* * * * * * * * * T E R R I E 'S T A K E * * * * * * *<br>A weekly roundup of news & information from Terrie Lloyd.<br>(<a href="http://www.terrie.com">http://www.terrie.com</a>)<br><br>General Edition Sunday, August 08, 2010 Issue No. 577<br>
<br>+++ INDEX<br><br>- What's New<br>- News<br>- Candidate Roundup/Vacancies<br>- Upcoming Events<br>- Corrections/Feedback<br>- News Credits<br><br>SUBSCRIBE to, UNSUBSCRIBE from Terrie's Take at:<br><a href="http://mailman.japaninc.com/mailman/listinfo/terrie">http://mailman.japaninc.com/mailman/listinfo/terrie</a><br>
<br>BACK ISSUES<br><a href="http://www.japaninc.com/terries_take">http://www.japaninc.com/terries_take</a>, or,<br><a href="http://mailman.japaninc.com/pipermail/terrie/">http://mailman.japaninc.com/pipermail/terrie/</a><br>
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or call: 03-4550-2557.<br><br>------------- PBXL is Business Communications -------------<br><br><br>+++ WHAT'S NEW<br><br>According to 2008 Ministry of Health statistics, <br>approximately 50% of men and 20% of women between 40 and 74<br>
years old are at risk of obesity, or "metabolic syndrome" <br>as it's known here. That's about 20m people. Now that the <br>government and companies have declared war on "metabo", one<br>industry that we would say has a bright future in Japan is<br>
that of fitness clubs, along with those providing apparel and <br>accessories to that industry. <br><br>Despite the metabo focus, the percentage of the population <br>that actually belongs to a fitness club is still a meager 3%, <br>
well below the 15% level in the USA. Perhaps with all that <br>cycling to the supermarket on mama-chari (mom-style <br>bicycles), and salary men climbing copious numbers of<br>train station stairs to go see customers, people feel less <br>
in need of the extra work outs... But more likely it's the <br>extra cost and time that's putting them off.<br><br>One of the fastest growing fitness chains in the USA, <br>Anytime Fitness, is due in September to open the first of a<br>
planned 300 clubs here, starting with Chofu. The company <br>has started a joint venture with a management team led <br>by a number of industry veterans, the star of whom is the <br>new CEO will be Toru Yamazaki, the former CEO of <br>
Megalos, Japan's 5th largest health club chain. Megalos <br>is owned by Nomura. Yamazaki and his colleagues will <br>hold the master franchise for Anytime Fitness, and after <br>opening 3 of their own stores to show how it's done, they <br>
will start sub-franchising the system to other operators. <br><br>[Continued below...]<br><br>---------- Denphone - Voice, Video and Networks ----------<br><br>Denphone provides a wide range of telephony, video<br>conferencing and IT infrastructure solutions.<br>
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<br>We have an acquaintance in the fitness industry who just <br>recently resigned from his job to do other things, and who <br>thus felt he could share some tips with us on why fitness<br>can be a great business. He says that the industry attracts <br>
workers at very low salaries, even the instructors can expect <br>just JPY350,000/month or so -- even though the good ones<br>may attract a fan base of hundreds of customers who come <br>just to work out with that one instructor (this happens a lot).<br>
<br>Coupled with the low operating costs, he also pointed out <br>that fitness is like dieting. People start off with the <br>best intentions and so sign up for year-long contracts and <br>automatic membership renewals. But after a couple of <br>
months, the will power starts to weaken and many people<br>stop showing up. But since they "fully intend to resume<br>their training" of course the club keeps getting the dues and <br>makes sure that it extends enough incentives to encourage <br>
inactive members to at least stay another year.<br><br>Less attendees means less demand on the facilities and more<br>capacity to bring in new members without extra cost -- and <br>we are told that some of the best performing branches in the <br>
Megalos chain have upwards of 10,000 members -- which at <br>an average JPY6,000 per month can produce JPY60MM a <br>month in revenue. Not a bad business indeed and no wonder <br>Anytime Fitness wants in and is bringing a Megalos ex-CEO <br>
