Making It Big: Japanese Chain Stores Spread In China

From 7-Eleven convenience stores to the retail giants Muji and Uniqlo, Japanese brands are rapidly expanding across China, with 50,000 stores and counting.

Now Japanese-owned, 7-11 is making inroads in China (Eric Chan)
Now Japanese-owned, 7-11 is making inroads in China (Eric Chan)

BEIJING - As the Japanese manufacturing industry undergoes a general malaise at home, Japan's retail sector is gaining momentum overseas, particularly in the Chinese market. At the Beijing Trade Fair held last week, the chief executives of several Japanese service industry giants all talked about their expansion plans in China.

From Uniqlo, the clothing retailing chain to MUJI, the household goods and clothing chain, to Lawson and 7-Eleven (7-11 in China) -- two U.S.-born convenience store giants now under Japanese ownership -- this year China will see the opening of over 50,000 stores owned by Japanese corporations.

As the first foreign-owned convenience store chain to be approved by China, 7-11 opened its first Chinese franchise in 2004 and within eight years swept across the country with 855 shops -- 50 in Beijing alone, with a daily turnover up 20% in comparison with last year.

MUJI, which owns currently 42 stores in China, has been accelerating the opening of stores in the past three years.

What is most interesting is that the competition for these two stores which do particularly well in China comes from other Japanese companies such as Lawson and Uniqlo respectively. MUJI's CEO, Matsui Tadamitsu, told E.O., "I don't think this will affect Muji's business. On the contrary, it can bring a synergetic effect."

Up to now, China itself has not yet developed any convenience store chains with a reputation comparable to 7-11 or Lawson, and the ones that already exist do not cover the country's vast territory as extensively.

Apart from the high quality service these Japanese stores provide, another winning point is the Japanese firms' flexibility in catering to local authorities or the local environment: "In China if you want to open a shop, you must have a good relationship with the developer, because the store's rent can be equivalent to 15% of its sales - which is a very large operating cost. It's not even possible to rent a store unless one has a good relationship with the developer. This is a very different business environment. China is a challenge", Matsui Tadamitsu stated.

Different strategies

7-11 and MUJI have very different strategies in China. 7-11 opens a huge number of stores in the same cities, while MUJI tries to cover as many Chinese regions as possible: 7-11's 855 shops are concentrated in the four cities of Beijing, Shanghai, Guangzhou and Chengdu, whereas MUJI's 41 stores are spread out in 21 cities.

Other convenience store chains such as Lawson and FamilyMart follow the same strategy as 7-11. The advantage is that the density of their implantation makes them live up to the name of "convenience" stores. From a logistics and cost-cutting point of view, this is optimal, in addition to being more environmentally friendly.

As for MUJI, it needs to set up a brand image in order to expand its influence, which explains why it has gone for a wider diffusion in China.

Their ways of operation are different too: While 7-11 prefers franchising, which helps them adapt to local conditions, MUJI has chosen to develop outlets. MUJI also keeps operating rights so it can control the shops' quality.

In Japan and other developed countries today, tertiary industry accounts for more than 70% of GDP --only just about 50% in China. China's retail sector still has a lot to learn from Japanese brands' business models and experiences.

Read the original article in Chinese by Wu Haishan

Photo - Eric Chan

*This is a digest item, not a direct translation

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Preparing a COVID-19 vaccine booster in Huzhou, China.

Hannah Steinkopf-Frank, Anne-Sophie Goninet, Jane Herbelin and Bertrand Hauger

👋 Ciao!*

Welcome to Wednesday, where Brazil's senate backs "crimes against humanity" charges against Jair Bolsonaro, the UN has a grim new climate report and Dune gets a sequel. Meanwhile, German daily Die Welt explores "Xi Jinping Thought," which is now being made part of Chinese schools' curriculum.



• Senators back Bolsonaro criminal charges: A Brazilian Senate panel has backed a report that supports charging President Jair Bolsonaro with crimes against humanity, for his alleged responsibility in the country's 600,000-plus COVID-19 deaths.

• Gas crisis in Moldova following Russian retaliation: Moldova, one of Europe's poorest countries, has for the first time challenged Russia's Gazprom following a price increase and failed contract negotiations, purchasing instead from Poland. In response, Russia has threatened to halt sales to the Eastern European country, which has previously acquired all of its gas from Gazprom.

• New UN climate report finds planned emission cuts fall short: The Emissions Gap Report 2021 concludes that country pledges to reduce greenhouse gas emissions aren't large enough to keep the global temperature rise below 1.5 °C degrees this century. The UN Environment Program predicts a 2.7 °C increase, with significant environmental impacts, but there is still hope that longer term net-zero goals will curtail some temperature rise.

