Yōkoso – welcome to the Japan category of this blog. This blog was inspired by my love of Japanese culture and their consumer trends. I was introduced to chambara films thanks to being a fan of Sergio Leone’s dollars trilogy. A Fistful of Dollars was heavily influenced by Akira Kurosawa’s Yojimbo.
Getting to watch Akira and Ghost In The Shell for the first time were seminal moments in my life. I was fortunate to have lived in Liverpool when the 051 was an arthouse cinema and later on going to the BFI in London on a regular basis.
Today this is where I share anything that relates to Japan, business issues, the Japanese people or culture. Often posts that appear in this category will appear in other categories as well. So if Lawson launched a new brand collaboration with Nissan to sell a special edition Nissan Skyline GT-R. And that I thought was particularly interesting or noteworthy, that might appear in branding as well as Japan.
There is a lot of Japan-related content here. Japanese culture was one of odd the original inspirations for this blog hence my reference to chambara films in the blog name.
I don’t tend to comment on local politics because I don’t understand it that well, but I am interested when it intersects with business. An example of this would be legal issues affecting the media sector for instance.
If there are any Japanese related subjects that you think would fit with this blog, feel free to let me know by leaving a comment in the ‘Get in touch’ section of this blog here.
Collapse OS — Bootstrap post-collapse technology – a vision of dystopian technology that fits right in with William Gibson’s more recent views of the future with the Jackpot. A slow moving systemic collapse due to global warming, flooding, pollution, global conflict, terrorism and pandemics
The battle inside Signal – Platformer – Casey Newton has pulled together an interesting portrait of Signal and how its developing as its user base scales
Online retailers are playing a risky game with the UK high street | Financial Times – like Arcadia and countless rivals, Debenhams had underlying conditions stemming from over-enthusiastic cash extraction. CVC, Texas Pacific and Merrill Lynch acquired Debenhams in 2003 in a £1.8bn leveraged buyout that needed just £600m of equity. The trio then extracted more than £1bn via property sale and leaseback agreements and floated it again for almost the same price in 2006 – the Times makes a really good case with regards private equity excesses. Other examples outside the retail sector include TWA and Eircom
Jim Slater and the warning from the 1970s that we ignored – BBC News – a very brief piece in the BBC Online reflecting on the legacy of Slater Walker. The reality is that there needs to be a far deeper reflection on the effect of his asset stripping model had lighting a touch paper that led directly to deindustrialisation, populism and Brexit.
“Marketing is what you do when you have a sh#tty product.” – Christopher Lochhead – not particularly smart viewpoint, though great product and service design really helps marketing and helps reduce the amount that needs to be spent due to word of mouth. A second thought occurred to me, people with this mindset are building the entire martech stack….
CES 2021 – the Consumer Electronics Show usually sets the tone at the start of the year for consumer-oriented technology. It usually fills up Las Vegas’ hotels and conference facilities.
CES 2021 went online only. Like attending online conferencing the experience was lacking. Networking and informal conversations aren’t something that technology has managed to solve.
Consumer electronics manufacturers didn’t let the virtual nature of CES 2021 put them off though. LG and Samsung went gangbusters rolling out new products. One can understand their enthusiasm based on CTA research for US TV sales in 2020:
Televisions: Households channeled discretionary dollars into upgrading TVs in a record-setting year for shipments in 2020. CTA expects steady demand for displays in 2021 as TVs remain the centerpiece for entertainment in homes. Television shipments will drop 8% to 43 million units in 2021, the second-highest volume on record, while revenues will decline just 1% to $22 billion. Growth areas for TVs in 2021 include sets over 70-inches (3.3 million units, up 6%) and 8K Ultra High-Definition TVs (1.7 million units, up 300%).
U.S. Tech Industry Revenue to Jump 4.3% in 2021 After Record Year in 2020, Says CTA
According Parks Associates, smart TVs were the most popular devices for streaming content. This has been on the rise since 2018. This offers a business opportunity for TV manufacturers and also a potential point of differentiation.
