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Business English: Tokyo rolls out smoking salons
In a lax regulatory environment, Japan Tobacco is using new techniques to woo the key youth market. Although the legal smoking age is 20, it is almost never enforced allowing companies to come up with new and inventive ways of marketing cigarettes to young adults.On a summer night in Shibuya, the high-tech heart of Tokyo and a hang-out for teenagers, a group of youngsters are chatting away in a café close to the station. Upon closer inspection, though, something seems odd: every person in the café has a cigarette in their hands. Unlike the owners of smoke-free cafés and bars in the west, where health regulations are becoming increasingly stringent, the presence of cigarette smoke does not perturb the proprietor of the Shibuya café. For its owner is Japan Tobacco (JT), the world's third-biggest tobacco company.
Faced with a shrinking Japanese population and a declining percentage of smokers JT has come up with inventive ways to market cigarettes to its most crucial demographic group: young adults. Overall, the number of smokers has declined in Japan. In 2005, 46 per cent of Japanese men smoked, compared with 61 per cent in 1990, according to the ministry of health. But among those in their twenties, 52 per cent of men and 21 per cent of women smoked in 2005. "The fastest growing group of smokers are 20-year-olds, particularly women. There is the perception that they will lose weight by smoking and look cool at the same time," says Manabu Sakuta, professor of neurology at Kyorin University.
JT, a former state-owned monopoly, opened the Shibuya café two years ago, and its appeal has grown steadily. Last month it attracted about 340 smokers a day during the week and 470 a day at the weekend. The café is staffed by two women, who scarcely bat an eyelid when apparent teenagers amble in. Although the legal smoking age in Japan is 20, it is almost never enforced and cigarettes are readily available to anyone tall enough to reach the buttons of a vending machine. It is estimated that there is one cigarette vending machine for every 50 people in Japan.
"Our objective in opening this space was to communicate information about our products, since Shibuya is the trend-setting city of Japan," says JT's Yoshihisa Fujisaki, head of marketing operations. Although Mr Fujisaki says that, in principle, the two attendants are supposed to check identification, they do not if a person looks of legal age. "The people who come into this space are also our customers. We try to make an effort not to create any unpleasant feelings," he says.
JT is prohibited from selling cigarettes in the café, yet it serves as an indispensable tool for market research and advertising. "Shibuya is an area where our competitors are strong,"says Mr Fujisaki, referring to Philip Morris and British American Tobacco. "We wanted to hear more views and opinions from young adult smokers." The two attendants sometimes offer smokers who enter the café a newly launched cigarette line and ask them for their opinion on taste and other attributes.
Ritsuko Tsunoda, tobacco analyst at Merrill Lynch in Tokyo, says: "The efforts to woo young smokers are universal in the industry and crucial. Once these people start smoking they become hooked and steadily increase the number of cigarettes they consume. "JT has become more aggressive in marketing its brands, for example by changing the design of its Mild Seven cigarettes to appeal to younger smokers. They are trying to prolong the cash-flow generating period from their brand assets."
Japan is a peculiar market for tobacco because the government retains a 50 per cent stake in JT. The country's tobacco policy does not lie with the health ministry but with the ministry of finance, which critics say creates an inherent conflict of interest within the government. A near absence of tobacco-related litigation in the country, and relatively lax regulations, have made the environment for tobacco companies in Japan a virtual nirvana, say critics.
"In Japan, it's still seen as uncool to be associated with anything that advocates a non-smoking lifestyle. But I hope this will change in the future, and perhaps Japan will be a bit more like America in that regard," says Dr Sakuta.
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FTD.de, 19.07.2006
© 2006 Financial Times Deutschland,
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