First of all, what is Gamification?

Gamification is the process of using game mechanics to engage audiences and solve problems, taking the best ideas from games and applying them to fields where they are not usually used.  It produces a big bump in user engagement quickly and cheaply, relative to other methods.

The four key fundamentals of Gamification for consumers:

Self-Motiviation – The desire to act immediately to tackle an obstacle combined with the belief that we have a reasonable hope of success.

Social Mechanism – the idea that people like one another better after they’ve played games with them, have a higher level of trust and a great willingness to work together.

Productivity – the idea that playing in a game makes you happier working hard, than you would be relaxing. Essentially, we’re optimized as human beings by working hard, and doing meaningful and rewarding work.

Meaning/Purpose – players will be highly motivated if they believe they are working to achieve something great, inspiring, and bigger than themselves.

Key incentives for businesses to implement Gamification:

The perks of Gamification in business include increased participation, increased engagement, and ultimately increased sales. There are a number of levels at which brands can use gamification. However, the ultimate goal is to increase user engagement and retention. The most popular use of gamification is for “gamified applications”, more than gamified websites apparently.

Best of all, Gamification empowers loyalty. For example, the “rewards/point cards” found in almost every store in Japan’s retail show how much Japanese consumers embrace the concept of loyalty with a healthy dose of gamification.

Smartphone apps such as Foursquare and Loctouch, a Japanese-clone of Foursquare, which are both popular in Japan play on gamification by allowing users and their social circle to view check-in history, mayorships, badges, people you’re following and those who are following you.

Once in a while, certain venues in may offer special deals to the mayor of the venue or just by checking-in, although at the moment not many venues in Japan (at least in metropolitan Tokyo) have been taking advantage of this promotional tool on Foursquare.

Loctouch, on the other hand, has taken a localized approach by displaying a campaign site of venues that encourage the use of Loctouch check-ins to collect and redeem coupons. The coupon feature is how successful non-gamifying restaurant apps with large volume of active users such as Gurunavi, Tabelog, and Hot Pepper provide incentives for users to visit venues.

Loctouch campaign site (only in Japanese): http://tou.ch/cp

Examples of Gamification campaigns in Japan:

1. MINI COUPE HUNTING

The concept goes as follow:

• Find a virtual Mini Coupe using the smartphone
• Grab the virtual Mini once you reach the spot
• Compete against other users of the app in real-time to capture the virtual Minis first.
• On a set date and time, one of the virtual mini spots will have an actual Mini Coupe cooper sitting there for the winner to take home.

2. COCA-COLA JAPAN’S “HAPPINESS QUEST” CAMPAIGN

The concept:

• Unique QR codes are assigned to each Coca-Cola vending machine in Japan that allows users to scan with their mobile phone to earn rewards.
• Users can login to the Coca-Cola Park site using their mobile phones to create a vending machine avatar and scanning the QR codes on each machine.
• With each QR code scan, the user’s avatar gains experience level which translates to more points earned
• The points could be used to spend on virtual items such as character skins, accessories and backgrounds.
• Users can also “favorite” vending machines and share with friends the details of the favorited machines over Facebook, Twitter, and mixi.
• Badges can also be gained from checking-in to certain machines.
• There were 400,000 Coca-Cola vending machines located across Japan as of November 2011, with Coca-Cola aiming to increase it to 820,000 units by March 2012.

3. HONDA’S JANKEN SURVIVAL

Applying the janken (paper-rocks-scissors) game into a social game where players on Facebook are battling head-to-head in real-time. The idea of the game included an increase of your score with each janken victory, and at the end of the campaign, the highest ranking player wins an exclusive Honda Insight hybrid car.  The idea of motivating players with the prospect of winning a car provides users with meaning to get engaged and rack up points.

Electronic money became popular around 2007, when two major retailers, Aeon Co., Ltd. and Seven & i Holdings Co., Ltd., started their own versions of electronic money. The transactions by Aeon and Seven & I account for roughly 50% of all transactions in Japan.

Just to highlight how huge the e-money market is in Japan: Transaction volumes at Edy, the country’s biggest prepaid e-money issuer, nearly doubled in 2010 to 1.2 trillion yen (US $15 billion).

