Dealmaking in Escort Bars Thrives in Pockets of Corporate Asia – Bloomberg

  • Drinking in hostess clubs prevalent even amid #MeToo movement
  • Male bonding in such clubs popular in China, Korea, Japan

In Tokyo’s Ginza, Seoul’s Gangnam and Beijing’s Chaoyang financial district a familiar scene plays out almost every night of the work week. As dusk falls, businessmen flock to karaoke and hostess clubs to close deals and build relationships in the liquor-lubricated intimacy of young women.

Call it bonding over vice. It’s a culture that sits uneasily with the #MeToo movement that has swept across Europe and the U.S. In parts of Asia, corporate men continue to openly drink with colleagues or business clients at venues where women escorts are paid to consume alcohol, sing karaoke and — often illegally- perform sexual favors, according to interviews with men and women including Regina Yuan, who works at a Shanghai-based startup.

A woman holds an advertisement for a girls bar in the Shinjuku ward of Tokyo.

Photographer: Noriko Hayashi/Bloomberg

For 27-year-old Yuan, her reality entails entertaining clients from out of town — often for several evenings in a row — sometimes drinking with them while picking up the bill, and shouldering most of the burden for her own safety. She said the roster of clients who visit such clubs includes prestigious Chinese investment banks, insurance and finance companies and increasingly, venture capital funds.

“You just have to think of yourself as a man,” Yuan said. “Pretty much going to hostess clubs is like a tourist destination when our clients and investors come to town. It’s like if you don’t take them there, you haven’t paid your respects to your guests.”

The tradition underscores the distance Asia has to go before women are treated as equals at work even as governments encourage them to stay in the labor force and rise to higher ranks. Beyond the salacious, hostess clubs are arenas of power display, where money is doled out, expenses can be murky and alcohol consumption feeds into one’s career trajectory. Some men, often junior, compare the experience to hazing. Women risk being left out — and missing important networking opportunities — or embracing the culture and opening the floodgates for misogyny.

An information center for adult entertainment businesses in the Kabukicho area in Tokyo.

Photographer: Noriko Hayashi/Bloomberg

“Visits to hostess clubs are an integral part of doing business in China and Japan,” said Zheng Tiantian, author of “Red Lights: The Lives of Sex Workers in Postsocialist China” and a professor at the State University of New York. “Interactions with hostesses are constantly performed and being evaluated by others to determine their characteristics and qualities and whether they are worthy as business partners.”

“Those deemed worthy will get advancements in their careers, and those deemed unworthy will be derided and mocked,” Zheng said.

The practice stands in contrast to the U.S., U.K. and France, where companies have been lambasted for conducting business in so-called gentlemen’s clubs or at venues with burlesque dancers. Uber’s managers were berated for visiting a hostess club in South Korea and traders attending the European Commodities Exchange came under fire for attending a show featuring semi-naked women.

Work Culture

While such male-bonding outings may occasionally occur in the U.S. and U.K., interviews show the practice remains embedded in the Asia work culture. In Japan, China and South Korea some startups, venture capital and finance companies say they try to enforce best practices, yet the conduct is hardly being eliminated. For investors, the prevalence of the clubs comes with a silver lining: the ability to differentiate between types of entrepreneurs, according to China Growth Capital’s Gong Yuan.

“There’s no better way to understand a founder than by looking at what bonding method this person uses,” Gong said. “The startups that emerged three years ago trying to transform traditional industries brought a lot of these questionable behaviors. Companies that have real technology just go on hikes.”

Remaining silent or leaving the company without making a fuss is often the choice for many women, part of the reason the hostess club culture can continue to thrive in Asia even with the gradual emergence of the #MeToo movement in the region, said Kumiko Nemoto, a professor at Kyoto University of Foreign Studies in Japan who has done extensive research on this subject.

“In order to have #MeToo happen on a broader scale in Asia, there needs to be a substantial population who share the knowledge of feminism, gender equality,” Nemoto said.

Japan’s Hostess Clubs

In Japan more than 63,902 hostess clubs — often called kyabakura, short for cabaret clubs though dancing isn’t necessarily on the menu — operated with licenses in 2017, according to the Japan National Crime Prevention Association. Prices range from a few hundred dollars to as much as $30,000 for bottles to share with a group of female hostesses.

The culture is a grim reality that many career women in Japan face. For 31-year-old Aya Ueda, it meant having to leave her investment banking job and Tokyo altogether, after five years in sales.

An advertisement for a girls bar is displayed on a truck in Tokyo.

Photographer: Noriko Hayashi/Bloomberg

She tagged along with male colleagues to local hostess clubs or more expensive venues known as kurabus. There, she heard them openly talk about their affairs and their escapades at brothels, refer to female staff as kyabajos — the local word for club babes — and make comments about how the company could save money by having their female colleagues act as the entertainment.

“I definitely had some uncomfortable moments working as a female in the male-dominated industry,” Ueda said. “The scary thing is, I think I was somewhat brainwashed when I was living in Tokyo where I would justify that all the comments directed toward me as a female were part of Japanese culture.”

