Archive for the ‘Lifestyle’ Category

Some local governments think health checkups save money, and some don’t

Saturday, April 5th, 2014

Preemptive stride: If you do have metabolic syndrome you can guess what the doctor will tell you to do

Preemptive stride: If you do have metabolic syndrome you can guess what the doctor will tell you to do

Though there’s a minority opinion to the contrary, conventional wisdom says that regular health checkups are the only way to prevent the development of major illnesses, so, logically, they should also help reduce healthcare costs in the long run. This is the concept behind tokutei kenko kensa, or “special health checkups,” that were started six years ago by the Ministry of Health, Labor and Welfare. The main target is metabolic syndrome, the inevitable gain in fat that accompanies midddle age and which, unchecked, is thought to be the gateway to many so-called lifestyle diseases, like diabetes.

The idea is that local governments would provide checkups to insured residents between the ages of 40 and 74 with national insurance, which, in principle, doesn’t cover regular general health checkups since Japan’s public health system is designed to treat existing problems. If the special checkups uncover unhealthy situations, then the individuals are advised with regard to better diets or exercise regimens, or even pharmaceutical assistance, so as to head off costly treatment down the road, like, for instance, dialysis, which can cost on average ¥5 million a year, most of which ends up being paid for by the government, both local and central.

CONTINUE READING about health checkups →

Special K: Mini-cars come of age in a maxi-world

Sunday, January 26th, 2014

Thinking inside the box: Honda's N-WGN

Thinking inside the box: Honda’s N-WGN

The nationwide used car dealer, Gulliver, recently set up a new venture called Gulliver Minicle, which deals only in kei-jidosha, often referred to as minicars in English, though here we like to call them K-cars, which make up a separate class of automobile. The engine displacement can’t be more than 660cc, and they were developed in the ’60s and ’70s for people with limited incomes.

When K-cars first appeared the engines were as small as 360cc, and have always been a point of contention for the U.S. automobile industry, which describes them as a “non-tariff trade barrier” because taxes for K-cars have been much less than they are for regular cars and thus are deemed as being unfair competition for infamously larger American cars — though it should be noted that U.S. automakers have tried to sell compacts in Japan.

K-cars have always had one glaring drawback. Because the engine is so small, they have to be light, and that means they are less safe. Consequently, families don’t buy them; or, at least, they didn’t until recently.

Gulliver’s launch of a retail entity that only sells used K-cars shows that there must be a viable market, since K-cars are already cheap and Japanese people aren’t big used car buyers. So far there is only one Minicle, in Morioka, and it has about 50 cars on display divided into three sizes: S, M and L, like apparel.

According to an article about the store in the Asahi Shimbun, there really isn’t much difference in the sizes, but the designations appeal to women, who are now the main target demographic for K-cars. There is even a play space in the store where kids can relax while mom is shopping for new wheels.

Gulliver is already planning Minicle stores in Hokkaido, Tohoku, Kyushu and the San’in region, and by 2018 expects to have about a dozen throughout Japan, mainly in the vicinity of regional capitals and not so much in the big three metropolitan areas.

In December, the Japan Light Motor Vehicle and Motorcycle Association estimated that 2.1 million K-cars would be sold in Japan during 2013, a new record. In contrast, sales of all other cars amounted to about 3 million. So while sales of minicars increased by 4.8 percent over 2012, sales of other cars decreased by 5.3 percent.

As a portion of all car sales, Ks increased by 2.4 points to 39.3 percent. The only other automotive sector that showed more growth was foreign (read: German) cars, whose sales increased by 9 percent, also a record. And in terms of production by Japanese automakers, 40 percent are now K-cars.

The obvious reason for the popularity of minicars is their price, but they’ve always been cheap. It’s their reason for existing in the first place. Some say that people bought them last year because the K-car tax is set to be eliminated sometime this year, but a more likely reason is increased safety and functionality.

More than a year ago, Daihatsu started selling a new version of its Move model that uses sensors to automatically reduce speed when it gets too close to the car in front of it. Though it’s offered as an option at ¥50,000, more than 80 percent of the buyers order it. In succession, similar options were added by Suzuki to its popular Wagon R model, for ¥42,000, and by Honda to its N-WGN model.

