Japanese
Internet Users
The Japanese government has set up a goal to "become the
world's most advanced IT nation" by 2005, according to
the e-Japan Strategy formulated in January 2001.(*1) So far,
some goals have been achieved: provision of low-cost broadband
services and optical fiber services, gaining lead in the mobile
communications field, such as mobile Internet.
According to the 2003 White Paper on Telecommunications published
by the Ministry of Public Management, Home Affairs, Posts and
Telecommunications, the population of Internet users in Japan
at the end of 2002 was estimated to be 69.4 million, an increase
of 13.5 million or 24% over the previous year.(*2) The Internet
saturation rate stood at 54.5%, exceeding half the population
for the first time. The number of Internet users is expected
to reach 88.9 million by the end of 2007, including 59.7 million
broadband users.
Recognizing that the industrial structure has taken a new direction
and information technology has emerged as a leading industry,
the Japanese government made special allocations for promoting
IT industry in the budgets for fiscal years 2001 and 2002. In
May 2002, the Industrial Strategy Council, an advisory committee
to the Minister of Economy, Trade, and Industry, announced an
interim economic revitalization package outlining six strategies:
First, the promotion of technological innovation; second, the
promotion of corporate restructuring by selection and concentration;
third, the enhancement of labor mobility and increased creation
of employment in the service industries; fourth, the attraction
of direct investment and talent from overseas; fifth, the establishment
of an "East Asia Free Trade Area"; and sixth, the
creation of a new market for the twenty-first century.(*3)
In June the same year, following the announcement of the six
strategies, the government's Council on Economic and Fiscal
Policy formulated the Basic Policies for Economic and Fiscal
Management and Structural Reform 2002, which called for, among
other things, the implementation of strategies for industrial
revitalization and the promotion of new industries and technologies.
Electronic Commerce
Doubling of "B2C" market in
2002
The growth of electronic commerce is picking up speed in Japan
due mainly to the rapid spread of broadband and wireless Internet
services. The market for business-to-consumer (B2C) e-commerce
in Japan doubled in 2002 over the previous year to ¥1.6
trillion, while business-to-business (B2B) sales surged 10.5%
to ¥60 trillion, according to the 2003 Telecom White Paper.(*4)
About 30% of all manufacturers, retailers and wholesalers conduct
business with other companies over the Internet, while more
than 30% of all financial institutions have gone online with
their consumer operations. Certain insurance companies, for
instance, are selling lower-priced automobile insurance products
over the Internet and telephone.
Meanwhile, new electronic settlement technologies are also behind
the economy's move onto the web. The non-contact IC card technology
developed by Sony Corporation has spawned a new, increasingly
popular electronic settlement tool: Edy electronic cash. Convenience
store chain am/pm Japan, for instance, has introduced the Edy
systems at all of its 1,400 outlets throughout the country.
Companies over a wide range of industries, including All Nippon
Airways and McDonald's Japan have also introduced the system,
which can be used for online purchases. The number of Edy smart
cards issued reached 3.3 million as of December 1, 2003.(*5)
There are, however, problems that could slow the strong growth
of e-commerce. The biggest challenge is protecting consumer's
security and privacy. To protect privacy in the Internet era,
the government enacted a new law in 2003, setting new standards
for privacy protection.(*6) Companies are gearing up their privacy
protection systems for the new standards prescribed by the law.
The legislation requires private businesses to bear responsibility
for protecting customers' personal information and enables consumers
to demand disclosure of information about them held by companies.
Broadband
7.8 million subscribers
The development and use of broadband has rapidly grown in Japan.
The number of subscribers to broadband services, including digital
subscriber line (DSL), cable, optical fiber, and wireless, was
7.8 million at the end of 2002, according to the 2003 Telecom
White Paper.(*7) This figure ranks third in an international
comparison of broadband subscribers, following the United States
(18.7 million) and the Republic of Korea (9.9 million).
The continuing fall of broadband rates is one of the causes
for the rapid spread of the service. According to the white
paper, the costs of DSL and cable Internet services in Japan
are the lowest in the world. The size of the broadband-related
market, including infrastructure and transaction, is expected
to grow from ¥2 trillion in 2002 to ¥10.2 trillion in
2007.
The number of subscribers to mobile Internet services, which
began services in February 1999, reached 62.5 million at the
end of March 2003. The proportion of mobile Internet subscribers
among the total cell phone subscribers for major carriers stood
at 79.2% at the end of September 2002, marking up the highest
ratio in the world.
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