Posts Tagged ‘Internet sales’

Mail order scofflaws are the exception that proves the rule

Monday, September 15th, 2014

The gods know if you're honest: An unmanned farm stand in Inzai

The gods know if you’re honest: An unmanned farm stand in Inzai

A recent article in the Asahi Shimbun described a small cross section of consumers who take advantage of a peculiar aspect of mail-order sales in Japan. Some small- and medium-sized sales agents who do their business over the Internet have problems with customers who don’t pay. In most cases, Internet and mail order sales are done on a prepaid basis: The buyer either provides credit/debit card information or makes a bank/post office money transfer prior to the item being shipped. But a few work on what can best be described as the honor system. They send the item to the buyer with a bill that the buyer pays after receiving the item. Sometimes the bill has a handling fee attached and sometimes it doesn’t.

According to the Asahi article, some people don’t pay up, and perhaps never intended to. A non-profit organization called the Mail Order Unpaid Protection Network (MOUPN), which monitors such scofflaws, estimates that mail-order sales companies lose about ¥20 billion a year to such people.

Asahi, in fact, found one, though he seems reluctant to admit it. In the article, a reporter visits an unnamed man “in his 50s living in an apartment in Tokyo.” The man receives an order of green tea by courier, but the reporter notes that the name on the package is that of a woman. “I made the order on behalf of a friend,” the man explains. When asked why he didn’t use his real name, the man doesn’t answer. Other packages arrive addressed to different women. When asked what’s in one of them the man shrugs and says, “Maybe food?” He insists that he will pay for it but usually “just forgets.”

CONTINUE READING about abuse of Japan's honor system

Government wondering how to tap burgeoning ebook market

Saturday, October 12th, 2013

No waiting

No waiting

It’s official. The consumption tax goes up to 8 percent in April, and the government is anxious to plug any loopholes. The most bothersome one is for ebooks. Though domestically sold ebooks, meaning those distributed by Japanese vendors from physical addresses in Japan, are already taxed, those sold from overseas are not, and the tax bureau is wondering how to correct this problem, especially now that the price gap between an ebook purchased from a foreign-based agent and one purchased from a Japan-based seller will widen, thus setting up a disadvantage for the latter. Market research company Daiwa Soken reports that in 2012 the government missed out on ¥24.7 billion worth of tax revenues from the purchase of ebooks from abroad.

Legally, sales transactions that occur outside of Japan are not subject to consumption tax, and the place of the transaction is determined by the address of the seller. So if you go to Amazon.co.jp and look at various books, you’ll notice that those which are sold by Amazon Japan have consumption tax included in the price, while ebooks sold by Amazon Services International do not. What the government wants to do is change the law so that the place of the sales transaction is not the place of sale but rather the place of usage, a tactic that some American local governments have tried with regard to sales tax. But sales taxes are paid at the retail stage, while consumption taxes are incurred at every step of distribution, so a Japanese importer adds the tax after the item arrives in Japan.

If a customer in Japan buys the book directly from overseas, no tax is imposed, but when the law is changed customs could add it because the imposition location is the user’s address, not the seller’s. However, since ebooks, as well as music tracks and software, tend to be purchased over the net it’s more difficult to monitor, if not downright impossible.

According to Tokyo Shimbun, the Finance Ministry’s plan is to strike deals with tax agencies abroad so that the consumption tax is added on when sales are made. Overseas sales companies who do business in Japan would have to register with the Japanese tax bureau. For large-scale companies with widespread presence in Japan and sales units overseas, like Amazon and Rakuten, which in 2011 bought the Canadian ebook seller Kobo, that shouldn’t be a problem, but there are dozens if not hundreds of smaller content vendors who will fall through the cracks.

Already, some Japanese language ebook sellers and other net vendors have set up operations overseas to exploit this loophole, thus causing concern for domestic companies like Yahoo Japan, whose president compared such competition to a boxing match in which Japanese companies “have to fight opponents who are three weight classes above them.” Eight percent can make a big difference, especially since Japanese ebooks tend to be priced high anyway compared to ebooks in other countries.