A Honda representative told Asahi that since 64 percent of K-car drivers are women, this option was incorporated specifically to attract them. A good portion of K-cars are bought as second cars, for shopping and shlepping the kids around. In the past, these women bought compact cars, but they’re switching over to Ks.

Nissan and Daihatsu have upped the ante by also offering windshields that cut ultraviolet rays, something else women demand. In addition, K-cars now have much roomier interiors than in the past and larger cargo areas. In truth, there isn’t much difference, performance-wise, between a K and a standard compact.

Which is why the U.S. is even angrier than before, because that makes the so-called trade barrier even higher to scale. Due to regulations and consumer sentiment, K cars aren’t marketable in America, and the Big 3 automakers aren’t going to manufacture them only for one market, but that could be changing. India seems ravenous for K-cars and Suzuki is quickly setting up factories and joint ventures on the sub-continent.

Some experts say that the U.S. Trade Representative’s gripe about Ks is actually a means of keeping pressure on other sectors, generating leverage to open Japan’s agriculture and insurance markets more, for example. Also, it gives the American government an excuse to maintain its own tariff to protect the U.S. truck market from low-priced Japanese imports.

McDonald’s smells the coffee: Limited expectations are here to stay

Friday, December 27th, 2013

Fill 'er up: Customer using self-service coffee maker at 7-11.

Fill ‘er up: Customer using self-service coffee maker at 7-11.

If the central point of Abenomics is to boost prices and thus wages and consumption — the old “raise all boats” metaphor — then to a certain extent the plan has succeeded over the last year. Consumers don’t seem to be fixated on cheap goods and services any more, though, to be honest, it’s difficult to tell if this willingness to spend more is a function of anticipation for April’s consumption tax hike. But for the time being there seems to be that old desire for high quality stuff, regardless of how much it costs; which isn’t to say consumers aren’t looking for cheap things, only that they aren’t making it a priority any more.

This paradox seems to have had a bad effect on the fortunes of a company that some once thought was invincible: McDonald’s. Since August, the fast food behemoth’s Japanese operation has had to lower its sales projection for fiscal 2013 twice. Profits are expected to be around ¥5 billion, or a whopping ¥6.7 billion lower than originally thought. Sales have decreased five months in row, with the number of customers dropping for 7 consecutive months. The company is telling the media that the reason is “no hit product” this year, thus making it sound like a PR failure, but according to Asahi Shimbun, and almost every other Japanese media that has reported the story, McDonalds’ poor showing seems to be more systemic, an indication of a sea change in consumer sentiment.

The company’s response has been to bring in new blood. Sarah Casanova, a Canadian, was appointed president of McDonald’s Japan last summer, and, again, it seems to be more a matter of an image makeover. The announced new strategy is to target women as a demographic, since it is younger females who have tended to resist McD’s charms the most during its two straight years of falling revenues. The plan reinforces “healthy menu” items, which to a company like McDonald’s means offering more things with chicken in them.

Though it doesn’t sound like much, it’s actually quite a turnaround. When the previous president, Eiko Harada, was appointed in 2004 his big move was pushing the so-called ¥100 Mac, the cheap hamburger that was always going to be McDonald’s mainstay, and it worked. For the next six years profits grew.

The next big coup was ¥100 coffee, which effectively challenged coffee shops and coffee chains like Starbucks. Then the company made over their restaurants with more attractive decor. These various gambits were predicated on boosting the brand, but actually it was the price and the speed of service that mattered to customers. People buy McDonald’s hamburgers not because of the taste or the atmosphere, but because they’re cheap, and the same went for the coffee, which was pretty good considering but not as good as Starbucks, for what it’s worth.

To make matters worse, McDonald’s raised prices in the past year, thinking that the economy justified the change, and in a way it did, but people don’t think that way about McDonald’s. They aren’t willing to pay more for fast food, no matter how well it’s presented or how nice the decor is.