along for the ride.<br><br>However, having said that, it's clear that the industry as <br>a whole is suffering. Adult memberships are down, as young <br>people can't afford the fees, and middle aged workers are <br>
still smarting from the fall-out of the Lehman Shock. The <br>biggest operator of fitness clubs in Japan is Konami Sports <br>and Life, a subsidiary of the games machine giant, Konami. <br>The company in 2009 had a nationwide network of 228 fitness <br>
clubs, as well as providing operations management for an <br>additional 117 independently owned sports clubs. The <br>directly owned clubs had a membership of 916,438 covering <br>all ages, with childrens' dance classes a growing segment <br>
as the company tries to diversify its income streams.<br><br>Yet with all those members and fitness sector sales of <br>JPY85.8bn in FY2010 (ending March 2010), the company<br>could only manage a loss of JPY1.9bn. Actually, last year <br>
the loss was even worse, at -JPY8.3bn -- indicating that the <br>severe financial climate rather than declining population is <br>the main reason for the industry's malaise at the moment. <br><br>Anytime Fitness operates small locations with modest <br>
facilities in the USA and it appears that they will do the <br>same here in Japan, following a typical coffee shop style <br>franchise model. Franchisees will buy a brand, marketing, <br>and presumably the machines, and hope that the market will <br>
do the rest. With all the experience on board, we believe <br>that they will be focusing on creating a strong brand image <br>for the new company. 80% of industry revenues comes from<br>middle-aged customers, so they have to come up with a <br>
marketing mix which projects a fresh new image, but to an <br>age group that is looked at as dowdy and unappealing.<br><br>What will they come up with? Our guess is either a <br>community concept, which Anytime Fitness pushes in the USA,<br>
where kids and moms can hang out, or a variety of new <br>classes appealing to young women, such as yoga and pilates <br>studios -- which will probably attract young men as well. <br>It's going to be a tough challenge, but if they can manage to <br>
bring in 5,000+ members for their first few establishments, <br>then they will have bragging rights when selling to future <br>sub-franchisees, all of whom will be dreaming of riches while <br>bearing most of the financial risk. <br>
<br>Ain't life grand?<br><br>**************<br><br>Next, we'd like to remind readers that at the end of most<br>"Takes" there is reader feedback to earlier articles. For<br>example, this week's feedback is a very lucid summation of <br>
the media craze over Chinese tourists coming to Japan and<br>how the whole plan to boost tourism may actually backfire<br>for the government if they are not careful. Look under the<br>CORRECTIONS/FEEDBACK section below. Enjoy.<br>
<br>**************<br><br>Lastly, next week we will be taking a break, one of four <br>weeks a year that we do so, to enjoy a little bit of summer. <br>We'll be back on deck on August 22nd.<br><br><br>...The information janitors/<br>
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<br><br>+++ NEWS<br><br>Singapore fund buys Tokyo hotels<br><br>Evidence is gathering that Japan's property market is <br>hitting another low, as Singapore's IPC Corporation <br>announced that it has bought and refurbished two Tokyo <br>
business hotels. The company says that it plans to buy up <br>to 98 more such hotels, as well as condominiums, as it <br>builds up its Japan portfolio. IPC says it will market the <br>properties to tourists (and we suspect, investors) from <br>
China and elsewhere in Asia, to ensure sufficient <br>occupancy. ***Ed: We are hearing more and more anecdotal <br>evidence of Asian plans to make Japan a tourist <br>destination, specifically by bypassing the existing <br>
over-priced and under-serviced Japanese-operated <br>infrastructure. Shades of Niseko perhaps?** (Source: TT <br>commentary from <a href="http://e.nikkei.com">e.nikkei.com</a>, Aug 4, 2010)<br><br><a href="http://e.nikkei.com/e/ac/TNKS/Nni20100803D03JFA17.htm">http://e.nikkei.com/e/ac/TNKS/Nni20100803D03JFA17.htm</a><br>
