Self-Transformation through Strategies That Anticipate Market Changes

Since the 1990s, the ICT & Financial Business Company has seized opportunities to access leading-edge technologies and services that drive innovation through investment in venture capital funds in Silicon Valley and other parts of the world. The culture and practice of developing new businesses has taken root. While undergoing a series of integration and reorganization with other segments historically, the earnings base has been rebuilt by steadily implementing strategies that anticipate market changes.

In expectation of expanding markets in the telecommunications and mobile sector, as well as growing recycling needs and higher prices for mobile devices, the ICT Division launched a secondhand mobile devices distribution business as it works to expand mobile-related business. In addition, in the information technology sector, we fully entered the DX and BPO* businesses with an eye toward increasingly sophisticated utilization of IT and rising demand for communication with consumers.

In the Financial & Insurance Business Division, we focus on the retail business, operate an auto loan business in Europe and a retail finance business in Asia, and invested in HOKEN NO MADOGUCHI GROUP INC.

Since transitioning to our current Business Company structure in FYE 2017, we have continued to steadily expand profit through these efforts. Going forward, with DX, mobile, and retail finance and insurance business as our focus sectors, we aim to achieve growth by providing market-oriented services adapted to the accelerating pace of change in the business environment and diversifying customer needs.

*Business Process Outsourcing: Outsourcing of some business processes, from planning and designing to operation

Expanding Profit through the DX Support Business

Recent years have brought rapid changes in the social environment, spurred on by the COVID-19 pandemic. As a result, there are growing needs to transform corporate business models using digital technologies. DX focused on business model transformation cannot be realized simply through products and services recommended by system vendors. We should propose strategies from a market-oriented perspective by gathering and analyzing a vast amount of data generated at customer contact points, and by identifying issues. Previously, the Group’s DX support business mainly developed and operated systems and applications as a system integrator (SI). To meet these needs, however, we entered capital and business alliances with data utilization specialist BrainPad Inc., and with SIGMAXYZ Inc., which has its strengths in consulting. As a result, we built a system that enables dynamic DX promotion throughout the value chain, from upstream consulting and design to downstream data analysis, systems development, operations, and BPO. Going forward, we will continue working to expand profit and create synergy throughout the value chain by addressing needs through upstream DX and connecting them to the core downstream Group companies such as CTC and BELLSYSTEM24, Inc.

ITOCHU utilizes digital businesses that provide such DX support for its own Group companies’ frontline operations. This has resulted in cost reductions and efficiency gains through activities such as the digitalization of billing as well as optimization of the supply chain by AI automated ordering systems. As a Group with well established strength in the consumer sector, by first building up its track record for DX support within the Group, the insight and know-how gained in the process can be applied to other sectors, leading to a more robust earnings base.