In 2012, two expats in Tokyo started a blog about making the most of Japan’s capital on a budget. Tokyo Cheapo is now one of the most popular English-language websites about the city, and has expanded into a global media business with the launches of Japan Cheapo, London Cheapo and Hong Kong Cheapo. Kiwi co-founder Greg Lane shares his experience of starting a media company in Japan.
How did you end up in Japan?
I met my future wife while she was studying in New Zealand. She returned to Japan after her studies and I joke that she took me home as a souvenir. I arrived not long after the start of the new millennium and Japan hasn't managed to get rid of me since.
What is the story behind Tokyo Cheapo?
After the devastating earthquake and tsunami in northern Japan, a lot of small businesses struggled to keep going. A company I'd been involved with for a few years was winding down so I was looking for something new to do. I had been considering reviving my long dormant blog with some new articles about doing stuff on the cheap in Tokyo. At the same time, I met up with my co-founder Chris Kirkland at an izakaya and he suggested turning it into a standalone website. At the time, people were talking about Tokyo as the most expensive city in the world and we wanted to show that this wasn't necessarily the case. There were so many free things to do and ways to do things within a budget. Our timing turned out to be perfect as Japan was on the cusp of a tourism boom. The number of visitors took off from slightly more than six million people in 2011 to 31 million last year, so our timing couldn't have been better.
Did you have any prior media experience?
I started blogging in 2006 as a creative outlet — somewhere to share my photos and thoughts. There were a lot of rants, but forcing myself to write regularly helped me to improve my writing skills. I started writing articles for a couple of magazines in Tokyo and eventually got a monthly column on new business and technology. Looking back, the quality of the articles was terrible, but it was good experience.
In the early days, where did you focus most of your energies?
It was all about writing interesting articles. The design of the site was pretty bad and for the first three years we didn't bother ourselves with trying to monetise it. It was all about building the audience and writing the content we thought they needed.
How long did it take for the site to take off, in terms of growth? Where does most of your audience come from?
At the time, we didn't really know what a big audience meant. Being naive about audience numbers gave us a lot of encouragement. We thought it was awesome that we managed to get 4,000 monthly visitors to the site just a couple of months after starting. Growth has always been quite steady, but it really started to take off in 2015. That was the first year that we broke through 100,000 visitors/month. Now we get between 700,000 and 800,000 visitors on the network each month. The traffic on Tokyo Cheapo is quite diverse, but almost 30 per cent of our traffic is from people inside Japan. We suspect about half these people are international tourists checking the site after they've arrived in Japan. Outside Japan, the biggest markets are the US, Singapore and Australia.
How did you monetise it?
We have a number of ways that we monetise the site. The main ones are display advertising, sponsored content, affiliates and selling products and services directly to our readers. Our sites are all about solving problems for both travellers and people living there, so our readers are usually in a buying frame of mind. If you can answer someone's questions about the best way to travel from A to B, there's a good chance we can monetise the content by integrating offers or information from affiliates. We're careful to keep our focus on the end user though. If it's a pain point for our readers, we'll write about it even if there is no obvious path to monetisation.
What is the English-language travel/lifestyle media landscape like in Japan? Who are your main competitors?
When we first started, there were hardly any other sites targeting inbound travellers to Japan, which is one of the reasons we got traction so quickly. The only competition was a legacy site called Japan Guide (which has been running since the mid 1990s), TripAdvisor and the official government websites. In the last few years, with the explosion in the number of tourists coming to Japan, there has been a flood of new sites. Most have been produced by big Japanese media companies who don't really have any experience producing content for a non-Japanese audience. The competition has definitely heated up, but we're still more than able to compete with the big corporations with their enormous resources. We're making profits and we're pretty sure that they aren't, so we're confident that we'll still be standing long after they've lost interest.
How did your media company, Fast Train Limited, come about?
Fast Train Limited is the parent holding company for all our sites and operations. From pretty early on, we wanted to build a global media business, so we set up the company in Hong Kong. As much as I love Japan, it's not the easiest place to build an international business.
And you recently launched Hong Kong Cheapo?
We started Hong Kong Cheapo in January this year. We think Hong Kong fits really well into our model. Like Tokyo, it's a big, intensely urban Asian city with an expensive reputation. We also think there is a gap in the market for the type of content we provide.
Can you talk a bit about the general operation of the company — how many staff do you have? How much do you rely on contributors?
Although a large part of our business is in Japan, we have staff and contractors spread around the world. Our Editor in Chief lives in Toronto and one of our senior writers lives in Cape Town. We also have people in London, Portugal, Ukraine, Hong Kong and the Philippines. All up we have eight people working full time and about another 10 part-time contractors. We prefer to have a pretty tight rein on our editorial process so we don't take many pitches from freelance writers. When we do accept pitches, it's usually a trial to see if we want to take the person on for a more long-term contract.
What are some of the biggest challenges of running a digital media company in Asia?
Most of our challenges are in Japan. Doing business in Japan is quite different to somewhere like Hong Kong. The business culture and the institutions can be quite rigid. Since we run English language media sites, there's also not much understanding among Japanese companies of who we are and what we do. We're quite well known within the foreign English-speaking community in Japan, but the average Japanese-speaker will not have heard of us. Specific to running a digital business, there is a lack of knowledge with Japanese companies in regard to digital marketing and selling to non-Japanese online. This makes it difficult for us to partner with some companies as they don't have the ability to handle the customers we send to them. It's often basics like not translating pages into English properly (or at all) and not tracking or understanding online sales funnels. Things are slowly improving and we've found some pretty good partners, but we often have to say no to working with a business because they lack the ability to convert traffic that we send their way.
Like most digital media companies, you've obviously had to experiment with video, social media, and sponsored content. What has worked for you, and what hasn't?
For us, social media is more like a necessary evil than a key part of our strategy. It's important for our branding, but we're not selling dreams, we're soothing pain, so people tend to find us directly or through search. We have articles on topics like how to get from one city to another, which doesn't tend to make great shareable social media content. So social media (including our YouTube channel) tends to be a gateway to our site rather than a big traffic driver. Influencers on Instagram and YouTube do our job for us without realising it. They put out a vague, interesting image and then we fill in the gaps when their followers need some concrete, usable information that they can trust.
Sponsored content is something that has grown in importance for us. We approach it the same way as we do our own content. If the quality of the information doesn't measure up, we don't publish it. No one wants to read a 1,000 word long advertorial.
What are your plans for the future? Will we be seeing the Cheapo brand in New Zealand anytime soon?
We’d like to open more sites in more cities. Since we're already in Tokyo and Hong Kong (as well as London), it's easier for us to expand in Asia first. However, we're open to opportunities even if it isn't strictly on the road map. That said, New Zealand is a relatively small market and the media environment is intensely competitive, so it's not at the top of our list!
- Asia Media Centre