance doesn’t breach anti-monopoly law
Google owns the search engine market in North America and most of the English-speaking world. It’s strong on the continent of Europe. Here in Japan, however, it’s still second (and spaced back a ways) to Yahoo Japan (note: Yahoo Japan is a separate organization from Yahoo US, although they started out together). In PRC China, Google is getting strangled by Baidu and the CCP– but that’s another day’s story.

I’ve always marveled at Yahoo Japan’s ability to stay on top of the game. I’ve noticed most Japanese use Yahoo for their homepage, and the mix of news, sports, weather and search make a nice jumping off place (standard portal stuff). Culturally, I can only guess as to why this is the case:

Did the Japanese embrace the web right at the peak of Yahoo’s power, who simply lucked into first place?
Do Japanese prefer clicking through to finding something instead of text searching for it? (yes)
Did the blank white abyss of Google’s homepage just not gel with the Japanese? (likely– behold the Japanese hatred of whitespace in advertising sometime)
Did Japanese cell-phone internet access initially skew them toward Yahoo? (also yes– it’s been called the “galapogos effect“)

One other smart play that Yahoo Japan did a long time ago was to launch Yahoo BB, a broadband service launched in 2001 by the communications pioneer Son Masayoshi. This likely cemented the brand for many Japanese. Just as the Internet meant AOL for many Americans in the mid- to late-90s, the Internet meant Yahoo for Japanese quickly adopting broadband.

But what happens when the dominant portal cannot get a quality search engine from the US partner anymore? Develop one in-house? [That's what the Chinese are trying-- and it's an expensive venture, made possible only by the cheap labour and lavish government funding provided by Beijing.] No, too expensive. It’s better to go shopping, but which engine to get?

The Google search engine is the clear leader– everyone knows that (even Japanese users– they simply stay on Yahoo because it’s their default homepage). The Bing engine may have been a better deal, but likely came with too many strings attached. Overall, IMHO, this deal seems to be a good idea for both partners: Yahoo gets a quality search engine and can continue to concentrate on it’s portal offerings (news, email, shopping, etc.), while Google finally gets enough penetration in the AdWords market here.

The Galapogos Effect in Japan Cell Phone Market

ecommerce 1 Response »

Nov 072010

A great article on the Japan cell phone market. I was about to write something similar, but my article would have been much more stupidly speculative. Kudos to Peter. Having said that, however, I have noticed many many more iPhones on the street than when I looked two years ago. Moreover, the Docomo (a carrier) Android advertising is in full court press, invoking the Sith Lord himself to show you their product is superior to those hipster brats over at Apple.

There’s No Penny Dish in Japan

Japan No Responses »

Oct 252010

The 1-yen coin will float on water

Japan is a very urban environment. The countryside is draining of people, and the population is increasingly concentrated in a few large cities (kinda like that P K Dick story, except without the nuclear war). As a result, there is a convenience store every 100 meters. These ‘konbini’ are pretty much like their US equivalents, with some extra bonuses: a lot more microwave lunches and sandwiches all brought in fresh that morning, many more kinds of hot food (beyond just the 7-Eleven Hot Dog), and you can even pay your utility bills by handing the clerk the bill and some cash.

One thing is missing, however: the penny dish (take-a-penny, leave-a-penny). Why?

Yes, the smart ass quick answer is because they don’t use “pennies” in Japan, they have little one-yen coins made out of stamped aluminum, which can even float on water from the surface tension because of their light weight. Why no 1-yen dish?

The 1-yen coin is, monetarily, about the same value as a penny. It is just as much a nuisance, also. They jangle in your pocket, take up space, and are probably more expensive to manufacture than their actual worth. Americans long ago voted their disdain for the penny by leaving them randomly on the counter, which spurred the idea of the penny dish in the first place. Japanese are often astounded at the sight and concept of the penny dish when they first see it (this is usually their second surprise for the day– the first was “wow! You have 7-elevens here in the US, also?!?”. Every time I buy something at a kombini here in Japan, I leave the 1-yen coins on the counter, hoping that someone behind me will use them, and the light bulb will finally go on for the store manager. It hasn’t worked yet (and I’ve been doing this since the ’80s).