• COVID update: As part of its long-awaited reopening, Australia will officially allow its citizens to travel abroad without a government waiver for the first time in more than 18 months. Bulgaria, meanwhile, hits record daily high COVID-19 cases as the Eastern European's hotel and restaurant association is planning protests over the implementation of the vaccination "green pass." In the U.S., a panel of government medical advisors backed the use of Pfizer COVID-19 vaccine for five to 11-year-olds.

• U.S. appeals decision to block Julian Assange extradition: The United States said it was "extremely disappointed" in a UK judge's ruling that Assange, the founder of Wikileaks, would be a suicide risk of he traveled across the Atlantic. In the U.S., he faces 18 charges related to the 2010 release of 500,000 secret files related to U.S. military activity.

• Deposed Sudan prime minister released: Prime Minister Abdalla Hamdok has been released from custody, though remains under heavy guard after Sudan's military coup. Protests against the coup have continued in the capital Khartoum, as Hamdok has called for the release of other detained governmental officials.

Dune Part 2 confirmed: The world will get to see Timothée Chalamet ride a sandworm: The second installment of the sci-fi epic and global box office hit has officially been greenlit, set to hit the screens in 2023.


Front page of the National Post's October 27 front page

Canadian daily National Post reports on the nomination of Steven Guilbeault, a former Greenpeace activist, as the country's new Environment minister. He had been arrested in 2001 for scaling Toronto's CN Tower to unfurl a banner for Greenpeace, which he left in 2008.


Chinese students now required to learn to think like Xi Jinping

"Xi Jinping Thought" ideas on socialism have been spreading across the country since 2017. But now, Beijing is going one step further by making them part of the curriculum, from the elementary level all the way up to university, reports Maximilian Kalkhof in German daily Die Welt.

🇨🇳 It's important to strengthen the "determination to listen to and follow the party." Also, teaching materials should "cultivate patriotic feelings." So say the new guidelines issued by the Chinese Ministry of Education. The goal is to help Chinese students develop more "Marxist beliefs," and for that, the government wants its national curriculum to include "Xi Jinping Thought," the ideas, namely, of China's current leader. Behind this word jam is a plan to consolidate the power of the nation, the party and Xi himself.

📚 Starting in September, the country's 300 million students have had to study the doctrine, from elementary school into university. And in some cities, even that doesn't seem to be enough. Shanghai announced that its students from third to fifth grade would only take final exams in mathematics and Chinese, de facto deleting English as an examination subject. Beijing, in the meantime, announced that it would ban the use of unauthorized foreign textbooks in elementary and middle schools.

⚠️ But how does a country that enchants its youth with socialist ideology and personality cults rise to become a world power? Isn't giving up English as a global language the quickest way into isolation? The educational reform comes at a time when Beijing is brutally disciplining many areas of public life, from tech giants to the entertainment industry. It has made it difficult for Chinese technology companies to go public abroad, and some media have reported that a blanket ban on IPOs in the United States is on the cards in the next few years.

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"I'm a footballer and I'm gay."

— Australian soccer player Josh Cavallo said in a video accompanying a tweet in which he revealed his homosexuality, becoming the first top-flight male professional player in the world to do so. The 21-year-old said he was tired of living "this double life" and hoped his decision to come out would help other "players living in silence."


Why this Sudan coup d'état is different

Three days since the military coup was set in motion in Sudan, the situation on the ground continues to be fluid. Reuters reports this morning that workers at the state petroleum company Sudapet are joining a nationwide civil disobedience movement called by trade unions in response to the generals' overthrow of the government. Doctors have also announced a strike.

Generals in suits At the same time, the military appears firmly in control, with deposed Prime Minister Abdalla Hamdok allowed to return home today after being held by the coup leaders. How did we get here? That's the question that David E. Kiwuwa, a professor of international relations at the University of Nottingham, takes on in The Conversation:

"Since the revolution that deposed Omar el-Bashir in 2019, the military have fancied themselves as generals in suits. They have continued to wield enough power to almost run a parallel government in tension with the prime minister. This was evident when the military continued to have the say on security and foreign affairs.

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True, the economy has continued to struggle from high inflation, low industrial output and dwindling foreign direct investment. As in all economies, conditions have been exacerbated by the effects of COVID-19. Sudan's weakened economy is, however, not sufficient reason for the military intervention. Clearly this is merely an excuse."

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471 million euros

Rome's Casino di Villa Boncompagni Ludovisi, better known as Villa Aurora, will be put up for auction in January for 471 million euros ($547 million). The over-the-top price tag is thanks to the villa having the only known ceiling painting by Renaissance master Caravaggio.

✍️ Newsletter by Hannah Steinkopf-Frank, Anne-Sophie Goninet, Jane Herbelin and Bertrand Hauger

Who wants to start the bidding on the Caravaggio villa? Otherwise, let us know what the news looks like from your corner of the world!!

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