* * * * * * * * TERRIE’S TAKE – BY TERRIE LLOYD * * * * * *
A weekly roundup of news & information from Terrie Lloyd, a long-term
technology and media entrepreneur living in Japan.
(http://www.terrielloyd.com)

General Edition Sunday, June 21, 2015, Issue No. 809

– What’s New — Big Shakeup in the Loyalty Points Sector
– News — Toyota exec in drug arrest
– Upcoming Events
– Corrections/Feedback — Ryan Air is worse than Narita Terminal 3
– Travel Picks — Mann’s wines in Yamanashi, Yaki-curry Kyushu
– News Credits

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+++ WHAT’S NEW

This last week, Itochu entered into an exclusive license with
California-based Ifeelgoods, the USA’s leading online digital rewards
company, to start offering digital content such as music and videos to
recipients here in Japan, and in an optional second phase, possibly
throughout Asia. The two companies jointly said that they would try to
sign up at least 500 Japanese companies to Ifeelgoods end-to-end
loyalty-points-and-rewards platform, and that the gross revenue target
over the next three years is a massive JPY100bn.

That’s a lot of money, and hints to how big the rewards market in Japan
may become.

Itochu’s move is interesting for several reasons. Firstly because it is
the latest in a slew of loyalty points and rewards systems tie-ups and
deals that started in earnest earlier this year. Secondly because Itochu
owns Japan’s third largest convenience store chain, FamilyMart, and
because “Famima” itself entered into a joint JPY20bn investment
alongside Softbank in March to buy 30% of loyalty points company T-Point
Japan, thus linking the almost 60m-member points club with the USA’s
most proven end-to-end software platform.

BTW, in case you didn’t know, T-Point Japan is owned by Culture
Convenience Club subsidiary (CCC). You’ll know them for their ownership
of Japan’s largest video store chain, Tsutaya.

——— Help Us Test New No-Network Maps App ————

Japan Travel is getting ready to launch its first iPhone app, which will
be a No-Network mapping tool. The tool lets foreign tourists use their
smart phones to prepare Google-like maps and find their way around Japan
without having a local network connection. Testing will require you to
download the application (you will need an iPhone) and to use it next
time you go out for a walk. Estimated test time and reporting back any
bugs will be about 30 minutes. For testers who are pre-registered on
www.japantravel.com, you will be paid 500 points after you report back
in from the test. We are hoping to have about 100 people test the
application, so please help us if you can.

To register as a tester, send an email to info@metroworks.co.jp. To
register for Japan Travel, go to: http://en.japantravel.com/join
———————————————————–

[…Article continues]

Right now T-Point is the third largest of the three giants in the
Japanese points-and-rewards industry, the other two being
Mitsubishi-Recruit’s Ponta and Rakuten’s Super Points. T-Point was
established by Tsutaya as a means of keeping customers coming back to
its video stores in the face of ravages by internet players, and since
its spin off the company has been expanding ever since. T-Point’s big
break came in 2012, when Yahoo Japan took a 15% stake and started
rewarding its 80m+ users with them. There are now around 59m T-Point
card members. Other major participants in the T-Point system include:
FamilyMart, Eneos, Skylark restaurants, drugstore chain Welsia, and of
course Softbank Mobile.

The competing Ponta platform is run by Mitsubishi subsidiary Loyalty
Marketing, and has around 69m members. Other key players in the Ponta
alliance include Lawson convenience store chain (also owned by
Mitsubishi), database media giant Recruit, and as of last month, NTT
DoCoMo, which will tie its own 50m loyalty points members to the Ponta
system. If NTT DoCoMo were to fully integrate into the Ponta system,
something it might be encouraged to do, then that would probably make
Ponta the largest player in the rewards space.

And who is largest at present? According to the Nikkei, it’s Rakuten,
with 99m Super Points users. We find this number a bit hard to believe
given that it amounts to almost every adult in Japan. It’s more likely
that there are people with multiple Super Points accounts. But even
allowing for overlap, which all the other systems have as well, Rakuten
still appears to be the biggest. In order to prevent erosion of its
leadership position, we expect Rakuten to start doing more data-sharing
deals of its own. Although early days, the company’s tie-up with
Marubeni back in 2014 to venture into the electricity sector might be a
hint of things to come.

