While the nation continues to struggle with weak consumer spending amid the protracted economic slump, the World Cup soccer finals, which Japan and South Korea will cohost from May 31 to the end of June, seem to be loosening the purse strings of some consumers.
Consider John Goss. In April, the Briton, who runs a private English language school in Tokyo, bought two new TV sets — a Sharp with a 29-inch screen for himself to watch the games and a 15-inch Aiwa for his wife and daughter, who otherwise might be unable to watch their favorite programs for the duration of the event.
Goss also bought and installed a tuner and antenna for receiving digital satellite broadcasts and began subscribing to SkyPerfecTV, which will offer live broadcasts of all the FIFA World Cup championship’s 64 games.
“I will probably watch most of the games live on SkyPerfecTV and the England games on a big screen at the English pub, The Tavern, here in Meguro (central Tokyo),” said Goss, a native of Lancashire, northern England.
He added he has purchased several goods — notebooks, letter sets, pennants and badges — at the 2002 FIFA World Cup Official Shop’s outlet in Shibuya Ward for his friends back in his home country.
With less than one month remaining before the opening kickoff, some businesses are benefiting from similar buying binges.
For instance, Yamada Denki Co.’s Tokyo head store has seen increased sales of audiovisual products such as TVs, tuners and DVD recorders, said Makoto Ishii, a deputy manager of the discount electronics outlet in Setagaya Ward.
“We can’t tell which customers buy products to see the World Cup, but it is a factor boosting our sales,” he said, adding that the store’s sales of TVs, tuners and antennas are expected to rise by 20 percent on a year-on-year basis in the month leading up to the event.
SkyPerfecTV, which is offering a cash-back campaign for new subscribers until the end of June, estimates that the World Cup will boost the number of its subscribers by 200,000, said Hiroaki Komatsu, a spokesman for Sky Perfect Communications Inc., which runs the broadcasting service.
As of the end of March, the service had 3.04 million subscribers, up 16 percent from a year earlier.
Some companies are targeting people who plan to travel around the country to watch the games or practice sessions of the national soccer teams.
Japan will host half of the World Cup games at 10 stadiums from Hokkaido to Oita Prefecture. In addition, 23 of the 32 national teams participating in the matches will lodge in Japanese locations before and during the event.
According to an estimate by the Ministry of Land, Infrastructure and Transport, about 443,000 people will visit Japan from overseas and 3.08 million will travel around the country during the tournament.
Prince Hotels Inc. expects a 15 percent to 20 percent increase in the number of guests at its hotels, compared with an average year, according to Yoshihiro Tatara, spokesman for the nationwide chain of 74 hotels.
To draw more visitors, some of the hotels plan to serve traditional dishes of the countries sending national teams to Japan, he said.
The World Cup’s overall economic effect on Japan will likely top 3 trillion yen, according to Dentsu Institute for Human Studies, a research arm of the advertising giant Dentsu Inc. The estimate covers all the benefits generated in the period from May 31, 1996, when Japan won the right to cohost the World Cup, to this June 30, when the final match is to be held.
The estimate shows that construction of new stadiums, facilities and roads, which inevitably also feed related business such as the manufacturing of construction materials, accounted for 1.44 trillion yen of the total.
Consumer spending and the production of consumer goods explains the rest, but its value could vary from 1.74 trillion yen — if Japan fails to advance out of pool play — to 2.16 trillion yen — if Japan wins the championship.
Sales of licensed FIFA World Cup goods are estimated to reach 100 billion yen, said Jiro Yoshino, an associate research director at Dentsu institute.
To maximize the effect, it is important that the event goes off without trouble caused by hooligans or misjudgments. A rainy spell during the event could also dampen consumer spending, he said.
And there is that possibility; rainy season runs from the end of May until the middle of July throughout most of Japan.
While businesses hope the World Cup will trigger a feel-good effect and spur a long-awaited economic recovery, any increased consumer spending may instead trigger belt-tightening elsewhere.
Yoshino of Dentsu pointed out that people who have spent a lot on World Cup-related goods and services may cut back in other areas of their budget.
Ishii of Yamada Denki expressed a similar concern, noting sales of other home appliances, including refrigerators and washing machines, may decline this year as consumers rush to buy large-screen TVs or digital broadcast devices.
Prince Hotels’ Tatara, however, sees the World Cup, the world’s largest sporting event, as an opportunity for long-term gain.
“This is a good opportunity for us to boost the attractiveness of Japan among foreign visitors so that they will come back to this country again,” Tatara said.
Taking advantage of the World Cup being held in Asia for the first time, adidas Japan K.K., the Japanese unit of adidas-Salmon AG, a major German sporting goods and apparel maker, is aggressively trying to expand business.
Adidas, an official sponsor for the FIFA World Cup, is holding events to get more people to feel closer to soccer through the end of June and is planning to open several shops in Japan featuring its own brand products this year, in addition to the five stores it opened last year.
“With this event, we would like to stimulate latent demand for sporting goods in the Japanese market,” said Seiji Shimada, a spokesman for the Japanese unit. “We will be very happy if people get enthusiastic over the World Cup games.”
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