Terrie's Take 935 (Tourism Edition) - Japantravel.bike Up and Running - and the Competitive Landscape

Mon Mar 12 09:59:31 JST 2018

* * * * * * * * TERRIE'S (TOURISM) TAKE - BY TERRIE LLOYD * * * * * *
A bi-weekly focused look at the tourism sector in Japan, by Terrie 
Lloyd, a long-term technology and media entrepreneur living in Japan.
(http://www.terrielloyd.com)

Tourism Sector Edition Sunday, Mar 11, 2018, Issue No. 935

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+++ Japantravel.bike Up and Running - and the Competitive Landscape

Just over a year ago, in Terrie's Take 882, I wrote an article entitled 
"We're Getting into the Cycling Business", which was to announce a 
contract we'd just signed with DoCoMo Bike Share (DBS), the largest 
rental cycles operator in Japan. I had reason to be excited: DBS had 
more than 3,500 electric bikes mostly in Tokyo, there was only one (very 
small) competitor, and we were being given a sole agency agreement to 
target foreign tourists... Oh, what a difference a year makes!

So, firstly, I'm happy to announce that in fact the service is now up 
and running. If you go to www.japantravel.bike, you can rent a bike from 
any DBS bike port in Japan, with nothing more than a credit card. This 
is a milestone both for DBS, which has allowed us to bypass their own 
policies and system front end, and for us, to be able to get the project 
up and running. Today there are more than 4,000 bikes in Tokyo (6,000 
across the country), and over 500 bike ports, so if you feel so 
inclined, step up to a DoCoMo bike port, whip out your smartphone, and 
go to www.japantravel.bike on your browser to try one out.

For now we have one-day passes for JPY1,500, which allow you to serially 
use (i.e., one at a time) as many bikes as you like, or the same bike 
for the whole day. Why multiple bikes? Because the batteries will only 
give you about 30km, and you may want to go further than that. Or, you 
may want to release your bike, do a bit of shopping and pick up another 
bike later without having to return to your starting point. We'd like to 
offer shorter rental periods, but for now DBS's system doesn't support 
third-party incremental rentals - possibly later this year.

You might be wondering, "Why did Terrie's team take a whole year to roll 
out a bike app?" Probably I don't need to explain to readers the 
challenges of dealing with large Japanese companies, ranging from trying 
to change end-user policies they have had in place for years, to dealing 
with the 3-yearly reassignment of your key stakeholder, the 
parent-company-seconded CEO of the business. But, as with all things in 
Japanese commerce, if you show perseverance, and particularly if the 
market landscape changes with the arrival of some huge Chinese 
competitors, then all things are possible.

[Continued below...]

--------- From Veggie Burgers to Carrot Cake --------------

Our commitment at Alishan Organics is to give our customers the best of 
western organic foods, but prepared with a Japanese twist. That's why 
our menus cover such a broad range of styles and tastes. If you're just 
getting to know us, why not visit our cafe by the river in Saitama? That 
way you can try out a variety of dishes and decide for yourself. Choose 
from an Amy's organic pizza straight from the oven, a mouthwatering 
veggie burger packed with seasonal greens and reds, or if you're feeling 
chilly, a filling vegetable curry with rice. And although we're healthy 
minded, we don't skimp on desserts. Favorites include Jack's scrumptious 
carrot cake, vegan brownies (of course with vegan icecream), and baked 
banana cheese cake.

Our Cafe: http://bit.ly/2m0r8z7
Our new online store: http://bit.ly/2v8gRpi
-----------------------------------------------------------

Our breakthrough on the user interface side of things was to 
significantly speed up the credit card interface. Rather than the 20 
minutes it used to take, you can now have your payment and bike approval 
code in about 30 seconds. Not only that, if you're a family or couple, 
you can book more than one bike on the same credit card - imagine that! 
(Actually, it's hard to imagine a system that used to impose a one card, 
one bike limitation - but that's why there are entrepreneurs to 
arbitrage these opportunities.)

Although not quite ready yet, we will shortly roll out itineraries for 
tourists to self-guide themselves around the city, pre-bookings so that 
you don't have to show up at a bike port at 09:00am and find out local 
commuters have taken ALL the bikes, and helmet rentals if you come from 
a country where you feel naked without head protection. Hiroshima, 
Sendai, Nara, and a number of other cities will roll out later this year.

Although no one at DBS has told us, and of course we're grateful that 
things have moved to where we are now, I suspect that the big motivator 
for speeding up the collaboration was the fact that that the Chinese 
have landed. Back in August last year, the Japanese press reported that 
China's Mobike was kicking off a rental service in Hokkaido, while Ofo 
had tied up with Softbank and was set to roll out services in Tokyo and 
Osaka. Various local players are also trying to get into the rental 
bikes business, including LINE (tied up with Mobike), parking lot 
company Times24, online flea market operator Mercari, and online adult 
entertainment's DMM.

Mobike and Ofo are quite a phenomenon in China and have raised US$600m 
and US$700m respectively. Between them they are reputed to be managing 
about 18m bicycles in that country! Their massive economy of scale 
business models eclipse DBS's operation in Japan, and many wonder how 
the Japanese company, with its much more expensive electric bikes and 
limited scale (10,000 units projected by 2020), can compete. The DBS 
bikes cost JPY150 every 30 minutes, while its non-electric Chinese 
competitors charge just a few yen.

The likely answer to DBS's survival is the fact that Japan's local 
authorities are generally very strict on usage of public spaces, and as 
many readers who ride bicycles to work will know, they have an unlimited 
number of retiree parking officers dedicated to quickly remove illegally 
parked bikes. Thus, either a bike rentals operator needs to prepare its 
own parking spaces, OR, do a deal with the local authorities to allow 
its bikes on their sidewalks. To its credit, DBS has spent over 5 years 
and thousands of man-hours negotiating deals with each city it operates 
in, and thus it is unlikely that we will see the competition gain public 
parking spaces in these areas for the next 12-24 months.

Instead, Mobike, Ofo, Softbank, and Times24 all plan to tie-up with 
partners who have publicly-accessible real estate in front of their 
buildings, or to lease dedicated parking areas for bikes. For example, 
Softbank's "Hello Bike" franchise business has tied up with 7-Eleven, 
and the convenience store chain has agreed to expand an initial 9-store 
program to a total of 5,000 bikes.

The big question in my mind is, while you can pick up a bike at a 
7-Eleven, where do you drop it off at? Even other 7-Eleven stores may 
not be usable, since many are owned by independent franchisees who may 
not want non-shopper bikes clogging up their precious customer parking 
spaces. The company that solves this problem economically will be the 
first successful challenger to DoCoMo.

...The information janitors/

***********************************************************

---------- Bilingual vet clinic opens in Azabu ------------

PetLife Veterinary Clinic is opening its doors in central Tokyo from 
March, providing bilingual (Japanese/English) services for both the 
domestic and international communities. The clinic provides experienced 
veterinarians with many years of experience serving families and their 
pets using the latest technology. They have a compassionate and welcome 
approach and aim to nurture close bonds within the local community.

The official opening is March 6, however a three-day open clinic event 
will be held Mar 2 - 4 including a special day for international 
residents Mar 3. Pet owners are welcome to come visit and check out the 
new center.

1F. Daiichi Bldg., 2-3-5 Higashi Azabu, Minato-ku, Tokyo 106-0044. 
TEL:03-6807-4058 Website: http://petlife.co.jp/en/
-----------------------------------------------------------

END

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+++ ABOUT US

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