Japan has been highly successful in integrating the ecommerce and traditional retail arenas into an e-money environment. Consumers are increasingly using prepaid and post-paid e-money purses which are integrated into payments cards and mobile phones to make quick and convenient contactless transactions both at the point of sale and online.

For example, retailers have promoted the use of their e-money currency by giving points to shoppers, such as the Nanaco card, offered by Seven & i, which allows consumers to earn 1 point for every 100 yen of shopping, which can later be used to pay at a rate of 1 yen per point.

Presently, there are six major prepaid e-Money currencies used across Japan.

Below is an introduction to the six major currencies:

Edy
Cards Issued: 67.8 million
Monthly Transactions: 32 million
Number of Outlets Supported: 287,000

Edy, the country’s biggest prepaid e-money issuer, is a prepaid rechargeable contactless smart card. It uses Sony’s FeliCa technology, also used by the competing Suica/Pasmo cards by JR East.

SUICA
Cards Issued: 35.4 million
Monthly Transactions: 52 million
Number of Outlets Supported: 161,060

The Suica is a prepaid e-money card issued by JR East Japan for moving around and shopping in the Tokyo area. There is no more need to buy a ticket from a vending machine. Just touch your Suica to the ticket gate and the fare is automatically deducted from your Suica. The Suica can be used not only for JR East trains, but the subways and buses as well. For shopping, use your Suica card in the place of cash wherever the Suica mark is displayed. Buy soft drinks and coffee from vending machines and on the train. Even buy a newspaper at the station kiosk without fiddling for coins. For traveling in Japan, the Suica makes a more pleasant trip.

WAON
Cards Issued: 22.8 million
Monthly Transactions: 47.5 million
Number of Outlets Supported: 130,000

Waon was introduced by AEON in April 2007. The card’s official mascot is a white dog and card reader makes a “waon” sound upon each successful transaction, a Japanese onomatopoeia for dog barks.

Unlike other e-Money cards, such as nanaco, the basic Waon card can be purchased without any registration. Waon also has a mobile payment system, known as Mobile Waon.

PASMO
Cards Issued: 19.0 million
Monthly Transactions: 15.8 million
Number of Outlets Supported: 117,000

Interlinked with SUICA to some degree, it can be used at all SUICA electronic money participating stores displaying the “Suica mark”.  For transportation, PASMO can also be used in all SUICA areas throughout the Kanto-region (Tokyo, Yokohama, etc) as well as metropolitan areas of Sendai and Niigata.

Nanaco
Cards Issued: 15.7 million
Monthly Transactions: 51 million
Number of Outlets Supported: 95,000

Introduced in 2007 by Seven & I Holdings Co, “nanaco” became the first retailer in Japan to issue e-money. Seven & I owns Seven-Eleven Japan Co., Ito-Yokado Co. and other retailers. Seven & I’s “nanaco” services are available in two forms — an integrated-circuit card and a mobile phone with the e-money function. Users can electronically transfer money to their cards or phones at terminals at stores and payments can be made by placing them over readers.

ICOCA
Cards Issued: 6.5 million
Monthly Transactions: 2.4 million
Number of Outlets Supported: 136,970

Icoca (“Shall We Go?”) is a prepaid IC card issued by JR West Japan and is the Kansai region equivalent of the SUICA card. For shopping, use your ICOCA card in the place of cash wherever the ICOCA mark is displayed. Buy soft drinks and coffee from vending machines and on the train. Even buy a newspaper at the station kiosk without fiddling for coins. ICOCA can be used at all places where there is the SUICA mark.

The figures of the six major currencies above are from the Nikkei Marketing Journal as of end of November 2011.

Below are the various categories of e-money currencies presently active in Japan:

Prepaid with “Mobile Wallet” (Osaifu-keitai) functionalities
Osaifu means “wallet” and keitai means “mobile phone.” In addition to electronic money, these phones serve as train and airplane tickets, membership cards and entry keys.

Osaifu-Keitai is based on a FeliCa card embedded in mobile phones and is a device-based mobile payments solution, supporting both proximity payments in shops that have a FeliCa chip reader and remote online  payments. It can support multiple payments instruments including credit cards, operator billing, prepaid e-money, transport ticketing and postpay services.

