Japan's Vending Machines Want to Talk to You

Baldwin Louie — Mon, 02 Apr 2001 15:00:00 -0700

Vending machines are a Japanese obsession. You can buy almost anything from them - condoms, sanitary towels, batteries, tobacco, soft drinks, beer, hundreds of varieties of canned tea, train tickets, instant noodles, sandwiches, you name it. A few even dispense porn magazines - shading their content with tinted glass by day, and waking up with glittering lights after dark.

You cannot spend a day in a Japanese city without making a vending machine transaction - they are both reliable and omnipresent. According to the Japan Vending Machine Manufacturers Association, there are more than 5.6 million vending machines in a country of about 126 million people. The sales of products dispensed through this means in Japan last year exceeded 7.1 trillion yen ($57.6 billion).

The machines are becoming smarter and more interactive. Indeed, a recently spotted drink-dispensing machine was flagged as having a "lucky game function" - giving you the chance win another beverage of your choice - hot or chilled. But there are more advanced varieties. The Japanese unit of Coca-Cola (KO), NTT DoCoMo (9437) and conglomerate Itochu will attempt to start networking Coke's 1 million vending machines in Japan this summer with DoCoMo's i-mode phones, which have more than 21 million subscribers. The companies plan to offer customers the cashless purchase of beverages, and to deliver ads and other information on a display, or printer, installed in the new machines.

The Coca-Cola Co. revealed its plan last year to invest $100 million in an intelligent online vending technology developed by an Atlanta-based subsidiary of Marconi (dossier), and has about 60,000 first-generation interactive vending machines installed in countries such as New Zealand, Australia and the U.S. Also, Coca-Cola conducted a similar field test with Telecom Finland (now Sonera (SNRA)) to see the potential of intelligent vending machines there - or better put, the new generation of digital kiosks.

Takashi Kurosaki, secretary general of Japan Vending Machine Manufacturers Association, says of the trial in Finland: "It took about 15 seconds to complete the transaction and dispense my drink from the machine. That was just too long. If you are Japanese, I don't think you can wait that long. We are used to the instant, always-on connection to the wireless Internet, and vending machines that dispense the products you ordered instantly."

The new generation of vending machines will be carefully scrutinized by millions of demanding Japanese customers this summer. If they can get the approval of the world's toughest customers, they won't be too far from becoming the next hot thing for the Internet Economy.

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Japan's Vending Machines Want to Talk to You