China: the next frontier for konbini
Aiming to export Japanese convenience store culture, four big Japanese companies are laying plans for expansion into China. Seven Eleven, Lawson, Mini Stop and Family Mart are all intending to open more stores in the near future, going up against both domestic and other foreign competitors for a lucrative slice of China’s convenience store pie.
While China has its own convenience store chains, such as Kedi, which has over 700 outlets in Shanghai and other parts of China, there’s no particular chain dominating the market nationwide, leaving the field open for Japanese names, as well as Tesco and Wallmart (who operate under the name of Smart Choice, or Hui Xuan in Chinese), to take the lead. And it’s not just the big players who are competing; China also has an abundance of privately run local stores.
According to Nikkei Trendy, big convenience store chains in China have the image of being cheap and rather fashionable. In addition they stock foreign goods unavailable in locally run stores. Japanese convenience chains stock items like bento pack lunches and onigiri rice balls which are perceived by the Chinese public as being high-quality products. The Chinese media, who’ve been taking note of the convenience-store wars, have been impressed with the standard of service at Japanese convenience stores compared with that of locally run small businesses.
As in Japan, convenience stores don’t just limit themselves to selling everyday goods; it’s also now possible to pay utility bills and make purchases over the Internet using a Lakala terminal. These terminals are proving very popular, and there are now over 40,000 spread across 246 towns and cities in China. Having one of these terminals available in-store appears to be a key factor toward winning over the market in China.
Plans for expansion by Japanese firms are as follows: Lawson aims to have opened 10,000 stores by 2020; Family Mart wants to increase the number of stores from the existing 400 stores into 4,500; Seven Eleven, who opened 100 stores in Beijing and Tianjin in 2010, wants to open 50 in Chengdu by the end of 2011; and Mini Stop is slated to 200 shops within five years.
One difficulty that Japanese businesses might encounter is anti-Japanese sentiment. At the end of 2010 when tensions were running high over the Senkaku Islands issue, Japanese retailers Ito Yokado and Isetan suffered damage at the hands of protesters. However, at present, the market looks set to expand throughout 2011.
Photo: Prince Roy