Major providers:
Edy, Suica, WAON, nanaco, IC E-Card

Prepaid (IC Card only without “Mobile Wallet”)

In Japan, the contactless card was introduced around 2001. Then, almost all transportation companies introduced this type of contactless ticket. At the same time, there was a new prepaid type e-money service which was launched in 2001 called Edy. It is from this background that people have become educated in using contactless IC cards.

Major providers:
PASMO

Postpaid

Postpaid e-money offers simple and speedy offline payment service. By simply applying for this service, part of the customer’s existing credit limit is assigned to a specific contactless IC chip, which may be embedded in a plastic card, or incorporated in the customer’s i-mode FeliCa service compatible mobile phone.

As the QUICPay amount is billed to the customer’s existing credit card, the new application lets customers continue to enjoy their credit card loyalty point and mileage benefits. While users of prepaid cards must track the remaining value and take the time to reload it with cash, with QUICPay, they can increase the credit line amount during a payment transaction at any service supported store.

Major providers:
iD, QUICpay, VISA TOUCH,  Smart plus

Virtual Money

Virtual money in Japan is typically used by Japanese consumers to have more convenient access to ecommerce purchases, virtual goods within social gaming applications, or download games, music, movies and other digital content. They can be purchased at most convenience stores across Japan.

Major providers:
WebMoney, BitCash, Digi-Coin, NET CASH, Chocom e-Money

Japan continues to experience further growth in the e-money sector, however, it has yet to see much activity in the sectors with higher spending, such as the luxury market.

China presently has the world’s largest virtual goods market, with an estimated revenue of US$4 billion per year. Majority of the revenue comes from “free-to-play” MMO games that are typically played on a less-portable PC. The market leaders are Tencent, Rekoo (after recently acquiring another Chinese social gaming developer, HappySNS in late 2011), Renren, Kaixin001.

Japan is another huge market for virtual goods.  Its top three social networks generate over US$2 billion in revenues in 2011, mostly through mobile games and services. In Japanese games, there are rare virtual items that are worth over as much as US$1,000 due to its scarcity. The key players in Japan are GREE, DeNA, and Mixi, with the three companies being worth more than $10 billion combined. Remarkably, these three companies collectively have 70 million members which makes up for over half of Japan’s population with majority of the users logged in using a mobile phone. Facebook is becoming increasingly relevant in Japan as new users have been rapidly increasing in Japan since 2011.

We can expect to see the increase of M&As in Asia’s virtual goods sector as social gaming giants from the US seek to quickly gain foothold in the region.

Do you wonder where Japanese people go to find news, socialize, watch videos when they are online? Below you can find
a list of commonly visited sites in Japan.

“All-Rounded” Social Networking

Microblogging

Video Sharing

Social Bookmarking

E-Commerce (Online Retailers)

E-Commerce (Auction Sites)

Art & Illustration Sharing

Business Social Networking

Price Comparison

Location-based Check-in

Restaurant Reviews

Travel Reviews & Recommendations

Smartphone Instant Messenger

Smartphone Photo Sharing

China’s group buying market started to take off last year with exponential numbers of sites springing up, following the growth of the group buying market in the U.S. Its business model is similar to that of Groupon in the U.S. With a large number of players competing for market share, it can be expected that the a wide majority of the China’s group buying market will phase out, leaving a few key players to survive and outperform the rest, as mentioned by Wang Xing, CEO of Chinese group buying site, Meituan.

Groupon has entered the market in a joint venture with Tencent, known as Gaopeng.com since March 2011. However, Groupon has had to undergo a layoff of hundreds of employees since August 2011.

Nevertheless, the trends we are seeing with China’s group buying market appear to be:

1. The number of deals are increasing, however number of sales are decreasing with average revenue decreasing

2. The movements in the top 10 positions among the group buying sites in China are mostly the same players shifting positions within the top 10.

3. QQTuan, a joint venture between QQ and Groupon, relaunches as a group buying platform in September 2011.

Below is the list of the Top 10 Group Buying Sites in China with Market share (By Revenue)

A similar observation with statistics was shared and the question (title of this article) posed, by a marketer in a recent discussion. Banking on “I am thinking aloud” and adding for good measure “and I am not an expert in the digital field, but..” I ventured forth with my response that this could be because:

• Most of the URLs are in English; and Japanese are not comfortable with the language
• The default language settings on keyboard are Japanese, and it is not worth the effort to switch on to Roman script just to key in the URL

Though the response met with “seems logical and commonsensical” comment from the marketer and murmurs of agreement from the domain experts in audience, I wanted to find out for myself.