In the era of Abenomics, that means any competition can eat into McDonald’s sales more easily. Just as McD stole customers away from Starbucks when it launched its ¥100 coffee, now convenience stores are taking business away from McD with their own cheap coffee. About a year ago 7-11 put self-service coffee machines, which grind beans and brew coffee while you wait, in 16,000 stores, and by September they had sold 200 million cups. It only costs ¥100, and other CS have followed suit, though Lawson’s coffee is a bit more expensive at ¥150.

The market has grown so much that the consumer report magazine Nikkei Trendy named convenience store coffee the #1 hitto shohin (hit merchandise) of the year. It should be noted that Japan is a formidable coffee market, number 4 in the world in terms of consumption — 50 percent more than green tea, in fact. Even sushi restaurants are now serving fresh coffee. More significantly, 7-11 reports that its new coffee service does not subtract from other in-store coffee-related sales, such as canned coffee or chilled pack coffees. It’s simply gravy.

But someone has to lose in this equation, and it seems to be McDonald’s, which has a lot to lose. After all, ¥260 billion, which is McD’s projected revenue this year, is still a great deal of money. The problem is that McD is associated with hamburgers, whose traction on the Japanese imagination has always been tentative. Older people don’t really eat them as much, and Japan, as everyone knows, is the fastest aging society in the world.

Also, the tendency to eat out is becoming weaker in Japan as the population ages. Restaurant sales have decreased by 20 percent since they peaked in 1997. The weekly magazine Gendai, in typical hyperbolic fashion, has predicted the end of McDonald’s in Japan after reporting that the company will have closed 160 outlets by the end of this fiscal year.

Rental video stores ponder their reason for existing

Sunday, December 22nd, 2013

Many happy returns: Prepaid mailer for Rakuten DVDs

Many happy returns: Prepaid mailer for Rakuten DVDs

It’s coming up to that time of year again, the long post-Christmas New Years break when days not spent in the company of relatives you can’t stand are wiled away in front of the television airing programs you can’t stand even more. Traditionally, that makes it one of the biggest seasons for the rental video business; or, at least, it used to. The industry has been in a progressive slump since it peaked more than a decade ago.

According to industry group Japan Video Software Association, the number of stores in Japan peaked in 1990, when it stood at 13,529. In 2012 there were only 3,648, a drop of three-fourths. In terms of revenues the biggest year for rental videos was 2004, when the industry took in ¥258.4 billion. It has decreased by about ¥100 billion since then.

A recent article in the Mainichi Shimbun quoted a 41-year-old owner of a rental video store in Yokohama who said that he used to run two other shops but had to close both. There’s not enough demand for him to be able to afford all the new movies coming out on DVD or Blu-Ray, and it’s new titles that have driven rentals in the past. He remembers the days when he could charge ¥1,000 for a new movie for two days, but since then prices have dropped drastically, mainly due to competition from major national chains.

The main culprit, of course, is the march of technology. Though on-demand streaming and downloading isn’t as widespread in Japan as it is in the U.S., the big three mobile phone carriers have started offering movies that can be streamed on TV sets at home. The number of titles right now is only about 7,000, but even at ¥500 per title, it beats trudging down to the local rental store, if one actually exists within trudging distance.

The problem with on-demand is that accessing such services requires a certain level of computer literacy that tends to decline the older the customer is. This is always a problem for IT service companies but may be the last bastion of revenue for rental video stores. An editor from the industry magazine Video Insider Japan told Mainichi that the strategy from now on will be for video stores to target “customers in their 60s and 70s.”

But only the major chains can afford to do that, apparently. Between them, Tsutaya and GEO account for 70 percent of all the rental video stores in Japan, and because they can afford to buy as many new titles as they want, they price smaller stores out of business. Tsutaya, however, is a franchise operation, and individual owners may find it harder to compete against GEO outlets, which are company owned. Since Tsutaya franchise owners can set their own prices, some are being forced to match GEO’s in order to compete, while others are keeping prices higher. It all depends on location. Also, Tsutaya has made exclusive deals with some distributors that give them a distinct advantage. For a time, they were the only company that had permission to rent out “The Amazing Spider-Man.”

