Gex Corporation is evolving from an aquarium maker into a global pet supplier, aiming to enrich human lives and protect the environment through innovative pet products and sustainable practices
Over the past five years, Japan has seen an increase in pet ownership catalyzed by a variety of factors, including the COVID-19 pandemic. This primarily includes cats and dogs but also includes fish and other types of popular pets. Although there was a decrease in the number of new pets joining families after the pandemic, overall, Japan seems to be embracing pets. What role do pets play, and why do you think pet ownership in Japan is increasing overall?
Pets offer many benefits, including healing, calming, and emotional education. In particular, children can learn a lot emotionally when taking care of a family pet. During the pandemic time, consumers couldn’t go outside and needed to stay at home. Since people wanted to feel the benefits I mentioned, the demand for pets increased significantly. There was a sharp increase, but now I believe it has smoothed out a little bit. This kind of demand for pets, however, will continue in perpetuity.
In correlation with the increase in pet ownership in Japan, the pet supplies market is expected to increase right alongside it. Additionally, the global pet supplies market is expected to reach over USD 450 billion in 2024, with the United States, Europe, and China representing the biggest market opportunities. What is your firm doing internationally to capitalize on global opportunities? Additionally, what are you doing domestically?
In the Southeast Asian market, we distribute our own brands through distributors. Also, for EU and North America, we have a partnership with Rolf C. Hagen Inc. based in Montreal Canada, where we also distribute their global brand, EXOTERRA, CATIT, FLUVAL in Japan.
When you look internationally, are there any countries that look particularly appealing for expanding your business?
The countries we find appealing are India and Indonesia, where population growth is expected, and we can also predict the development of the pet industry. Additionally, the United States remains our largest market.
Founded in 1977, your company initially focused on aquariums before introducing the industry’s first air pump series. Over time, it has expanded its offerings to include a wider range of pet products. Today, the company is a comprehensive pet supplier, providing and specializing in the manufacturing development of aquariums and products for small animals, dogs, cats, and reptiles. Can you talk about how your business has evolved over time and what some of your core values are?
Our motto is “Life with lives innovates future environments.” We set out our business with this strong belief in mind: the belief that the lives of animals enrich humans, and the lives of humans enrich animals. Our company has evolved from the maker of aquariums to the comprehensive maker of pet supplies. Over time, we have made a lot of mistakes and errors. Looking at aquariums specifically, they use water and electricity, so they are a dangerous kind of product by nature. We have experienced various recalls of our products, such as heaters, and based on some of these experiences, we now believe that we are not dealing with pet supplies. Rather, we are supplying home appliances for humans. This is where we thought that we should enhance the quality of products to the same level as human equivalent products. Of course, there are a lot of experts in the pet supply industry, but we decided instead to invite people from home appliance and electronics makers as well as experts from Panasonic. As such, we have completely changed the suppliers, thinking, and specifications of our products.
Your All-In-One Aquarium is an innovative overflow aquarium equipped with a slide filtration system that improves maintenance and has an LED feature that creates a bright and vivid environment. To add to this, the product features smoke glass, making the aquarium look beautiful and reducing the light, which makes the product more animal friendly. This product was also the recipient of a 2023 Good Design award, receiving praise for its ease of maintenance. What sets the innovation of this product apart, and what competitive advantages in your manufacturing and development processes have enabled you to create award-winning products like this one?
Most of our staff members live with animals, so it is clear that they really love being around animals. It also means that they seriously think about what customers want. In the manufacturing process, all of us are trying to produce something creative. There are, of course, some companies that copy the other products and sell them at a cheaper price, but our goal is to add additional value to our products. By doing so, we can make customers happy and distribute something new to the industry.
One of your newest products, the Glass Aqua PERCO, operates on the U-TUBE structure system. Its name is derived from the word percolation, which is the process of liquid slowly moving through a substance. The product is designed to provide maximum comfort for the fish. What was the inspiration behind this product, and considering this product has made it to the second round of the Good Design Award, what do you believe are the benefits you will receive once you win?
Yes, we have already received an award for this product. Speaking on the inspiration behind this product. At first, we considered what potential customers might want from a product like this by combining the wants with the needs of existing customers. This product features no coils, pumps, or heaters inside the glass, while conventional ones have everything inside. Although we might have good ideas, without the technology to manufacture this and partners to distribute the product, it will remain simply that: an idea. It is all thanks to our partners that we are able to get our product out into the world.
In 2015, the United Nations adopted the 2030 Agenda for Sustainable Development, aiming to address socio-economic challenges and enhance environmental protections. Additionally, if you look further down the line, the UN has the goal of reaching carbon neutrality by 2050, and Japan is involved in this goal. What initiatives have you introduced to reduce your environmental impact and contribute to a more sustainable world?
SDGs aren’t just something we are focusing on but also something we take very seriously. We are actively utilizing biomass in our product development, particularly in the form of plastic, for many parts of our products. We like to think of ourselves as a pioneer in introducing this material for pet supplies. Biomass plastics are used in our pet drinking fountain “Pure Crystal” and Aquarium filter medias. As such we are replacing about 12 tons of material per year with biomass alternatives. Recently, we’ve also begun to focus on alternative food materials for pet food. Conventionally, fish food is made with fish meal, and now we have replaced them with insect meal protein using black soldier fly larva, where we also use for our reptile foods.