With the help of my good friend and colleague Nariya-san, I quickly did a dipstick study (40 respondents). The following are the results:

• 100% used search to visit a website for the first time (one more statistic reinforcing the observation)
• 50% visited the same site again through search, while a good 43% used bookmarks to visit it subsequently (convenience kicks-in along with comfort)
• 80% said the reason is difficulty in keying the English URL and 20% said it is because the default language settings are in Japanese (validating the hypothesis)

Further probing (and discussion with experts in the field, Craig and Shimada-san) revealed that it is:

• Easier to spell the URL incorrectly as most Japanese are less familiar/comfortable with English language (for non-Japanese sites)
• Less cumbersome to type in the theme or associated words (in Japanese, transliterating)
  • In the search box where one has the search engine as the homepage in their browser
  • Using the address bar as search box (fewer keystrokes since you do away with .com or .co.jp) and clicking on the link once it is displayed
  • It works well for Japanese sites too, as a Japanese URL can be composed of characters from three scripts – Kanji, Hiragana, Katakana; and it is difficult to type in the exact URL using the language settings

That must satisfy the stakeholders in the SEO/SEM field as it looks like the business is here to thrive for a long time to come. It did make me a happy person momentarily by validating the “loud thinking”.

Still, the initial elation led to one motherhood question, having been on the client side earlier (now I take their side) – What are the implications for the marketers?

• Do they have to continue investing in multiple keywords (even misspelt ones, just in case)?
• How can they get users to bookmark once they visit the site through search, so:
  • Next time they do not risk losing out the consumer to competitor, since purchasing a keyword at a higher price does increase the chances of staying on top of the results; but the user could as easily click the 3^rd or 8^th result, if found relevant.
  • Can subsequently reduce spends as they would be paying for fewer new click-throughs
• Is the behavior same across demographics? Or are there any idiosyncrasies that one has to take into account?
• What about other markets where the keyboards are set to non-Roman script language defaults? (E.g.: Arabic, Chinese)
  • Are there any best practices that one can use from across these markets to increase chances of higher click through and lower spends / cost per clicks (or such metrics)?
• Should they be investing in local language URLs, simplified with characters from one script? E.g: Kanji, or Hiragana, or Katakana and not a mixture of all or some of the scripts
• What of search through mobiles/smart phones? Does the SEO/SEM tactics have to be any different over there? Will it necessitate an investment reallocation?

(As an aside, what is the implication for Yahoo, if more people are using the address bar as a search box? It could be a double whammy as it

• Does not have a browser unlike Google or Bing(IE) and
• Is not a default browser on Safari or Firefox (it is there as an option, but not necessarily default).

Is it likely to lose share of market in search in years to come?)

Soon more marketers are going to ask the SEO/SEM fraternity to help find answers for the above posers, beyond the existential keyword purchase or meta-tag tinkering.  Let the search for the answers begin now.

Contributed by Arun Vemuri
First published in CampaignAsia on 21st June, 2011

Kitchou Udon

A udon restaurant chain with outlets in Miyazaki, Japan. Top page flash reveals the restaurant, including behind-the-scene activities in the kitchen.

Universal Citywalk Osaka

Universal Studios Osaka’s shopping enclave, Universal Citywalk, promotes hot pickup items within shops and restaurants. It has also been promoting it’s Twitter page as well as its mail magazine.

Lacoste L!ve Japan

Lacoste L!ive utilizes your Facebook contacts to customize its interactive online campaign for its brand in Japan.

Palty

Cosmetics brand, Palty, well known for items such as hair dye and eye liner products catered towards ladies in their teens and 20s has a flash intensive site with their online shop as well as interactive pages such as the “Palty theater”, “Love fortune teller” and “KARA-OK” page featuring Korean pop celebrity, KARA.

Nike Women “Sokushime no Machi”

Nike Women’s Training Club microsite, specifically tailored to women athletes.

We introduce the inaugural issue of our editor picks for inspiring web designs in Japan. This section will be updated on a weekly basis, providing fresh ideas and insights into what are the latest trends in Japanese web design and development. Enjoy!

Story Branding

A brand marketing agency based in Tokyo that specializes in conceptualizing and designing a story to communicate your brand.

