As if to justify its reputation of having the world’s most advanced mobile phones and mobile infrastructure, pundits waited with bated breath to make pronouncements that even the mighty iPhone, which had conquered the relatively backwater rest of the mobile world, could not make a dent in Japan’s mobile market. Those prognostications appear to be premature, however, as of recent the iPhone, and in particular the iPhone 3GS, has begun to find itself topping mobile handset sales charts across Japan. And for anyone who has had to commute in a major Japanese center recently can attest, the number of iPhones in use has gone up in a noticeable fashion. Now while all of this might make an interesting case study for Apple or trendwatchers, the most interesting thing about the iPhone’s recent popularity is that it appears to be leading a shift in the notoriously fickle Japanese consumer’s mobile handset usage habits. With a new set of demands by consumers, over the coming months it’s likely that we’ll see an shift in the types of phones manufacturers produce (along with the services they provide with them), and a shift in how mobile content is distributed in the Japanese market.

While this isn’t an exhaustive list of everything the iPhone is doing to change habits, the following three factors seem to have had the most impact thus far:

Applications

One could also couch this as smart marketing and solid service development. Music and entertainment for mobile doesn’t really carry that much cachet in terms of differentiating yourself in Japan’s mobile market, as local providers have been doing that for years; as examples you have AU’s highly successful music service, Lismo, and more recently Docomo tying up with Avex to create a unique video on demand service for their mobile with Bee TV. Instead, Apple chose to focus on applications which has created a new niche for the iPhone that allows it to be positioned as a gaming, productivity or entertainment tool at once - sort of like a Nintendo DS you can talk on. (Have a look at the commercials from the iPhone 3GS Japan campaign here - most of them are for applications). Now this is not dissimilar to how iPhone is marketing itself around the world, but it certainly seems to have struck a chord with consumers in Japan, especially now that a critical mass of applications are available. If you’re looking for parallels in the marketplace, the strategy Apple employed isn’t all that dissimilar to that of social network Gree; once it realized that it was in an unrecoverable position to dominate the traditional social networking marketplace, Gree changed their focus to a "social" gaming platform to build a differentiated, strong position against the incumbent, Mixi. In short, they brought something else to the table that the other players couldn’t match, and to this point it seems to be working.

Changing web surfing habits

It’s impossible to deny that Japan’s first connection with digital content and communication was more geared toward the mobile than the PC. In 1999, NTT Docomo’s i-mode service was released as one of the world’s first content distribution platforms, which was followed by the other major carriers  setting up their owned gated communities of content development with their own browsers and "pay for play" content schemes. Thus began the dawn of a process where Japanese consumers began to consume content and communicated, sometimes almost exclusively, on the small screen. Over time, however, broadband penetration has reached near-ubiquity and the demand to access the free and open PC internet is palpable; according to Forrester Research, between home and work Japanese consumers spend 45% of the time they are exposed to media on the internet (compared to 31.5% and 5.3% for television and newspapers, respectively). For a time if you wanted to surf the "PC web" your options were limited to web surfing/smartphone players such as Willcom and eMobile, who cater more to the early-adopter/heavy user consumer niches who were willing to pay a premium (often in the form of a second handset) for always-on access. The iPhone, using Softbank’s network, seems to be the first "mainstream carrier" handset that allows people to surf the PC Web at a reasonable cost without the inconvenience associated with carrying extra handsets, which is unlocking this as of yet untapped demand to surf what many Japanese are beginning to refer to now as the "real", open PC internet.

Structural changes lead to a change in what’s important to consumers

There’s also a strong structural impetus for these changes to have taken place when they have. The iPhone appeared at a time where a number of regulatory changes were still getting worked out, and the long-term industry wide effects just now being felt. In the summer of 2007 number portability was introduced, followed by a ruling in September of the same year where Japanese carriers were no longer allowed to give away handsets at discounted prices - the dominant sales and marketing strategy until that point. The net effect of this regulation had a big impact not just on sales of the iPhone, but on all handsets and smartphones across the board, as Japanese consumers began using their phones for a longer periods of time. The result was less switching that softened handset demand for a long period after the regulations were enforced. Adding to all of that, there was a rush to buy handsets before the ruling changed, further dampening demand in 2008.  Ironically, this may be one of the reasons for what we see happening right now in 2009; the initial uptick in demand before the fall of 2007 to purchase deeply discounted handsets means that now many of those two year contracts are now coming up for renewal just as the iPhone seems to be gaining some sales momentum.