I’ve often ascribed this disdain for the penny dish to the store’s need to run an exact till, to issue exact change and keep perfect books. That isn’t it, though– the whole point of the penny dish was so that the clerks could balance the till down to the last penny on each transaction and at the end of the day. Then, I used to think it was because Japanese have an extended sense of “fair dealing” where they ask and get the stated price for every item (as opposed to their haggling, free-dealing neighbors). That may be part of it, but I think I’ve finally figured out why: the Japanese term is “enryo”　遠慮　which the dictionary translates as “hesitation”, but that’s not all of it. Something drives that hesitation, and I think it’s the anonymous nature of the penny dish.

Japanese people are not averse to borrowing things– neighbors borrow ingredients when they run out, pickup trucks when they move, pens in the office, and everything else. However, the biggest difference here is that there is more ceremony, more polite asking, more quick returning, and overall a better personal connection between the borrower and the borrowee. In other words, Japanese will only borrow something if they can return it right away, or otherwise compensate for the imposition with some nice gift, like a $100 cantaloupe or $75/pound of thin-sliced beef. The concept of penny dish has no back-path; there is no way for the borrower to find out who their benefactor was that left the money there before. Japanese cannot get the concept of “pay-it-forward” on this level yet (okay, maybe that’s too much– Japanese are very generous people)

That, or maybe it’s just culturally weird to leave money sitting around in such a down economy.

Ecommerce in Asia

Japan, ecommerce 1 Response »

Oct 072010

I’ve relocated to Tokyo with my wife for a four month assignment (possibly longer) in order to work with my company’s retail and wholesale partners in Japan, Korea, China, and perhaps The Philippines. I hope to understand the nuances of Ecommerce much more closely as I settle in over here. Here’s what I can tell from the first week:

Japanese retailers are behind the US retailers in terms of integrating social media. This is likely due to Facebook’s (relatively) recent arrival. Twitter seems to have good penetration, but not so much integrating into the catalog sites yet (no one is screaming ‘tweet this product!’ at me like every site in the US)
Design aesthetics are– well– a bit on the noisy and crowded side. This is probably just as much due to the print legacy of crowded leaflets as well as to an under-representation in the drive for UX and its effect on conversion.
Rakuten. They still call the shots.

I’ll be meeting with as many marketing software and ecommerce vendors as I can while I am here. If you know of anyone I should meet in Japan, Korea, or China, please let me know.

Japan and twitter: why such a hit?

Japan, Network, Social Media, mobile 4 Responses »

Aug 132010

Japanese twitter users at a football game. Source: theHindu.com (I see Ricky from "Better Off Dead" finally made it over to Tokyo)

I increasingly hear from people that they are “giving up” or abandoning twitter. Reasons given are the usual suspects: the signal-to-noise ratio is bad, no quality insights are possible in 140 characters, most tweets just look like shallow self promotion, product company spam. Indeed, there was a golden era (that lasted about 6 weeks) where one could tweet about a company, and receive a prompt response. Now that most companies have installed a twitter-monitoring robot, the service level is quickly degrading right down to the same level as the automatic email responders– or worse– the automated telephone system.

Twitter as a viable business tool is limited; as a marketing blurb tool it’s adequate, but as an ongoing small-talk medium it seems to do pretty well.

As I’ve picked up more and more Japanese friends on twitter, I’ve noticed that it seems to be doing relatively well in Japan (compared to the US market). Why is that? Is it just the stereotype of tech-friendly gadget-wacko Japanese? Or are there some other more specific factors in play? I have absolutely NO SCIENTIFIC RESEARCH to back this up, but here are my postulations. Perhaps someone out there can follow up with some actual useful information. I’m throwing this out now to get the conversation started.

Possible technology explanations for better twitter penetration into Japan:

Character/language density – One quality of East Asian languages that use Kanji is that many words can become pretty short. In English, “transport” is 9 characters; in Japanese it’s two: 交通. “Tokyo” is 5 characters in English, Japanese is two: 東京. Similar consolidations go for names, places, verbs, etc. Yes, Japanese grammar may get longer, but since when is proper grammar needed in twitter? It seems that the Japanese writing system has an inherent “density” advantage over English.
Input tools – Twitter seems tailor made for mobile devices: short, text-centric, quick input. For a networked society that already preferred the mobile phone-based Internet access, twitter drops right into place, often much handier than email. I’ve discussed this before.

