Olympic Windfall: Games Boost Japanese Economy by ¥1 Trillion

[Fiona]

Japanese athletes brought home a record haul of medals from the 2004 Athens Olympics, and thanks to their efforts the Japanese economy has also struck an unexpectedly large pot of gold. Companies that employ or sponsor Olympic medalists have benefited from the positive publicity that comes from being associated with a winner, while surveys by economic research organs suggest that electronics manufacturers and others have also reaped the rewards of the Olympics, with some estimates suggesting the games have boosted the economy to the tune of ¥1 trillion (about $9.1 billion at ¥110 to the dollar).

Basking in Reflected Glory
Companies that employ medal winners or supply them with equipment have benefited greatly from these links. Sports equipment manufacturer Mizuno, which employs Murofushi Koji, the men's hammer thrower whose silver medal was later upgraded to gold, quickly sold out of the 4,000 T-shirts it made celebrating Murofushi's silver medal and later sold 3,000 more marking his gold medal. Starting in October, Mizuno also plans to put on sale replicas of the swimming costume worn by double gold medal-winning swimmer Kitajima Kosuke, along with replicas of the uniforms worn by Japan's baseball, softball, volleyball, track and field, and other Olympic teams. It expects to sell over ¥3 billion worth (about $27.3 million) of these products.

Asics Corp., which supplied the running shoes in which Noguchi Mizuki won the gold in the women's marathon, is proud of its contribution to her victory. Footage of Noguchi kissing her shoes after she crossed the finish line has been played repeatedly on TV, and the company commented, "This achievement proves the high level of our technological prowess." The company estimates that it will sell ¥4.7 billion (about $42.7 million) worth of sports shoes in the six months to March 2005, ¥800 million (about $7.3 million) more than in the previous six months.

And Yamamoto Kogaku Co., which supplied Noguchi with sunglasses, will release a limited edition of the model she wore next spring. As Noguchi's running style tends to result in particularly pronounced up and down movements, the specially developed model incorporated an innovative bridge section designed to minimize slippage. Since the day of the race Yamamoto Kogaku has been inundated with inquiries from people wanting to know whether this model is available commercially, in response to which the company hurriedly decided to produce a limited run of several hundred pairs.

Home Entertainment Devices Fly off the Shelves
But it is manufacturers of home electronics, such as flat-screen TVs and DVD recorders, that have enjoyed the greatest Olympics windfall. Matsushita Electric Industrial Co. reports that it shipped about 4.5 times as many plasma televisions in July as in an average month. Pioneer Corp., meanwhile, which specializes in wide-screen plasma TVs, slashed the scheduled summer holiday at its production affiliates from nine days to two in order to keep up with demand and is considering raising its planned production levels, reporting that the wide-screen TV market is buoyant. And Sharp Corp., the largest producer of liquid-crystal TVs, reports that the 45-inch screen it announced in June has been warmly received by consumers. Despite a price tag of around ¥1 million (about $9,091), more than 1,000 orders had been placed for these TVs even before they went on sale on August 1.

According to figures for July 2004 domestic shipments of consumer electronic equipment produced by the Japan Electronics and Information Technology Industries Association, demand from consumers rushing to purchase home-entertainment products before the Olympics boosted sales of DVD recorders with hard-disk drives to 329,000 (about 4.5 times more than the previous year) and sales of plasma TVs to 34,000 (about 2.2 times more than the previous year). These figures demonstrate just how big a boost the Olympics provided.

In June the Dentsu Inc. Center for Consumer Studies estimated that the Olympics would directly push up consumption by ¥407.2 billion (about $3.7 billion) and that the games would provide a total boost to the Japanese economy - including parts procurement and other indirect benefits - of ¥885.7 billion (about $8.1 billion). It forecast that if the Olympics really caught the public's imagination, this figure could rise to a maximum ¥933.1 billion (about $8.5 billion), but the center has now revised even this figure upwards, saying "It looks like we can expect an economic boost of close to ¥1 trillion."

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