More than that, however, is the fact that now that consumers must make an investment in their mobile handset. This has created a marketplace that more closely represents true consumer needs and interests - and naturally they are gravitating towards handsets that fulfill those needs. Prior to the fall of 2007, price and carrier were more important factors for purchases of mobile phones than was the selection of a handset, but in 2009 carriers are less important now, while handsets and services are playing a much bigger role in determining what mobile phones Japanese consumers buy.

As a result of these changes, we are seeing a "shuffling of the deck" in terms of what is important to Japanese mobile users and developments in the Japanese mobile industry.  While there are a number of things that the iPhone isn’t able to do (i.e., eWallet applications, terrestrial TV broadcasts over oneseg without the help of an add on, bad camera, etc), perhaps these "only in Japan" functions weren’t as important to Japanese consumers as we were lead to believe. Ultimately, when it comes to technology flexibility, power and usefulness eventually trump habit, regardless of culture. Apple has delivered what even the inventor of i-mode has called "the future of the mobile phone" to the world’s most complex and advanced mobile infrastructure, and it seems to be changing, slowly but surely, what consumers expect from their mobile phones.

Earlier today, mobile carrier docomo and entertainment company Avex announced some promising results for their new mobile subscriber based TV service "BeeTV" that was launched on May 1. Currently, the service boasts 21 brand new exclusive programs available on demand for download, all 3-8 minutes in length, across eight channels; comedy, drama, music, variety, movie blogs, talk, animation and edutainment. The charge for the service is 315 yen/month and available only to docomo subscribers. In it’s first month of inception, programs from the BeeTV service were downloaded over 10 million times, and although subscriber numbers were not officially made available, sources speculate this number is in the neighborhood of 300,000.

The numbers are still relatively small when you look at the market as a whole, but the speed in which they have been attained certainly has sent a shot across the bows of content distributors in Japan. In particular, television stations are at risk from this new content delivery model, unless they begin to move away from defining themselves simply as the purveyors and distributors of the equipment and signals that enable broadcasting. Unlike their counterparts in other parts of the world, Japanese broadcasters do not have a core competency in creating content; they simply own the means to get it into people’s homes. BeeTV essentially has created a new content delivery mechanism that shuts these traditional broadcasters out. If it’s successful, expect others to do the same.

The other interesting aspect of BeeTV’s service is it’s potential impact on one-seg service.  If consumers find BeeTV’s video-on-demand format is more suitable for consumption of mobile content than the signal based oneseg, this would be another blow to conventional broadcasters who have relied on oneseg as their default "mobile" application.  If an elegant on-demand mobile delivery system can steal eyeballs and change the game in terms of consumer expectations for content delivery in Japan, broadcasters will either have to invest and adapt, or accept shrinking audiences.

Of course, one month of positive early adoption does not make BeeTV and docomo a new media empire. It’s still a closed system, which will limit how quickly and to whom it can spread, and the subscriber base must grow significantly in order to achieve revenues that will allow them to produce consistently high quality content. The part that is most interesting about the service, however, will be how it changes the game in terms of impacting consumer habits, and whether or not this will cause a shift in the way consumers expect mobile content to be consumed and distributed in Japan in the future.