So why all the movement in the points and rewards sector? There seem to
be a number of drivers. The first is that the government is relaxing the
law on consumer data sharing between companies, allowing sharing to
occur so long as the data is anonymized. If you have data on people you
can target your marketing and offers, and if you get it right then you
get to steal market share away from the other players.

The second driver is the deregulation of semi-public companies such as
the power utilities, banking (mobile payments and E-Commerce), and
telecoms (specifically deregulation of business limitations on NTT).
This is causing both excitement by new entrants, and semi-panic by the
incumbents. Loyalty systems are of course most desired by the
incumbents, so that they can reduce the attrition that will occur as new
competitors start slashing everyone’s margins.

This would explain why in March, Tokyo Electric Power Company (TEPCO)
announced that it would seek a partnership with both a mobile phone
carrier to start services bundling, and also a rewards program
provider/partner. The power company has solicited proposals from all
three rewards players and on its side has 27m retail and commercial
customers that it can bring to the table. When the UK liberalized
electricity sales in 1999, in the following 15 years at least 60% of
consumers had switched to other power companies, mostly motivated by
power, telecoms, and gas bundling deals, and rewards. Everyone expects
the same thing to happen here, and certainly KEPCO and other regional
power companies are watching and getting ready to follow suit. So the
first half of 2015 represents a ground-shift in the data tracking and
sharing industry.

…The information janitors/

***————————****————————-***

————- Bilingual Web Designer Vacancy ————–

Japan Travel KK, the operator of www.japantravel.com, has a vacancy for
an experienced bilingual web designer, to work on service roll-outs for
the portal. This is a chance to work with a dynamic leader in the Japan
inbound travel sector — in a stimulating and front-line position where
your work will be seen and used by millions of people a month.

Ideally the applicant will have a minimum 5 years experience in web and
user interface design. Any nationality, as a visa can be supplied to the
qualified individual, however, English and Japanese capability is
desirable. Modest salary to begin, then significant increases as the
business becomes self-sustaining. Great team, modern office in
convenient location in Roppongi. Choice of PC, Mac. Adobe CS6/Creative
Cloud applications.

Interested applicants please send your resume to info@japantravel.com
***********************************************************

+++ NEWS

– Toyota exec in drug arrest
– Netflix moving forward in Japan
– More infrastructure investment into Asia
– More infrastructure investment into Asia
– Tax loophole creates profitable gifts industry for small towns

=> Toyota exec in drug arrest

“What was she thinking?” was our first reaction when we heard that
Toyota’s top female executive had been arrested on drugs charges in
Tokyo after illegally importing a prescription medication from the USA.
The executive, Julie Hamp, is apparently still in jail as police
interrogate her as to why she had the small shipment of the pain killer
oxycodone sent in a package alongside other personal effects, and which
had an inaccurate customs declaration. No doubt she didn’t think the
medication was such a big deal, just a month’s supply, but it turns out
that the Japanese authorities are taking the case very seriously. ***Ed:
To its credit, Toyota is sticking by Hamp and saying that they trust
her, so most likely Hamp will be allowed out again after suitable period
of embarrassment and apologies from all concerned. A similar case
earlier this year saw a 26-year old American women held for 18 days
until her Dad, a prominent lawyer in Oregon, wrote a letter to the
prosecutors apologizing for the import of a small amount of Adderall
medication, and more importantly expressing remorse.** (Source: TT
commentary from usatoday.com, Jun 19, 2015)

http://usat.ly/1GtvKiV

=> Netflix moving forward in Japan

Streaming video service Neflix is making steady progress in its
establishment of a business in Japan, by not just bringing dubbed U.S.
programming to Japan but also cutting deals and creating original
programs for the local market. The company will launch its service in
October, and apparently has content coming from collaborations with Fuji
TV, Yoshimoto Kogyo, and others. In some cases the content will be on
multiple delivery media, starting with streaming video on the web and
mobile, then moving to broadcasts on terrestrial and satellite TV. An
analyst at Zachs.com reckons that Netflix has a good chance of success
not only because of national high-grade internet infrastructure but also
because pay-TV is still in its infancy in Japan (just 38% of the viewing
population). (Source: TT commentary from zacks.com, Jun 19, 2015)

