(Japanese Site)
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June 29, 1998 (TOKYO) -- Full-fledged electronic commerce (EC) will
soon gather momentum in Japan, following the advent of business-to
-consumer EC.
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Expectations are running high for business-to-business EC, industry
sources said.
Two main types of business-to-business EC are apparent. Client
companies use EC to purchase various items including office
equipment. And users can procure products through EC so as to boost
their efficiency.
Competition in MRO Market Heats Up
On the suppliers' side, business in maintenance, repair and
operations (MRO) has been gaining momentum, just as in the United
States, where the business of MRO has grown rapidly. It is the
leading type of EC in Japan, too. In the office product market, for
example, manufacturers, wholesalers and retailers are preparing to
enter the EC business.
In the stationery industry, Ginza Bungu will create an exclusive
home page for Japan Airlines Co., Ltd. (JAL) to sell stationery and
other items from July.
Through the system, JAL employees will register stationery items on
the home page, and a purchasing manager will collect orders to make
a bulk order through Ginza Bungu's home page. The ordered goods
will be delivered in one day. Ginza Bungu has received inquiries
from about 20 companies, and it plans to create such home pages for
other companies as well.
In July, Kokuyo Co., Ltd., a leader in the stationery industry, will
establish Net Kokuyo to start Internet sales of stationery. However
, in this case Net Kokuyo won't engage in direct sales to client
companies, but instead will supply the system to stationery shops
that aren't able to implement EC by themselves.
As an example of a simple EC shop style, Askul K.K., a subsidiary of
Plus Corp., has been marketing office products to customer
companies since April 1997. And from December 1997, K.K. Asahi
Shokai, a stationery wholesaler, has offered similar services.
Companies are launching MRO businesses in other sectors.
Since January 1997, Kinokuniya Co., Ltd., a leading bookstore, has
been generating sales online almost in the same fashion as Ginza
Bungu and Net Kokuyo. University libraries are listed as its main
users, and five client companies also are on its customer list.
Japan Air System Co., Ltd. (JAS) started sales of air tickets to
companies as part of its MRO business in April 1997. Employees of
client companies can reserve air tickets via the airline's home
page for their business trips. The tickets are issued by a
proprietary terminal installed at the companies' administrative
departments. The reservations can be changed up to one hour before
flight departure.
Large Companies Employ EC Beyond Group Boundaries
EC is becoming a means of moving the entire Japanese industrial
community beyond the confines of the traditional "keiretsu"
business groups.
In April, Nissan Motor Co., Ltd. established a "Group Intranet"
operation to connect more than 250 affiliates and partner companies
. It uses a Web-electronic data interchange (EDI) system to process
order receipts and other paperwork for parts.
Nissan's intranet system based on business-to-business EC was
recently joined by Aisin Seiki Co., Ltd. and Denso Corp., both of
which are leading parts makers in Toyota Motor Corp.'s group.
Nissan plans to disclose details of sales results and production
schedules to the member companies from October, to build an order
receipt/placement system with more flexibility.
Daiei Inc., a leading supermarket chain,
has been wrestling with development of an electronic conferencing
system for negotiations with distributors. Distributors store their
new product information with images in an intranet server, to
improve the efficiency of business negotiations (See chart ).
Daiei plans to supply system integrators and others with software
that it has developed, in the hope that the software will be used
widely by various companies, including competitors. If the software
is used by many retailers and becomes a standard EC tool of the
distribution industry, it will result in higher efficiency for
Daiei.
Many leading companies also use EC to procure parts and materials.
An increasing number of companies are opening their EDI systems,
which use conventional leased lines, by applying Internet
technologies.
Brother Industries Ltd. in April switched its EDI system for parts
procurement to a business-to-business EC service based on an
extranet of Hitachi Ltd.
Suntory Ltd. will soon begin using EC to procure cans, packing
materials and other items. The company plans to connect 400
material suppliers over a network.
Successful U.S. EC Companies Coming to Japan
Advanced U.S. companies have started business-to-business EC
operations in Japan. In June, Dell Computer Corp. of Japan began
selling PCs with specifications tailored for client companies over
its "Premier Page," a home page for such client companies.
Dell supplies order status information, and it will commence support
services by the end of 1998. In response to the requests of user
companies, it provides services to add special functions to the
Premier Page, such as a feature to print a ringisho (a special
corporate request form) for internal use.
Nihon Cisco Systems K.K. intends to migrate to a thorough business
-to-business EC system in July. Because the company is not engaged
in direct marketing in Japan, it plans to construct an EC system to
connect 20 sales agencies. Its EC-based transactions do not exceed
25 percent of its total sales.
"Companies that fully accept the EC system are limited to NEC Corp.,
Itochu Techno-Science Corp. and Softbank Corp.," said an official
at Nihon Cisco Systems.
When additional expenses are incurred by sales agencies as a result
of not using EC for a transaction, Nihon Cisco Systems plans to
charge the expenses from support costs to be paid to them, starting
in August. The company intends to take such a decisive step in
order to achieve a full-fledged EC operation.
Virtual Market Business Yet to Come
Suppliers and customers are promoting business-to-business EC
systems in Japan in the same way as in the United States. With the
emergence of business-to-business EC, the "Virtual Market" has
debuted. It provides both parties with opportunities to meet over
the network.
Trading houses are conducting various trials of virtual markets. For
example, Itochu Corp. aims to set up virtual markets in textiles
and rice, Tomen Corp. for tires, and Kanematsu Corp. for
transactions related to pets.
Since April, Seino Information Service Co., Ltd. has attempted to
attract MRO-related vendors via an electronic mall constructed
within an extranet. And since November 1997, Orix Rentec Corp., a
rental company, has been working on an Internet auction for used
PCs and other items. A total of 50 vendors have joined it, and more
than 400 items are traded in each auction.
Chart: Daiei's conferencing system and intranet scheme
(1) Store products with images.
(2) Employ a product and put a code on the product.
(3) Input detailed information in the product master file.
(4) Approve the product master file and create a contact route with
stores on the screen.
(5) Confirm new product information.
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(Nikkei Multimedia)
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