The idea of collecting and sharing pictures online is nothing new, but the Japanese website Ittemia Saizensen（イッテミア最前線） (a loose, probably not too terribly accurate translation would be "the cutting edge of items")  puts a new twist on the whole idea of cataloging and posting photos by putting a gaming spin on it. The service is relatively simple; it provides a mobile and PC platform to submit photographs to the site under a list of user-generated themes (which are framed as "お出かけミッション, "Missions for when you go out"), and works a bit like tagging in reverse. Under each individual theme/mission users then submit relevant photos to the topic that are ranked, commented on and mashed up on a map for all to see. As you’d expect, the photographic themes (missions) on the site range from the relatively mundane (users submitting photos of sky, scenery) to the relatively absurd (users assembling a collection of manhole cover designs). And in order to be more to it’s users than a simple social catalog service, they have a sister site called "Ittemia Rally"
that mixes the cataloging of themed photographs with the concept of "long tail" community building. On the site, photo hunter/gatherers establish more intricate challenges, and the site tools available to the "mission" participants give it a feel that’s more suitable for person to person interaction.  In addition to sponsored official Ittemia Rally events,  Ittemia Rally features missions that are easy to grasp (dining around Tokyo station), challenging to do (hiking 500 meters up to the highest beer garden in Tokyo) or of a more time consuming, broader scale (J-League Division 1 stadium photo challenge).

In addition to the participatory, game style presentation of the site, one of the big reasons why the site has the potential to gain a niche acceptance is that there are extremely low hurdles to site participation. Practically everyone in Japan is equipped with a camera phone, many of which are GPS enabled, making the pool of content producers is potentially huge. And since the platform and community is more about the subjects or the missions being cataloged, having an individual or "real" identity really isn’t that important.

The other thing that’s noticeable is who the site appeals to right now. A scan of the topics on the site feature standard otaku memes (i.e., train station name games, trains) and a variety of notorious oddities that act as "uniquely Japanese" in-jokes enjoyed by the same set, such as the aforementioned manhole covers, "rice ball" shaped road number signs, and Japanese fire hydrants. Look through the site and you’ll get the feeling that a big chunk of the traffic it generates is due to it’s adoption by the otaku set.

In fact, in Japan it seems that most of the successful unique social computing technologies/tools tend to be vetted by these otaku early adopters before gaining more mainstream traction. While this doesn’t guarantee the success of sites like Ittemia Saizensen, it certainly helps in prognosticating whether or not a particular tool will stick. Blogging aside, the success of a number of Japan’s unique social tools (Hatena, Mixi, 2-Channel, Pixiv, et al) owe a debt of gratitude to these otaku early adopters; they helped establish a domestic standard of Web 2.0 that works as contrast, not a copy, of Web 2.0 in the English-speaking west (i.e., no true equivalent of Digg, much less use for tagging, lower instance of self produced video, etc).

If you’re looking to troll for the "next big thing" in the Japanese social computing scene, the unglamourous but logical place to look is by following these early adopters. Stay tuned, and in the meantime get out and, err, find some teeth logos… or anything else that strikes your fancy.

Whether bullish or bearish about Japan’s long-term prospects, there should be no question that Japanese consumer society has undergone a major transformation in the last decade. A recessionary economy and falling wages have slowly chipped away at a once-vibrant and high-speed trend-driven consumer culture. Sales in almost all cultural fields — music, fashion, video games, manga, DVDs, magazines — have seen serious decreases since the late 1990s. (This may also be true in the United States, but the incredible cultural penetration of the internet in the English-language sphere has somewhat softened the blow.) Now with a cyclical economic crisis in Japan triggered by the global recession, Japanese consumers are becoming extreme parodies of their former frugal selves: choosing Uniqlo over luxury goods and no-brand Chinese electronics over superior domestic products.

How in the world then do you try to "spot trends" in an unequivocally-declining consumer marketplace? At the moment, the normal trendspotting protocol is not equipped to handle this kind of stagnant environment.

The first major problem is that most trendspotting tends to be overly optimistic; trendspotters’ audiences are mostly corporations, so there is an inherent goal in making the future market appear to have great potential for further growth. After all, no one wants to spend money on a report that tells them their earnings are sure to decline. Trendspotters thus must either highlight the bright spots in the consumer market or spin negative-sounding social change into euphemistically positive phrasing. Non-consumers become "post-materialists." Obscure tech companies with crazy ideas become banner carriers for the entire industry. Yet something like the current strength of low-price Uniqlo is generally ignored, since this development does not portray Japan as "cutting-edge" nor provides a soothing narrative about the country’s future prospects.