However, in order to attract this older cohort that is now the main demographic for rental videos, chain stores have to go to them rather than the other way around. Both Tsutaya and GEO offer plans wherein customers pay a set monthly fee for a certain number of disks that are delivered directly to their homes. This system has been available for about 10 years, and the only real innovative change has been the addition of so-called spot rentals, meaning members can order videos a la carte without having to sign up for a plan. Right now, GEO is offering some titles for as low as ¥80, with Tsutaya offering ¥100 (both for limited times). What’s interesting about spot rentals is that, depending on which videos you rent and how many, they can be cheaper than monthly plans.

GEO has three monthly plans. The standard plan is ¥945 for four DVDs. After that there’s an 8-disc plan for a little less than ¥2,000, and a 16-disc plan for a bit less than ¥4,000. When you sign up for a plan you get the first month free, but the real difference is in the delivery fee. Whether your order is a spot rental or part of a monthly plan, the fee is ¥300 for up to seven discs at a time. The fee is ¥500 for orders of 8-16 disks. Regardless of the size of the order, the time limit is 10 days from the day the customer receives the disks. As with all such home delivery systems, the company includes a prepaid envelope for returning the discs. However, it’s important to note that GEO does not charge a late fee for people who belong to monthly plans. Late fees for spot rentals are ¥157 a day.

But GEO and Tsutaya now have to contend with an upstart: Rakuten. The Internet mall’s inventory isn’t as deep or wide as the other two companies, but its spot rental system is in many ways cheaper and more amenable to the way most people rent videos. Rakuten also charges ¥300 for delivery fee, but you can only request up to two discs per order. After that the delivery fee increases in increments of ¥200. In that regard, GEO would seem to have the advantage, but actually not. Brand new titles are priced the same as GEO’s, around ¥300, but older titles are usually priced at around ¥50. And titles that are more than, say, two years old can be as cheap as ¥10 or even ¥5.

Like GEO, the time limit for a Rakuten spot rental is 10 days, but if you see two discs over the course of two days you return the discs and can immediately order two more. They usually arrive within a day of placing the order. For sure, the delivery fee for GEO is cheaper, but if you took full advantage of the fee and ordered 7 discs, you’d still have to watch all of them in less than 10 days, and even at ¥80 per disc, they aren’t as cheap as Rakuten’s.

Rakuten’s system is especially rational if you want to watch full seasons of TV series. Last month we watched the second season of “Homeland,” which, because it’s relatively new, cost ¥280 per disc, with two episodes per DVD. But we also went through the first two seasons of “Mad Men,” which were only ¥5-¥10 per disc, also with 2-3 episodes per disc. And they always had the DVDs we wanted in stock. It beats trudging down to the rental video store.

Supermarkets finally get serious about shopping bags

Thursday, November 21st, 2013

A few weeks ago we were waiting at a checkout counter in an Aeon supermarket and placed in the basket one of those laminated cards that say you don’t need a shopping bag. When our turn came the cashier gave us a funny look and asked us if we really needed a bag for one item. We then read the card, which said that you should put it in your basket if you want a shopping bag.

Card saying bags cost ¥2 each

Card saying bags cost ¥2 each

We made a false assumption because we don’t usually shop at Aeon. The supermarket we normally patronize asks you to indicate if you don’t want a bag, and they’ll knock ¥2 off the total if you do. Apparently, that practice is now giving way to the opposite tactic: You have to tell the cashier if you want a bag, in which case they will charge you for it.

Aeon, Japan’s biggest supermarket chain, started this practice way back in 2007, and as of Nov. 1 every outlet follows the policy, which is ¥5 for an extra large bag and ¥3 for a large bag. Even Aeon’s discount food chain, MaxValu, has adopted the charge-for-bags policy. For that matter, so has every other major supermarket chain. Ito Yokado charges ¥2 per bag, Uny ¥5, Seiyu ¥2 for a medium and ¥3 for a large, and Daiei ¥3 to ¥5, depending on the size.