In that regard, buyers of non-Japanese language books have an even greater advantage in Japan, since Japanese publishers still enjoy government-sanctioned fixed prices for all first-sale books and magazines, regardless of when they were printed. Japanese bookstores cannot set their own prices and industry distribution rules discourage remainders. With the rising popularity of ebooks in the West — 20 percent of all books now sold in the U.S. are electronic as opposed to 8 percent in Japan — print books have actually benefited since people can seek out remainders and used books through Internet sales agents, and usually they purchase them for less money than an ebook, even with shipping included. That’s not the case in Japan, except for used books. But if Japanese ebook sellers set up agencies abroad they can corner the market.

Hot biz: stocks that climb with the temperature

Tuesday, August 20th, 2013

You can never have too few air conditioners

You can never have too few air conditioners.

The extremely hot weather that has covered Japan since late July has had a multiplying effect on the country’s economy. Though it isn’t going to solve all the government’s fiscal problems, the heat has temporarily revitalized some retail and service sectors and, in turn, driven up related stock prices.

Some are obvious. Makers of air conditioners, particularly Fujitsu General and Daikin, have seen their share prices rise markedly in recent weeks. Meiji Holdings’ stock has increased by 20 percent since the middle of June thanks mainly to their ice cream division. Other makers of cold treats, like Ezaki Glico and Morinaga, are also enjoying high stock prices. Beverage makers can always look forward to good sales in summer, but this year in particular breweries are having their best season in 2 years. Shares for convenience stores have also risen steadily since the middle of July, based on strong retail sales as a result of the hot weather.

Another sector that’s benefited is Internet retailers. Yumenomachi Sozo Iinkai, a web supermarket, posted record high stock prices on Aug. 8 because of its special delivery system. People just don’t want to go outside in this heat, so they even order their groceries online and have them delivered. The nation’s biggest supermarket chain, Aeon, has said in terms of volume, deliveries have increased by 50 percent since the hot weather started. Even Tsutaya, Japan’s main rental video service, has seen its deliveries of DVDs double over last year’s.

Tokyo Shimbun reports that department stores, which deliver goods but count more on customers actually showing up at their stores, have initiated special events to get bodies out of the house and into their air-conditioned spaces. Shinjuku’s Takashimaya, for instance, has an unusual policy. The first 40 patrons who visit the food fair in the store’s basement between 2 and 5 p.m. on days where the temperature hits 35 degrees get free watermelon or a free extra scoop of gelato if they buy a single scoop.

A representative of a securities company told Asahi Shimbun that another reason for the sudden jump in stock prices was the Upper House election, which essentially pushed economic news aside. Investors had little information with which to make decisions, so when the hot weather became a topic they immediately went to companies that they thought would benefit.

Annals of cheap: Kenko.com

Friday, September 2nd, 2011

Water, water everywhere

Remember back in March, right after the earthquake, when people all over the Kanto area were cleaning the stores out of batteries and mineral water? It seems like a long time ago, especially to Kenko.com, an Internet sales company that specializes in “everyday goods.” Like a lot of retailers, Kenko.com made a lot of money in a short time and expected to keep making it, but people eventually calmed down. In the meantime, the company bought all the bottled water it could get its hands on and as a result it’s been left with a huge overrun of inventory. By June 11, its stock of bottled water was 37 percent larger than it was exactly a year earlier.

The loss in profits for the company as a result of this over-supply is estimated to be anywhere from ¥180 to ¥220 million for fiscal 2011, according to the Nihon Keizai Shimbun, and the stockholders are understandably anxious, so that means they’ve got to get rid of this water.

Consumers who are still edgy about radiation and cesium in their food and drink should note that the product Kenko.com is most determined to unload is Crystal Geyser, which is bottled in California. Right now you can get a case of 48 500-ml bottles for ¥1,290, which works out to about ¥27 per bottle. In fact, the whole Crystal Geyser line is cheap, maybe even cheaper than tap water. But there are other foreign water brands available: Contrex is ¥1,555 for a case of 24 500-ml bottles; 12 1.5-liter bottles of Volvic goes for ¥1,675. Even better is that, for the time being at least, there are no delivery fees for any bottled water products.

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