Next Generation 01:
Toward “Reinvented Business”

Amid the advances of the “Fourth Industrial Revolution,” we will reinforce and upgrade existing businesses that the ITOCHU Group has enhanced over the years, pursuing a distinctively ITOCHU-style business transformation.

Take Advantage of Real Assets and Promote “Reinvented Business”

The “Fourth Industrial Revolution” is in progress in various industries throughout the world. Digital Giant has built an enormous economic sphere and, as a new company, has changed the game in a traditional industry with business innovations that freely utilize leading-edge technologies.
Large structural changes are gathering speed within the wide-ranging industrial fields in which the Group’s seven Division Companies are expanding their businesses.
In terms of brick-and-mortar business, we have improved our existing businesses over a long period of time and has built up prime assets, including intangible assets such as customer base, relationships with partners, and business expertise. By fully leveraging these distinctive assets, we will view changes in the industry as opportunities, evolving our “earn, cut, prevent” philosophy and promoting “Reinvented Business” while adopting new technologies.

Enhancement of the Consumer-Related Business Value Chain

It is getting more important to meet customer needs in the retail industry.
Due to this change, proper understanding of consumer needs, marketing through optimal channels, and competitiveness are all keys to competitiveness. In recent years, e-commerce companies are moving more quickly toward sales at physical locations. These companies are particularly interested in acquiring customer data in brick-and-mortar stores, where over 90% of personal consumption occurs.
FamilyMart UNY Holdings Co., Ltd. is the Group’s largest consumer contact point, operating approx. 17,000 stores nationwide. These stores are visited by around 15 million customers daily, making it possible to secure vast amounts of consumer data. Additionally, NIPPON ACCESS, INC. possesses approx. 10,000 trucks, primarily at its 550 locations nationwide, and its low-temperature range distribution network boasts a high rate of competitiveness. The ITOCHU Group also holds additional assets with extremely large potential, such as one of the world’s largest companies in the fresh produce business, Dole International Holdings, Inc. We also own YANASE & CO., LTD., one of the largest sellers of imported vehicles. With this business infrastructure as a platform, we are working to improve our value chain on a Companywide basis.

Promote Reinvention in All Division Companies

As we promote “Reinvented Business,” it is important to bear in mind that our primary concern as a sogo shosha is not to develop sensational new technological innovations or products but to construct new business models that are compatible with customers’ sense of value. We are already constructing strong earnings base in the non-resource sector, particularly in the consumer sector. Accordingly, we are carefully reviewing each of the businesses that compose these sectors and creating new added value by utilizing advanced technologies. At present, we are connecting the dots between independent businesses and are changing to a new business model that will contribute to expansion across whole region, namely the “existing business version update.” The keywords when exploring the construction of new business models are our expertise and experience as a sogo shosha, our customer base, and our relationships with partners, while the main points are our instincts and the individual capabilities we use to implement them. We will take advantage of the “Fourth Industrial Revolution” by improving employee labor productivity and creativity through various measures that revolve around our “Reinvented Work-Styles ,” and enhance sustainable corporate value.

An Example of “Enhancement of Value Chain in the Consumer Sector”

 Building a Foundation for Data Analysis and Analytics

We will work with FamilyMart UNY Holdings (UFHD) to put in place an IT infrastructure, converting the data on purchasing and customer trends it gleans from daily customer visits to its group stores to big data and building a next-generation ID foundation for multifaceted analysis and analytics.
As a first step, to further increase the number of customer contact points we will build a customer base by introducing specialized apps and accumulate data. In November 2017, ITOCHU and the FamilyMart group conducted a joint tender offer of POCKET CARD Co., Ltd. as one of the initiatives to strengthen consumer contact points.
UFHD is working to increase the efficiency of its business operations by leveraging AI, IoT, and other new information technologies. Meanwhile, ITOCHU and UFHD have established UFI FUTECH Co., Ltd., which will promote cashless transactions and fintech-related businesses.

 Value Chain Optimization

We will push forward with optimizing our entire value chain by utilizing data analysis and analytics results. Understanding customer needs and behavior will help mitigate opportunity loss; curtail procurement, storage, disposal, and distribution costs; and reduce labor required for store operation.
Additionally, by building a common platform that integrates transaction data from NIPPON ACCESS and other Group companies in our value chain, we will reduce inventory in intermediate distribution, manage manufacturer production volume, and conduct product development. Additionally, in terms of NIPPON ACCESS, we will raise competitiveness by reinventing our distribution systems and cultivate customers on a wide-ranging scale.

Create New Earnings Opportunities

For the future, we are considering various possibilities. These include one-to-one marketing, such as high-precision advertising that utilizes results obtained from common-platform data analysis and analytics. We are also considering retail financial services and loan services for smaller businesses based on transaction history.