No.36 November 1, 2001
Consumers and Consumer Industries
in the Ubiquitous Network Era
Juro TODA
NRI Papers No.36
November 1, 2001
Consumers and Consumer Industries
in the Ubiquitous Network Era
Juro TODA
I
Growth in IT Use by Japanese Consumers
1 PCs in Over 50 Percent of Households
2 Rapid Improvement in Information Literacy Among People in Their Forties
and Fifties
3 Almost One-Half of All Consumers Use the Internet
4 Consumers Using E-Commerce Approaching 10 Percent
II International Comparisons in IT Usage
1
2
3
4
Rapid Increase in Internet Usage in Each Country Over the Past Three Years
Japan Ahead in Mobile Internet Usage
Fears of Personal Data Leaks Hindering E-Commerce Use
Changes in Consumer Attitudes Towards IT
III The Advent of the Ubiquitous Network Society
IV Consumer Industries in the Ubiquitous Network Society
apan has embraced the ubiquitous network era on a scale without parallel anywhere in the
world. Evidence of this trend includes the spread of Internet use via mobile phones, and the
growth of broadband networks. Consumers are now able to take advantage of the benefits of
information technology brought to them via networks. The whole of Japanese society, including
consumers who were formerly passive users of information technology, can now benefit from
networks. Such networks have stimulated communication between consumers and businesses as
well as among consumers. This has the potential of not only enhancing consumer lifestyles, but
also of revitalizing consumer industries, and ultimately of strengthening the Japanese economy.
J
Copyright 2001 by Nomura Research Institute, Ltd.
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NRI Papers No. 36
November 1, 2001
trend has made technical innovations available at relatively low costs, which is increasing usage.
The following article is based on the results of nine
surveys covering trends in IT usage, which were carried
out every six months between March 1997 and March
2001 under NRI’s Cyber Life Observations as noted
above. It outlines the characteristic trends in the use of
IT by consumers.
I Growth in IT Use by Japanese
Consumers
While most Japanese have curtailed their consumption
in recent years due to the continuing economic stagnation, the use of information technology (IT) devices and
services, including mobile phones, PHS and the Internet
has continued to grow rapidly. In its March 2001 Cyber
Life Observations survey to measure trends in IT usage,
NRI found that over 70 percent of Japanese had mobile
phones or PHS terminals for personal use, and that nearly
30 percent were using the Internet at home (see Table
1). In the four years since we carried out the first of these
surveys in March of 1997, these ratios had increased 2.6
times and 6.0 times respectively.
Previously, Internet usage in Japan had centered on
job- and school-related activities. However, the focus is
now shifting to personal uses, such as email communication with friends and browsing hobby-related Websites.
The scope of Internet-based activities has also expanded
beyond simple Web surfing. Today, people are increasingly using the Internet to gather information about purchases, or to engage in e-commerce.
Initially mobile phones and PHS were used when
people were away from home or traveling, but now they
are being used more in the home. There is a growing
tendency to treat mobile phones as a personal possession. The use of mobile phones as stand-alone terminals
for email and as an alternative means of Internet access
is also increasing.
In the past, mobile phones were used mainly by males
in their twenties and thirties, but the range of users is
now expanding both in gender and age. A cyclical pattern has emerged, in which pioneering users develop new
ways to use the existing means, thereby introducing new
types of devices to the market—which in turn stimulates further usage. Digital technology has improved
functionality while prices have continued to fall. This
1 PCs in Over 50 Percent of Households
As shown in Figure 1, the percentage of people who have
PCs in their homes and use them (individual usage ratio) has risen sharply from 23.9 percent in March 1997
to 38.1 percent in March 2001 (unless otherwise stated,
Figure 1. Home PC Usage
Have PC at home and use it
Have PC in my home but do not use it
Have PC in my home but nobody uses it
Do not have PC in my home
No response
2001/3
N=1,410
38.1
2000/9
N=1,402
17.7
32.8
2000/3
N=1,410
1999/10
N=1,410
1999/3
N=1,430
1998/9
N=1,431
1998/3
N=1,406
1997/9
N=1,409
14.2
0
10
2.2
15.2
18.3
1997/3
N=3,067
2.5
15.2
19.1
17.0
2.1
17.6
21.9
2.8
13.2
11.3
2.4
20
30
0.6
51.9
2.5
14.7
0.7
45.0
1.9
16.5
23.0
41.9
3.6
17.9
29.2
1.6
0.5
58.6
1.1
58.2
0.3
62.8
0.3
64.0
0.2
66.7
0.3
71.4
40
50
60
0.7
70
80
90 100
(%)
Source: Cyber Life Observations (March 1997-March 2001), NRI.