Based on research by Park Associates
TV vendors were looking at differentiating their products from the increasing amount of competition.
Looking at the change in TV design; where there is less distinction from the display technology, cabinet or frame design, even OS (with Android) has become commoditised – new sources of differentiation become important.
LG has been soldiering on with with version 6 of webOS, originally derived from Palm’s attempt to meld HTML 5 web service based apps on top of Linux during the mid to late noughties. (It was also interesting that Samsung didn’t do a similar thing with their Tizen OS; which is derived work done by Intel and Nokia on Linux for mobile and consumer electronics applications.)
Google Duo tried to get a jump on Zoom by having support in smart TVs. TVs were found to be supporting multiple voice assistants which implies that there has been a stalemate amongst the major players. Whether or not that will result in voice service customer us promiscuity in the home is an interesting question.
On the hardware front, Japanese manufacturers Sony & Panasonic were promoting the use of onboard machine learning to optimise image processing in real time.
SWAS – screen with a subscription
LG expanded its support of content streaming services to include streaming games platforms. Looking at the Parks Associates data, one can understand why they think that the games console market is ripe for disruption.
Samsung looked to get into the digital art market, with subscription based imagery available on its Lifestyle TV line, which look like a picture frame when off. This is only three decades after Bill Gates Xanadu 2.0 home was filled with digital art. He patented the e-picture hanging in 2003.
Samsung has gone into coopetition with Peloton with new functionality within the Samsung Health function on its TVs. But also integrating with the fitness training service. The camera and machine learning provides guidance and advice on form for exercisers. This mirrors where Apple has gone with its fitness offerings that are included in the Apple One subscription.
Sony doubled down on its content business with the Bravia CORE streaming service for its top of the range TVs. A few things with this announcement:
CORE uses up to 118Mbits/sec for ‘IMAX enhanced’ content
It is initially only a 2-year project, which implies that it might be a reaction to COVID limited box office numbers rather than an ongoing Netflix killer
It is also interesting that Sony is still hamstrung by its different lines of business and hasn’t launched a streaming games service in its TVs for fear of cannibalising PlayStation sales.
Other revenue streams on screen
LG Shop Time 2.0 built on the Shop Time app launched late last year. ShopTime allows you to buy what you see on screen with 1-click in partnership with the Home Shopping Network. Korea has a large TV shopping culture, with mobile commerce and TV experience integration, so this move seems to be a logical progression.
Picture I took on a trip to Ulsan in 2012, TV home shopping integrated with mobile commerce by scanning QRcode to buy item currently being sold on the show.
However the launch of Shop Time 2.0 is a decade on from the pioneering work by Japanese media house Girlwalker; that mixed live and streamed entertainment with 1-click shopping. Their Tokyo Girls Collection and Shibuya Girls Collection events set the standard in this kind of retail experience.
Samsung TV Plus focused on new targeted advertising capabilities with its own DSP and DMP solution. Ad tracking provides a record of everything that you watch on TV for better ad targeting.
SWAS and the other revenue streams change the game for TV manufacturers at CES 2021. Previously, a TV was once in a decade purchase. Now manufacturers have the opportunity in the upfront purchase and in multiple recurring revenue streams. The increased amount of technology in the devices, implies an expectation of faster upgrade cycles. However device security and data privacy still don’t seem to be issues on the radar of TV manufacturers.
AIoT – artificial intelligence of things
In the same way that fuzzy logic made its way into consumer electronics from rice cookers and cameras to lifts, connected machine learning is now taking a similar path with variable results. Machine learning seemed to feature in CTA Innovation Award Honorees across categories at CES 2021.
