Archive for the ‘Retail’ Category

Will rice cookers save the Japanese home electronics industry?

Monday, July 14th, 2014

Pricey rice: High function rice cookers on display at a discount electronics store

Pricey rice: High function rice cookers on display at a discount electronics store

It’s been well documented that the Chinese are considered the saviors of the Japanese tourist trade, but there’s more to the story than just tour numbers and hotel bookings. An article in the July 10 Asahi Shimbun described an odd and recurring dilemma at Kansai International Airport. Chinese tourists are buying Japanese-made rice cookers at the airport’s souvenir shops in large numbers. Since the purchases are made after the travelers have gone through immigration processing, they don’t have to pay duty, but at that point they’ve already checked their luggage, and the rice cookers in their boxes won’t fit into overhead bins in airplane cabins.

Some of the rice cookers will fit if they’re removed from the boxes, but people on these flights are buying more and more of the home appliances so in some cases there is no room for any of them, which means flight attendants have to assist in having these patrons check the items so that they can put them in the cargo hold, and as a result more and more flights back to China are being delayed.

Rice cookers became a very popular item among Chinese tourists in 2010, when visa rules were relaxed to allow travelers who weren’t members of organized tours to come to Japan freely. One of the clerks in the Osaka airport souvenir store told Asahi that he once saw a Chinese tourist buy six of the devices at one time. One Chinese businessman who comes to Japan on a regular basis says he’s always getting requests from acquaintances to buy rice cookers for them. This souvenir store, in fact, sells an average of 10 cookers a day, most of them high-end models, which can cost as much as ¥90,000.

Last April, during cherry blossom viewing season, the store sold an average of 20 a day. A representative of Yodobashi Camera Multimedia Umeda in Osaka told the paper that whenever Chinese tour groups visit the discount electronics store they usually buy more rice cookers than they have members. Yodobashi has a duty-free system for tourists, but actually most Chinese prefer buying their rice cookers in the airport, since the price isn’t any different and they don’t have to lug the things around with them prior to departure. But there is the problem of carry-on.

Why rice cookers? There are few appliances that reflect Japan’s so-called Galapagos design mindset as thoroughly as rice cookers. They basically do one thing: Cook Japanese rice in a way that only Japanese people prefer. The rest of the world doesn’t eat much sticky, white, short-grained rice unless it’s combined with sauce or other prepared foods, and that includes the rest of Asia. Even China, from which Japan first imported rice-growing techniques, isn’t big on rice as a separate dish. It prefers long-grain rice, which is always prepared with something else in mind, and while it is considered a staple, at mealtime it isn’t as important as other dishes. In the northern part of China, many people don’t eat rice at all, since they grow more wheat there due to the colder climate.

But as more and more Chinese tourists have come to Japan, they have discovered the unique joys of sticky white rice.  As incomes rise in China, people are broadening their food choices, and one of those choices is short-grain rice. If it’s Japanese grown, it’s even better, despite the high price. And the best way to prepare it is with a Japanese-made rice cooker.

According to the Japan Electrical Manufacturers Association, more rice cookers are manufactured in China than in any other country in the world, but the vast majority are inexpensive models with few features. The first Japanese rice cooker was made by Toshiba in the mid-1950s, and since then they have become extremely sophisticated. Some even include porcelain containers and functions that allow the user to make rice that tasted as if it were made the old-fashioned way, in a kamado, the traditional, charcoal burning Japanese stove. Now, apparently, Japanese manufacturers are incorporating functions that will appeal to Chinese users, such as the ability to cook long-grain rice and different kinds of porridge.

In its own peculiar way, the Japanese rice cooker has done more to extend a specific Japanese sensibility than any electronic device since the Walkman. As any Japanese person over a certain age will tell you, the preparation of rice is the most important culinary consideration with regard to the Japanese menu. Cooking rice the proper way is difficult and time-consuming. You have to wash the rice throroughly until the runoff water is utterly transparent. Then the rice has to sit in that water for a certain length of time. The pot used for cooking rice, a kama, is only used for rice. First the rice in the water is boiled and the flame reduced — which, before gas stoves, meant removing pieces of charcoal from the kamado. And the person doing the cooking has to stay and monitor the flame for at least 15 minutes.