Table 1. Changes in Consumer Attitudes Toward the Use of IT Equipment and Services and the Information Society
1st
Survey
(1997/3)
9th
Survey
(2001/3)
Change
(times)
Major changes
Internet usage ratio (individuals)
Portable MD player usage ratio (individuals)
Car navigation usage ratio (individuals)
PC usage ratio (individuals)
Mobile phone/PHS usage ratio (individuals)
4.6%
4.3%
3.2%
14.2%
27.1%
27.8%
15.7%
10.3%
38.1%
71.1%
6.0
3.7
3.2
2.7
2.6
Middling changes
Fax machine usage ratio (individuals)
CATV subscription ratio
Wide-screen television usage ratio (individuals)
20.0%
9.0%
17.2%
37.2%
15.6%
28.5%
1.9
1.7
1.7
Minor changes
Percentage of people able to type rapidly on keyboards
Portable CD player usage ratio (individuals)
Video game machine usage ratio (individuals)
24.8%
27.0%
26.3%
32.2%
32.6%
27.3%
1.3
1.2
1.0
Notes: (1) Usage ratios represent the percentages of individuals who use each device in their own homes; (2) the CATV subscription ratio represents the
percentage of people who subscribe to cable TV from their own homes; and (3) CATV = cable TV.
Source: Cyber Life Observations (March 1997, March 2001), NRI.
Consumers and Consumer Industries in the Ubiquitous Network Era
Copyright 2001 by Nomura Research Institute, Ltd.
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NRI Papers No. 36
November 1, 2001
all Figures cited in this article were current as of March
2001).
Another 17.7 percent of survey respondents stated that
there were PCs in their homes, even though they themselves did not use them. There were also 1.6 percent who
said that nobody used the PCs in their homes. Adding
these percentages, 55.4 percent of consumers have PCs
at home, which is a two-fold increase over the past four
years.
The PC usage ratio remains higher among males. In a
year, the usage ratio for males in their twenties, thirties
and forties rose by 9.4 points, 13.6 points and 13.8 points,
to 51.1 percent, 50.9 percent and 51.1 percent respectively, taking the usage ratios for all three age groups
above the 50-percent level (see Figure 2). There were
also sharp increases in the usage rates for teenage males
and females in their thirties and forties—up by 13.6
points, 8.0 points and 8.5 points respectively. These gains
accelerated the growth in the overall usage ratio for individuals.
2 Rapid Improvement in Information
Literacy Among People in Their Forties
and Fifties
The percentage of consumers who reported using PCs
at home, at work, at school or elsewhere has increased
by 7.2 points over the past year, rising to 64.6 percent.
For the same period, the percentage indicating no PC
experience and almost no keyboard skills has fallen by
5.6 points to 20.4 percent (see Figure 3).
Among those in their teens, twenties and thirties,
around 10 percent stated they have no experience in using a PC and almost no keyboard skills (see Figure 4).
Figure 2. Trends in PC Usage Ratios by Gender and Age
(%)
60
1997/3
51.1
1998/3
1999/3
2000/3
2001/3
51.1
50.9
50
44.4
41.7
40
30
37.3
34.3
31.2
32.4
30.8
22.2
25.0
28.5
26.0
23.9
32.8
29.8
30.5
12.5
9.8
20s
29.2
27.5
20.7
5.5
14.3
10.7
16.4
Teens
28.5
35.5
21.3
20.9
0
34.3
33.8
30.1
20
10
37.7
35.0
37.3
30s
Males
40s
50s
16.5
14.9
12.8
16.1
12.7
5.7
9.4
9.6
Teens
20s
30s
Females
12.6
11.2
3.2
4.6 4.2
40s
50s
Source: Cyber Life Observations (March 1997-March 2001), NRI.
Figure 3. Trends in Years of PC Use and Percentage of Consumers with Little Keyboard Skills
10 years or longer
5 to 10 years
3 to 5 years
2 to 3 years
1 to 2 years
Less than 1 year
Can type rapidly
Can type slowly
Limited keyboard skills
No response
2001/3
N=1,410
10.0
2000/3
N=1,410
10.1
1999/3
N=1,430
8.3
1998/3
N=1,406
7.3
No experience in using PCs
11.3
13.6
9.8
9.1
10.8
10.5
20.4
1.6
10.6
12.3
9.1
7.6
7.7
2.9
13.5
26.0
1.3
9.4
13.0
8.5
6.9
8.0
1.9
15.2
27.5
2.7
10.6
8.7
6.8
8.6
7.9
0.7
12.9
34.2
2.6
1997/3
N=3,067
5.7
9.1
7.3
8.6
6.5
9.7
0.5
17.1
31.5
3.2
0
10
20
30
40
50
1.2
60
70
80
Source: Cyber Life Observations (March 1997-March 2001), NRI.
Consumers and Consumer Industries in the Ubiquitous Network Era
Copyright 2001 by Nomura Research Institute, Ltd.
3
90
100 (%)
NRI Papers No. 36
November 1, 2001
The ratio of those giving the same response increases
with age. When these data are viewed along the time
axis, however, it is clear that the number of people in
this category is declining, even among those in their forties and older. The scores reached 23.6 percent for those
in their forties, and 35.1 percent for those in their fifties.
This suggests that the age gap in information literacy is
rapidly being rectified.
mobile phones (e.g., NTT DoCoMo’s i-mode service)
or by connecting data communication terminals or other
devices to mobile phones or PHS terminals has reached
21.1 percent.
Over 60 percent of people in their teens and twenties
now use the Internet. The proportion of consumers in
these age groups who use both PCs and mobile phones
is also high compared with those in their thirties or older.
In addition to the high level of usage, there has been
considerable diversification in the means used to access
the Internet.
The percentage of people who use the Internet via PCs
in their home (the individual usage ratio) has risen by
11.1 points in the past year to 27.8 percent (Figure 6).