http://bit.ly/1GAKtvp

=> Move to generic drugs to be accelerated

The Ministry of Health, Labor and Welfare (MHLW) has said that it will
accelerate the move to generic drugs to treat those in the public health
system. Currently Japan spends about JPY50trn on drugs, of which 20% are
prescription drugs, and this cost is expected to increase dramatically
over the next 20 years. The acceleration plan calls for the percentage
of drugs that are generics to increase from the current 46.9% to 60% by
FY2016, and to 80% by FY2020. As a comparison, generic drugs already
account for 90% of the market in the USA and 82.5% in Germany. (Source:
TT commentary from jdsupra.com, Jun 19, 2015)

http://bit.ly/1IXf4Ej

=> More infrastructure investment into Asia

As a partial rebuttal to China’s Asian Infrastructure Investment Bank
(AIIB), PM Abe last month unveiled a plan to increase Japan’s lending
for infrastructure projects in Asia by 30%, to US$110bn over the next
five years. Abe pointedly said that the money would provide high-quality
Japanese technology and support, and that there is “no room for cheap
and sub-par”. It appears that while some of the money will be channeled
through the existing Asian Development Bank (ADB), which already has
capital of US$153bn, the Abe government is also going to extend loans
through its own organs, such as the Japan Bank For International
Cooperation (JBIC), without requiring recipient government guarantees
for those funds. ***Ed: Sounds like a lot of unsupervised taxpayer money
to us.** (Source: TT commentary from wsj.com, May 21, 2015)

http://on.wsj.com/1LslH1V

=> Tax loophole creates profitable gifts industry for small towns

An entertaining piece from the New York Times covers the tax loophole
(Furusato Nozei) that allows people who “donate” cash to small rural
towns in return for a tax rebate. Apparently a number of towns have hit
on the idea of creating “thank you” gifts to encourage these donors,
where the gift is worth up to 80% of the donation. As a result, donors
can receive both a tax deduction AND a worthwhile gift. The article
mentions the town of Hirado in Nagasaki, which provides donors with
lobsters, oysters, veges, and even fold-up electric bikes. As a result,
the town now has more donors, 36,000 of them, than it does residents.
***Ed: Never underestimate the ingenuity of country folk who after all
need to survive the urban shift.**(Source: TT commentary from
nytimes.com, May 31, 2015)

http://nyti.ms/1dXhFDp

NOTE: Broken links
Some online news sources remove their articles after just a few days of
posting them, thus breaking our links — we apologize for the inconvenience.

***————————****————————-***

————– Have a Tour to Promote? ——————–

Japan Travel is recruiting tour operators who would like to list their
inventory on our new Tours Marketplace (http://bit.ly/1IsujUw). Listing
is free, and only successful bookings will attract a marketing fee. Take
advantage of our position as Japan’s largest independent inbound travel
website (714,000 unique users in March, 2015) and give your tours the
exposure you need to develop your business. We are particularly
interested in tours that include a unique aspect of Japan and where your
marketing collateral includes strong photography and/or videos,
evocative descriptions, and strong appeal. After June 1st, all new tours
MUST include at least a one-night stay or formal (not public) ground
transport.

Operators and agents wishing to apply, contact info@japantravel.com
———————————————————–

+++ UPCOMING EVENTS/ANNOUNCEMENTS

—————— ICA Event – June 22nd——————-

Speaker: Pieter Franken – Chief Technology Officer, Monex Global Vision
Title: “How has Open Source technology helped my Organization”

Details: Complete event details at http://www.icajapan.jp/

Date: Monday, June 22nd, 2015
Time: 6:30 Doors open, Buffet Dinner included and Cash Bar
Cost: 4,000 yen (members), 6,000 yen (non-members) Open to all. No sign
ups at the door!!!!!!!
RSVP: By 5pm on Thursday 18th June 2015. Venue is The Foreign
Correspondents’ Club of Japan

http://www.fccj.or.jp/about/access.html
—————————————————-

+++ CORRECTIONS/FEEDBACK

=> A reader reckons that whatever we moan about concerning the new
Narita Terminal 3 airport, it can’t be as bad as experiences he’s had
with the original LCC airline, Ryanair, in Europe.

*** Reader says: Concerning “Narita is Worst Airport”, I am going to go
have a ride on that myself in a few weeks so I can help fill in the
blank spaces. HOWEVER my guess is that it is not that bad. Have you ever
flown Ryanair? The King of LLC? If you have not, then this article makes
sense. I am simply a layman and feel that discount airlines have to cut
away a lot of the “services” to achieve the low prices. This is a two
way street!!

