Japanese convenience stores are storming into Vietnam

Japanese convenience store chains are rapidly expanding across Vietnam, where demand is strong for the service culture of the East Asian island nation.


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In February 2017, Seven-Eleven Japan began advertising for staff to operate its first retail establishment in Vietnam, which will open in Ho Chi Minh City in the near future.

The expansion of the Seven-Eleven brand into Asia first began when US based Southland Corp., the original founder of the 7-Eleven chain, entered Taiwan back in 1980.

Subsequently, in 1991, Seven-Eleven Japan acquired US based Southland Corp. and then in turn was acquired by Japanese retail giant Seven & I Holdings Co.

In 2014, Seven-Eleven Japan, as a then subsidiary of Seven & I Holdings Co., successfully opened its first outlet in Beijing, China in 2014.

That market entry into China was so highly successful, according to the experts, that it spawned immediate plans by Seven-Eleven Japan to enter into the Republic of Korea, Hong Kong, Vietnam and elsewhere in Asia.

So when Seven-Eleven Japan opens its first store in Ho Chi Minh City, the experts forewarn, the brand is bringing with it decades of highly successful operations in the toughest markets around the globe.

Its management team, a few of whom have been with the company since its founding in the US some thirty-five plus years ago, are highly skilled professionals in the convenience store segment.

Other chains are also promoting Japanese-style products, services and staff training throughout Vietnam.

The FamilyMart Co., the third largest convenience store operator in Japan, had 106 outlets in Vietnam as of the end of last July. The company had announced that it targeted reaching 150 by the end of 2016 and 300 in 2018.

Its other prominent Asian markets include Taiwan, China and Thailand.

Ministop is a convenience store chain that is a member of the AEON Group, the leading retailer in Japan. Outside of Japan, Ministop operates mainly in the ROK but has plans to open stores in Vietnam at all AEON Group shopping centres.

Lawson Inc., which is the second largest convenience store operator in Japan, lags the competition in terms of expansion, with only 821 stores in Asia outside Japan as of the end of last June.

Lawson entered the Chinese market in 1996 through a joint venture with a local company in Shanghai but failed to increase either sales or the number of outlets due to lack of management skills.

Lawson is aiming for 3,000 outlets in China by 2020 by promoting franchises. It also has plans to promote franchising in Vietnam and Malaysia. Lawson currently has only 790 stores outside Japan. In addition to China, it has stores in Indonesia, Thailand, the Philippines and Hawaii.

Demand for convenience stores is forecast to grow in Asia, where increasing numbers of people are expected to enter the middle-income class.

One of the hallmarks of Japanese-style management of convenience stores involves innovation and the continuous release of new products and services providing an interesting shopping experience.

This service stands in stark contrast to traditional Vietnamese retail that tends to offer the same products year in and year out with little to no innovation or new product development.

The Japan External Trade Organization is upbeat on the chains’ ability to meet expectations across the continent. One JETRO official said Japanese convenience store chains are ‘fully capable’ of developing merchandize that will fly off the shelves in Vietnam.

VOV

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