<br>Missing centenarians also include 10 foreigners<br><br>As the embarrassment continues that there are possibly more<br>than 100 residents of Japan listed as centenarians who may <br>in fact be deceased, the Japan Times reports that around 10 <br>
of the missing are in fact non-Japanese. The reason being <br>given for such a high missing body count of foreigners is <br>the fact that the Justice Ministry is in charge of foreigner <br>registrations, not local ward offices, and is not releasing the<br>
information. ***Ed: This is also an indictment on the family<br>registration system in general, such that: a) dogs and seals <br>can get family registers but foreigners cannot, and b) that the<br>family registry system doesn't seem to have a proper <br>
checking system -- as highlighted by the case of an oldster <br>who had died 30 years earlier and was found nicely <br>dessicated inside his house.** (Source: TT commentary <br>from <a href="http://japantimes.co.jp">japantimes.co.jp</a>, Aug 7, 2010)<br>
<br><a href="http://search.japantimes.co.jp/mail/nn20100807b2.html">http://search.japantimes.co.jp/mail/nn20100807b2.html</a><br><br>Zynga turns around and buys Unoh<br><br>Feeling more like a pass-the-parcel game than M&A, <br>
US-based Zynga Game Networks announced just a week after <br>it's huge investment influx from Softbank that it would be <br>buying mobile content operator Unoh Company, here in <br>Japan. Zynga is reputedly paying JPY2bn-JPY3bn for the <br>
9-year old Japanese company. ***Ed: Clearly the two deals <br>were conceived hand-in-hand -- but we are surprised that <br>Softbank didn't just take over Unoh first then sell it to <br>Zynga for an additional stake in the business. Therefore, <br>
one can be forgiven for wondering if there wasn't a reason <br>for not doing this? Any ideas anyone?** (Source: TT <br>commentary from <a href="http://businessweek.com">businessweek.com</a>, Aug 6, 2010)<br><br><a href="http://tinyurl.com/35lex4r">http://tinyurl.com/35lex4r</a><br>
<br>DoCoMo ties up with DaiNippon on e-books<br><br>Will e-books on smart phones such as the iPad be as big as <br>everyone thinks? It's hard to say, although clearly in <br>cultures that like doing lots of reading, the distribution <br>
of e-books is both cheaper and more efficient than paper. <br>Amazon's Kindle is testimony to this fact. Whatever, the <br>big boys here in Tokyo are betting that e-books are the <br>wave of the future and they're jumping in to the sector <br>
quicker than you can turn a page. Thus NTT DoCoMo has <br>announced a joint venture with Dai Nippon to produce <br>e-books by the end of this year. The new service will carry<br>Dai Nippon's 100,000 library of titles. Apparently paper <br>
book sales in Japan are worth around JPY200bn annually, <br>while e-books are less than 1% of this. However, estimates <br>are that the e-book market will be worth JPY10bn by 2014. <br>(Source: TT commentary from <a href="http://reuters.com">reuters.com</a>, Aug 4, 2010)<br>
<br><a href="http://www.reuters.com/article/idUSTOE67308820100804">http://www.reuters.com/article/idUSTOE67308820100804</a><br><br>Proof that all sugars are not the same<br><br>For those who scoff at the idea that honey and stevia <br>
consumption serve as a better replacement for regular sugar<br>-- saying that all sugars are the same -- well, we beg to <br>differ. Cancer researchers at UCLA have found that <br>pancreatic cancer tumors proliferate on a diet high in <br>
fructose, but do not when fed glucose. The researchers are <br>trying to find if there is a link between high consumption <br>of fructose syrups (such as corn syrup used in most U.S. <br>sweetened foods and soft drinks) and cancer. Right now, at<br>
least, it appears that there is such a link. ***Ed: What's<br>really interesting to us is that the research proves that <br>different sugars are consumed by the body in different <br>ways, and thus opens the question as to whether there are <br>
"good" sugars and "bad" sugars, much the same as there are <br>different types of cholesterol (i.e., lipoproteins). <br>(Source: TT commentary from <a href="http://reuters.com">reuters.com</a>, Aug 4, 2010)<br>
