Industry Report: Japan Round-up

This is an update report building on the last edition published by BSG in May 2008. It provides a summary of the key developments in Japan’s B2B media industry over the past year. The report is segmented into exhibitions, online & mobile and print.

Japan’s B2B market often receives less attention than its size would suggest is merited. Conventional wisdom still suggests that the B2B media market in Japan is slow-growing (even sleepy), highly regulated and offers limited opportunities for foreign operators. Despite this reputation, a few companies such as UBM and Reed Exhibitions have built solid businesses in Japan with both events and publications and online players such as Alibaba.com and Baidu have made the Japanese market a strategic priority. In addition, The Wall Street Journal has been active in the past year, pursuing both print and online opportunities.

Alibaba.com has pushed ahead with its 65-35 joint venture with Softbank: the Japanese-language sourcing site received a US$20 million cash injection from Softbank and Alibaba.com Japan launched various marketing initiatives and events to increase awareness of its brand amongst Japanese buyers. Although the website is still loss-making (US$3 million in the first six months of 2009), Japanese membership now stands at 120,000 and it has 1.4 million products listed.

Similarly, Baidu, a Chinese language Internet search provider, committed to investing US$20 - US$25 million in the Japanese market last year and the company is still not charging for any of its services there. Losses from Japan for the first half were US$11.6 million and for the full year of 2008, US$19 million.

In terms of print media, the magazine market in Japan is finally showing signs of adapting to digital platforms instead of ignoring the opportunities. Dentsu-Souken, a major advertising agency in Japan, launched MagaStore, an Apple iPhone application which enables users to purchase digital versions of 30 popular Japanese magazines for 115 Yen (US$1.21) each. In addition, the Japan Magazine Publishers Association (JMPA) has established a “Consortium for Digital Promotion of Magazine Content” which will promote studies regarding how to “digitalise and monetise magazine content.”

Japan’s exhibition market, although large, continues to underperform the rest of the region in terms of growth. In 2008, BSG estimates that nearly 2.06 million m2 were sold at exhibitions in Japan – 14.3% of all of the space sold in Asia in 2008, but Japan’s overall share has fallen from 19% in 2006. In terms of exhibition space sold, Japan was one of the worst performing markets in Asia, recording a 6% decrease in space sold compared to a regional average of 9% growth. That aside, revenues from Japan’s exhibition industry were US$745 million, second only to China and yields there remain strong by regional standards. Several foreign players including UBM and Reed Exhibitions continue to be significant players in this market."