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Japanese Retailers' China Dreams
Summary:7-Eleven, Ito Yokado, Uniqlo, MUJI, Rosen, Alldays, Saizeriya, Family Mart - more and more Japanese retailers are pinning their ambitions on China.

By Wu Haishan (吴海珊)
Corporation, page 29
Issue 572, June 4
Translated by Tang Xiangyang
Original article:

7-Eleven, Ito Yokado, Uniqlo, MUJI, Rosen, Alldays, Saizeriya, Family Mart… more and more Japanese companies are establishing Chinese outlets and expanding across the country.


7-Eleven opened in China eight years ago, the first foreign convenience store to get approval from the Ministry of Commerce. Now there are 855 mainland stores belonging to the chain, which was launched in Texas almost 90 years ago and came under Japanese control in 1991. Beijing is home to its busiest store worldwide and there are also 925 7-Elevens in Hong Kong, 40 in Macao and 4,900 in Taiwan, compared to a total of 14,061 in Japan.

Ito Yokado and Alldays are also experiencing rapid growth in China. There are 10 Ito Yokado shopping malls in Beijing and Alldays has opened three stores.

MUJI, which is known for the minimalist design of its merchandise, launched in Shanghai in 2005, but had to suspend its plan after a Hong Kong company filed a lawsuit saying that it owned right to the brand in mainland China. The case was settled in 2008, and MUJI reopened its Shanghai store and now has 42 shops on the mainland, 10 in Hong Kong and 25 in Taiwan.

“MUJI may open 15 new stores every year in Japan if everything goes smoothly. But in China it’s 30 every year. This is the most vibrant market in the world,” said MUJI president Matsui Tadamitsu.

He went on to say that the existing Chinese stores are likely to see annual revenue growth in excess of 20 percent.

Matsui Tadamitsu said that MUJI’s experiences in today’s China are similar to those in Japan after it’s establishment in 1989.

“We expect to have a fast development in the future ten years in China. Japan has only 100 million people but the Chinese population is 1.3 billion.”

What’s interesting is that the Japanese retailers' main competitors are their compatriots. 7-Eleven’s competes in China with Rosen and Family Mart, and MUJI is fighting for market share with Uniqlo.

Currently, the service sector accounts for 80% of Japan’s GDP whereas in China it’s only half of the economy.

Different Strategies

7-Eleven is focuses on big cities like Beijing, Shanghai, Guangzhou and Chengdu, whereas MUJI has 41 stores in 21 cities.

“7-Eleven is a small convenience store. 70% of our customers make visits every week. So it's convenient for us to have stores close to each other. Additionally, it helps us reduce cost of logistics,” said chief executive Joe DePinto.

7-Eleven prefers to operate through franchises, but it has full ownership of its stores in Chengdu, holds controlling stakes of outlets in Beijing and minority stakes in its Qingdao shops.

Both MUJI and 7-Eleven have been localized. For example, the 7-Eleven’s Chinese stores offer hot food cooked on the premises. MUJI has chosen 3,500 out of 70,000 sales items especially for the Chinese market. It also has found learned rules for doing business here.

“The largest character of doing business in China is that we have to keep a good relationship with developers. They are very powerful. We have invested a lot in this field,” said Matsui Tadamitsu. MUJI’s Chinese stores normally cover several hundred square meters and so rents accounts for a high proportion of its costs.

Next step

In 2012, the speed will pick up for MUJI and 7-Eleven opening new stores.

MUJI plans to have 25 new stores in China this year, but Matsui Tadamitsu really wants to reach 30 and 100 stores by 2013. Now it is facing a problem of how to localize its production.

Matsui Tadamitsu says that 50% of MUJI’s overseas sales rely on import from Japan and tariffs account for 25% of their prices, making them 30% more expensive than that in Japan.

“In Fujian Province, we will produce our items in local areas and try to make the local pricing level be equal to that in Japan.”

By 2011, 7-Eleven had 150 stores in Beijing and it plans to have 70 new ones in 2012. In the past, the stores were mainly located in center of towns. The company now wants to open branches within local neighborhood compounds, but there will have to be a change to the law before they can offer sandwiches and steamed stuffed buns in these locations.

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