The average monthly hours of Internet use have remained
almost constant at around 13 hours.
3 Almost One-Half of All Consumers
Use the Internet
As shown in Figure 5, 47.3 percent of consumers use
the Internet, and 40.2 percent use the Internet via PCs in
their homes, workplaces, schools or other locations. The
percentage of consumers who use the Internet via single
Figure 4. Percentage of People in Each Age Group with
No Experience in PC Usage and Almost No
Keyboard Skills
Figure 5. Internet Access Methods (by Age Group)
(%)
90
(%)
70
80
1997/3
2000/3
60
1998/3
2001/3
1999/3
50
60.0
56.7
50.1
47.6
70
25.2
10.6 23.9 19.9
15.8 11.5
19.7
18.6
20
16.3
15.5
12.9 7.6
12.0
9.7
7.7
10
30
35.1
32.9
27.0
23.6
40
30
20s
Teens
40s
30s
11.7
47.3
53.0
8.0
43.0
7.1
14.0
22.5
28.6
26.2
23.9
21.2
Teens
N=142
20s
N=283
15.4
7.4
29.6
32.5
30s
N=338
40s
N=351
3.1
24.0
1.0
2.0
20
10
0
61.5
18.3
50
37.2
64.5
60
37.7
40
Mobile telephone or PHS only
PC and mobile telephone or PHS
PC only
50s
0
Source: Cyber Life Observations (March 1997-March 2001), NRI.
Overall
N=1,410
20.9
50s
N=296
Source: Cyber Life Observations (March 2001), NRI.
Figure 6. Trends in Percentage of Individuals Using the
Internet at Home and Monthly Hours of Use
(hours)
20
Monthly hours of Internet usage (left)
Internet user ratio (right)
27.8
13.0
12.8
13.6
Dial-up
(%)
30
62.8
57.4
31.3
27.3
ISDN
25
22.8
15
Figure 7. Types of Connections for Home Internet Users
(Multiple Responses)
7.8
7.4
Cable TV Internet
13.1
12.7
12.8
20
0.0
3.8
FLET’S ISDN Plan
10
High-speed 0.0
dedicated lines in 0.5
condominiums, etc.
0.0
ADSL 0.0
15
16.7
11.4
13.5
10
5
8.0
6.6
5.9
Mobile phones
5
PHS
0
1998/9
N=1,431
1999/3
N=1,430
1999/10
N=1,410
2000/3
N=1,410
2000/9
N=1,402
2001/3
N=1,410
0
0
Note: Monthly hours of use is the average number of usage hours per
month among Internet users.
Source: Cyber Life Observations (September 1998-March 2001), NRI.
2000/9 N=320
1.6
2.8
2001/3 N=392
10
20
40
50
60
70
(%)
Notes: ADSL = Asymmetric Digital Subscriber Line; ISDN = Integrated Services Digital Network.
Source: Cyber Life Observations (September 2000-March 2001), NRI.
Consumers and Consumer Industries in the Ubiquitous Network Era
Copyright 2001 by Nomura Research Institute, Ltd.
30
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NRI Papers No. 36
November 1, 2001
Figure 8. Internet Use Via Single Mobile Phones
(%)
100
Cannot access the Internet with single mobile phones
Can access the Internet but do not use it
Can access the Internet and use it
90
80
15.3
70
33.5
16.7
40.7
12.4
10
32.5
22.9
15.1
40.0
18.3
30
32.9
45.0
40
20
24.3
39.6
60
50
34.3
26.3
16.9
47.2
16.2
16.6
20.6
46.0
27.8
20.6
15.0
12.9
34.2
34.3
17.2
21.6
Teens
20s
N=72
N=137
30s
Males
N=137
8.6
2.6
17.2
3.4
4.7
40s
0
2000/9
2001/3
N=1,402 N=1,410
29.1
40s
50s
Teens
20s
N=180
N=145
N=70
N=146
30s
Females
N=146 N=171
50s
N=151
Source: Cyber Life Observations (September 2000-March 2001), NRI.
There is growing interest in flat-rate plans that allow
home users to access the Internet via high-speed lines.
As shown in Figure 7, only about 10 percent of users are
currently connected via high-speed lines, but the percentage is expected to rise rapidly as prices fall and service
areas expand. The spread of flat rate, high-speed access
plans is reducing the costs for users and thus promoting
usage of the Internet.
The percentage of consumers using the Internet via
single mobile phones (without PC connections) has
reached 20.6 percent (see Figure 8). The use of Internetcapable mobile phones is higher among the younger age
groups, where Internet usage is also more widespread.
Almost one-half of males in their teens and twenties and
about one-third of females in the same age groups use
the Internet via single mobile phones.
Figure 9. Trends in Ratios of Consumers Who Have Used
or Intend to Use E-Commerce
(%)
30
25
20
27.8
Ratio of those wanting to
use e-commerce
23.3
20.8
20.0
15
16.7
13.5
11.4
10
0
20.5
20.3
Ratio of those using the
Internet at home
9.4
8.0
5
7.6
1.8
2.2
1998/9
N=1,431
1999/3
N=1,430
3.5
1999/10
N=1,410
4.7
Ratio of those with
e-commerce experience
2000/3
N=1,410
2000/9
N=1,402
2001/3
N=1,410
Source: Cyber Life Observations (September 1998-March 2001), NRI.
