In March 2022, Tokyo Century signed a business alliance agreement with XMart Inc., a start-up company based in Tokyo that promotes DX in food distribution. We interviewed its president, Yoshifumi Terada, and Ryoko Shimodaira of our DX Strategy Division about the partnership’s background and future vision.
What synergies are being created by integrating leasing with DX? The answer might lie in the practical cooperative approach to DX discussed in this interview.
- Using Digital Technology to Streamline Order and Supply Operations in the Food Service Industry
- Partner Companies Are Indispensable for Promoting DX
- XOrder is an Ideal Teaching Tool for Understanding Practical DX
- What the Two Companies Have in Common Leads to the Essence of Business
- Striving Together to Form the Infrastructure for Food Distribution by Realizing DX that Benefits Customers
Using Digital Technology to Streamline Order and Supply Operations in the Food Service Industry
――First, could you tell us about XMart’s business?
Terada: Currently, our main business is operating XOrder, an order and supply platform that connects restaurants and wholesale companies. In the Japanese food service industry, ordering and receiving food ingredients and drinks is often done by fax or phone, which can be tough for both parties. This is why we provide XOrder, a service using the messaging app LINE and Fax-OCR* to make things easier and improve efficiency.
*Optical character recognition: A technology for reading handwritten or printed characters and converting them into digital text.
――What advantages does XOrder have for restaurants and wholesalers?
Terada: XOrder operations are completed on a smartphone LINE app. It allows restaurants to place purchase orders anywhere, at any time, and centrally manage and share the information of multiple suppliers. Without LINE, they can use a dedicated form to automatically convert handwritten text on the fax into data, so restaurants can continue making orders by fax, while wholesalers can reduce paper-based processing.
Consequently, digital data enables users to place and receive orders promptly and accurately, reducing the costs associated with cumbersome conventional processing.
An advantage of XOrder is that users don’t need to buy another PC or software to implement it but can realize DX in existing environments and devices. This totally user-oriented service is a strength of ours that industry peers aren’t offering.
Partner Companies Are Indispensable for Promoting DX
――Could both of you tell us what led up to this partnership?
Shimodaira: The DX Strategy Division handles all kinds of operations, from business creation to human resource development, to drive business transformation with digital technology, a key theme of Tokyo Century’s New Fourth Medium-Term Management Plan. Our division shares a common understanding that open innovation in close collaboration with partners is essential for creating new services and business models applying ever-evolving technology.
While gathering information with this understanding, we saw that vertical SaaS,* which is industry-specific and developed through open innovation, was increasingly becoming highly valued, and we started to focus our attention on companies providing unique services and tools. When a company introduced XMart to us, I was very excited about being able to create an interesting business that would bring new possibilities to DX at Tokyo Century.
*SaaS is a way of delivering applications over the Internet designed for a specific industry, whereas the concept of vertical service stands in contrast with horizontal SaaS, which is used in versatile areas such as accounting and human resources, regardless of the industry.
Terada: Since we made XOrder to support food distribution, the user base is limited. We knew from the beginning we’d need to develop an alliance with a company having a wealth of contacts in their user base, instead of continuing to develop the service on our own.
When it comes to acquiring new users, Tokyo Century’s presence is very reliable and appealing to us because its customer base extends across a wide range of industries. So, this business tie-up has also been a great source of motivation for all our employees.
XOrder is an Ideal Teaching Tool for Understanding Practical DX
――What changes have you seen at the company as a result of the partnership?
Shimodaira: The XOrder briefings we hold for equipment leasing sales staff at each branch are very well attended, with participants presenting a rapid series of questions. I have the impression that while many sales representatives fully understand the need for DX, they’re still somewhat uncertain about the specific proposals they should make to customers. We’re confident that XOrder proposals can lead to the best example of practical DX.
Terada: I’ve been amazed by how much energy attendees put into these briefings.
Shimodaira: Even during the COVID-19 pandemic, our sales staff really want to maintain our relationships with customers through approaches beyond leasing and to build new relationships. So, in addition to the need for DX, these concerns may be reflected in the high participation rate and the many questions asked in these sessions.
After meetings to introduce XOrder, sales staff are quite happy because they now know the solution to what before seemed like an unsolvable problem for their customers.
