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Japan warming to cheap foreign gadgets amid slump

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[March 20, 2009]  TOKYO (AP) -- The recession is causing a massive consumer shift in Japan: No longer do its famously finicky and brand-conscious consumers assume imported and no-name electronics are as cheap in quality as they are in price.

As products from toasters to laptops carry increasingly similar components and special features -- and as consumers increasingly seek bargains -- price is becoming as important a distinction among electronics in Japan as it is in most countries.

InsuranceLesser-known manufacturers like China's Haier and Taiwan's AsusTek, which have seen success around the world for years, are finally cutting into the sales of homegrown electronics powerhouses like Sony Corp. and Panasonic Corp. And opportunities are opening here for retailers catering to consumers who are comfortable seeing electronics as commodities.

Nikkei Market Access, the research unit of Japan's biggest business newspaper, The Nikkei, estimates that consumers expect to pay one-third less for a computer this year than they did last year. Shinya Torihama, retail analyst at Okasan Securities Co. in Tokyo, says products from lesser-known makers do well as long as consumers believe they offer quality comparable to bigger brands.


"Japanese are still picky about quality, but they are starting to take a much harder look at pricing," Torihama said.

Those who lived through the luxury-worshiping bubble years of the 1980s now routinely compare prices and study reviews online, says Yoshiya Nomura, supervisor at researcher Dentsu Communication Institute in Tokyo.

"Japanese consumers these days are looking for what I'd call super cost performance," Nomura said. "The choice is all about how a product is the best fit in matching an individual consumer's needs."

Newly frugal Japanese consumers may finally be ready for Wal-Mart Stores Inc., which pushes electronics made outside Japan and has struggled here since arriving in 2002. Wal-Mart does not break down financial data by nation.

At Tokyo Seiyu, as Wal-Mart is called here, a boxy, utilitarian clothes washer from China's Haier selling for 19,700 yen ($200) sits next to a curvy, futuristic Panasonic machine selling for 137,000 yen ($1,400).

"A lot of people don't care about brands," says sales clerk Masataka Komorida. "Product choice varies among individuals. The Haier is being bought by both the young and the elderly."

Komorida said he expects to sell five or 10 of the Haier washers on a busy day compared with one or two of the Panasonics per month. Haier's fridge appeared in Nikkei Market Access' list of the 10 best-sellers for the first time in September, ranking after five from Japanese makers.

BCN Inc., which compiles data from retailers, two years ago found only two of the 10 best-selling laptops in Japan were made by foreign companies. The top 10 now include laptops from six foreign makers: Acer Inc. and AsusTek Computer Inc. in Taiwan; China's Lenovo Group; Round Rock, Texas-based Dell Inc.; Cupertino, Calif.-based Apple Inc. and Gateway, which is now owned by Acer.

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About 77 percent of smaller laptops sold in Japan now come from Taiwanese makers, according to GfK Marketing Services Japan. Japanese makers still dominate in desktops and larger laptops and higher-end products, like 50-inch TVs.

New arrivals are generally limited to niche areas because most Japanese still believe their country's products are superior to any made abroad, said Nikkei Market Access editor-in-chief Atsushi Matsubara.

"It remains to be seen whether this new trend will stick or grow to become mainstream," Matsubara said. "If they don't match Japanese lifestyles, the products won't sell in big numbers."

Japanese companies are fighting back by bringing down prices for lower-end products such as toasters and low-tech washers, while packing their higher-end items with perks: refrigerators than can kill bacteria, washers that save energy and air conditioners that moisturize the skin.

Haier is a clear hit for those who just want the basics, said Komorida.

"The market is now divided into two extremes," he said.

Mamoru Obayashi, a Yokohama resident, who owns numerous gadgets, like many Japanese, buys at both extremes. His computers are from lesser known makers in South Korea and Taiwan as well as Apple and Toshiba.


The 55-year-old college professor recently bought a 3,790 yen ($39) made-in-China DVD player called Wee, a clear echo of Wii, the hit game console from Nintendo Co. The dubious naming strategy by Maxer, a tiny Japanese company, didn't bother him a bit.

"It works perfectly," he said. "At the same time, it is very small and cheap."

[Associated Press; By YURI KAGEYAMA]

Copyright 2009 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.


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