A minute before 10am a group of men in their twenties, each fixated on the screen of his mobile phone, forms a queue outside a tiny store in a backstreet of Tokyo’s hip Harajuku district. The door opens and they stream in, eagerly grasping at a newly-arrived cardboard box full of designer scarves.
It is good news for the owner of the store, and excellent news for Mixi – the Japanese social networking service that ultimately created the crowd that knew the scarves would be there and for sale at half price. But in the group of Japanese twentysomethings may lie what amounts to big trouble for MySpace, the US social networking site with global ambitions.
The scarf-hungry Harajuku mob was assembled through its constituents’ membership of a highly specialised online shopping circle, one of 900,000 virtual communities nurtured within the six-million-strong empire of Mixi users.
In Japan such communities have become so strongly linked to the real world in recent years that they now can affect the behaviour of consumers of everything from pet shops to noodle bars.
MySpace, the US-based social networking site, is determined to muscle in on this scene – a paradise for advertisers – and hopes to use its strong global brand and the weight of its 125m worldwide members to do so.
In November, MySpace announced a joint venture with internet and telecommunications group Softbank in a move that should see a fully localised PC-based version of MySpace operating in Japan in March 2007.
It remains unclear when the service will reach mobile phones, and the whole project is understood to be bogged down in negotiations between MySpace and the Japan Society for the Rights of Authors, Composers and Publishers.
Analysts, though, believe the task is both daunting and misunderstood. They point to the relative failure in Japan of previous attempts by the giant South Korean social networking site Cyworld and even home-grown brands such as Sony who have attempted to enter the market.
Equally critical, say observers, is the failure of MySpace to launch an early attack on the mobile internet. This week, the International Telecommunication Union identified Japan as having the world’s highest penetration of broadband internet services, with 17.7m users in 2005. According to Mixi’s president, Kenji Kasahara, the long overland train commutes experienced daily by many Japanese produce both the time and an “ideal context” for users to become immersed in its communities, or to upload pictures and blogs to their own page.
“Japanese are naturally drawn to communities, and when they are online they are even more attractive,” Mr Kasahara says. “Housewives use this site to help each other. Working people use it as a pleasurable entrance to their favourite hobbies. Japanese as a people love the concept of “wa” [harmony], and in a way they use Mixi to achieve that by forming these community groups.”
Via what some have dubbed “social commerce”, Japan was engaged in the building of social networks before the software of Web 2.0 made it a global phenomenon. The online communities that thrive within Mixi’s site are also the high-tech descendants of the thousands of so-called “keitai clubs” that existed online and were available via mobile phones before MySpace had even been conceived.
The internet is littered with examples of huge global brands such as Ebay who have failed to make a substantial impact on Japanese users, according to Daisaku Masuno, an analyst for Nomura.
Since it began operating as a social networking site in March 2004, Mixi has carved itself a dominant position among Japanese websites. Its ranking puts it second only to Yahoo. The invitation-only social networking site receives more than 750m hits per month from PC users, and nearly 2bn hits from Japanese accessing the service on their mobile phones.
Mixi also has uniquely Japanese features that could make alternative social networking models from abroad less attractive. Foremost among those, says Mr Kasahara, is the invitation-only nature of the site, which delivers a much cherished sense of privacy and exclusivity.
More critically, say industry observers, Mixi has managed to create a fairly mature membership, with 78 per cent of users aged between 20 and 34. And if, as Mixi’s Mr Kasahara predicts, his site manages to attract a new legion of users from the ranks of Japan’s retiring baby boomers, then the average social networking site user in Japan will be even further demographically removed from the average user of MySpace.
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