4 Consumers Using E-Commerce
Approaching 10 Percent
will be accompanied by a number of trends, such as
Internet access via mobile phones, the use of broadband
network access, and access to digital satellite broadcasting.
E-commerce appears to be gaining considerable acceptance among consumers. The ratio of consumers with ecommerce experience has doubled in the past year to 9.4
percent, and this rate of increase appears to be accelerating (see Figure 9). Annual spending on e-commerce has
reached about ¥60,000 (see Figure 10), with 15.2 percent of users spending over ¥100,000 annually, and 42.4
percent spending ¥10,000 to ¥50,000.
E-commerce is strongly associated with the use of PCs
to order merchandise or make ticket reservations directly
from home. Though it is basically a form of shopping,
the main users at present are males and the younger age
groups.
The number of people using e-commerce is expected
to increase as consumer lifestyles change. This growth
II International Comparisons
in IT Usage
The spread of IT within Japan has been remarkable.
From an international perspective, however, Japan continues to lag behind the leading IT nations identified in
this article, both quantitatively (in terms of the percentage of individuals using the Internet) and qualitatively
(as measured by the shift to always-on, high-speed access).
As discussed later in this article, trends in Japan are
characterized by the diversification of Internet access
Consumers and Consumer Industries in the Ubiquitous Network Era
Copyright 2001 by Nomura Research Institute, Ltd.
22.8
23.1
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NRI Papers No. 36
November 1, 2001
Figure 10. The Amount of E-Commerce Purchases Over the Past Year
¥500,000 or more
¥300,000 to ¥500,000
¥100,000 to ¥300,000
¥50,000 to ¥100,000
¥10,000 to ¥50,000
¥5,000 to ¥10,000
¥1,000 to ¥5,000
Less than ¥1,000
No response
Average
2.3
2001/3
N=132
12.1
9.1
42.4
10.6
6.8
12.1
0.8
¥59,000
3.8
1.9
1.0
2000/9
N=103
7.8
10.7
39.8
13.6
16.5
5.8
¥62,000
2.9
0
10
20
30
40
50
60
70
80
90
100 (%)
Note: Figures represent percentages among all people with e-commerce experience.
Source: Cyber Life Observations (September 2000-March 2001), NRI.
Figure 11. Trends in Percentage of People Using the
Internet Via Home PCs (Individual Usage Ratio)
methods based on mobile phones. However, Japan will
need to stimulate greater IT usage through policy measures, based on the government’s e-Japan strategy, to
promote IT infrastructural development. Similar approaches have been adopted in Sweden, which has used
policy-based initiatives to promote the diffusion of IT
equipment, and in South Korea, where efforts to facilitate IT infrastructural development have accelerated the
shift to broadband network access.
As in other countries, the majority (about 80%) of
consumers in Japan believe that IT will make their lives
more convenient. However, there is some concern about
the fact that those who expect IT to improve inter-personal contact and communication remain in the minority in Japan, in contrast with the situation in other countries. Therefore, there is a need in Japan not only for the
development of the IT infrastructure, but also for a future vision of the information society that focuses on
how IT will enhance communications as the basis of a
new social system.
The following summary of characteristic changes in
the growth of IT usage in various countries is based on
the results of an international comparative study by NRI
of surveys on IT usage trends (Cyber Life Observations)
conducted in Japan, the United States, South Korea and
Singapore in September through December 1997, and
in Japan, the United States, South Korea, Singapore and
Sweden in September through November 2000.
(%)
70
60.7
N=501
1997
60
2000
48.9
N=1,009
50
40
30
5.9
N=1,402
39.2
N=507
31.2
N=510
30.9
N=500
24.2
N=505
22.8
N=1,409
20
11.4
N=500
10
0
Japan
USA
South Korea
Sweden
points) over the same period, although these countries
were still behind South Korea.
In South Korea, 51.6 percent of people who use the
Internet via a home PC have digital subscriber line (DSL)
access (see Figure 12). Additionally, the development of
a high-speed IT infrastructure has caused a significant
leapfrog effect, with 11.9 percent of people using private lines installed in residential facilities, while 7.5 percent have access via CATV internet.
On the other hand, the personal usage ratio of the
Internet in Japan has increased by 17 points over the
past three years, reaching 22.8 percent as of September
2000. Nevertheless, the gap between Japan and other
countries has not narrowed, and Japan lags far behind
Korea in terms of the percentage of users with broadband access capability.
While the individual Internet usage ratios for South
Korea and Singapore are low compared with those for
the United States and Sweden, the ratios of people in
their teens are similar (Figure 13). However, even Japa-
1 Rapid Increase in Internet Usage in Each
Country Over the Past Three Years
As of November 2000, the percentages of people with
home Internet access (personal usage ratios) were 48.9
percent in the United States, 31.2 percent in South Korea, 39.2 percent in Singapore, and 60.7 percent in Sweden (see Figure 11). The ratio for South Korea has risen
dramatically, with a 20-point increase over the past three
years. There were also substantial increases in the ratios
for the United States (18 points) and Singapore (15
Consumers and Consumer Industries in the Ubiquitous Network Era
Copyright 2001 by Nomura Research Institute, Ltd.
Singapore
Note: Figures for Sweden were available for November 2000 only.
