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Galapagos – Darwin’s Natural Laboratory of Japanese Mobile Phone, K-car, and Beer

January 31, 2012

Galapagos Islands are an archipelago of islands in the Pacific Ocean, a unique biosphere for many endemic species like Galapagos Tortoise, Galapagos Land Iguana and Blue-footed Booby. Known as Darwin’s natural laboratory, the isolated islands helped them evolve off the main trunk of the evolution tree – further to the evolutionary dead-end.

Today, Galapagos is very popular in Japan, not as a vacation destination, but as a buzz word to describe the evolution dead-end of Japanese industry self-mockingly. Some endemic species that you can find in Japanese Islands are: mobile phone, K-car, and beer.

Mobile Phone

Use of the term Galapagos became common when Japan started to realize that our mobile phone market went to the dead end of the evolution tree in 2000’s. Until then, Japan was running at the top of the main branch of the evolution. The average cell phone had a mini browser with a data service called ‘i-mode,’ a TV receiver with a HD quality screen, and IC prepaid card integrated with major public transportation systems. This was when the average mobile phone in the US only had SMS and 10 ringtones.

Within five years, however, the global mobile phone market had completely changed. Blackberry opened a new age of smartphone, followed by WindowsPhone, iPhone and Android. Since Japanese cell phone makers were too busy competing each other in the small island, they failed to notice that the main stream of the evolution has shifted somewhere else, where Samsung and LG are winning the market.

K-car

The car I drive, Nissan Micra (or Nissan March in Japan,) is categorized as a compact car – one of the smallest in the market except some cute outliers like Mini or Smart.  If you go to Japan, however, Micra does not seem so small, but rather bulky, because other cars are way much smaller. In Japan, there is a segment called K-car, where K means ‘light’ in Japanese. K-car is the car with no more than 660 cc displacement and it costs less than the ‘regular’ car, thanks to a better tax treatment.

This K-car segment is becoming more and more popular and now you can find every type of vehicles in a miniature scale on the street in Japan – pick-ups, SUVs, convertibles and sports. You can find them only in Japan, of course.

Beer

Another product evolution that has been formed around a unique tax regulation is beer. Japan used to enjoy good beer – Kirin, Asahi, Sapporo, and Ebisu. A decade ago or so, however, the beer companies came up with a way to work around the relatively high Japanese tax regulations, under which beer is defined that more than 50% is malt extract, by diluting it with other ingredients. They invest a lot of R&D budget to make better low-malt beer, or Happo-shu in Japanese, and they seem to enjoy some success among the people looking for an economical alternative to beer.When you travel to Japan, you may want to try Happho-shu, although I personally think that even the best-evolved Happo-shu is still an inferior mutant of beer. Once you go outside the islands of Japan, you will probably not order Happo-shu even if you are lucky to find one.

Today’s Lesson

Japan is an archipelago of islands in the Pacific Ocean, a unique socio-econo-sphere of many endemic species like mobile phone with TV, a miniature SUV, and Happo-shu.

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