In response to the Sustainable Development Goals (SDGs) adopted at the United Nations General Assembly in September 2015, which are to be achieved by 2030, GEX has been fully committed to these goals since 2020. We believe that the best way to operate our business sustainably is by focusing on two key areas: what can be achieved through product development and what can be achieved through initiative proposals.
In terms of products, we have adopted biomass resin for the plastic parts used in refills for aquarium filters and filter-type water dispensers for dogs and cats, replacing an annual total of 12 tons. Additionally, to address potential future food crises, we have been quick to adopt insect-based alternative proteins for fish, small animals, and reptile food. Our recycling efforts to regenerate broken glass aquariums into new glass products have also been featured in numerous media outlets.
Regarding initiative proposals, we have promoted the idea that keeping pets provides opportunities to reflect on environmental issues and advocated that aquarium keeping is ideal for STEAM education. We conduct classes at kindergartens and elementary schools, and also support biology clubs at junior high and high schools.
In addition to your fish items, you also offer a variety of items for cats and dogs. This includes your Pure Crystal Water Filter, which ensures clean water for both cats and dogs. What are your competitive advantages when developing products for both cats and dogs and what growth do you foresee in the cat and dog pet supplies industry not only in Japan but globally?
Our strength lies in our know-how with electronic products for cats and dogs. Recently, we have been focused on IoT, such as Auto Feeders, which can be controlled by a mobile phone. We believe that this will be our competitive advantage going forward.
Our company also has expertise in bacteria and bio-science. We are thinking about utilizing this expertise in the development of next-generation pet toiletry supplies.
Have you seen any success with your electronic products in international markets?
We are now challenging ourselves to enter new markets, but it has been very difficult with electronic products due to the voltage differences. We started producing DC-type products, which meet different electric standards. It is our thought that by continuing these kinds of developments, we will be able to apply our products to the global market.
E-commerce has really begun driving growth in the pet supplies market as it has in most retail sectors, boosting sales and improving customer experiences through data-driven insights as well as expanding global reach. Your online shop that offers aquariums and products for cats and dogs demonstrates a strong commitment to leveraging these e-commerce opportunities. What role does e-commerce play in your business strategy, and how are you using it to boost efficiency, sales, and overall customer satisfaction?
Consumers can shop at any time using e-commerce platforms, which is a huge benefit. They are also able to select from a wide variety of products. We are actively engaged in e-commerce using existing platforms. What is different from other categories of daily supplies, however, is that our market won’t grow without an increase in pet ownership. The distribution of pet supplies is down since ownership of pets besides fish is down in Japan.
Online shops are important for our business, but we also believe in the importance of retail locations. This is vital for allowing customers to visit and touch the animals. Another area for improvement of e-commerce is that through this channel, we cannot listen to the problems of our customers. It means there is no follow-up, which is something that can be done at physical locations. To address this issue, we have our own customer center where customers can receive advice, whether online or offline. Since online sales are increasing, so too are the inquiries we are receiving online. Something that our company really values is the follow-up with customers after sales.
Your company has an interest not only in the domestic market but also in the international markets such as Indonesia, the United States, and Canada. Which countries have you identified as being most appealing for your company’s expansion?
Therefore, we are thinking about Southeast Asia, specifically, Vietnam, and India. Also, for Indonesia since we have our own factory and understand the culture and customers, we wish to develop the market.
Can you tell us more about the Indonesia factory and the role it plays in your business?
Our factory in Indonesia, LIMA TEKNO INDONESIA (LTI) was established on September 16, 1996, within the Karawang Industrial Estate in Jakarta, as the core factory of the GEX Group. Initially, the company commenced with the production of glass aquariums and air pumps. In 2002, LTI began exporting to overseas markets such as Europe, America, and Asia, transitioning from a primarily domestic focus. Concurrently, the company embarked on factory management reforms and the development of new operational systems. Today, LTI integrates the Toyota Production System (TPS) to achieve efficient and high-quality manufacturing.
LTI employs approximately 350 people, and its production capacity is world-class, exceeding 3,000 aquariums per day. A significant portion of the glass aquariums and small animal habitats distributed in Japan are manufactured at this facility.
Currently, LTI’s production is not limited to aquariums. The company also manufactures various electric products such as filters and heaters for aquarium, heaters for small animals, and the "Pure Crystal" filter media for dogs and cats. Additionally, LTI produces instrument cases for a major musical instrument manufacturer. Leveraging the expertise gained from this production, LTI has expanded to produce pet carriers. The factory's strength lies in its wide-ranging manufacturing expertise across different categories, including glass, resin, electric products, filtration media, and general products. Its ability to combine these elements into innovative products serves as a competitive advantage over other companies. Despite having a diverse range of SKUs, the high quality is maintained through close communication between the Japanese design, development, and quality assurance teams and the diligent, skilled LTI factory staff.
Overcoming the challenges posed by the COVID-19 pandemic in terms of personnel and procurement, LTI expanded its facility in 2022. Moving forward, LTI aims to deliver high-quality pet products not only for the domestic market but also to North America, Europe, and Asia.
Imagine that we come back in three years and have this interview all over again. What goals and dreams do you hope to achieve by the time we come back for that new interview?
I am confident in the goodness of every pet owner, and I aspire to inspire everyone to experience the joy and fulfillment that comes with living alongside an animal.
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