Consequently, the rice cooker was a huge boon for housewives. It not only freed up their time so that they could cook other dishes simultaneously, it freed up cooking space. Most Japanese kitchens with natural gas have only two burners. When makers added timing devices, rice cooking became exponentially easier because it cut the time needed for preparation, especially in the morning when housewives had to prepare breakfast and lunchboxes. Reheated cold rice is normally not acceptable. That’s why the next development was the “jar,” a special device for storing already made rice to keep it warm for later in the day without drying out. When the rice cookers themselves incorporated jar functions, the appliance had become perfect.

But only perfect to Japanese people. Most everyone else in the world didn’t eat rice this way, but apparently the Chinese are catching on. It’s too much to hope that their sudden affection for Japanese style rice will single-handedly save Japan’s home electronics industry — not to mention Japanese agriculture — but you never know. Look what the Walkman wrought.

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.

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 →

The price is right, but sometimes difficult to read

Sunday, April 27th, 2014

Do the right thing: this supermarket tells customers that all prices indicated include the consumption tax

A quick survey by the Ministry of Internal Affairs and Communiciations has revealed that the average price of goods and services, excluding “fresh produce,” since the consumption tax hike went into effect April 1 has increased 2.7 percent, which sounds about right since the hike itself was 3 percent. When the consumer price index is announced next month, the ministry projects that it will be 3 percent higher than it was a year ago, so everything is going as planned.

Of course, that’s the word from on high. Here in the real world, meaning in the stores where we all shop, the situation isn’t that clear-cut.

Some consumers will notice that prices have gone up much more than what they would perceive as 3 percent, while some prices have actually gone down, and many prices have stayed the same.

CONTINUE READING about post sales-tax prices →

Consumption tax hike projected to increase appeal of electronic money

Monday, March 24th, 2014

The ones: You'll be seeing more of these guys in the near future

The ones: You’ll be seeing more of these guys in the near future

Last month the national mint intensified production of ¥1 coins in anticipation of the consumption tax hike on April 1. The Ministry of Finance wants 26 million of them manufactured by the end of March, and then another 160 million after the start of the new fiscal year. Once the consumption tax goes up from 5 to 8 percent, retailers will need more small change.

With a 5 percent tax, it’s relatively easy for stores to limit their use of coins since they can set prices based on multiples of 5. Maybe it’s possible to do that with multiples of 8, too, but not right away, and many fear they will not have enough ¥1 coins on hand when the tax hike goes into effect. An employee of the nationwide ¥100 shop CanDo told Asahi Shimbun, “Altough we sometimes receive ¥1 coins in payment from customers, we don’t recycle them as change to other customers, but now we’re trying to hoard as many as possible.”

If the consumption tax increase is an inconvenience to retailers, it’s even more of a pain in the neck for the government, since it costs between ¥2 and ¥3 to make a ¥1 coin, which is 100 percent aluminum. It’s the first time the mint has produced ¥1 coins on anything approaching this scale in four years. It will also produce an extra 100 million ¥5 coins, just to be safe. The government doesn’t want to relive the small change panic that happened in 1989, when the 3 percent consumption tax was first introduced.

CONTINUE READING about the consumption tax hike's effect on e-money →

Tax structure encourages getting wasted

Monday, March 3rd, 2014

Zero's not in it: Selection of Suntory chuhai at discount store

Zero’s not in it: Selection of Suntory chuhai at discount store

There’s no end to speculation as to how the consumption tax increase in April will affect the country, socially as well as economically. Last week, Tokyo Shimbun published a conversation between a college professor and one of its reporters about the effect on beer prices and, in turn, beer consumption, which last year declined for the ninth year in a row.