The COVID-19 factor
CES 2021 itself went virtual because of the pandemic. And two trends became apparent. Machines replaced service staff with devices like an autonomous shopping trolley that would follow the consumer around a supermarket. The second was disinfection, with UV light used as a the go-to germ-killing technique. LG had a number of robots for aiding in hotel room service functions such as delivering items including food packages. There was also a bot for sterilising empty rooms with UV. Accessories company Targus won an award for its UV-C desktop disinfection lamp.
Cheddar put together an interesting study into popular Christmas songs. I really like that Cheddar put their sources including The Wall Street Journal and other news sources. I’d love to see more people do this on YouTube videos. The start of popular Christmas songs took off with recording music and the move away from religious music to a more secular family festival celebrated in America.
As the clock ticked down to Brexit finally happening, I watched the late Darcus Howe’s three part series White Tribe using the All4 service. Looking back two decades, you could see effects of the Thatcher administration which accelerated the decline of the British industrial heartland without thinking about what came next beyond shopping malls, loft apartments and garden festivals. The schism in society that fuelled Brexit was readily apparent. The void of what being English meant, was again apparent during the head-scratching paean to the NHS that was the London Olympics opening ceremony. What I thought was most remarkable is that White Tribe is very consistent with what I saw in John Harris’ series for the Guardian Anywhere but Westminster. All of it in retrospectYou can watch the full series of White Tribehere.
In common with other organisations from design agencies to the Irish government’s department of foreign affairs; Japanese airline ANA celebrated Christmas with a content focus this year DO: Bring Japanese Christmas Home ‘Tis the season… – ANA. The content is unusual as it focuses on secular Japanese Christmas traditions including Christmas songs. More Japan related content here.
Revealed: China suspected of spying on Americans via Caribbean phone networks | US news | The Guardian – China is alleged to have used Caribbean phone networks to conduct its surveillance. I’d imagine that they aren’t the only people to do this – At the heart of the allegations are claims that China, using a state-controlled mobile phone operator, is directing signalling messages to US subscribers, usually while they are travelling abroad. Signalling messages are commands that are sent by a telecoms operators across the global network, unbeknownst to a mobile phone user. They allow operators to locate mobile phones, connect mobile phone users to one another, and assess roaming charges. But some signalling messages can be used for illegitimate purposes, such as tracking, monitoring, or intercepting communications.– always use a VPN when roaming whether it’s Caribbean phone networks or elsewhere. We don’t know which Caribbean phone networks are vulnerable, could it be Digicel? More security related posts here.
LS Keynote Shanghai 2020: The Digital Transformation of International Brands in China – studies by Boston Consulting Group for the luxury sector showed that 93 per cent of purchases in China are influenced by digital touchpoints – which is significantly higher compared to the 60 per cent observed in the global market. This makes developing digital offerings in China more significant for luxury brands. On top of its external transformation, it is also crucial for brands to establish an effective organisational structure and infrastructure internally. When it comes to creating omnichannel experiences, the development of online channels should be done so in tandem with offline touchpoints, opined Liang. Any projects that straddle online and offline must be supported by frontline staff – something he sees as a key challenge for luxury brands today – interesting stuff from Luxury Society
To the moon and back, Chinese R&D is leaving the US behind | Financial Times – Once upon a time, the US government invested heavily in research. US federal R&D spending surged after the Soviets launched Sputnik, peaking in 1965 at 11.7 per cent of federal spending and at 2.2 per cent of gross domestic product. Frontier discoveries from that time led to the internet and GPS, the global navigation system. But in the decades since putting a person on the moon, US government investment in ideas has waned. In constant dollars, Nasa spending had fallen by more than half by the early 1970s; it has been flat ever since. By 2019, total federal R&D spend constituted just 2.8 per cent of all federal spending and just 0.6 per cent of GDP — the lowest since the start of the cold war.
