SBT Co., Ltd. (SBT), a trading company specializing in the export of automobiles and other vehicles to more than 150 countries and regions around the world, and NTT Communications Corporation (NTT Com), the ICT solutions and international communications business within the NTT Group (TOKYO:9432), today announced they will conduct a trial of a solution that allows prices and settlement details to be displayed in local currencies at guaranteed rates of exchange on SBT’s cross-border e-commerce site.
The trial, which will commence on October 13, will introduce local currency pricing and settlement on the SBT’s e-commerce site – the first-of-its-kind solution in the field of cross-border vehicle e-commerce.1 NTT Com’s “Home Currency Anywhere”™ (HCA) service2 will be used to guarantee exchange rates at the time of contract during the period of transportation of vehicles. The aim of the proposed new service is to increase convenience for users and further expand the market for used vehicles, and the trial will seek to uncover potential further needs in this market.
The envisioned verification process will be as follows:
Step 1: Displaying car prices in the appropriate local currency on the SBT’s e-commerce site., measuring buyers’ levels of usage of these, followed by a survey collecting the reasons for users selecting local currency rates and their feedback on the facility.
Step 2: For currencies that prove to be popular during Step 1, implementing local currency settlement and rate guarantee functions, measuring usage rates of these, followed by a survey collecting the reasons for users selecting local currency settlement or guaranteed exchange rate, and whether they will use it again.
The trial will run from October 2021 to January 2022 on the SBT’s used car cross-border e-commerce site. SBT will utilize the HCA service to display prices and settlement amounts in prospective buyers’ home currencies and to provide guaranteed rates for settlements. NTT Com will provide guaranteed foreign exchange rates and will be responsible for design of the e-commerce platform.
Based on the results of this trial, the two companies aim to provide full-scale local currency pricing and settlement at guaranteed rates in Africa, Latin America, Asia, and certain other regions, by the end of 2022. In addition, NTT Com’s “NoMado,”3 a communication tool with multilingual translation functions, will be used to facilitate business negotiations with overseas customers and thereby expand the volume of transactions.
This collaboration with NTT Com will allow SBT to expand its business beyond a “From Japan to the World” model to a “From the World to the World” model, and the company will continue to develop services aimed at boosting customer satisfaction around the world.
Based on the business vision “Re-connect X™,5” NTT Com will contribute to the realization of a sustainable future in the new normal world by providing ICT services and solutions that reconnect consumers and businesses with society’s new values in a safe, secure and flexible manner.
The number of used cars exported from Japan to overseas countries has been growing steadily over the past few years, and is currently estimated to be around 1.47 million units annually, with a total export value of 700 billion yen (approx. 6.2 billion USD).4 In particular, exports to Kenya and other African countries have been increasing since 2016 in line with the remarkable economic growth of Africa.
Used cars exported from Japan to Africa are mainly transported by ship, with shipments taking about 30 to 40 days. Payment of fees is made in multiple installments between the time of conclusion of the contract and landing of the vehicle in the destination country in order to reduce the risk for both the seller and the buyer. However, there is the risk of exchange rate fluctuations during the long transportation times. In some cases, local suppliers cannot fix the selling price because the exact purchase price cannot be determined until the vehicle is landed, and individual buyers have to sign contracts without knowing the exact purchase price. In addition, the lack of familiarity with foreign currencies among many market participants often leads to errors being made during the contract and payment process.