The second problem is that most trendspotting looks in the wrong places: namely, "leading-edge" culture. The real cultural leaders of Japan are now the yankii working class delinquents who control the direction of the ever-growing gyaru and Oniikei fashion subcultures. Their magazines are expanding, and their favorite brands are profiting. But since the former gatekeepers and tastemakers in Japan dislike their aesthetic, the story of their rise is essentially ignored. Cell-phone novels, for example, are portrayed in the media as "innovative uses of technology" rather than as the increased preference for yankii-esque narratives. Articles about the recent popularity of hostess-fashion magazine Koakuma Ageha rarely mention its monthly content targeted towards to rural single-mothers working in the mizu shobai world. The "downward shift" of popular culture towards working class values and narratives could be said to be the most significant cultural trend of the last five years, but again, this is not a trend narrative anyone wants to hear.

In a similar way, there is much attention to Japan’s eco-consciousness, but these stories overly reflect the interests and aesthetics of upper middle class Tokyoites who have grown bored with decades of over-consumerism. Looking at the leading companies at this time of recession, however, mass consumers are clearly choosing products based on low price and high cost performance and not on abstract notions of environmental friendliness. The media and urban elite’s pro-environmental tastes are a good start for the green movement within Japan, but hardly tell the true story of basic consumer preference.

Unless the economy recovers dramatically, there is no reason to believe the two major narratives of cultural change in Japan — the erosion of conspicuous consumer spending and the rise of working class tastes amongst the middle class — will come to an end. Trendspotting in Japan must cease being an advocate for culturally-savvy innovation in technology and leading-edge culture and instead become an unbiased examination of the true market. On this score, Atsushi Miura — author of Karyu shakai (Downwardly-Mobile Society) and the recent Onna ha naze kyabakurajo in naritai no ka? (Why do women want to become cabaret club hostesses?) — has provided the perfect template. For years, he worked at PARCO’s Across — the beacon of leading-edge consumer research — but now writes almost exclusively about youth’s cultural shift towards less urban and urbane values. He went towards the real story instead of trying to fit contemporary Japan into the "traditional" progressive trend mold.

With an unprecedentedly-high product turnover, Japan offers much temptation to concentrate solely on eccentric technologies and quirky new products (ice cucumber soda and QR-code graves, anyone?). Most of these products, however, are total flops or otherwise have only the most minor influence on the wider market. Good trendspotting must ignore these products or at least admit their total irrelevance to the wider consumer market up-front. In other words, trendspotting must stop searching for phenomena that fit the 1990s concept of "trends" and instead work to discover new social patterns and (often uninspiring) hit products. The prolonged Japanese economic downturn has not erased trends; it has just made trends less exciting and "cool" to the normal trendspotter crowd. Ultimately, trendspotting is not about sexy content and stimulating readers; it’s about telling the true story of the market in order to make accurate predictions for the future. As Japan has shown over the last decade, the near future does not always become bigger, bolder, and brighter than the past. Trends can be depressing, disappointing and maybe even a little boring, but reality turns out to be the best starting point for formulating business strategy.

At the time of its initial establishment in 2005, Tokyo Girls Collection (TGC) offered a revolutionary alternative to the standard industry "fashion show." E-commerce company Xavel (now Branding Inc.) founded TGC as a multimedia fashion event focusing on "real clothes" — low-priced domestic brands with an eye towards street trends. Instead of generic foreign drones imported from Eastern Europe, TGC used young models from popular magazines to parade the clothes on the runway. With its winning formula, TGC found quick success and ultimately rewrote the rules for Japanese fashion: choosing inclusivity over exclusivity and immediate relevance over artistic intention. TGC was "real" fashion for "real" Japanese women. Take a hike, "fake" fashion purveyors!

Now in 2009, Tokyo Girls Collection has taken its rightful place as a core institution of the Japanese fashion world, with big sponsors all clamoring to get a piece of the action. Uniqlo has just offered its second TGC collaboration — spring blazers promoted with popular ViVi model Marie. Last weekend’s 2009 Spring/Summer TGC took the brand line-up into totally new territory: select shops Beams, Kitson, and Free’s Shop, as well as originally-American brands Milkfed and Jill Stuart. All five are much more "fashion-forward" in the traditional snobby sense than the usual Shibuya 109 fare. The inclusion of these brands perfectly illustrated the fact that TGC is no longer a niche event for offshoots of the Shibuya gyaru subculture but an event where 20,000 female consumers with open minds and relatively heavy wallets can congregate and party. In just four years,
TGC has become completely and utterly mainstream.