According to Sankei Shimbun, Aeon donates all the money it collects for bags to various environmental causes, while Uny donates half the money it collects. Saving the environment is what bag reduction is all about, though the government stresses it from a different angle than you might think. A study sponsored by the Environmental Ministry looked at the shopping bag problem in terms of resources. One bag requires 18.3 ml of oil and Japan uses 30.5 billion shopping bags a year, which is the equivalent of more than 600,000 kiloliters of oil.

The study also calculates that 967 shopping bags are given away every second in Japan, or the equivalent of 8.82 two-liter PET bottles of oil. The study says that shopping bags waste precious resources, which is of course a relevant situation in resource-starved Japan, though in most other countries the plastic bag problem is associated with pollution.

The main reason bags aren’t considered a waste problem in Japan is that they are routinely incinerated here. In America plastics generally are not burned, which is why the campaign against shopping bags is older, since most end up as landfill. Then again, more European countries are starting to burn plastic refuse, but they are also more strict about shopping bags. In Ireland, for example, a shopping bag will cost you ¥15, which is why there are almost none in Ireland any more.

Card saying no bags and it's ¥2 off your purchase

Card saying no bags and it’s ¥2 off your purchase

Refuse officials in Japan say there is no problem with burning plastic. Dioxin emissions are almost non-existent because Japanese incinerators use very high temperatures, an assertion some environmentalists are skeptical of. But in any case, people still use shopping bags and plastic bags mandated by local governments to dispose of household waste, and the real problem with incineration isn’t plastic but organic waste and kitchen scraps, which tend to be wet and thus require a lot more heat to burn up.

So while the bags themselves may not be a problem, what they contain is. San Francisco realized this and went beyond limiting plastic bags, requiring residents to dispose of organic waste in composting boxes, and it’s been a success.

So while every reduction helps, environmentalists belief that only limiting shopping bag usage isn’t enough. One person on the Internet (scroll down to commenter qqme9839) calculated that in 2009 burning garbage accounted for only 3 percent of all CO2 emissions. And since plastic constituted 45 percent of the garbage being burned, it created only 1.35 percent of the CO2 that was emitted that year. And since production of shopping bags in 2009 accounted for 0.55 percent of all discarded plastic by weight, that means plastic bags’ contribution to CO2 was 0.075 percent. Reducing people’s reliance on shopping bags is a good thing, but it’s not the only thing.

Young women’s life preferences acknowledge workplace reality

Friday, September 27th, 2013

Preference or default?

Preference or default?

Social media has been buzzing about the results of a survey released this week by the Ministry of Health, Labor and Welfare. The survey was carried out last March among men and women, both single and married, between the ages of 15 and 39. The results that provoked the most discussion had to do with attitudes toward marriage, or, more precisely, a woman’s role in a marriage.

When asked if they want to be full-time homemakers, 34.2 percent of the female respondents said “yes” or “probably.” And while more women, 38.5 percent to be exact, said they didn’t want to be homemakers, the portion who said they did was apparently higher than people expected, especially now that the government is pushing an agenda to make it easier for women to join the workforce and contribute more directly to the economy.

Some people are saying that these results indicate a regressive attitude among women, but it’s impossible to say from the results that the women who want to be homemakers are being guided by some kind of cultural gender identification.

When men were asked in the survey if they wanted their wives to be homemakers, 19.3 percent said “yes” or “probably,” which implies that the other four-fifths want their wives to work. That’s because they know that a single income isn’t enough any more to support a household, especially one that does or will someday include children.

When the women were asked how much income they thought their husbands should make a month, 40.8 percent said ¥200,000-¥300,000, 24.8 percent said ¥300,000-¥400,000 and a mere 4.2 percent said “it doesn’t matter.” So much for marrying for love.

A more likely reason for this desire to stay at home is a perceived understanding of workplace norms, something the labor ministry didn’t ask about. In a different survey conducted by the Japan Management Association, young men (751) and women (249) already in the workforce were asked if they aspired to be leaders among their colleagues. Of the female respondents, 81 percent said they would rather be “supportive.”

