Case Study: Italtex: A Romanian SME

ITALTEX - from RO

Italtex is a Romanian manufacturer of accessories for the fashion industry, such as clothing hangers and clips. Aside from their traditional, plastic line of products they are expanding their range with more ecological products. The company’s main customers are currently located in Europe, but they are also targeting the American and Japanese markets.

Business: accessories for the fashion industry (e.g. clothes hangers)
History in Japan: none
Size in Japan: independent local contractor (± 80 staff in Romania, ± 10 staff international)
Target market: fashion retailers

Romanian SME Italtex has been creating accessories for the fashion industry such as clothing hangers, bags and clips in plastic, for almost 15 years. Their clients include some of the biggest players on the international market such as Zara, Massimo Dutti, Hugo Boss and Armani. With the goal of expanding their product range to include more ecological products, the company has been working on the perfection of ‘liquid wood’, a material created from bio-components combining many of the characteristics of plastic with the benefits of renewable materials.

WHY JAPAN?

With a population of 127 million and the third largest economy worldwide, Japan is a crucial market for consumer goods, including retail, and therefore also for those supplying to retail companies. Moreover, because the method of doing business in Japan is so different from that of Europe, HRTP represents a real opportunity for Italtex to teach its managers valuable lessons for the internationalisation and overall management of the company.

STEPS TAKEN

Although Italtex’ customers used the company’s products in their stores worldwide (including Japan), Italtex itself had only established limited direct contact with companies in Japan.

CHALLENGES

Italtex’s manager Silvius Buimistru, who participated in HRTP 49, believes he was able to avoid most of the cultural issues people encounter when coming to Japan by themselves.

The major challenge for Italtex is the competition from companies from nearby countries, primarily China, who can offer plastic products for a lower cost. It has proven especially hard to push the ‘green’ products, which come at a higher price. With high-end or designer clothing the extra cost of a pricier hanger is hardly an issue, but it does make a big difference for high-street retailers, which form a much larger group in Japan. 

CURRENT STATUS – NEXT STEPS

Italtex’s first contacts in Japan were facilitated by the EU-Japan Centre. Mr Buimistru visited several potential partners during his stay in Japan, and the company has hired an independent representative to maintain these contacts and look for new leads to expand the company’s presence in Japan.

Step by step, Italtex has been gaining the trust of Japanese retailers. Mr Buimistru was able to meet with his Japanese contacts again when he attended the World Class Manufacturing programme in November 2013.

After sending product samples to different nation-wide fashion retailers, the company is hopeful to start shipping to Japan by next year. They have developed a brand-new product which will likely be introduced in Japan before being released on the European and North-American markets.

At the same time, Italtex and its Italian and German partners have been working with a Japanese company to enhance liquid wood, which consisted of 30% bio-components at the beginning of their cooperation but can now be developed with anywhere between 30% and 100% bio-components. The companies are still improving the material’s durability, but they will soon be able to use it for the creation of anything from clothes hangers to smartphone covers, and much more.

RECOMMENDATIONS

Show that you are a reliable partner by arriving on time for meetings, being precise in what you have to offer and honouring agreements 100%.

Have your business cards translated in Japanese (a habit that can prove useful in other countries as well!), and have your cards and business card holder with you at all times.

When visiting Japan to look for new contacts, rent a Japanese cell phone. People will be more inclined to contact you than on your own, foreign, cell phone.  

Interview made with Silvius Buimistru