The day after Tokyo Girls Collection, Branding Inc. held TGC’s "little sister" event Shibuya Girls Collection (SGC) on the same Yoyogi National Stadium stage. Most wondered whether back-to-back Girls Collections would not mutually cannibalize audiences, but the pre-show buzz had the younger SGC outselling its big sister TGC. By the day of the event, all tickets for SGC had totally sold out. The day of the show, the arena was completely packed — with even the press seats over-run with eager girls. (Although SGC offered a "Men’s Stage" to show Oniikei fashion brands modeled by Men’s Egg superstars, the crowd was ultimately over 90% women.)

The two Girls Collections essentially share the same format, but SGC is a completely different beast than TGC — almost like the young weekend crowds at Shibuya 109 broke into the stadium and threw their own fashion show. As the name suggests, Tokyo GC is about girls’ street fashion in a wide and comprehensive sense, encompassing the diversity of looks found in Japan’s capital. SGC, on the other hand, is all about the specific gyaru style that emerged in the Shibuya neighborhood in the mid-’90s and remains strong. Accordingly, the SGC atmosphere was much more subcultural and niche than TGC, representing a fashion world that remains under the shadows of the "serious" industry. But despite the more narrow focus, the seats were equally packed at TGC, proving that the Shibuya fashion movement is just as legitimate in size and energy as the "mainstream" of fashion.

That does not mean, however, that SGC is particularly comprehensible to outsiders. I nominally cover the girls’ "street" fashion beat, and yet, most of the details of SGC culture are totally alien to me. TGC employs beloved magazine stars with name-value: celebrities who double as dramatic actresses (like Karina), singers (like Yu Yamada), and general TV talent (like Marie). Many are even known outside the confines of the "real clothes" fashion world. The participating TGC brands too, like Beams, are universally well-known. SGC’s models, in comparison, may draw total blanks even with a hardcore TGC audience. They are total unknowns to anyone besides avid Popteen readers. The "star" model of SGC was Tsubasa Masuwaka — a 23 year-old ex-Popteen model and young mother who is big with the kids in Shibuya but has no connection to the mainstream entertainment industry. (She is sometimes featured on TV shows but only in news stories about her marketing power with teens. Despite her popularity, she is not invited to be a cute tarento on quiz shows.) Tsubasa is just the tip of the iceberg. The crowd’s other favorites — Wei Son, Jun Komori, Yui Kanno, and Kumiko Funayama — also came from Popteen. Admittedly, Popteen is a popular magazine in terms of readers, but representative of a style without much influence on mass culture.

With SGC relying on dokusha "reader" models — young fans of the magazine who volunteer posing and smiling services to magazines for little-to-no money — the model pool was markedly amateur. Most SGC models are about 5′4" max. Star Tsubasa does not even hit five-foot. The SGC heroes dwarf in comparison to the professional long-legged models of TGC. Of course, these imperfections are what makes the girls so popular with readers: what could be more "real" and imitable than a 4′11" model? And likewise, opposed to the half-Japanese mania of TGC, almost everyone at SGC is "pure" Japanese. The gap between fans and models at SGC thus becomes incredibly narrow. But since fans pay good money to attend, the models need to look "larger than life." This needs pushes the girls to ramp up their normally over-tanned and bleach-blond appearance to the maximum degree: dark skin tones, faces caked with glitter, hair curled, crimped, permed, and teased out. They all looked like an army of idealized gyaru robots hot off the beaches of Hawaii.