Source: Cyber Life Observations (September-December 1997, SeptemberNovember 2000), NRI.
6
NRI Papers No. 36
November 1, 2001
nese teenagers lag significantly behind their counterparts
in other countries.
tries except Sweden. The significant change is the
57.7point surge in South Korea’s individual usage ratio
over the three-year period. By November 2000, it had
overtaken Japan, the United States and Singapore, which
recorded increases of 34.1 points, 21.6 points and 23.9
points respectively over the same period.
Japan leads in mobile Internet usage with a ratio of
13.8 percent (Figure 15). Mobile Internet usage is defined as consumers using the Internet via a single mobile phone or connecting data communications terminals or other devices to mobile phones or PHS terminals. South Korea comes next at 4.1 percent, followed
2 Japan Ahead in Mobile Internet Usage
A comparison of percentages of individual usage ratios
for mobile phones (including PHS in the case of Japan)
shows that Sweden is in the lead at 83.4 percent, followed
by South Korea (73.9%), Japan (69.8%), Singapore
(55.4%) and the United States (54.0%) (see Figure 14). A
comparison with the 1997 statistics shows that there have
been sharp increases over the past three years in all coun-
Figure 12. Types of Lines Used to Connect to the Internet at Home
Dial-up
Wireless
(%)
100
ISDN
DSL
Leased line
Satellite
Mobile phone/PHS
Others
CATV internet
95.0
92.1
90
81.9
80
70
62.8
60
51.6
50
40
31.3
28.3
30
20
0.0
0.0
7.8
10
0.0
0
8.2
0.0
1.8
2.8
0.3
Japan
N=320
2.4
2.0
11.9
7.5
0.4
2.0 1.5
USA
N=494
6.6
0.5
0.0
2.0
1.5 0.5 1.5
0.0
0.0
0.5 1.9
3.8
South Korea
N=159
9.5
4.3
1.0
Singapore
N=199
0.0
1.3
0.7
Sweden
N=304
Notes: (1) Figures represent percentages of total subscribers with home Internet access; and (2) DSL = Digital subscriber line.
Source: Cyber Life Observations (September-November 2000), NRI.
Figure 13. Percentage of People in Each Age Group
Using the Internet via Home PCs
(Individual Usage Ratio)
Figure 14. Trends in Individual Usage Ratios for
Mobile Phones
(%)
100
(%)
80
70
60
64.8
62.5
58.7
56.4
50
40
30
20
67.6
64.2
63.9
35.7
80 N=1,409
62.8
Sweden
52.2
49.5
48.4
South Korea
70
50.0
60
41.4
50
USA
39.6
2000
83.4
N=501
Japan
28.5
32.4
25.6
23.2
28.9
21.9
21.1
Teens
20s
30s
40s
73.9
N=510
69.8
N=1,402
55.4
N=507
54.0
N=1,009
32.4
N=500
40
35.1
10
0
1997
90
31.5
N=505
30
Singapore
16.2
N=500
20
15.1
12.2
10.8
10
0
Japan
USA
South Korea
50s
Source: Cyber Life Observations (September-November 2000), NRI.
Consumers and Consumer Industries in the Ubiquitous Network Era
Copyright 2001 by Nomura Research Institute, Ltd.
Singapore
Sweden
Note: Figures for Sweden were available for November 2000 only.
Source: Cyber Life Observations (September-December 1997, SeptemberNovember 2000), NRI.
7
NRI Papers No. 36
November 1, 2001
In terms of the percentages of people with e-commerce
experience (online shopping), Sweden and the United
States are the clear leaders. Ratios in these countries are
29.9 percent and 29.3 percent respectively, compared
with 12.5 percent for South Korea, 7.3 percent for Japan, and 6.9 percent for Singapore (Figure 16).
As shown in Table 2, the goods most frequently purchased through e-commerce in the United States are apparel, accessories and gifts. In Japan, e-commerce is used
mainly for making hotel and ticket reservations.
The primary area of concern about e-commerce in the
United States and Sweden is the leakage of private information—a fear expressed by 40.4 percent and 54.3
percent of respondents respectively (Figure 17). Large
percentages of people in Japan, South Korea and
Singapore are also concerned about the leakage of private information. In the United States, 26.0 percent cited
Figure 15. Internet Use via Home PCs and Mobile Phones
Figure 16. Trends in Experience and Use of E-Commerce
by Singapore at 2.8 percent, the United States at 2.6 percent, and Sweden at 1.6 percent. Japan’s lead over these
four countries is substantial. The combined ratios for
mobile Internet users and those who access the Internet
only through home PCs are 60.7 percent for Sweden,
49.2 percent for the United States, 39.9 percent for
Singapore, 32.1 percent for South Korea, and 29.8 percent for Japan. On this basis, Japan’s ratio comes close
to that of South Korea.
