Archive for May, 2014

Diamonds are suddenly everybody’s best friend

Saturday, May 31st, 2014

Several years ago the term “urban mining” took off. It referred to the discovery of precious metals that were “buried” in people’s homes in the form of personal possessions like jewelry and home electronics that they weren’t using. A lot of cell phones, for instance, use gold and other valuable materials in their circuits, and when the price of these substances was high, brokers would pay premium prices for them, no matter where they came from or what form they were in.

Komehyo outlet in Ginza, Tokyo

Komehyo outlet in Ginza, Tokyo

At the time, gems were not coveted so much, but that’s changed. Right now, the price of diamonds on the world market is about 30 percent higher than it was a year ago, according to a recent article in Chunichi Shimbun, thanks to a healthier world economy. Consequently, well-to-do people in Asia, North America and the Middle East are craving diamonds, and foreign buyers, particularly from the U.S., China, India and Dubai, are flocking to Japan because they think there are a lot of the rocks here “sleeping” in people’s closets and vanity cases.

The reason is simple. During the bubble period of the late ’80s, when the value of various assets was higher than it probably should have been, people with even a little money bought a lot of jewelry that they don’t wear any more. Many of these people probably have forgotten they even have diamonds.

Komehyo, the Nagoya-based retailer that specializes in recycling high-end merchandise such as designer accessories and expensive jewelry, is spearheading the drive to get Japanese people to dig into their tansu (wardrobes). As one of the company’s store managers told Chunichi, another reason foreign buyers are descending on Japan is that the diamonds are already cut, and used cut diamonds tend to be cheaper than new ones, though there really isn’t any difference in quality. Komehyo is hoping to sell used diamonds in bulk and is offering premium prices to anyone who wants to unload theirs. The chain has launched a Diamond Purchase Fair at all its 20 outlets throughout Japan.

In order to get a handle on the market, Komehyo conducted a survey among men and women over the age of 20. They found that, on average, respondents have each spent about ¥780,000 on “jewelry, watches, bags and brand goods” during their life so far.

Several years ago Tanaka Kikinzoku Kogyo, a dealer in gold and other precious metals, carried out its own survey and found that 80 percent of female respondents have jewelry they don’t wear any more, either because they no longer like the design, or lost one earring or just forgot about it. The company calculates that the average woman in this group has ¥40,000 worth of jewelry they never wear. Tanaka was interested in gold, however,

Based on its own findings, Komehyo estimates the average person possesses about ¥160,000 yen’s worth of jewelry and other valuables that they don’t use any more, which means there could be as much as ¥15 trillion worth of diamonds in people’s homes.

Japanese low-cost carriers hit hard by pilot shortage

Sunday, May 25th, 2014

Onward and upward: Plane taking off from Narita airport

Onward and upward: Plane taking off from Narita International Airport

Low-cost carriers (LCC ) — airlines with cheaper fares than standard carriers — came relatively late to Japan. Peach Aviation was the first in March 2012, followed by Jetstar Japan, an affiliate of Australia’s Qantas Airlines, in July of the same year, and then Air Asia Japan, which has since changed its name to Vanilla Air, for some reason. (Skymark, which also charges less that most airlines, is technically not an LCC.)

As of March, LCCs accounted for 7.5 percent of domestic passengers, which isn’t bad, and growth seemed assured, but suddenly all three bargain airlines have hit a wall. Vanilla recently announced that it will cancel 154 flights, or 20 percent of its schedule, for June, and Peach said it would curtail its own schedule by more than 2,000 flights through October. Jetstar had planned to expand its flight coverage this year but has since postponed those plans.

The reason is a serious shortage of pilots, in particular flight captains. Vanilla says it has had personnel problems recently due to pilots quitting or taking sick leave, but its president, Tomonori Ishii, has assured the public that it will address the problem by “borrowing” personnel from its parent, ANA, but on a temporary basis. Of Peach’s 52 captains, eight were out of action due to illness or injury, but, in fact, the problem is more intractable.

CONTINUE READING about Japan's pilot shortage →

Japan home electronics makers plays dumb on smart TVs

Sunday, May 18th, 2014

Smart enough? The latest model LG net TV at Yamada Electronics

Smart enough? The latest model LG net TV at Yamada Electronics

Last year Panasonic ran up against a wall when it came out with its first dedicated “net TV set” for the domestic market. Though TVs had entered the Internet age years before, this new “smart” model in the home electronics giant’s Viera line was an all-in-one device. It hooked up to the Internet directly and basically acted as a computer monitor, so users could stream movies from on-demand services, watch YouTube videos, mirror their PCs and tablets, whatever, while also enjoying the usual offerings of terrestrial and satellite broadcasting.

