Japan's Ministry of Economy Subsidizes E-Commerce for Businesses in Disaster Affected Areas

so that the small to medium size companies based in all of Tohoku including Fukushima and northern Kanto Prefectures and Chiba can sell their goods produced in these areas via eBay, J-Shoppers (for Europe, the US), Taobao, Buy-J (China), Yahoo Taiwan, PCHome Store (Taiwan).

Information from the press release from the Ministry of Economy, Trade and Industry (METI) (2/29/2012):

Program target:

• Businesses located in the disaster-affected areas;

• Businesses that sell goods made in the disaster-affected areas

Disaster-affected areas defined as:

• Tohoku - Aomori, Akita, Iwate, Yamagata, Miyagi, Fukushima

• Kanto - Gunma, Tochigi, Ibaraki, Chiba

Types of subsidies:

• 1/2 of E-Commerse setup cost including translation

• 1/2 of monthly running cost (for businesses located in the disaster-affected areas only)

• PR and marketing campaigns by the two companies who have been selected to assist these businesses

Companies selected to assist these businesses [probably the recipients of fat fees from the Ministry]:

• ECAA (E-Commerce Asia Association) to assist in selling to the US, Europe, and China;

• Nippon Express [one of the largest logistics companies in Japan] to assist in selling to Taiwan

Number of businesses to be assisted:

• Businesses targeting the US, Europe: 70

• Businesses targeting China: 70

• Businesses targeting Taiwan: 60

The press release does not say anything about what kind of goods are to be sold.

ECAA seems to have been set up in 2009 by a person named Takashi Okita, president of a credit card transaction processing company called SBI VeriTrans. ECAA is being operated from inside SBI VeriTrans.

SBI VeriTrans has a service to support client companies sell goods by setting up sites in virtual shopping malls for them and managing the operation for them. The webpage does not say how much they charge for the service.

Looking around, I found this site that has the rough cost estimate to set up a website with different features. The simplest would cost 500,000 yen (US$6,000), the most sophisticated 5 million yen (US$60,000), with E-Commerce features 2.5 million yen (US$30,000) (as of 2008). Site management fee is on top of these setup costs.

By helping 140 businesses set up E-Commerce sites and operating the sites for them, it looks like the company behind ECAA is set to make a small fortune, courtesy of the Japanese tax payers.

Regulatory capture is the way to do business in Japan even among the younger generation of businesspeople like Mr. Okita. It has become more so in post-Fukushima Japan, with new NPOs cropping up to capture the government handouts for the supposed "recovery and reconstruction of Tohoku", and somehow they are well-accepted by people because, as a non-profit, "they are not there to make money like for-profit companies".

One such NPO operating out of a business address service company in Shinjuku, Tokyo managed to get the government money to host a marathon road race featuring elementary school children in Minami Soma City the other day, in the same district where the "black dust" containing 3.43 million becquerels/kg of radioactive cesium was found (Kashima).

(H/T Enformable for METI press release)

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