Kyoto Prefecture Tourism Guide

Sightseeing information of Kyoto Prefecture, Japan.

Mangrove World

Education site on Mangroves, set up by Tokio Marine Group

“Anata no yume ni ouenka” / JACCS CM site

Translates as “Cheerful songs for your dreams”, this is a TV commercial site for Japanese credit card provider, JACCS.

Sony VAIO S Power Player

Microsite for the newly launched Sony VAIO S series notebook PCs.

Mixi has been known to be popular among users in their 20s, especially females. As a matter of fact, females constitute over 55% of its mobile users. In terms of age, over 55% of Mixi users are in their 20s. Mixi is known to be a platform where users connect primarily with close friends, and user-to-user interaction is heavily concentrated in “communities” where people with common interests can interact with one another. Theoretically, mixi is only available for users in Japan as it requires the new user to register with their Japanese mobile e-mail address assigned by the Japanese mobile provider. However, there are some users from overseas who have somehow managed to bypass this requirement by either borrowing a Japanese mobile e-mail address to register, or registered prior to the implementation of this policy sometime in 2007. Although mixi’s main content base consists of “diary”, the most commonly used feature is the “voice” feature which allows users to send short 150 character text, similar to Twitter. mixi allows users to search for friends by e-mail address, company affiliation, and schools from elementary school onwards.

Facebook users are more widespread with many users in their 50s, though majority of users are males between ages 30 to 40. As Facebook is just beginning to pick up in Japan since early 2011 among the adult demographic, it is very commonly used for business-related purposes, by facilitating group chat, events, and messaging features. And because many Japanese businesspeople find good value in the messaging and list features, a growing number of companies have started using Facebook to communicate internally with project teams. It is also used in Japan by both overseas expatriates and Japanese users to stay in contact with friends from outside of Japan. This was witnessed during the March 11th earthquake in the Tohoku region of northern Japan where user count spiked by 27% (about 1.4 to 1.5 million more users as compared to February 2011).

Twitter users in Japan are primarily male users in their 30s and is perhaps one of the only foreign-based social networking platform that has successfully penetrated into Japan, successfully surpassing mixi in the number of active users as of March 2011. The microblog with the ability to quickly “follow” updates on a user as well as to be able to send a direct message has made it a convenience factor in communicating and keeping up-to-date with various users and media sources, including celebrities, politicians, news feeds, and so forth. Newly registered Twitter users spiked by about 37% in March 11th, in part due to the March 11th earthquake.

GREE and Mobage, both targeting mobile gamers, is a social gaming platform which allows users to communicate and interact, and each of these providers has more registered users than mixi, Twitter, and Facebook. Recently, both services have released smartphone versions of their application. GREE released the iPhone version of its service in August 2010, while Mobage started offering support for smartphones since December 2010. Users on these social gaming platforms meet new people through interaction in games, and typically do not know each other in person other than the virtual avatar or photo in their gaming profile, thus establishing virtual buddies.

Teetering on the edge of Nishi-Shinjuku inside a modern cocoon-like skyscaper is a cafe, Blue Square Cafe, complete with Apple gadgets such as the Macbook internet corner and iPod stations.

The theme within the cafe resembles a chic study hall at one corner, a New York style sandwich cafe around the counter area, and a Apple-inspired entertainment zone with a Macbook corner and iPod stations freely available to use.

A mixed crowd including students of fashion design, IT, and medicine within the Mode Gakuen Cocoon Tower, nearby office OLs and young business professionals can be seen reading a book or enjoying a cup of coffee.

For books, there are selections of books offered by Books 1st that are available for your viewing pleasure.

A cup of coffee will cost ¥290 and for those who are hungry for a snack, try the creamy Okusawa roll.

And if you bring your laptop, enjoy the free Wi-Fi access to your heart’s content as there is also a few power supplies to keep your battery powered in case your laptop needs a quick charge.

Contact details:
BLUE SQUARE CAFE
Mode Gakuen Cocoon Tower 1F, 1-7-3 Nishi-Shinjuku, Shinjuku-ku, Tokyo 160-0023
tel: 03.5339.7613
hours: 08:00am until 09:00pm / weekends and holidays: 10:00am-09:00pm
http://www.transit-web.com/shop/cafe/blue-square-cafe (in Japanese)
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