Major supermarket operator Nagasakiya Co. has just gone bankrupt, and reports say many department stores are taking heavy losses.

According to the Management and Coordination Agency, Japan's consumer spending fell by 1.2 percent in 1999 over the previous year for its seventh consecutive year of decline, showing that private consumption remains locked in its long recession.

But it is also true that there are brighter and more positive aspects of consumer behavior to be seen, especially in the information sector.

Microsoft Corp.'s release of Windows 2000 here on Feb. 18 may have been a success, but perhaps more striking was consumer reaction to PlayStation 2, Sony Corp.'s powerful next-generation game machine. Approximately 600,000 orders in one minute were placed when the firm began taking orders on the Internet, so many that it caused computer problems.

Another example is the increasingly widespread use of mobile telephones. In Japan, it is said that more than 50 million mobile phones are in use among a population of 126 million. Furthermore, due to technological progress, some of them are not just telephones but computer terminals that can send e-mail, data, and even pictures.

In fact many young people can be seen in the streets pushing the buttons on their cellular phones instead of speaking into them.

With the number of mobile telephones produced last year rising to 479 million units, or 24.5 percent more than in 1998, we can assume Japanese consumers are replacing their phones with more sophisticated models.

A third example is personal computers. In 1999 Japan produced 11.5 million PCs for a 19.4 percent rise on a year-on-year basis. This can perhaps be attributed to the wider range of uses that people have found for them.

In other words, more people are presumably beginning to use PCs to tap the Internet, despite the well-known fact that Japan's telephone charges are relatively high compared with those in other countries.

The government statistics above reveal a trend that is clearly opposite the deep and long-rooted stagnation reflected by total private expenditures. This is because information-related expenditures rose by 10.4 percent in 1999 compared to the previous year.

Keeping these facts in mind, one can determine some interesting trends in regard to household consumption.

One is the bipolarization of consumers. Over the past several decades, economists have discussed the growing disparity between the "haves" and "have-nots."

From now on, however, we may have to discuss a different problem: the growing contrast in spending behavior between the "cans" and the "cannots."

Needless to say, the cans are able to use information-technology products sufficiently, while the "cannots," of course, are unable to.

It seems the former tend to spend their money on information-related purchases rather than traditional consumer goods, such as food, drink and other everyday items.

Another trend is the bipolarization of the economy into an electronic or "e-economy" and the traditional or "t-economy."

As we have discussed, the former is rapidly growing and innovative, powered by advances in information technology. The latter has been stagnant and inactive.

One could interpret Japan's current overall economic environment as the t-economy dominating the e-economy and becoming the fundamental cause of the recession.

This leads to the third issue -- policy.

If we reduce consumers' IT-related costs through say, deregulation, the cans will put more money into the e-economy, so much that it eventually outweighs the t-economy and rejuvenates overall consumption. This, in turn, would hopefully bring the Japanese economy out of recession.

Deregulation in the telecommunications sector, therefore, can be regarded as the key to realizing economic recovery.