Terada: Since the alliance was formed, the number of our contacts with large wholesalers operating nationwide has increased significantly, and this is reflected in our business performance. Given that we have offices in Osaka, Fukuoka, and Sendai, in addition to our Tokyo headquarters, we intend to further strengthen our cooperation across each area.
What the Two Companies Have in Common Leads to the Essence of Business
――How do you feel about the significance of this partnership?
Terada: It’s been helpful in that we’re learning the value of continuity and trust. I believe Tokyo Century’s track record of doing business with over 20,000 companies is based on the trust it has cultivated over the years. Its sales representatives visit customers and simply ask what they can do to help. This is also the nature of a sales approach that we always strive to maintain. Selling goods and services is not the goal; it’s just the beginning. We will thoroughly adhere to this concept in developing our business.
Shimodaira: We can learn a lot from XMart’s flexible thinking and light footwork, which are unique to start-up companies. Rather than forcing customers to use advanced technology, XMart staff listen to their customers and update their services in-house accordingly. We can strongly relate to their approach.
What’s more, when I interact with XMart staff at briefing sessions or with those who accompany me in making proposals to customers, I can clearly sense their confidence in XOrder. And this creates a very positive atmosphere around those who absolutely love their work.
Through communicating almost every day, I’ve come to clearly understand the challenges faced by restaurants and wholesalers. I feel that deeper knowledge about the industry will be our great asset for many years to come.
Striving Together to Form the Infrastructure for Food Distribution by Realizing DX that Benefits Customers
――Could you share your future vision for XOrder?
Terada: The DX of order and supply operations through XOrder is the first stage of our business development. For example, restaurants and wholesalers now face a number of other issues, such as promoting sales and making settlements. So, our goal is to address these issues in an integrated way to establish an infrastructure for food distribution.
In this context, we want to continue enthusiastically developing services to broadly support the industry for a long time. Eventually, we intend to provide services that food manufacturers, producers, and end consumers will find valuable.
Shimodaira: While XOrder is positioned at the midpoint of food distribution, we have customers in areas upstream and downstream. When XMart takes its business to the next level, we’d like to explore new forms of collaboration to contribute to the DX of the entire industry.
――Thank you for sharing your future vision. Finally, what challenge does the partnership represent for you?
Shimodaira: In the past, Tokyo Century has engaged in collaborative projects to realize DX for individual customers. This partnership has made me keenly aware of how to realize DX for customers and how to expand the base.
By expanding awareness of new digital technologies and actively seeking ways to put them into practice, we’d like to continue taking on the challenge of demonstrating further possibilities that DX can bring to and outside of the Tokyo Century Group.
Terada: Our business starts with determining the usefulness of the approach for the customer, regardless of whether it’s digital or analog. As owner of a company, I place the utmost importance on continuing to be of service to customers. I feel that the XMart staff can share the values of Tokyo Century. So, we’ll keep challenging ourselves and doing our best to realize the infrastructure of food distribution as a joint force.
On a side note, Ms. Shimodaira is known among our staff as the company’s most effective PR promoter when it comes to presenting XOrder. We’d like to continue to refer to her presentation skills as a model.
Shimodaira: Thank you! I’m really enjoying the opportunity to work with the remarkably energetic people at XMart.
President, XMart Inc.
At CyberAgent, Inc., he was engaged in launching alliance businesses with major companies and a Facebook commerce business. In 2013, he launched healthcare media Doctors Me, scaled up to 3 million unique users per month, and sold the business in 2017. In 2018, he joined XTech Corporation to create new businesses by applying technology to existing industries and established XMart Inc.
DX Strategy Division, Tokyo Century Corporation
She joined Century Leasing System, Inc. (now Tokyo Century) and was assigned to the IT Equipment Business Division as an assistant. After switching to a career-track position, she was engaged in equipment leasing in the then System Business Division. Next, she worked in the Business Administration Division (now the Leased Asset Operations Division), General Affairs Division, and IT Promotion Division. She has been in her current position since April 2021. During her career, she was also placed on loan twice to subsidiaries and took childcare leave.
Established in July 2018 as a start-up company focusing on the DX of food distribution with the vision of establishing a marketplace for food that generates new value. Demand for business digitization and DX has been growing amid the COVID-19 pandemic, and the number of restaurants using XOrder has surpassed 25,000 (as of July 2022).
*The contents of the article and the position titles are as of the date posted.
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