Frankly I “HATE” Narita for a shopping list of other reasons, all things
considered (after all they started with clean slate and had the
possibility to study all the success stories of modern airports around
the globe). Haneda sucks too… but it is what it is.

I will give them one thing. Everything probably works, which despite
being basic, is not something you can depend on in Europe or the US of A.

Anyway, Ryanair will land you far from downtown Paris or Milan,
requiring you to take a 1 1/2 hour non-air-conditioned bus ride, which
is also not free. Often if the plane is late, then the bus is gone and
you have another expense finding somewhere to stay (or a taxi ride from
town). But dat’s the deal!!! Don’t bother writing to O’Leary either,
although in recent years he has made somewhat of an effort to up the
airline’s image. He only did this after every Noveau Internationale
businessman in Britain and Ireland started joking about the toilet charges.

https://www.youtube.com/watch?v=Wq9mu0HMiVg

While the airports served by Ryanair don’t get a mention, they are
pretty much the same deal. Check In and Boarding shut promptly. You have
very strict and continuing Nazi-like baggage rules. I saw one poor
Frenchman in Shannon one time being asked for 1,800EUR as he brought two
large bags with him on his way presumably home. Most people (luckily for
me) don’t pay the 2 quid to avoid the queue and that means luck of the
draw in seating. In recent years the LCCs have cottoned on to the fact
that faster boarding can be achieved with seat allocation. I have
watched old ladies back in the day being physically knocked to the
ground in the rush (Xmas circa 2005 I would guess) to get on a Christmas
flight home from the UK.

You de-plane and either walk or get a bus to the terminal rather than
the sky-walk. This cuts down on landing charges.

I conclude that LLCs are a fine option when traveling light and without
kids. Otherwise, if you can afford it, take a regular airline and thank
the LCCs for pressurizing their airfares down a fraction. On the other
hand a downside of the discounting trend has been that normal airlines
now have to cut corners to make ends meet. This is not always a good
thing either.

***————————****————————-***

+++ TRAVEL DESTINATIONS PICKS

=> Tour of Manns Wines, Yamanashi

The Mann’s Wines winery is situated in Katsunuma, surrounded by
vineyards and peach orchards. The company is part of the Kikkoman family
and their premium wines are branded with the Solaris label. You can get
to the original facility about 15 minutes by car from the Katsunuma
Interchange, however it might be better to go by train (and a 7-minute
taxi ride from Enzan JR Station), then nobody has to miss out on tasting
the wines because they are driving.

The tour begins with a movie explaining the history of the winery, then
a guide will take you around the grounds showing major points of
interest. Huge white fermenting vats stand behind the buildings, but
because it was spring, they were unfortunately empty when I was there. I
think there would be a lot more to see in autumn. Manns Wines started in
Katsunuma, but the company now has another larger facility in Komoro in
Nagano Prefecture, where the bulk of the company’s production now takes
place.

http://bit.ly/1Jcb85F

=> Yaki-curry, Kyushu
The place to go for Kitakyushu’s spicy specialty

Japanese diners love their curry dishes, but the town of Kitakyushu
takes it one step further with a baked curry meal that has made the city
famous. While you have over 40 choices of restaurants in Kitakyushu
offering yaki-curry, you can’t go wrong with the award-winning recipe at
Princess Phi Phi in the Moji Port area.

Princess Phi Phi sits along the waterfront, a short block from the
central square of the refurbished port. The restaurant can be initially
confusing, as it offers diners the option of eating in a basement dining
room or in a small cafe on the first floor. Next door to the cafe, a
store of the same name sells clothing, jewelry and other goods.

Yaki-curry was first created in the 1950s in the Moji neighborhood when
a local chef combined curry and rice, topped it with generous amounts of
cheese and baked it all in an oven. The dish is finished off with a raw
egg mixed into the curry. At Princess Phi Phi, the yaki-curry is also
baked with at least a half dozen vegetables, ranging from potatoes and
Japanese pumpkin to broccoli and fresh tomatoes. It’s all topped with a
few basil leaves.

http://bit.ly/1K4kosI

***————————****————————-***

***********************************************************
END

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+++ ABOUT US

STAFF
Written by: Terrie Lloyd (terrie.lloyd@japaninc.com)

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