Nojima will acquire Hitachi, Ltd.'s white goods business for approximately ¥110 billion and strengthen its integrated manufacturing-and-sales operation centered on private-label products. Nojima's strategy is to use private-label product development to address customer complaints and create hit products.
Following its acquisition of Hitachi, Ltd.'s white goods business, Nojima has outlined a policy of strengthening an integrated manufacturing-and-sales operation centered on private-label products and using its store network to channel customer feedback directly into product development.
Nojima entered the private-label business in earnest in 2011 and sells products including batteries, vacuum cleaners and LCD televisions under the ELSONIC brand. Sales have grown on the strength of pricing below that of national-brand products. Private-label products are said to account for 5–10% of microwave ovens and rice cookers, and approximately 30% of LED ceiling lights.
Hitachi's business is viewed as an opportunity to strengthen Nojima's private-label operations. Some expect improved product development capabilities through synergies that integrate development, manufacturing and sales. Market participants are looking to further expand the private-label ratio.
Across the industry, integrated manufacturing and sales are becoming more widespread. Collaboration between Yamada Holdings and EDION is also seen as one factor driving the strengthening of private-label businesses. Strengthening product offerings through private labels is viewed as important in responding to the rise of Chinese and South Korean manufacturers.