US orders emergency action after huge cyber security breach | Financial Times – Hundreds of thousands of organisations around the world use SolarWinds’ Orion platform. The US department of Homeland Security’s cyber security arm ordered all federal agencies to disconnect from the platform, which is used by IT departments to monitor and manage their networks and systems. FireEye, a leading cyber security company that said it had fallen victim to the hack last week, said it had already found “numerous” other victims including “government, consulting, technology, telecom and extractive entities in North America, Europe, Asia and the Middle East”.
‘This Feels Uncomfortable’: Nike Tackles Racism In Japan – observers criticised Nike for misunderstanding or disrespecting its host country — as if racial prejudice were somehow a component of Japanese culture that should not be challenged. The issue is more complex than both the content and the censure suggest, but the reaction was a reminder that Japan is still less accustomed to ‘purpose-driven’ brand work than many economically advanced markets. It also underscored that extreme right-wing views exist in Japanese society, even if people rarely give voice to them in an offline environment. For some ordinarily bold brands, it is likely to prompt a round of second-guessing before adopting a sensitive social topic as part of their marketing efforts. “People think discrimination isn’t part of Japanese life, but it is,” said one Japanese in-house communications head at a multinational consumer-facing company, who wanted to remain anonymous. She added that she did not see the work as offensive but as helping to raise awareness of unconscious bias. At the same time, she said she would weigh the risks with extra care before embarking on any diversity-oriented campaign
China pulls back from the world: rethinking Xi’s ‘project of the century’ | Financial Times – two Chinese banks lent $462bn, just short of the $467bn extended by the World Bank, according to the Boston University data. In some years, lending by the Chinese policy banks was almost equivalent to that by all six of the world’s multilateral financial institutions — which along with the World Bank include the Asian Development Bank, the Inter-American Development Bank, the European Investment Bank, the European Bank for Reconstruction and Development and the African Development Bank — put together. In global development finance, such a sharp scaling back of lending by the Chinese banks amounts to an earthquake. If it persists, it will exacerbate an infrastructure funding gap that in Asia alone already amounts to $907bn a year, according to Asian Development Bank estimates. In Africa and Latin America — where Chinese credit has also formed a big part of infrastructure financing — the gap between what is required and what is available is also expected to yawn wider. China’s retreat from overseas development finance derives from structural policy shifts, according to Chinese analysts. “China is consolidating, absorbing and digesting the investments made in the past,” says Wang Huiyao, an adviser to China’s state council and president of the Center for China and Globalisation, a think-tank. – there are limits to what even China can do to defy economic laws. Overall the infrastructure costs of the British empire were much higher than is generally realised
I started thinking about the latest developments in luxe streetwear after leafing through the FT to see the following advert marking the proposed purchase of Stone Island by Moncler. (Stone Island had already sold its parent brand CP Company and intellectual property back in 2015 to Hong Kong manufacturer Tristate Holdings Limited).
R+R SpA – published in the Financial Times – a luxe streetwear merger
It follows hot on the heels of Supreme being purchased by VF Corporation.
Luxury disruption
From the luxury market point of view their customer base over the past 30 years has done three things:
The customers have become younger. Luxury shopping is no longer dominated by dowager heiresses in Europe and the New World. Now the man purchasers of luxury are much younger and are second generation money. They’ve had money in their families for somewhere between 20 and 50 years. They are the scions of political leaders or business leaders. Money has allowed them access to the world’s best education institutions. They might have had etiquette classes, but they’re no more than two generations away from having known deprivation.
The customers are in a different place. Globalisation massively changed their customer base. First it was the Japanese middle classes who picked up a taste for luxury brands whilst travelling abroad. As the Asian tigers took off, you started to see luxury purchases being made in Singapore, Hong Kong, Korea and China. When the Soviet Union fell luxury consumption also sprang up in the East as some people had money to burn. Much of the luxury retail in traditional shopping areas like London and Paris are derived from tourists rather than local purchasers. A change in the luxury tax regime in China has seen more domestic luxury consumption. China is now looking to build Hainan into a domestic luxury shopping and holiday resort.