<br><a href="http://tinyurl.com/22uqoxm">http://tinyurl.com/22uqoxm</a><br><br><br>NOTE: Broken links<br>Many online news sources remove their articles after just a<br>few days of posting them, thus breaking our links -- we<br>
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-----------------------------------------------------------<br><br>***------------------------****-------------------------***<br><br>+++ CANDIDATE ROUND UP/VACANCIES<br><br>=> BiOS, a Division of the LINC Media group, is actively <br>
marketing the following positions for customers setting up <br>or expanding in Japan, as well as other employers of <br>bilinguals.<br><br>** HIGHLIGHTED POSITION(S)<br><br>BiOS is now looking for experienced HR director candidates <br>
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coaching/development, organizational development and <br>workforce planning. Note that this role may require <br>relocation to Singapore, though this is yet to be <br>confirmed. <br><br>The successful candidate in this role will have more than <br>
10 years HR experience in a high-growth, fast-paced, and <br>changing environment, and in particular a deep <br>understanding of Japanese labor law and HR principles and <br>practices are essential for this position, to support the <br>
expansion plans in this territory, as well as the wider <br>HR issues in the overall APAC zone. In addition to this <br>you will demonstrate leadership in key HR issues with <br>versatility and enthusiasm, and be able to use all of this <br>
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<br>If you have been considering setting up your own company,<br>find out what it takes to make it successful. Terrie <br>Lloyd, founder of over 13 start-up companies in Japan,<br>will be giving an English-language seminar and Q and A on<br>
starting up a company in Japan.<br><br>This is an ideal opportunity to find out what is involved,<br>and to ask specific questions that are not normally <br>answered in business books. All materials are in English <br>and are Japan-focused.<br>
<br>For more details:<br><a href="http://www.japaninc.com/entrepreneur_handbook_seminar">http://www.japaninc.com/entrepreneur_handbook_seminar</a><br><br>-----------------------------------------------------------<br><p>-------- Essential Business References in English -------<br>
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<p>Japan is one of the world's most challenging jurisdictions<br>and you, as the director of your corporation, need to have<br>
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<p>-----------------------------------------------------------</p><br>***------------------------****-------------------------***<br><br>+++ CORRECTIONS/FEEDBACK<br><br>In this section we run comments and corrections submitted<br>
by readers. We encourage you to spot our mistakes and<br>amplify our points, by email, to <a href="mailto:editors@terrie.com">editors@terrie.com</a>.<br><br>*** In TT576 we wrote about the rapid influx of Chinese<br>tourists to Japan and whether expectations would match <br>
actual realties in terms of what the visitors would be <br>doing and spending in Japan. The following is an excellent<br>reader comment on the issue.<br><br>=> Reader comment: <br>Everyone has picked up on the recent surge in tourists from<br>
China, with the media —- from the chatty “wide shows” to <br>the Sunday pundit parades —- going breathless trying to <br>figure out what this new wave means for the country. It is <br>clearly a love-hate prospect. <br><br>
On the one hand, the head of the Tourism Agency is playing <br>the rousing cheerleader, traveling frequently to China to <br>meet with relevant government agencies and even presenting <br>a gift of a large Hello Kitty doll to the woman identified <br>
as the first to apply for an individual tourist visa (for <br>which, the program noted, she was later turned down; <br>apparently only about 20% of applications are being <br>approved at this point: the initial screening is being done<br>
by the travel agencies, which are erring on the side of <br>caution due to potential liabilities). <br><br>On the other, you have ex-NPA and prosecutors office <br>bigwigs subtly undermining these efforts with hand-wringing<br>