Along with the tech explanations, however, there may be some cultural differences in play. These are kinda squishy, so please squint appropriately:

Inherent public posting – Most Japanese people I know guard their privacy pretty strongly, but no more so than Americans or Europeans, I think. However, there sometimes is a strong tendency to make idle chit-chat items public out to the group. Japanese people will usually not talk with strangers, unless someone breaks the ice with small talk about the weather or some ramen noodles. Then, the mode shifts to everyone wanting to build a connection with others, and everyone will pipe in their 2 cents. Mind you, this isn’t a political debate or anything concrete, just pichiku-pachiku. Twitter seems to facilitate this nicely. Let me put it this way: that signal-to-noise ratio that drives some of my American friends nuts fits in nicely with the low-level buzz that Japanese ping to each other to reinforce their relationships.
ongaeshi 恩返し — My wife (who is Japanese) dislikes instant chat with other Japanese, because of all the built-in politeness requires everyone to say “thank you” and “goodbye” at least 4 or 5 times before closing the conversation. For Japanese, a similar thing looks like it’s occuring in twitter, albeit in asynchronous slow motion: someone follows you, you actually have a bit of an obligation to follow them back. If someone tweets your name, you’ll RT a simple acknowledgement. Taken together, this may push enough people past that critical mass needed to keep a social network flourishing.
Lack of a Mixi / Facebook alternative– Mixi is pretty noisy and cumbersome compared to Facebook, but has an interface completely native to Japan. Facebook, while cleaner, may be a little too “close” for the idle chit-chat that seems to go on in twitter (this is no different than the US: don’t you hate that guy on Facebook that has hotlinked all his tweets to show up in his friend feed?). Taken together, twitter gives a good outlet for quick updates via mobile phone in a text-rich environment (easily consumed on the train).
Son Masayoshi– The great thought leader of Softbank seems to be a prolific twitterer. Along with other leadingtech figures in Japan, Son seems to actually hold ongoing debates and policy discussions via twitter. This openness is refreshing if not counter-intuitive for Japanese business. Put together, twitter looks like the domain of the tech-forward progressives.

Circumventing the Roman Alphabet URL

Japan, ecommerce 6 Responses »

Jul 042010

Just search in Katakana

UPDATE 4JUL2010: The ICANN board has now approved Chinese character URLs. I doubt this will change the marketing strategies for Japanese companies, however. I think we’ll just get a bunch of redirects.

Americans invented the Internet, and it’s going to stay nice and readable to Americans as long as they have anything to say about it (daggumit). Most people in the Americas, Western Europe, and Australia are blithely unaware that a battle has been raging for several years among the internationalists over the format of the URL (the web address you type to go somewhere on the web). Why? Because these countries all use the roman alphabet. Our slavic friends would love to use cyrillic URLs; Chinese want Chinese characters, Koreans want hangul, etc. The ICANN (the international standards cops) are still only testing and allowing non-roman alphabets in limited trials.

Last month in Tokyo, I noticed something about all the adverts on the trains: the Japanese companies have found a way around the common restriction: they simply tell you (the customer) what to search for, using Japanese kanji and gana, nevermind what the actual proper URL may be. I’ve highlighted two examples here (forgive the low photo quality– lighting on subways isn’t so bright).

On the good side, by asking the commuter to search for a specific keyword, they’ve immediately screened out all the content from the English-language Internet (which can be overbearing in volume). Every mobile phone has this rudimentary web search capability, so the call-to-action is immediate.

Solar backpacks-- just search for

On the bad side, however, this strategy assumes some risk: if I ask for my customers to find me by searching for “スマート外国人” (smart gaijin), what happens when someone else comes along with a better SEO value for that term? All my advertising now goes to benefit someone else.

Mitigating this risk are three factors: 1) campaigns on the trains cycle pretty quickly, so keyword hints can be updated often; 2) the keywords are pretty specific, and the campaigns only bring more traffic, which then reinforces the lead position; 3) Rakuten has an almost monopoly-level stranglehold on web publishing in Japan. If two companies conflict over a desired keyword, Rakuten can probably work it out between them (ah, the Japanese sense of controlharmony). It’s kinda like when AOL or Yahoo could get away with this back in the day.

Older Entries

Patient Zero in the Next Economic Collapse

Yahoo Japan to use Google Search Engine

The Galapogos Effect in Japan Cell Phone Market

There’s No Penny Dish in Japan

Ecommerce in Asia

Circumventing the Roman Alphabet URL

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