Smart TVs were already available overseas, so in a sense Panasonic was playing catch-up, but it ran into opposition from the broadcast industry, which, perhaps justifiably, believed smart TVs bypassed advertisers, so at least one station refused to run commercials for the new Viera model, thinking the ads would make other advertisers uncomfortable. Eventually, the station changed its mind and started accepting the CMs, but the resistance is indicative of not only the media’s mindset, but that of the home electronics industry in general.

Some might call it a sympton of Galapagos syndrome, but the fact is Japanese manufacturers are in the smart TV race overseas. Panasonic and Sony both make smart TVs for the American and European markets, and they are available in Japan but are barely promoted. Given that Japan’s reputation as the world standard for television sets and home electronics in general has suffered in the last decade, it’s surprising that this sort of vanguard technology is being overlooked on the domestic front, but maybe it’s simply a matter of perception. According to an article published last summer in the New York Times, smart TVs are popular among younger consumers in Japan, but the TVs they are buying are not made by Panasonic or Sony. They’re made by LG, a South Korean company.

CONTINUE READING about smart TV's →

Labor shortage cutting across all industries

Friday, May 9th, 2014

A recent report in the Mainichi Shimbun says that Japan’s number one gyudon (beef bowl) chain has seen its business suffer due to lack of workers. Sukiya’s policy is 24-hour service, but in many areas the company can’t find part-timers who are willing to come in during the wee hours. The company has shortened operating hours at about 250 outlets, and a few have even been closed altogether due to the labor shortage. The Mainichi reporter talked to some former Sukiya part-timers who said when they worked the midnight shift they often ended up all by themselves, meaning they had to do everything — cook, wait on customers, clean up, etc. — alone. Besides being nerve-wracking, the job wasn’t worth the wage that Sukiya was paying, so they quit.

Sukiya in Tokyo

Sukiya in Tokyo

Sukiya isn’t the only restaurant company that’s having this problem. Watami, the popular izakaya (drinking establishment) chain that has been called by some a burakku kigyo (a “black company” that exploits its workers), has announced it will close about 60 outlets by the end of the year, which represents 10 percent of all their stores, though the company characterizes this move as being more about rationalization. More personnel will be employed at the remaining outlets in order “to improve the work environment.”

There’s a certain self-relexive irony at work here since the success of chain restaurants in the past 10 years or so was built on a greater reliance on part-time workers, for whom companies don’t have to provide benefits and whose hours and wages can be managed more flexibly. Invariably, the point is to save money so that the chain can be more competitive in terms of prices, but with the labor shortage expanding into other industries, part-timers don’t have to work for restaurants, which notoriously don’t pay well and usually involve evening and night work.

Consequently, to keep the part-timers it wants, restaurant chains are having to increase wage offers in want ads, a move that runs counter to the part-time strategy.

CONTINUE READING about labor shortages →

Golden Week activity influenced more by logistics than by economics

Saturday, May 3rd, 2014

Too late to stop now: Travel brochures for Okinawa and Hokkaido

Too late to stop now: Travel brochures for Okinawa and Hokkaido

This year’s Golden Week holiday isn’t as golden as it normally is owing to the way the national holidays that make it possible fall in relation to the days of the week. Showa no hi (the Showa Emperor’s birthday) was on a Tuesday and Constitution Day on a Saturday, so there was enough time between them for people to work, which means they didn’t get those days off. That left a measly 4-day weekend to get all the things people usually do during Golden Week done — like visit their home towns — and the truncated time period meant more highway congestion in a shorter time span, which the media treats with such predictable urgency every year that it has become something of cultural touchstone. In any case, all that gasoline wasted in 45-km traffic jams and constant stops at expressway service areas doesn’t make up economically for the money lost during the reduced holiday.

The Japan Travel Bureau declared that the Golden Week holiday started on April 25 and ended May 6, despite the fact that, for the first half of that period, schools weren’t closed the whole time so it wasn’t a bona fide “break” for families with children, regardless of whether or not dad had to work.

According to a JTB survey of 1,200 people who presumably already knew what they were going to spend over the holiday, the amount expended per person for those who planned to travel domestically was ¥34,400, or 4.2 percent less than last year. For overseas travelers the amount was ¥249,500, which represents an increase of 8.1 percent. The peak days for domestic departures were May 3-4, and for foreign departures May 2-3, thus proving that the first half of the holiday was virtually meaningless. This concentration of recreation into such a short period will likely spawn even more post-GW stories than usual on the spike in attendant divorces and job resignations.

CONTINUE READING about Golden Week 2014 →

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