While SGC’s official cast of characters gravitated towards’ Popteen’s gyaru world, the prevailing fashion style of attendees came straight out of post-gyaru fashion magazine ViVi’s sophisticated and hard-boiled look. The uniform was shoulder-length hair with curled bangs, black leather motorcycle jackets, unzipped hoodie sweatshirts in bright blues, black-and-white horizontal striped T-shirts, high-waist tiered skirts or shorts, big belt buckles, and a man’s fedora. There was also an unexpected outbreak of giant bows propped up in girls’ hair. Perhaps this post-gyaru look is the current style moment for the Shibuya streets — a mishmash of original gyaru surf culture, Ura-Harajuku streetwear, punk influences, high-fashion silhouettes, and the elegant tastes of the original ’90s kogyaru who have graduated from the movement and created their own up-market brands. A more likely explanation is that the hardcore gyaru — those who take the style to formidable delinquent yankii extremes — were not going to shell out the ¥3,000 for tickets. Or maybe they were in the cheap seats at top.

So here was the strange divide: the crowds came to see their Popteen idols up-close, and yet, they choose a personal fashion style much more mainstream than the hardcore gyaru formula. Gyaru style originated in the 1990s as an delinquent upper-class high-school subculture, but as the decade progressed, the rich girls ceded leadership to rural working-class yankii followers. The army of sexy and tan kogyaru transformed into monstrous ganguro. Gyaru has returned to its more aesthetically-palatable roots in recent years, but the movement’s heart and values still stay close to the lower socioeconomic stratum, best evidenced by the large crossover between the style and employees at host clubs and low-priced "cabaret-club" hostess bars. So while the audience felt a step apart from the core gyaru style, the models on stage (especially the male models) generally embrace and embody the yankii delinquent lifestyle. This made SGC feel like an act of selling the allure and rebellion of Japanese working class delinquent subculture to middle class kids. Up to this point in Japan, the fashion industry has rarely indulged in this kind of marketing practice. Usually, elements of delinquent subcultures were forced to do their own marketing.

Most analysis on the two Girls Collections tends to focus on the possibilities the events have for the fashion market, as if Japan Fashion Week or even Paris Fashion Week could take a lesson or two from this real clothes festa. But lumping these "fashion shows" all together misses the true dynamic of TGC and SGC: sure, there are clothes traveling down the runways, but everything about the event makes the apparel feel like an afterthought. The multiple giant jumbotrons behind the runway zoom in on the model’s face for almost her entire walk down the path, save a single full-body scan. The press releases always boast about "girls buying clothes on their cell phones right as the clothes hit the runway" but I have never observed this "real-time e-commerce" in the audience; the girls are usually too busy cheering their favorite stars to take the time to buy clothes. Surely brands that participate get a huge promotional bump, but I think the excitement is less about shopping, commercial transactions, and apparel and more about being in the same room as celebrities.

But as much as we believe the Popteen models are the draw, those subcultural folk heroes still lose out to the bigger crowd-pleaser: TV stars. A surprise appearance from Becky — a half-Japanese TV talent who is not a member of the gyaru community by any definition — elicited prolonged and severe screams from fans. After attending a handful of these "real clothes" events, I can tentatively conclude that the crowd is most interested in celebrating "celebrity." They may love their community icons like Tsubasa, but they go absolutely crazy with the appearance of an honest-to-god variety show regular.

So there is an unconscious tension boiling under SGC between the "gyaru community" and mainstream culture, but while the crowd loves the surprise of celebrity appearance, the 20,000 young women did not show up to Yoyogi National Stadium to see sumo wrestlers and musicians. They want to take part in the Shibuya fashion community. Shibuya Girls Collection proves that there is a huge — and growing — market around the gyaru subculture. Popteen is one of the few magazines to gain readers over the last few years (And the magazine looks more like the deeply working-class hostess-circular Koakuma Ageha by the minute.) As non-community members, we tend to reach for the word "subcultural" to describe SGC’s style and dramatic personae, as if these strange girls are interested in something far removed from our comfortable "mainstream" cultural paradigm. But in fact, the overwhelming popularity of SGC proves how little influence the entrenched mainstream entertainment and fashion worlds have in the 21st century. The powerful forces of traditional industry now all band together for TGC, but even with such support, the mainstream TGC does not really attract any more people than the niche SGC. When it comes to subcultural affiliation, the gyaru numbers are rising and the generic mainstream plurality is shrinking. SGC is not just popular in its own right, but may be a harbinger of bigger things to come for bottom-up culture.

Image above of Tsubasa Masuwaka comes from the Shibuya Girls Collection site.