3 Fears of Personal Data Leaks Hindering
E-Commerce Use
(%)
80
Have used e-commerce
Have never used e-commerce
but want to
No response
Mobile Internet access only
70
60
0.0
Home PC Internet access only
2.4
40
20
2.2
28.0
10
Sweden
N=501
16.0
0
Japan
N=1,402
USA
N=1,009
South Korea
N=510
Singapore
N=507
0.0
61.0
15.8
10
1.4
50.3
26.5
0.0
77.3
29.9
0
Sweden
N=501
17.5
12.5
Singapore
N=507 6.9
37.1
6.8
70.8
29.3
South Korea
N=510
59.1
3.1
46.6
20.5
USA
N=1,009
0.6
1.0
7.0
Japan
7.3
N=1,402
1.6
0.2
50
30
Do not want to use e-commerce
Both home PC Internet access and mobile phone access
13.6
20
30
40
0.0
56.5
50
60
70
0.0
80
90 100
(%)
Source: Cyber Life Observations (September-November 2000), NRI.
Note: Mobile Internet usage is defined as connections to the Internet via a
cellular phone or PHS terminal to use email or information services (excluding short messaging). The figures include both stand-alone access and
access via mobile phones connected to other terminal devices.
Source: Cyber Life Observations (September-November 2000), NRI.
Table 2. Ten Most Popular Items for Online Shopping Purchases
(%)
Japan (N=410)
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
United States (N=473)
Hotel, inn reservations
Concert, theater tickets
Air and rail bookings
Books, magazines
Financial services
Apparel, accessories
Travel reservations
Music CDs
Music downloads
Local government services
41.7
41.5
38.8
37.3
30.7
28.8
28.8
28.0
26.6
23.7
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Singapore (N=115)
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Books, magazines
Music CDs
Video software
Travel reservations
Household sundry goods
Gifts
PC software
Stationery, office goods
Foodstuffs
Air and rail bookings
Apparel, accessories
Gifts
Books, magazines
Music CDs
Air and rail bookings
Concert, theater tickets
Hotel, inn reservations
Travel reservations
Financial services
PC software
South Korea (N=199)
48.6
46.5
46.1
43.1
41.9
39.8
37.0
32.6
25.0
23.7
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Books, magazines
Music CDs
Apparel, accessories
Air and rail bookings
Concert, theater tickets
Financial services
Travel reservations
Household sundry goods
Gifts
Hotel, inn reservations
Sweden (N=216)
59.1
40.9
29.6
27.0
26.1
25.2
23.5
23.5
22.6
17.4
1.
2.
3.
4.
5.
6.
7.
8.
9.
10.
Music CDs
Air and rail bookings
Books, magazines
Financial services
Concert, theater tickets
Hotel, inn reservations
Video software
Travel reservations
Local government services
Music downloads
64.8
53.2
50.9
47.2
47.2
43.1
41.7
37.0
32.9
31.9
Note: Figures represent percentages of the total who have used or want to use online shopping.
Source: Cyber Life Observations (September-November 2000), NRI.
Consumers and Consumer Industries in the Ubiquitous Network Era
Copyright 2001 by Nomura Research Institute, Ltd.
8
41.7
38.7
34.7
23.1
21.6
21.1
20.6
16.6
15.1
15.1
NRI Papers No. 36
November 1, 2001
Figure 17. Concerns and Barriers Regarding Online Shopping (Multiple Responses)
(%)
The goods received may differ from expectations at the time of ordering (color, texture, taste, etc.)
90
Private information (credit card numbers, purchase records, personal profiles, etc.) may be disclosed to third parties
80
70
The goods received may be totally different from those ordered
The goods may not arrive
The vendor or business is not trustworthy
It is difficult to cancel orders made in error
Possibility of receiving or being charged for goods not ordered
No knowledge to cancel orders or return goods
The goods are not delivered immediately when I want them
(delivery takes several days)
The cost is high when delivery charges are taken into account
62.0
60
54.3
51.6
50
40
30
47.1
30.2
40.4
31.5
29.4
33.5
31.4
29.2
14.5
19.5
17.5
20
21.4
26.0
15.8
22.4
14.6
21.0
25.1
24.5
16.3
16.3 15.5
14.4
18.1 17.9
16.7
10
35.9
32.7
24.3
29.4
18.4
19.9
37.7
35.9
34.3
7.6
14.6
13.0
10.3
7.7
15.8
25.1
12.8
9.6 9.0
8.5
6.3
0
USA
N=1,009
Japan
N=1,402
South Korea
N=510
Singapore
N=507
Sweden
N=501
Note: Only the top ten responses for Japan are shown.
Source: Cyber Life Observations (September-November 2000), NRI.
the high cost of purchases when delivery charges are
taken into account. This response indicates that e-commerce is now regarded as part of everyday life, and not
as something special.
III The Advent of the
Ubiquitous Network Society
4 Changes in Consumer Attitudes Towards IT
Businesses involved in e-commerce are also beginning
to recognize the importance of communications, and
are approaching the Internet not simply as a sales channel or one-to-one marketing tool, but as a means of tapping and developing a business opportunity with significant potential. Moreover, companies are using the
Internet to build closer communication with consumers—including the processing of customer complaints
and as a mechanism for improving services and developing new products—so that they will feel a greater
empathy toward the companies they are dealing with.
It is becoming obvious that “e-tailers” cannot attract
consumers merely by gathering personal information
on potential customers as the basis for a one-way service supply.
How does this relate to Japanese consumers? Besides
those in their teens and twenties among whom Internet
usage is already high, most consumers are dubious about
the use of IT as a means of communication. Without
overcoming this perception, IT usage is unlikely to stimulate increased consumer spending.
