Covid-19 and its effects on Japan's Consumer Tech Industry
Every Cloud…
Let’s not beat around the bush: these are incredibly unusual and trying times. The uncertainty that the global COVID-19 pandemic has wrought on the world is unprecedented. When it comes to employment and recruitment, it’s telling that the media has drawn comparisons more with the Great Depression than Lehman Shock in recent weeks.
With that said, it’s important to recognize bright sparks in these dark times. As the manager of the consumer technology team here at Wahl+Case, it’s been important for my team and I to proactively reach out to the market and identify those services, sectors and professions that are adapting to this ever-changing world we live in.
Our coverage can be summarized as any business that sells their product or service to an end consumer, and in exploring this market, I’m pleased to present to you some examples of adaptability and ingenuity, despite - and in some cases as a result of - a world in flux. So wash your hands thoroughly, exercise a respectful social distance from your neighbor and read on!
Travel is hit hard
We all know by now which sectors have been hit hard. Travel booking startup Klook announced layoffs and furloughs affecting 10 to 20 percent of their workforce, and travel company Expedia announced in February a global cut of 3,000 staff. In the fiscal year of 2019, OTA sector clients comprised around 30% of our placement revenue; at the time of writing this, it is 0% for 2020. We have seen headcounts frozen or offset by several months for 9 mid to senior level requisitions with those same clients, and although we continue to work on mission-critical backfills, the OTA sector remains in a holding pattern.
E-Commerce is on the rise
But while people are not traveling, whether internationally or domestically, they most certainly are spending more time going online: for shopping, TV shows and gaming to name but a few things. Where only 7% of transactions in Japan were online in 2018, over 10% of respondents to a government survey in March between the age of 20 to 60 years of age confirmed that they are shopping online for daily necessities, electrical appliances, clothing and cosmetics. While this is lower than other developed country markets - China does one-fifth of its shopping online - it’s enough to give our e-commerce clients the confidence to continue hiring sales and marketing professionals. 32% of the consumer technology team’s current job portfolio is focused on e-commerce clients, from giants like Rakuten and Amazon to newer players like Wix, Shopee and Milleporte.
Mobile Gaming is still hot
People may not be playing their favorite mobile games on their morning commute, but that hasn’t slowed the gaming industry down one bit. Japan is the world’s most mature mobile gaming market and is currently worth over $14 billion and counting. With 5G technology helping to accelerate and improve the online gaming experience, game developers, esports and gaming platform providers have all continued to look for additional headcounts.
Although direct sales roles have been at times placed on hold, the need to engage with customers has meant that candidates in digital marketing and community engagement have continued to be in high demand. In 2020, the number of jobs placed by the consumer technology team in the gaming sector is double that of 2019, and we’re not even done with Q2.
Three weeks ago, I was concerned when I couldn’t reach the Country Lead for one of my most active gaming company clients. When I finally caught her on the phone, she apologized for the delay: she had been involved in discussions with global HQ to double the number of additional headcounts for the Japan business development team.
Social Media giants Facebook and Bytedance are getting in on the gaming act too, with multiple headcounts opening up in the last two months. Facebook Gaming, the FB platform to take on Twitch as a live game streaming tool, was originally slated for a June release: this was brought forward to April as a result of people quarantined globally, bringing with it APAC headcounts for strategic heads and marketing leads. Bytedance’s bid to compete with Tencent in the mobile gaming market has led to the hiring of 1,000 staff for their burgeoning gaming business to date, with Japan-specific hiring requiring regular recruiter seminars to keep consultants up to speed on positions.
My team has been kept busy sourcing product managers, digital marketing specialists, localization PMs and more for Bytedance’s continued focus on the Japan market.
Video on HIGH demand
Coming back after a rather subdued Golden Week, the topics of conversation on our first day back (remotely I might add) inevitably led to how many TV shows you watched. It’s no surprise then that while the world continues to divide its attention between our mobile device and the TV, VOD platforms go from strength to strength. With 15.7 million people globally signing up to the streaming giant Netflix in the first three months of the year, it’s no surprise that they have continued to search for top talent for ongoing hires, as well as opening new headcounts across marketing, partnerships and content acquisition.
In addition, Netflix’s emphasis on in-house production of shows and films has also meant an increasing demand for post-production, sound specialists and live action producers. Wahl+Case has gone to market to headhunt new skill sets for these high-demand roles in VOD; should the trend continue, I have no doubt that recruitment agencies will internally reposition to devote teams solely for these erstwhile rare skill sets in the Japan recruitment market.
Not to be outdone, Japan’s leading TV and anime streaming platform U-Next has been growing their leadership teams in content acquisition, brand marketing and media strategy, offering opportunities (and salaries) to successfully attract talent from GAFA companies. Wahl+Case have placed several VP and C level professionals into U-Next and the demand shows no sign of abating any time soon.
The New Normal
While the lasting effects of the pandemic on the Japanese consumer technology industry remains unclear, the last few months of observing the recruitment market has shown that there is cause for optimism. While recruitment consultants may need to adapt to unfamiliar industry specializations, there is no doubt that - for the more agile organizations with strong leadership - this pivot into growth sectors will undoubtedly present lucrative rewards. As candidates become more eager to work in the ever-growing areas of e-commerce, mobile gaming or VOD, there is one thing that is certain: it’ll be a very different - and dare I say exciting - normality that we’ll be stepping into.