Luxury serves a different purpose. Luxury has traditionally reflected status. Goods of a superior nature that the ‘wrong sort’ of people would never be able to afford. Luxury then became a symbol that you’d made it. In Asian markets, particularly China, luxury became a tool. People gifted luxury products to make relationships work better. It also signified that you are the kind of successful business person that partners could trust. You started to see factory managers with Gucci man bags and premium golfwear to signal their success. Then when the scions of these business people and figures in authority were adults, luxury has become about premium self expression. It has been mixed up with streetwear in a manner reminiscent of the Buffalo Collective.
So from the perspective of the luxury industry, they are feeling a massive amount of disruption going on. And that’s even before you get into digital transformation.
It is this transformation of customer segments, geographies and use cases which is forcing the luxury industry to ‘go casual’ fit in a luxe streetwear space.
Streetwear evolution
The perspective from the streetwear side of the table is more exemplified by my favourite Thai English phrase: same-same, but different. Their market hasn’t been disrupted in the same way as luxury. It has got a lot bigger.
Growth in streetwear
The internet has meant that streetwear culture has become global and trends catch on much faster. It has become more popular around the world and there are thriving secondary markets like StockX and GOAT.
Streetwear has pushed into luxury pricing models led by Japanese brands; who brought a higher attention to detail to the market. It has continued the trend of innovation that companies like Stone Island started. This is best exemplified now by the likes of German label ACRONYM.
From a design perspective right back to the origins of what we know as streetwear by the likes Shawn Stüssy or Harlem’s Dapper Dan co-opted luxury product language. In Dapper Dan’s case using fake fabrics and labels to make clothing. His customer base of African Americans from poor neighbourhoods whether early hip hop stars or criminals didn’t see the items that they wanted in boutiques. And even if they did, many of them didn’t feel welcome in the uptown boutiques.
From Stüssy’s point of view it was the pop art ethos and DIY fanzine culture that infused his work. The reversed double S in a circle is an obvious reference to Chanel’s design language.
Over the space of a decade Supreme went from being sued for aping Louis Vuitton’s design language to collaborating with them. Dapper Dan has recently been collaborating with Gucci.
Does luxe streetwear lack ambition?
Highsnobriety asked the question five years ago and concluded that no streetwear company had shown the serious ambition to become an umbrella brand the size of LVMH or Kering. Skiwear, skate wear and snow sports equipment are sectors that are a tenth of the size of streetwear. Yet they have seen consolidation into larger holding groups. These groups provided the financial cushion for these companies through the 2008 financial crisis.
The closest that luxe streetwear has got to the holding group is likely to be New Guards Group. New Guards Group describes itself as a contemporary luxury fashion holding group. It owns Off-White, Opening Ceremony and Palm Angels. This in turn was bought out by luxury e-tailer Farfetch. Farfetch in turn has Richemont and Alibaba as minority shareholders.
Surfwear is also described as having a generational strain. Dads keep wearing the gear. Kids no longer want to wear it. Given the commonality with the streetwear lifestyle. You could see similar things happening at even the largest of streetwear brands eventually. Some of the people wearing Supreme in the mid 1990s are still wearing it. The original international Stüssy Tribe are still going strong, repping streetwear in their 50s and 60s.
Luxe streetwear brand A Bathing Ape has definitely seen better days, by the time Nigo sold the business to Hong Kong I.T. Group. The transitory nature of streetwear brands is littered with names that were formerly prominent like XLarge (that came back) or 90s icon Massimo.
Stone Island and luxe streetwear
Moncler get a technically proficient firm in Stone Island. It was built on a foundation of experimenting with materials. It is the only company able to garment dye polyester fabric for lightweight applications like summer jackets.
The brand is widely respected and has collaborated with other innovators like Nike. It has been worn by Drake regularly that opened the brand up to hip hop fans. This has helped the brand widen its association beyond football hooligans and scally culture.