Ueda’s experience runs in the opposite direction to the womenomics policy pushed by Japanese Prime Minister Shinzo Abe amid the government’s campaign for women to stay in the workforce and to take on leadership roles. The effort is aimed at countering Japan’s shrinking working population and lifting the country out of decades of economic stagnation.

Long-term exposure to this culture, combined with a reluctance to report sexual harassment issues, can prompt women to leave their companies after an extended period of uneasiness, according to Hong Kong-based Helen Colquhoun, a DLA Piper partner who advises companies on employment matters.

“The damages for sweeping such issues under the carpet can include loss of talent, reputational damage and loss of faith and morale among employees in company values and policies,” Colquhoun said.

Korea’s Hostess Bars

In South Korea, hostess bars for a long time were considered an essential part of the business landscape. Some are built with underpasses or elevators to so-called love hotels. South Korea’s government estimates there were 13,316 so-called sex brokers in the country, with 57 percent operating in the form of hostess bars, as of 2016.

While causing some introspection, the #MeToo movement hasn’t yet resonated in a country where men are accustomed to drinking so much at hostess clubs that they occasionally show up at work vomiting, said K.G. Chi, who works for a trading company in Seoul. He said #MeToo is unlikely to change this culture for many of the men who participate.

The Gangnam area in Seoul.

Photographer: David Ducoin/Gamma-Rapho via Getty Images

Some companies overlook business expenses arising from taking clients to these facilities, according to businessmen interviewed. Hostess bars can provide receipts that look like they were issued by bakeries, snack shops or other small businesses, making them appear as appropriate expense items, though the tab can often total thousands of dollars for a single night, the people said, requesting not to be identified.

One employee of a Seoul-based consumer-appliances company said executives at his firm can ignore expense caps and be reimbursed for trips to hostess clubs for entertainment purposes. The company tacitly overlooks the expense given the importance of the meeting for sales, while achieving the appearance of playing by the rules, the person said, requesting not to be identified because of company policy.

Downturns in South Korea’s major industries in recent years, however, have led companies to cut back on the practice of entertaining clients at hostess bars. Some are starting to impose strict caps on expenses and dictate lists of restaurants that can be visited in an effort to enhance transparency, as the government has tightened its anti-bribery regulations.

China’s Illegal Clubs

In China, women face an extra layer of suppression — government censorship. Authorities have arrested female activists and silenced some social media activity and news stories related to anti-harassment movements over worries of igniting unrest.

Prostitution and hostess clubs are illegal in China. Yet websites that help these venues recruit women show that thousands exist. High-end parlors in Beijing and Shanghai can charge 20,000 yuan ($2,900) for a room, alcohol included. Escorts who drink with clients can cost more than $280 each.

The hostess club culture emerged in China three decades ago, with the country’s reform and opening up. Japanese companies brought in their capital, along with their kurabus, often using such facilities as beachheads for conducting business, according to Zheng’s research.

Shunned by mainstream society, Chinese KTVs nevertheless openly promote their business — and their host babes- on China’s largest video-streaming sites operated by IQiyi Inc., Alibaba Group Holding Ltd. and Tencent Holdings Ltd. The production can be extremely professional: interior drone footage of mass rococo-style complexes that also function as saunas; promos of hostesses preened for the World Cup, Halloween or Christmas.

Madams, who are referred to as “mamis,” or managers, will tap the popular social media platform WeChat to churn business, shelling out videos and photos of the scantily clad women on their semi-public social media feed. Clients book rooms, select specific women and pay via WeChat — all in one go.

A video posted to a madam’s WeChat account to advertise hostesses.

Photographer: Justin Chin/Bloomberg

IQiyi said in an emailed statement that it “applies strict community standards” to content and deletes anything inappropriate. Youku, owned by Alibaba, said in an emailed statement that it removes content deemed inappropriate. Jane Yip, a spokeswoman for Tencent, owner of WeChat, didn’t respond to requests for comment via email and text message.

Lisa Wang, a 34-year-old hostess in Beijing, knows the culture well. Hailing from China’s rust-belt Heilongjiang province, she has been a karaoke girl in the capital since 2013.

She manages a dozen women at a karaoke parlor, making 800 yuan in tips per guest. As a host she sings and drinks with clients, working from about 8 p.m. to 3 a.m. or even longer.

“It’s totally normal for people to come and do business here,” Wang said. “They know what their clients want and are trying to make them happy.”

When guests negotiate in the KTV rooms, she and her employees wait outside to give them privacy, though surveillance cameras blanket these facilities. Usually one person picks up the entire bill for the group. Receipts are seldom involved, as many pay out of pocket — if there are, the men try to mask the expenses via other items and spread the cost among colleagues to avoid a lump-sum bill. Every now and then, some “very successful-looking woman” will join the men and pick up the bill, she said.

Back in Shanghai, startup employee Yuan isn’t optimistic, as she continues to slog through entertainment sessions with guests and her male colleagues.

“I don’t think this will ever change in China,” she said. “I don’t think #MeToo has had any significant impact in China. People are too busy making money to think about these matters.”

Source: Dealmaking in Escort Bars Thrives in Pockets of Corporate Asia – Bloomberg