Line between retailers, manufacturers blurring: Isetan Mitsukoshi CEO

TOKYO - In an era where shopping over the Internet is commonplace, Hiroshi Ohnishi, president and CEO of Isetan Mitsukoshi Holdings, sees a future where the line between retailers and manufactures becomes blurred.

Speaking at the Nikkei Global Management Forum in Tokyo on Wednesday, Onishi said: "Retailers cannot survive just by clinging to the retail shops they have" when the market size remains the same and new competitors come in. He predicted a future where technological advances like the Internet of Things force retailers to act more like manufacturers to survive.

Onishi said Isetan Mitsukoshi had already taken steps in this regard. "Through our retail business, we had vast a vast range of customer data, and three years ago we began making our own women's shoes. We aimed to make shoes based on what we believed customers really wanted, and our sales have reached 700 million yen ($5.7 million)," he said.

The absolute value of a product is more important to its success in the marketplace than its relative value, Onishi said, and he expressed confidence that Japan can create truly global luxury brands.

"Eighty per cent of luxury brands, like Gucci, use Japanese textiles. Japan does not lag behind in terms of creativity either. Yet when people talk about luxury brands, they always think of European ones," Onishi said. "My dream is to make a 'Japan premium' brand in the next two to three years. And that is where all of the innovation we are undertaking as a company is leading to."