Hiroshi Onishi, CEO and Executive Officer of Haneda Future Research Institute, was once known as "Mr. Department Store" and has contributed greatly to the transformation of Japanese consumption and values, teaching the Japanese people what true wealth is. Onishi has sounded the alarm that Japan's current decline in national power will lead to it becoming a developing country if things continue as they are, and he spoke about the efforts that need to be made to address this issue, such as regional revitalization, Japanese manufacturing, and efforts to improve Japan's brand value.

Amidst the cries of overtourism,
Appealing for the need for essential measures to promote Japan as a tourist destination

As overtourism becomes a social issue, we spoke to Mr. Onishi, who works at Haneda Airport, Japan's air gateway, about the current situation.

"The number of customers at Haneda Airport is increasing rapidly, and in 2024, 3,600 million people will visit Japan, and in 2025, that number will surely exceed 4,000 million. We've also heard figures of 6,000 million in the future, but to be honest, I think it will be difficult for Japan to accommodate that number in its current state. Regional cities in particular have major issues with secondary transportation, such as a shortage of taxis, and Japan does not yet have a platform in place to accommodate more inbound tourists than it does now. Japan needs to quickly create an environment that can make tourism a viable industry," he said, calling for government measures.

Of course, it is also necessary for Japanese companies to become more energetic, and Onishi is implementing a series of measures with an eye to the future of current businesses.

The future of companies will change depending on how they design their corporate portfolios to support the Japanese economy

"For a company to survive, it is important that it transforms its corporate portfolio. Japan Airport Terminal Co., Ltd. operates the passenger terminal at Haneda Airport, but if that is all it does, it will be difficult for the company to survive. The COVID-19 pandemic is a good example of this; if planes stop flying and there are no customers, the company will no longer be able to carry out business. In other words, how to hedge risks in a corporate portfolio is extremely important. I believe that the Haneda Future Research Institute was born out of this as one factor in creating a new corporate portfolio."

Onishi currently serves as president of Haneda Future Research Institute, a think tank established in 2018 by Japan Airport Terminal Co., Ltd., the company responsible for the construction, management, and operation of the passenger terminal at Haneda Airport. With Haneda Airport at its core, the company is engaged in a wide range of activities, including "regional revitalization" and "tourism development" projects that connect people and regions and create value through new businesses and branding, as well as "art projects" that promote Japanese art and culture.

How should Japan face the world and how can it succeed in it?

"There may still be some Japanese people who have not realized it, but Japan has become a developing country, or rather a middle-developing country. Japan's GDP is expected to be overtaken by India in 2025, and will be caught up by growing countries in Southeast Asia in 2030. I believe that regional revitalization is an important measure for Japan to increase its national power. Half of Japan's GDP is generated by the regions. The regions are home to a lot of artisanal skills and technological capabilities, and the wonderful things they produce. I call industrializing these things the 'lifestyle and culture industry,' and I have made it one of my businesses. If Japanese culture and technology are highly regarded around the world and are exported, the regions will be revitalized, which will in turn contribute to Japan's GDP."

Japanese art is also an industry.
Japan will change if companies support arts and culture

Currently, Mr. Onishi is involved in a number of support activities for foundations and organizations that carry out cultural projects, etc., with the expectation that this will lead to business for the Japan Airport Terminal and the Haneda Future Research Institute in the future. In the midst of this, he feels that there is an issue with the low evaluation of Japanese art and culture.

"The art market in Japan is worth about 3,000 billion yen, but in Europe and the United States it is worth 2 or XNUMX trillion yen. Art and culture are also pillars of Japan's industry, so a system needs to be put in place to support them through corporations. However, young people today have great potential when it comes to art, so I hope that the way Japanese art and culture is perceived will change."

Haneda Future Research Institute opened the Japan Mastery Collection, a luxury brand created in Japan for regional revitalization, in a duty-free store in the departure area of ​​Haneda Airport's Terminal 3 in December 2023. The project aims to promote "Japanese beauty and craftsmanship that should be protected" to the world and lead to regional revitalization. It is a branding initiative for traditional Japanese culture and a stepping stone to establishing the Japan brand.