In all countries surveyed (including Japan), the majority
(over 80%) of consumers believe that the spread of IT
will make their lives more convenient by providing easy
access to necessary information (see Figure 18). In the
United States, South Korea, Singapore and Sweden, the
majority of respondents also expect IT to stimulate inter-personal contact and communication.
In Japan, the ratio of consumers who expect IT to make
life more convenient has increased across all age groups
over the past four years (see Figure 19). However, the
percentage of consumers anticipating that inter-personal
contact and communication will expand has actually
declined among those in their thirties and above. In addition to the development of infrastructure, moves towards codifying the rules and guidelines of network communication (i.e., “Netiquette”) between consumers and
businesses and between consumers is likely to play an
increasingly important role in improving consumer confidence regarding IT usage.
Consumers and Consumer Industries in the Ubiquitous Network Era
Copyright 2001 by Nomura Research Institute, Ltd.
9
NRI Papers No. 36
November 1, 2001
Figure 18. Trends in Attitudes in the IT Era
Agree
Agree somewhat
Disagree somewhat
35.2
5.7
48.6
9.6
0.9
40.0
5.9
13.0
0.7
Japan
1997
N=1,409
40.4
2000
N=1,009
36.1
1.8
10.0
50.7
USA
1997
N=500
34.2
No response
Inter-personal contact and communication will expand
Easy access to necessary information and
my life will be more convenient
2000
N=1,402
Disagree
23.9
15.7
1.4
4.2
12.0
48.2
11.3
39.9
27.5
37.3
36.8
41.0
30.6
1.4
23.9
43.2
19.1
0.4
5.2
15.3
1.8
15.6
South
Korea
60.4
31.8
44.7
6.7 0.2
8.4
34.1
3.0
1997
N=500
58.2
2000
N=507
40.4
40.6
0.0
34.8
23.6
0.2
53.3
31.4
0.0
1997
N=505
60.8
48.9
49.9
0.4
33.9
0.0
1.0
18.7
1.0
4.0
Singapore
0.4
1.0
38.6
5.3
2.2
3.9
16.9
1.0
2000
N=510
1.0
2.2
9.1
38.2
0.0
0.8
1.0
2000
Sweden N=501
50.5
0
20
32.1
40
60
10.6 6.8 0.0
80
100
(%)
40.7
0
20
35.7
40
60
16.8
80
6.8 0.0
100
(%)
Notes: (1) Number represent total for “Agree” and “Agree somewhat” responses; and (2) Figures for Sweden were available for November 2000 only.
Source: Cyber Life Observations (September-December 1997, September-November 2000), NRI.
environment in which consumers will be able to access
the Internet to obtain information “anytime, anywhere.”
The ubiquitous network is also expected to dramatically innovate industrial structures. For consumers, the
emerging environment will be radically different from
the ordinary IT environment. More importantly, not only
will consumers play an active role in accessing the network, but also the network itself will take the initiative
in approaching consumers (Figure 20).
Even people with little Internet usage at present will
be actively participating as their experience and knowledge grow through actual use of the network—much like
a process of on-the-job training (OJT). The ubiquitous
network society will enable today’s rapidly developing
information technology infrastructure to be used as a base
for training and educating people to make full use of
these networks.
With the advent of the ubiquitous network era, the
number of people who use IT in their daily lives will
increase. Currently, the consumer use of IT is centered
on email, but the focus is likely to shift to Web site browsing and e-commerce in the future, thus boosting the direct role of IT in consumption.
Figure 19. Trends in Attitudes Toward the IT Era in Japan
by Age Group
(%)
100
90
93.6
89.3
85.1
86.1
80
84.1
81.8
70
Easy access to necessary information
and my life will be more convenient
60
79.7
74.4
54.2
50
47.0
41.9
36.4
46.2
40.9
41.6
41.0
30
20
70.1
1997/3
1997/3
42.4
40
2001/3
82.9
2001/3
33.3
Inter-personal contact and communication will expand
10
0
teens
20s
30s
40s
50s
Note: Numbers represent totals for “Agree” and “Agree somewhat” responses.
Source: Cyber Life Observations (March 1997, March 2001), NRI.
Yet, the reduction of usage fees is already creating an
environment in which consumers are able to use a variety of IT devices (media) anytime they want. In addition, the pace of infrastructural development is also starting to accelerate under the government’s e-Japan strategy. The spread of mobile Internet usage and flat-rate
broadband access will promote network connections by
various devices, such as information home appliances.
This is leading to the evolution of a ubiquitous network
IV Consumer Industries in the
Ubiquitous Network Society
In Japan, industries directly involved in people’s lives
include finance, welfare, medicine, housing, agriculture,
forestry, fisheries, and leisure. Compared with export
Consumers and Consumer Industries in the Ubiquitous Network Era
Copyright 2001 by Nomura Research Institute, Ltd.