When the reporter asks the professor about this effect the professor feigns amazement that the reporter, who specializes in tax matters, didn’t know that “42 percent of the price you pay for your beer is already tax.” He goes on to explain that the beer tax is a holdover from the 19th century, when beer was considered a luxury item. Since then it’s become much more the drink of common people thanks to improved and cheaper refrigeration, but the government liked the revenues too much and maintained the tax structure for beer. To the professor’s thinking, the tax should be pegged to alcoholic content, and since beer’s is relatively low the tax should also be lower than it is for other alcoholic beverages.

It’s easy to get people to pay the tax since it isn’t indicated on the package or even at the place of sale, unlike the consumption tax. For the sake of reference, when you buy a 350-ml can of beer you pay ¥77 in tax. If you bought the same volume of whiskey you’d pay ¥129 in tax; shochu ¥70, nihonshu ¥42 and wine ¥28.

Basically, that means the consumption tax is levied on a tax, since the consumption tax is determined by the price that the wholesaler and retailer pays for the product, which, by the time they receive it, already includes the alcohol tax that is levied at the manufacturing stage. “When the government said they’d increase the consumption tax, people got angry,” says the professor. “But no one says anything about the alcohol tax, because people don’t notice it.” The reporter thinks that a “tax on a tax” violates the principle of taxation. The professor doesn’t disagree, and adds that beer accounts for half the revenues brought in by the alcohol tax. Because beer makers are large companies with responsible accounting practices, it’s easy for the Finance Ministry to collect the tax. The reporter says, “Why don’t manufacturers get angry?”

Actually, that’s why they started making the “beer-like” happoshu in the late ’90s. Because the ingredients used in happoshu are different from those that define beer for tax purposes, the beer tax doesn’t apply, and so makers could sell it at a much lower price. The government, of course, didn’t like that and eventually raised the tax rate for happoshu, too, though not as high as it is for beer (¥46 for a 350-ml can). Makers came back again with dai-san (third type) beverages, which use fermented soybeans for flavor instead of hops, and that got around the happoshu tax (¥28 for 350-ml). But while these new, cheaper brews outsold “real” beer handily, sales for all three beverages have still decreased over time, due to the shrinking population and a younger generation of consumers who don’t drink as much as their parents did.

In that regard, beer makers don’t see much of an impact of the consumption tax hike on beer and beer-like beverage sales; or, at least, they don’t see any point in trying to offset the hike. But they are modifying their lines of canned drinks that contain shochu, colloquially called chuhai. As the price of chuhai goes up thanks to the consumption tax, they are increasing the alcohol content. In fact, many companies have already added more alcohol to their chuhai products.

Kirin Beer increased its Hyoketsu Strong from 8 percent to 9 percent alcohol, and in April it will boost its Hon-shibori Lime chuhai drink from 6 to 8 percent.

Asahi Beer is already advertising its new Karakuchi Shochu Highball, which is 8 percent, in a bid to persuade normal fans of high balls — whiskey and soda — to switch to shochu and soda. That’s a full 5 percentage points higher than Asahi’s other chuhai, Slat, and both beverages will be sold for the same price. (Note: Slat is aimed at young women and the word suggests slimness, though an English speaker may be forgiven for thinking the name an unfortunate choice for such a target group.)

Suntory’s chuhai product, -196 Degrees C Strong, which enjoyed a 22 percent share of the chuhai market in 2012 thanks to its already hefty alcohol content, will be strengthened from 8 to 9 percent. The company told Asahi Shimbun that it expects sales to grow by 8 percent.

The target is middle-aged and elderly men, the main demographic for alcoholic beverages anyway. Makers think they will be attracted to the cost effectiveness, according to the Asahi, which means they can “get drunk more easily” for the same amount of money. In many countries, tax on alcohol is referred to as a “sin tax,” since it has a double-edged purpose: raising revenues on a product or service that may be harmful to society, on the one hand, and on the other checking consumption of the harmful product or service by making it more expensive.

This latter purpose doesn’t seem to apply in Japan, where alcohol companies have figured out a way to use the tax structure to their advantage. There’s no sin in that.

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