Business trends of 2015

Good morning everyone,

It was a bit chillier on the ride to work yesterday and the next few days or so, will see average temperatures for this time of year-highs around 10C and overnight lows around 2C. We're not expected to see any rain or snow for the next little while either. It'll be colder than it has been, but still not too bad. It's great weather for running!

The Nikkei Marketing Journal, known as 日経流通新聞 (Nikkei Ryūtsū Shimbun) in Japanese, the thrice-weekly newspaper has covered retailing, marketing and distribution since its founding in 1971.

To promote the NMJ in its first year, publisher 日本経済新聞社 (Nihon Keizai Shimbun-sha) came up with a brilliant idea: Each December it would fete the products, services and other economic activities that stood out during the previous 12 months. And in a particularly distinctive style, it proclaimed the year’s ヒット商品 (hitto shōhin, hit products), lettered with the same elaborate brush calligraphy used by the Japan Sumo Association for its 番付 (banzuke), a traditional sheet used to list wrestlers’ rankings just prior to each of the year’s six major tournaments. Like sumo, the hits at the top of the list were described as 横綱 (yokozuna, grand champion), 大関 (ōzeki, champion), 関脇 (sekiwake, junior champion) and so on through to the ranks of 前頭 (maegashira, top division rank-and-file wrestlers).

To qualify as a hitto, a product, service or other business activity was expected to do more than merely sell in large quantities. Ideally, it adopted 新技術 (shin-gijutsu, new technology) or some other 特徴 (tokuchō, characteristic) that carved out an entirely new market, or else caused an existing market to change direction, creating new demand. This was important because at some point most markets tend to become 飽和された (hōwa sareta, saturated).

The East yokozuna that topped the list for 2015 was the 北陸新幹線 (Hokuriku Shinkansen), which went into service linking Tokyo with Kanazawa in Ishikawa Prefecture in just 2½ hours. It succeeded in nearly doubling passenger demand, with 4.8 million passengers in the first six months, and setting off a travel boom to the region. (This is a good indicator that the Hokkaido Shinkansen will achieve similar results when the cities of Aomori and Hakodate are linked this coming March.)

The yokozuna on the West side, which only attracted the public’s attention fairly late in the year, was ラグビー桜ジャパン (ragubii sakura Japan, “rugby cherry blossom Japan,” better known in English as the Brave Blossoms), the team that took the nation by storm when — powered by place-kicker Ayumu Goromaru — it achieved an unprecedented three wins in the Rugby World Cup. Since Japan is slated to host to the next world tournament in 2019, the sport is almost certain to grow in popularity.

As a good example of the changes brought on by the emergence of new technology, the ōzeki on the West side of the NMJ’s listing was 定額配信 (teigaku haishin, distribution of audio or image content at fixed prices) offered by such companies as Netflix, Hulu and Amazon. Year-on-year growth reached 66 percent in 2015, leaving analysts wondering how conventional TV networks will respond to this new threat.

A 張り出し大関 (haridashi ōzeki, extra champion) rank was accorded to ハロウィーン・フィーバー (Harowiin fiibā, Halloween fever). Oct. 31-related festivities have taken hold here with a vengeance, creating a ¥122 billion market that is believed to have surpassed that of Valentine’s Day.

While some highly ranked hits, such as the Akutagawa Prize-winning novel 火花 (Hibana, “Spark”) by Naoki Matayoshi (with over 2 million copies sold over a five-month period) could be described as purely a domestic phenomenon, a variety of foreign influences could be found in the 38 items on the 2015 banzuke. They included:

• コンビニドーナツ (konbini dōnatsu, doughnuts sold by convenience stores) , a market estimated at ¥400 million.

• アップルウオッチ (appuru uotchi, the Apple Watch), which so far has sold approximately 300,000 in Japan.

• クラフトビール (kurafuto biiru, craft beer). Kirin and other major breweries have jumped into the business, and sales of pale ales and other varieties of microbrews have begun taking off in earnest.

• LGBT: The recognition by 自治体 (jichitai, local governments) of marriage unions by 同性カップル (dōsei kappuru, same-sex couples) has forced business to rethink how to best cater to the lesbian, gay, bisexual and transsexual communities, whose economic impact is estimated at ¥5.9 trillion annually.

• Airbnb: Users of the San Francisco-based Internet hotel booking service in Japan reached 525,000. The system has been especially successful at placing travelers in so-called 民泊 (minpaku, stays in privately owned residences), helping to relieve the tight situation in hotel room availability.

When goods and services are enjoying high demand, it’s common to see headlines using expressions like 大受け (ōuke, great acceptance, i.e., a big hit) or バカ売れ (baka-ure, selling like crazy). Their opposites would include 不振 (fushin, a slump), 不人気 (funinki, unpopular) and 激減 (gekigen, to decline drastically).

The naming of the top winners in the Nikkei banzuke didn’t really come as any great surprise, since they were well covered in the NMJ throughout the year. This newspaper, sold at station kiosks (and of course by subscription), comes out on Mondays, Wednesdays and Fridays and sells for ¥170 a copy. If you’re curious to know what people are spending their money on, I suggest you try reading a copy — then you can become a trend watcher too!

Have a great day!

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