Japanese convenience operator Lawson opened on Tuesday five new stores in Nanjing, capital of the eastern province of Jiangsu as part of its plan to have 3,000 locations in the country by 2020.
Lawson has become the first Japanese operator to land in Nanjing, but its ambitious expansion plan foresees it operating 300 stores in the city in the next three to five years.
Many Japanese companies have been hesitant to enter the province as it was the place where the invading Japanese troops committee heinous crimes against the Chinese civilians and disarmed soldiers in the six weeks following the Japanese occupation of the city on December 13, 1937, which was later known as the Nanjing Massacre.
Earlier this year, a subsidiary of Lawson that operates convenience stores in Shanghai signed a franchise agreement with Nanjing Central Emporium, a major local retailer, to open Lawson-branded convenience stores in the city.
Tokyo-based Lawson entered China in 1996 and now has about 1,100 stores there, mainly in Shanghai and Chongqing. The move into Nanjing is intended to build momentum toward closing the gap with Japanese rivals Seven & i Holdings and FamilyMart UNY Holdings, which have around 2,000 locations each in China.
In Japan, Lawson ranked third in share of convenience store sales in fiscal 2016, a Nikkei Inc. survey found. The trio together accounted for about 90% to domestic convenience store sales.
The launch of convenience stores by Lawson has ushered in a period of more severe market competition in Nanjing though consumers will enjoy more benefits from more choices other than Suguo Haodi and other local convenience stores.
Suguo Haodi, the convenience subsidiary of Suguo Supermarket, offers round-the-clock services by selling daily necessities and providing self-help services for utility payment and courier mail and delivery.
Suguo Haodi is operating 600 convenience stores in Nanjing but is planning to 1000 stores in the next five years.
Judging on the basis of the international practices of one convenience store for every 2000 to 2500 people, Nanjing is able to accommodate more convenience stores at 2000 to 2500 locations.
Insiders say Suguo Haodi should strengthen its brand name effect and rely on its recognition among the local consumers to offset the impact from the foreign-funded convenience stores which will bring into full play their technological expertise for diversified competitions in the tug of war for customers.
