If you know anything about the Japanese economy, you may have heard about the zaibatsu, companies that were able to embed themselves in many parts of the Japanese economy. While these business conglomerates no longer exist in modern Japan, their integration models have inspired many businesses to pursue that same level of reach and stability. Itochu, a general trading company, or Shosha, was founded in 1949, and since then has expanded into a wide range of products and investment. At Japan Info, we traveled to Itochu’s offices to interview a newcomer employee, Kensuke Okubo, about Itochu’s beliefs as a trading company, their overseas activities, and how Kensuke’s career arrived at this commerce giant.
Question 1: To start, could you explain Itochu’s general mission as a company?
Itochu: Our mission is “Committed to the Global Goods”, so we do business in a lot of different industries. For example, I belong to the ICT & Financial Business Company, and there’s other companies too, such as Machinery, Energy, Food, and Realty, to name some.
There’s basically two types of business dealings that we are focused on currently. One is trading, which is the basic function of Itochu and other sogo shosha (general trading) companies, and the other is investment. Those are basically the two main activities of Itochu and other companies in our industry. What we do in terms of trading is we aim to make a profit margin on buying and selling various goods. In terms of investment, we invest in those companies within a value chain in our trading process. For example, we can invest in companies that produce metal and also invest in a company that sells metal. Our aim is to synergize these twomodels to create a more efficient chain of value within the industry. By doing this, we can eventually develop synergies between different sectors as well, for example ICT and retail.
We recently established a new sector called the 8th Company. What we do there is we try to start new businesses using a retail chain that we operate in conjunction with Family Mart and other retail partners. We use our assets from various divisions to create new types of products for their consumers.
Question 2: Could you explain more about where you work, the ICT division?
Itochu: In our division, we have two departments – the Communications & Mobile Department, and the “techie” Information Technology Business Department, and what we do there is business segments like Enterprise IT, BPO, Healthcare, and so on. We also have strong connections with the world’s top tier VCs and are currently investing in various business sectors. I work in the Communications & Mobile sector, and our main focus is on satellite communications as well as mobile phones.
Question 3:You said Communications & Mobile deal with satellites? How does that work?
Itochu: In terms of satellites and space, we invested in SKY Perfect JSAT Holdings in ownership of 117 satellites, so we can broadcast to many people. In the mobile business, we are looking to expand the needs in various mobile related businesses from retail to after service.
Question 4: Earlier you mentioned one of Itochu’s main missions and mottos was “Committed to the Global Goods”. Could you expand on that statement and what that means in terms of business practices?
Itochu: In our department, as an example, we’re trying to expand the mobile market, and in my opinion, by doing so, we’re helping answer global demand by helping expand this market, since in many places around the world mobile phones are relied on for a number of important tasks.
Question 5: You mentioned that one of the stages of production Itochu focuses on is the production of goods. Could you expand on what the process of investing in the chain of value means?
Itochu: That process is essentially the strong point of shosha companies like Itochu, we can communicate to the producers and sellers along the stages of production because we know their needs.
Question 6: Itochu invests in Silicon Valley startups, correct? Are there any areas of focus with regards to your investment in this area?
Itochu: In terms of my department, we invested in startups whose technology aligned with our goals and related technology. Since startups don’t have the infrastructure in place to become a full-fledged company, our investments let us develop synergy with these startups who are providing new technologies to us.
Question 7: How did you come to work at Itochu?
Itochu: I’m only in my second year working at Itochu so far. When I was younger I spent a significant amount of time living abroad in the United States. I was interested in investment and working globally, so I knew that I didn’t want to work at a domestic-focused company. I had alot of interest in becoming an entrepreneur as a career. When I learned about shosha-style companies like Itochu, where they invest heavily in startups and growing companies, I became more enthusiastic about working close to those kinds of places. I chose Itochu over other shosha companies like Mitsubishi because of the companies’ connections to Silicon Valley. We actually have a Silicon Valley office in that region, so that offered additional connections to the investing business.
Question 8: Does Itochu employ many international employees?
Itochu: In terms of global recruiting, we don’t employ many international employees in Japan. Due to the changes in the Japanese education and workforce, more young employees are starting their careers with significant English-language experience. As I mentioned previously, I lived in the United States for 10 years, so I have a strong background in English. By contrast, a lot of older management-level employees at Japanese companies don’t have as much experience with the English language. This gives young employees like myself an opportunity to get our foot in the door, by being able to leverage our language skills to take part in meetings and negotiations with business partners. We also aren’t as large a company as the bigger shosha companies like Mitsui or Mitsubishi, so this smaller employee base gives young employees more opportunities to be seen.
Question 9: What kind of work do you do that falls under those opportunities?
Itochu: I will try to relay the experiences of myself and friends and colleagues I know who work at shosha companies. I’ve gotten the chance to meet with business partners in the US, and these have presented opportunities where I can serve as a translator and participate in the negotiations. I’m also participating in a business dealing we’re conducting in Brazil. It’s all thanks to my English-language skills that my hard work at Itochu was rewarded with success.
Question 10: So you would say that at these shosha companies, having good English language skills is a valuable asset?
Itochu: Well, in Japan, English is gradually becoming more common, and a lot of people are becoming more fluent. That said, English literacy and fluency is not as high in Japan as it is in regions like India or China. As a result, English speakers are really welcomed by these companies, because the management-level is in need of those language assets in order to conduct business successfully. While a global language like English is desired, our recruiting system is still focused on pulling from native Japanese speakers. Many of our new hires are Japanese natives with English fluency or other language skills. We only hire a few internationals living in Japan to Itochu in a typical hiring period.
Question 11: You’ve previously mentioned China and Brazil as international places Itochu does business with, could you expand on Itochu’s global reach, how many regions and markets it does business with?
Itochu: I think compared to other shosha companies, Itochu is more open to new ventures and adopting outside plans. Among shosha companies, Itochu currently has the strongest position on investing in outside areas such as Silicon Valley. The company leadership is aware of the need for flexibility and adapting to change in the modern global economy. In terms of countries, we have offices in over 100 countries around the world.
Question 12: Do you have any final words, is there anything else you’d like to discuss?
Itochu: The shosha business is very interesting to participate in, because we are present forthe creation of businesses from the start. If you like Japan and have an understanding of how Japanese business culture works, the shosha field can be very informative and beneficial. My colleagues here have a very enthusiastic mindset, so I find myself being influenced by them a lot. It’s been a very good experience during my time here so far.
Japan Info: Thank you for your time participating in this interview.
Our interview with Mr. Okubo was very friendly and informative. He was able to accurately convey the intentions and actions of a large interlinked company like Itochu in only a few words and was very candid about his own time at the company. While he was still only in his second year of working for Itochu, he was confident in what he could contribute as a young English-speaking employee to the company. For those interested in working at conglomerate trading companies like Itochu, he stressed the importance of bilingual skills and an interest in an economic career. Those qualities were what attracted him to Itochu, and what helped him discover the value in his job.
You can learn more about Itochu on their website.