The economic impact of Japanese baseball superstar Shohei Ohtani on Japan’s corporate landscape has become a hot topic, showcasing both opportunities and challenges for various businesses. Ohtani, who is not only energizing the economy in Los Angeles but also generating buzz back home, is estimated to have an economic effect of around ¥87 billion (approximately $594 million) this year alone. This figure surpasses the economic benefit from Taylor Swift’s concert tour in Japan, which is projected to bring in around $230 million over just four days.
Many companies that are partnering with Ohtani are enjoying the fruits of his immense popularity. However, some businesses have felt the pinch of rising advertising costs, which have negatively impacted their stock prices.
Among the notable success stories is the job search website Dip, which has seen its stock price jump by 8.7% since the MLB season kicked off on March 20, outperforming the Topix index, which has declined by 2.4%. Dip’s CEO, Hidetaka Tomita, stated in July that the advertising returns from Ohtani’s endorsement have already surpassed the fees paid to him.
Another beneficiary is Hotland, the parent company of the Takoyaki chain Gindaco. In May, Hotland announced it had become a sponsor of Ohtani’s team, the Los Angeles Dodgers, and subsequently opened a store at the Dodgers’ home stadium. This move has resulted in a stunning 22% increase in stock price since the season began. Masakazu Iwai, an analyst at Iwai Cosmo Securities, noted that establishing a presence at a sports venue is a smart strategy for boosting brand recognition, and he anticipates positive outcomes as Hotland aims to expand in the U.S. Additionally, cosmetics giant Kose secured a global partnership with Ohtani in 2022, hoping to broaden its customer base amidst declines brought on by a slowdown in the Chinese market.
Conversely, not all companies have fared well. Bottled beverage producer Ito En appointed Ohtani as the global ambassador for its flagship green tea, Oi Ocha, in April. However, this decision led to a 20% rise in advertising costs between May and July, resulting in a 29% dip in operating profits. Since the season began, Ito En’s stock has dropped by 8.6%, far exceeding the declines seen in the Topix index. Iwai pointed out that consumers are unlikely to choose Ito En’s tea solely based on Ohtani’s endorsement, implying limited influence on the company’s overall performance. Nonetheless, Ito En is optimistic about potential sales boosts in the U.S. in the upcoming quarters due to this partnership.
Japan Airlines (JAL) has also tapped Ohtani as a spokesperson, even launching a plane adorned with his image, yet this has not translated into stock price gains. The depreciation of the yen has increased costs when converted to dollars, resulting in a 14% decline in JAL’s stock since March 20.
