Business model and social role of trading companies
Trade and business investment are "two wheels of a car"
In addition to the traditional buying and selling of goods (trading), the proportion of investment activities has increased in recent years, forming a business portfolio in which trading and business investment are "two wheels of a car".
The profit structure of trading companies is shifting from a form centered on commissions generated from conventional transactions to a movement that captures the diverse profit opportunities obtained through the manufacturing and service industries, which are investment destinations, throughout the Group, including subsidiaries.
Difference between trading and business investment
Commerce (Trade)
- Buying and selling traditional goods
- Leveraging global information network, distribution network, and financial power
- Earn commissions (revenue) by finding and matching sellers and buyers on behalf of customers.
Business Management (Business Investment)
- It is characterized by being deeply involved in the management of investees and making strategic investments over a relatively long period of time
- Cultivate your own business through long-term holdings, expand your trade, and invest in anticipation of other synergies
- Sometimes it invests alone, and sometimes it aims to acquire know-how in a new field, and it looks for influential partners and co-invests
- It is not like investment banks and funds that focus on capital gains from selling from the beginning
Characteristics of business investment in trading companies
- Value Chain Strategy
- Handle a wide range of businesses from upstream to downstream
- Comprehensive strength gained from investment experience
- Leveraging comprehensive capabilities based on trading company functions, we will expand into unknown business areas
Experience working with partners in specialized fields around the world
- Versatile revenue structure
- In addition to dividends and equity profits, trading companies earn various profits, such as sales commissions related to trades, interest associated with trading, and management advice fees
- Development of know-how
- Profit not only from a single investment project, but also by developing similar investments in other companies or countries
- Strategic investment over the long term
- Unlike investment banks and funds that aim for short-term capital gains, they make strategic investments with long-term holdings
SDGs and trading companies
Trading companies have responded to changes in the environment in each era, always thinking about the functions and roles they should play, and have responded to their needs. The trading company industry is often said to have a wide range of business fields and complex business methods, but the 17 goals advocated by the SDGs have a high affinity with the wide range of businesses of trading companies, contributing to initiatives in various fields.
- Protecting the Global Environment
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In order to realize a decarbonized society, we are working on renewable energy business, recycling business, and environmental conservation.
- Responsible for stable supply
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We are working to build a stable supply system for food and resources.
- Supporting Global Businesses
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We support our business activities in various ways and are working to build a supply chain to reduce the environmental impact of logistics and protect human rights.
- Supporting a prosperous life
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In order to realize a healthy and prosperous life for all, we are engaged in the infrastructure business, the lifestyle industry, and the healthcare business.
- Create new value
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We are working to create innovative businesses that contribute to solving social issues.
- Enrichment of people and society
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We are working to create opportunities and workplaces where diverse human resources can share values and grow. We will contribute to the development of each country and region through social contribution activities.
Trading Company's Initiatives
Sustainability-related business of a trading company
This section introduces sustainability-related businesses that trading companies are engaged in around the world.
Renewable Energy Business
Power generation from renewable energy sources (geothermal, solar, wind, hydropower, etc.) is an alternative to thermal power generation using fossil fuels (oil, coal, etc.), and is being worked to build and expand its business around the world.
Circular Economy Related Businesses
We are working to realize a circular economy by focusing on a variety of waste in a wide range of business areas, from upstream to downstream in the value chain, and adding new value.
Stable supply of food
Trading companies are working to improve agricultural productivity, build a diverse supply chain for agricultural products, ensure a stable supply, and improve traceability.
Supporting a prosperous life
Since trading companies have a wide range of business areas, from upstream to downstream, and often provide various services to consumers through their investments, there are many cases where goods and services are purchased without knowing the involvement of trading companies. We are involved in almost all fields related to daily life, such as "dressing," "eating," "living," "living," and "enjoying," and contribute to the realization of comfortable lives for people in Japan and overseas.
Logistics Business
Trading companies always strive to optimize their own logistics and provide high-value-added logistics services that make use of their accumulated know-how and trading company functions.
Lifestyle Industry Business
By combining a wide range of products, functions, and know-how across the Group, trading companies stably provide a variety of products and services that support people's comfortable lives.
Healthcare Business
Trading companies are involved in a wide range of activities, including support for the development of pharmaceuticals, supply of pharmaceutical raw materials and formulations, establishment and management support for medical institutions in Japan and overseas, online medical consultations and diagnostic services using AI, and operation of drugstores and facilities for the elderly, and contribute to improving people's quality of life through their businesses.
Digital & Next-Generation Technology Business
Trading companies have contact points with various regions, industries, and people, and are working to evolve existing businesses and create new value by combining knowledge gained through business with digital technologies (IoT, AI, XR, etc.) to realize DX. In addition, we are constantly pursuing the construction of promising businesses for the next generation and the construction of businesses that will serve as a major profit base in the future.