Japanese Industry Update

 

It has been 40 years since America’s leading convenience store 7-Eleven opened its first Japanese outlet in Tokyo. The convenience store* has developed uniquely in Japan by Japanising its services and offering a customised product line-up of fast food such as bento (lunch boxes), as well as a wide variety of prepared foods, beverages and alcohol, everyday items and magazines. Consequently, a new market segment called ‘konbini’ has been established. Visitors to Japan used to be impressed by the stores and say, “I could live here!”.

Nowadays, the total number of konbini stores has reached almost 50,000, and the total annual sales turnover is as much as 6 trillion yen (about 60 billion dollars) which runs second behind supermarkets. Seeking the convenience of consumers and adopting the unique methodology of Tanpinkanri (Merchandise control not by division but individual product or SKU [Stock Keeping Unit]), the konbini has literally become ‘a part of life’ for Japanese and its services are being diversified.

*Definition of convenience store by the Ministry of Economy, Trade and Industry:
 A self-serviced store, open 14 hours or more per day, selling food and beverages, with a floor space between 30㎡ and 250㎡.

 

As a principle of service, konbini offers consumers a wide variety of products with flexible stock management, and one of the recent notable diversifications is the inclusion of a multi-copier.
This copier is not just a copier, scanner or fax machine, but also a printer which is used for not only digital camera photos, but also administrative services such as residence certificate copies, reserved tickets for movies, events, expressway buses etc. Moreover, if you bring data (saved as a PDF) on a USB or other media, or have registered data on an Internet site, you can print it out 24/7.

At konbini right now, it’s all about fresh coffee.
Fresh coffee, which is made by in-store order, became popular in 2013 when 7-Eleven made a real introduction into the market. The good balance of taste and price (100 yen for a regular coffee) has been well received, and this year it is expected that as many as 1.3 billion cups will be sold by the top five konbini chain stores. Coffee machines are located at the in-store counter and, depending on the chain store, customers either make their own fresh coffee through self-service after paying for a cup (filled with ice cubes for an iced coffee - very popular in summer) or get coffee freshly made by store staff. Either way, this quick, easy, cheap and tasty fresh coffee has become well-established enough to threaten nearby coffee shops.

The multi-copier and fresh coffee do not generate much of a profit margin by themselves. However, it would be effective for stores to gain sales from other items by providing customers with reasons to visit the store.

 

On the other hand, it has been said that there is little room left for opening new stores in Japan, and the konbini market is becoming saturated. In addition, konbini competes heavily with other industries, such as small urban-type supermarket discount stores and drugstores.

In this harsh business environment, each konbini chain store is reinforcing PB (private brand) development and overseas expansion. For PB, the focus is on differentiation in both product quality and variety ranging from confectionary and desserts, to prepared food and vegetables. For overseas development, konbini is accelerating the opening of new stores, especially in China, South East Asia and North America.

It may not be long before you find a konbini in Australia.

I hope I can look forward to getting tasty and reasonably priced Japanese bento and fresh coffee in Australia!

 

Hiroki Watanabe / Managing Director of Yokoso Australia Pty. Ltd
Engaged in marketing, sales and corporate management in the field of consumer goods in the Japanese market for 20 years. Migrated to Australia in 2008 and established Yokoso Australia to develop the exchange of culture, education and business communication between Japan and Australia.