10
NRI Papers No. 36
November 1, 2001
Figure 20. Functions of the Ubiquitous Network for Consumers
Functions of Ubiquitous Network
Users work the Internet
Internet works for users
Enterprise employee portal
All employees receive the same information
and services
Employees receive content and services based
on their authorization level
Customized learning
Students logon to a specific university’s online
site or go to the university itself
Anyone can learn according to individual
interests and needs
Email and document translation services
Contact a translation agency
Automated ad hoc translation
Internet business collaboration
Create one’s own virtual private network (VPN)
or dedicated secure connection
Dynamically share resources on an ad hoc,
on-demand basis
Wireless commerce and services
Use the mobile phone for call-related activities
and transaction authorization
Services run on the Internet and are controlled
and accessed by wireless devices
Restaurant reservations
Contact restaurants individually to book a table
Contact a service to do the booking
Purchasing securities
Give instructions for a transaction to be
carried out
Have a transaction carried out automatically with
notification according to specific parameters
Purchasing tickets
Purchase tickets oneself
Use service to purchase tickets based on
preference with automatic billing and notification
Carrying out banking and paying bills
Check bank balance and pay bills
Have bills paid automatically according to
account balance
Note: VPN = virtual personal network.
Sources: Compiled by NRI from data provided by Hewlett Packard Corp. and E-Service Corp.
industries, such as automobiles and electronics, these
industries have made relatively little effort to stay ahead
of the competition by considering market trends and customer needs.
Household consumption expenditures account for
about 60 percent of Japan’s gross domestic product
(GDP). The development of new markets through the
provision of services based on consumer needs by these
consumer industries would therefore greatly help to revitalize the Japanese economy, while bringing great benefits to consumers themselves.
Ubiquitous networks will play a major role as a tool
to facilitate the restructuring of consumer industries. In
addition to their role in business innovation, ubiquitous
networks will also provide an effective interface with
consumers. In the past e-commerce has been limited
mainly to sales and auctions. But in the future, companies may provide information that will enable consumers to easily compare and choose life-related services
offered by various firms. This is similar to the concierge
services offered in hotels. Other possibilities include
mechanisms that allow networks to approach users.
Until now consumers have had little information in
choosing services that relate directly to their daily lives.
As a result, it is undeniable that the services provided
have not necessarily matched consumer needs. Businesses have been unable to adequately fulfill consumer
needs, which is reflected in the stopgap approach that
characterizes the way in which uniform services are now
being offered.
Some consumers request services that match their
needs, even if this means higher charges. Unfortunately,
the lack of an effective means to identify these consumers and provide the services they require has discouraged companies from developing new offerings.
However, ubiquitous networks will completely change
this situation. Consumers will be able to compare services from anywhere and make their own choices. The
key to this kind of information service is the disclosure
of information by businesses. Every enterprise has its
strengths and weaknesses, but the public perception of a
firm depends on the individual consumer. Information
disclosure will also allow an enterprise to recognize its
own strengths and weaknesses. Thus communication
between businesses and consumers, which takes place
as consumers make their choices, will provide opportunities for the development of new services. This will lead
to establishing a wide spectrum of companies that meet
various consumer needs, thereby providing consumers
with an even greater range of choices.
Consumers and Consumer Industries in the Ubiquitous Network Era
Copyright 2001 by Nomura Research Institute, Ltd.
11
NRI Papers No. 36
November 1, 2001
The ubiquitous network era will also provide the
means to educate consumers so that they can take advantage of concierge-type services. We all know that
acquiring information by using IT can be a time-consuming process. Unless consumers have a specific need,
they are unlikely to search for adequate information.
Moreover, ordinary consumers are generally reluctant
to communicate personally with business firms, suggesting that most consumers are generally passive about IT
usage.
Ubiquitous networks can offer a solution to this problem, as they will provide consumers with information
that is closely related to their daily lives, thereby helping enhance their lifestyles. This function will be made
possible by advances in sensor technology.
For example, automobiles could be fitted with vibration sensors and other devices that would send various
alarms to owners and security firms via the network. Such
systems would provide an early warning of vandalism
or theft, allowing users to operate alarms remotely or
notify the police so that vehicle thefts and other crimes
could be prevented. Similarly, sensors could be used to
inform family members or relatives or medical personnel in remote locations to check on elderly people living
alone. It would be possible to detect changes from normal routines or early signs of emergencies. Acting on
such information would enable caregivers to prevent
accidents or other problems, and family members could
go out in peace.
With the active approaches of ubiquitous networks,
consumers who were passive toward IT will have more
opportunities to interact with the network. And as con-
sumers become increasingly aware of the convenience
of IT, they are expected to get more involved spontaneously. The ability of the network to approach users will
be further enhanced with always-on connections promoted by flat-rate Internet access fees, with improved
human interfaces for IT equipment, and through the assignment of IP addresses to all kinds of equipment under the next-generation Internet Protocol Version 6
(IPv6).
In the ubiquitous network era, information technology will no longer be simply a means of rationalization
for consumer industries. By considering IT as an interface, businesses will be able to establish two-way communications with consumers and address increasingly
diverse consumer needs that have hitherto not been adequately reflected in service offerings. This information
will be used to develop new services and create a variety of new businesses, thus leading to a radical innovation in consumer industries.
In the ubiquitous network society, security issues of
privacy and private information will become more critical, and it is vital to take the appropriate steps to improve technical measures. At the same time, however, it
is also necessary for consumers themselves to make efforts to balance convenience and privacy based on an
awareness that they control their own information.
Juro TODA is a senior consultant in NRI’s Information and
Communication Industries Consulting Department I. He specializes in business strategies and strategic marketing planning.
Consumers and Consumer Industries in the Ubiquitous Network Era
Copyright 2001 by Nomura Research Institute, Ltd.
12
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