JAPANESE ARE OPTING IN to small-screen mobile "mail-mags" on their keitai, and Tokyo-based Xavel is scrolling up the profits. The company's Girls Walker mobile Web site (http://gw.st/pct currently lists around 75,000 titles and 9.4 million subscribers, which converts to around 2 million users. Each mini-magazine links back to the mobile homepage, and users are encouraged not only to subscribe but also to publish their own writing via a simple mobile format. Ads on every issue promote mobile shopping through Xavel's partners and the Girls Walker full-color shopping sites. Helped along by sharp, clear images from the current generation of mobile phones, the company moves around [yen] 100-150 million worth of high-quality, brand-name clothing, perfume and accessories every month exclusively through the small screen.

"Two years ago, everybody laughed at us when we went looking for partners for Girls Walker," says the company's '30-something CEO and presides Fumitaro Ohama. "They said there was no way consumer would buy goods over the keitai." Retailers aren't laughing now. Xavel's return shopping rate is an enviable 45 percent, and sales from the 2002 Christmas campaign were expected to net around [yen] 500 million this year--nearly a fourfold increase from 2001. Girls Walker is the No. 1 Japanese mobile portal site, and they've done it all by word of mouth.

Ohama, who attended USC and originally thought about a career in filmmaking, says his concept for the company was to combine the business models of Yahoo, Amazon and Japanese PC mail magazine distributor MagMag into one handy portable package. His target market: young women in their 20s. Despite the economy's lingering malaise, this is an exuberant group of brand-loving big spenders eager to share new finds with friends. "These women generally don't have PCs at home because they'd rather spend the money on a designer bag," says Tatsuya Kodera, Xavel's business manager. "Their social network and link to the Internet center on the keitai."

Fun and frivolous

Japanese mailmags--free opt-in newsletters--started out on the PC but transferred easily onto mobile's smaller screen. Xavel began with in-house mail magazines covering fun and frivolous topics like fortune telling and melody downloads. As they began to create a community of readers and writers, topics expanded to include personal diaries, news about TV and movie stars, commentary and everything in between. All have a casual, friendly tone.

Grassroots publishing

About as visually exciting as Soviet-era public housing, the "publications" are generally a black and white scroll of text several screens in length highlighted by ads set off in lines of asterisks or blocks. What matters to users is nut how they look but the opportunity for expression they represent. Neeraj Jhanji, founder and CEO of ImaHima (www.imahima.co.jp), a location-integrated mobile group messaging service in Japan and Europe, points out the positive benefit of this grassroots mobile publishing boom:

"Many of these mobile publishers are young people. At that stage in life they are looking for self-expression, to gain more confidence while trying to understand the world around them. For them, communication becomes central. Mobile mail magazines, becoming a writer yourself, establishing independence--'I am an individual and these are my thoughts'--it's a healthy outlet for their emotions and intellect."

Xavel succeeded in part because its mailmags opened a dialogue with readers, even if much of that dialogue centered on beauty, fashion and fun. M-commerce sites have been further divided into Perfume Walker, Fashion Walker and even Men's Walker. Demographics for both mail magazine writers and in-shoppers have expanded beyond women in their 20s to include men and women from their teens to their 40s.

Jeffery L. Funk, associate professor at Kobe University Research Institute for Economics and Business Administration, has done extensive research into the management of technology. Funk points to Girls Walker's adroit use of viral marketing techniques. "On each magazine sent out, they have a link back to the mobile site to become a magazine writer. It's 'viral' in terms of getting more writers and 'viral' in terms of being easy to forward your mail to a friend," Funk says, referring to a marketing technique where a message is passed from one user to another like a computer virus. "It not only increased the number of readers but of writers. The portal then has these unique Ills, which it can then mail advertisements to--all opt-in. (And) they don't call them 'ad'; they call it 'information.'"

Advertising from outside sources is kept to a minimum, and only respected brands pass the company's screening. Amateur publishers earn a fee for ads placed on their publication. Strict policing on every level has built up huge reserves of consumer goodwill. "The last thing we want is for our users to feel that we are sending them 'meiwaku mail' or spam," says Xavel's Ohama. "We could make five or six times the ad revenue we now generate, but in the long run we would lose customers. Word of mouth is a very powerful marketing tool in this country--it can make or break you."