"We are currently actively collaborating with local governments. We are helping them with local branding and overseas expansion in order to resolve the issues they face. This is an important activity in letting the world know about Japan's wonderful culture and art. Of course, the development of our Japan Luxury 'Japan Mastery Collection' has only just begun, so we are also working on how to promote these overseas and how to spread them domestically."

"The existence of this Japan Brand will have an impact on everything from regional revitalization to art and culture, and even solving issues in the distribution industry. We hope that people who see our products will become interested in local manufacturing, visit the places where they are made, and experience them, which will lead to money being spent in the regions, creating a better cycle."

Why are there so many Western brands in Ginza?
What is needed to develop a Japan brand into a global brand?

Finally, we asked why Japanese brands that can rival Western brands are not developing.

"I think there are two reasons why brands don't develop. One is that Europe has a deep-rooted culture of carefully nurturing luxury brands. In order to maintain brand value, they collaborate with popular designers, for example, and are always conscious of breathing new life into their brands, thereby protecting their power and value. In contrast, Japan is highly regarded around the world for its creativity, but this is not fashion creativity, but rather manufacturing. Japan has long been based on manufacturing, including the automobile industry, and although there are wonderful handmade textiles in the regions, these are merely one material. There is a history of not nurturing them as brands."

Japanese pricing methods based on incremental pricing cannot compete with Western brands.

Furthermore, Onishi says that the inability to successfully establish the Japan brand is largely due to the temperament of the Japanese people.

"Unfortunately, people involved in Japanese retail have very little negotiating power. For example, global brands that are hugely popular in Japan have an operating profit margin of 26% in their home country. However, Japanese retail and distribution industries have a product profit margin of around 15%, which translates to an operating profit of just XNUMX to XNUMX%. You can't do business like this. I think people involved in Japanese retail and distribution industries need to have more confidence in Japanese brands, and the spirit and awareness to work on branding with an all-Japan effort. Unless you negotiate with a strong desire to not let profits go out, you won't be able to compete with famous global brands," Onishi emphasizes.

Onishi, who has been involved in retail for a long time, is well aware of the issue of pricing, and he says that Japanese people are also timid.

"Japanese brand products are too cheap to begin with. Japan has a culture that started with manufacturing, so price is decided by adding up the cost of materials, the remuneration of craftsmen, and manufacturing costs, so if the cost comes to 3,000 yen, then they add profits to that and sell it for 1 yen. However, in other countries, branding comes first, so they decide to sell a product for 1 yen. In fact, even if the cost was 1,000 yen, it's OK because the brand value is there. This is a difference in sensibilities. Japanese people are serious, so they decide prices based on functional value, but people overseas value the emotional value of products and services that move the consumer's heart and give them a sense of satisfaction. However, Japanese people are not good at this kind of thinking. But unless we start selling with added value like in the West, we won't be able to compete with overseas brands," says Onishi, emphasizing.

He also said that, in the current situation where Ginza is lined with an array of foreign brands, if all of Japan works together to establish Japanese brands, Ginza will surely be lined with Japanese brands in 10 years' time. It is clear that Mr. Onishi has a strong desire not only to succeed in his own business, but also to create a better Japan.

"After losing the war in 20, I believe it was thanks to the efforts of people about two generations older than me that Japan became an economic superpower. That's why I feel it is the role of our generation to entrust a proud Japan to today's young people in their 2s and 20s."

I was deeply moved, realizing that this is where Mr. Onishi's love for Japan began.

Hiroshi Onishi

Born in Tokyo. Graduated from Keio University in 1979 and joined Isetan in the same year. After serving as Managing Executive Officer and General Manager of Merchandising for the Department Store Business Division of Mitsukoshi and Managing Executive Officer of Isetan, he was appointed Representative Director and President of Isetan Mitsukoshi Holdings and Representative Director and President of Isetan Mitsukoshi in 2012. Since July 2018, he has been Representative Director and President of Haneda Future Research Institute.

Mio Shimamura

Representative, publisher and editor-in-chief of Premium Japan. After working at a foreign advertising agency, he held positions in charge of marketing and PR at top brands such as Walt Disney, Harry Winston, and Tiffany & Co. In 2013, he founded Russo Co., Ltd. He handles PR for various top brands. Because his parents' home was an environment that taught Japanese culture such as tea ceremony and kimono dressing, he acquired the business rights to Premium Japan in 2017 and established Premium Japan Co., Ltd. in 2018.