One of the more pressing issues in Japan is the paucity of women managers, a situation that is blamed on implacable male dominance in the workplace. The association analyzes this result as meaning that women value their private lives over their careers. In other words, they don’t think they can raise children or have families if they are in leadership positions. And, in fact, this is still a widely held belief.

You are where you eat: McDonald’s Japan sets prices by region

Thursday, September 19th, 2013

According to retail marketing research firm Soft Brain Field, McDonald’s is overwhelmingly the most popular fast food in Japan, with 68 percent of survey respondents saying they patronize the American hamburger chain regularly. When asked which fast food they like the most, the answer for 33 percent is also McDonald’s, with Mos Burger second at 25 percent and Mister Donuts third at 17 percent. Forty-two percent of McDonald’s users patonize an outlet once a month, and 29 percent do so two or three times amonth, more often for lunch (43 percent) than dinner (29 percent).

Why do they prefer McDonald’s? The most common answer is that it’s inexpensive and they can order as little as possible, meaning they can go there when they’re not in the mood for a full meal.

High overhead: McDonald's Roppongi Hills

High overhead: McDonald’s Roppongi Hills

The main underlying attraction of fast food is predictability. People who patronize national or international chains know what to expect in terms of quality and, more significantly, price. They probably think that prices are uniform from one outlet to another. The British newsweekly The Economist exploits and reinforces this perception with its occasional Big Mac Index, which analyzes relative values of national currencies by comparing the prices of Big Macs in all countries using the assumption that the value of a Big Mac is uniform.

However, if you go to McDonald’s American home page, prices are not listed, and if you do a web search you find that prices seem to vary slightly from one state or city to another, though it isn’t clear for what reason. Some people seem to think it has to do with differences in wages or local taxes or the fact that some stores are franchises while others are corporate-owned, but according to a recent article in Forbes, production costs have no impact on McDonald’s pricing, only competition. McDonald’s sets prices according to what the company reasonably believes it can get for its products in a given market at a desirable volume.

McDonald’s Japan also does not list prices on its home page, but it is fairly well known that prices differ from one outlet to another. These prices are not set by the outlets themselves. They are set by the headquarters, and on Sept. 10 the company announced that it was expanding the range of prices on its menu as well as increasing prices by as much as ¥50 per item. Since last year, the company’s profits have been dropping and it has pinpointed outlets that McDonald’s believes “can absorb price increases” without undermining its loyal customer base.

McDonald’s Japan first set up regional price schedules in 2007 by dividing Japan into six zones. Under the new system there will be nine zone categories, but these zone categories are not necessarily prefecturally-based. Urban outlets within a prefecture will have higher prices than suburban or rural outlets. Realistically, this means there will be seven different prices for a Big Mac, depending on the zone, ranging from ¥310 to ¥390, up from four different prices ranging from ¥290 to ¥340.

The highest prices will, of course, be in Tokyo. There is one zone within central Tokyo, made up of 10 outlets, that boasts the highest prices in Japan, and the overall price scheme has been formulated to support urban outlets, which serve the largest cross-section of customers. Rents and other overhead in the centers of large cities are multiplicatively greater than they are in the boonies, though prices are not multiplicatively different. The largest gap in prices between zones is ¥80, up from ¥50 before the changeover. Unaffected will be the prices for promotional loss leaders, like the “¥100 Mac” and Chicken Crisps, not to mention certain meal sets. In a sense, the countryside is helping support city folks’ fast food habits.

According to the Asahi Shimbun, the strategy is simply to maximize profits and has nothing to do with regional wage demands, local taxes or cost-of-living conditions. The company tested the new pricing system last April in a select number of outlets and determined that the number of patrons did not change when prices went up slightly. Overall, about 40 percent of the menu items will be affected by the price changes.

McDonald’s predicts that the price increases will boost its profits by 1 percent, which doesn’t sound like much but with an outfit as huge as McDonald’s that should amount to billions of yen. In any case, the lower yen has increased the price of imported ingredients, particularly meat and potatoes.

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