over the prospects of an explosion in crime by foreigners <br>(never mind that crime in nearly all categories continues <br>to drop steadily), in particular the risk of individual <br>travelers “disappearing” from their tours to stay on <br>
illegally. One frequent guest, a former prosecutor who <br>often provides commentary on crime and other social issues,<br>went so far as to urge the government to ease off of <br>pursuing such business from China, insisting that a <br>
criminal element is already trying to take advantage of the<br>new, less stringent requirements.<br><br>Meanwhile, evening news special reports are chasing down <br>tourist groups to see where they go, what they do, and more<br>
important, what and how much they buy (one report threw out<br>a statistic that the average amount spent by these tourists<br>during their stay in Japan was over 160,000 yen per <br>individual), focusing on luxury goods and mass purchases of<br>
electronics and small appliances. <br><br>Reports have covered growing Chinese acquisitions of small <br>businesses, real estate agencies setting up to sell homes <br>with views of Mt. Fuji specifically to Chinese nationals, <br>
and the growing business of Chinese-only hotels catering to<br>group business in this emerging market. All of this is <br>being reported in a tone that suggests great ambivalence.<br>On one hand the hope for the potential economic boost, but <br>
on the other, an only slightly veiled sense of dread, as <br>if to suggest this is the first wave of an economic and <br>cultural invasion that at some point will swallow the <br>country whole.<br><br>This push-pull dynamic is certainly nothing new in Japan, <br>
but it hints of the extent to which a government policy <br>aimed at building tourism as an economic pillar has been <br>pushed through by the powers that be —- and a select group <br>of commercial interests -- with little support or <br>
understanding from the public, and with few attempts to <br>educate people on the implications of such a policy. Once <br>again, it falls to the media to tell the story, and <br>inevitably, a note of sensationalism and fear-mongering <br>
is creeping in that is directly at odds with the message <br>the authorities are trying to convey. <br><br>At the same time, the government, by focusing almost <br>exclusively, and very publicly, on its efforts to build <br>
tourism from among neighboring Asian countries —- with an <br>approach that emphasizes shopping opportunities over <br>cultural enrichment -- is failing to address the <br>still-significant language, service, cultural and <br>
environmental issues that have caused tourism from Western <br>countries to consistently lag far behind what other, often <br>much smaller nations enjoy. <br><br>By going all-in with the Chinese market, and its purely <br>
economic prospects, the government is setting itself up <br>for an inevitable backlash that could eventually harm the <br>prospects for tourist growth across the board.<br> <br>***********************************************************<br>
END<br><br>SUBSCRIBERS: 8,972 members as of August 8th, 2010<br>(We purge our list regularly.)<br><br>+++ ABOUT US<br><br>STAFF<br>Written by: Terrie Lloyd (<a href="mailto:terrie.lloyd@japaninc.com">terrie.lloyd@japaninc.com</a>)<br>
<br>HELP: E-mail <a href="mailto:Terrie-request@mailman.japaninc.com">Terrie-request@mailman.japaninc.com</a><br>with the word 'help' in the subject or body (don't include<br>the quotes), and you will get back a message with<br>
instructions.<br><br>FEEDBACK<br>Send letters (Feedback, Inquiries & Information) to the<br>editor to <a href="mailto:terrie.lloyd@japaninc.com">terrie.lloyd@japaninc.com</a>.<br><br>ADVERTISING INFORMATION<br>For more information on advertising in this newsletter,<br>
Contact <a href="mailto:ads@japaninc.com">ads@japaninc.com</a>.<br><br>SUBSCRIBE<br>Get Terrie's Take by giving your name and email address at<br><a href="http://www.japaninc.com/newsletters/free_sign_up">http://www.japaninc.com/newsletters/free_sign_up</a>, or go<br>
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