Japan's Lawson to ride consumption recovery

Japan's Lawson Convenience Store has plans to increase its store count to 10,000 in China by the end of 2025, up from 6,330 at the end of 2023, as consumption in the country gradually recovers, one of its local executives said.

Tokita Takashi, general manager of Lawson's branch in Shenyang, capital of Liaoning province, said the Tokyo-based firm has been continuously increasing its investment in the Chinese market.

The goal of 10,000 stores in China by the end of 2025, including 1,000 stores in Shenyang and Dalian, is just one milestone.

Takashi said: "Since the opening of the first Lawson store in Shenyang in 2019, Shenyang Lawson has established over 300 stores in 10 cities within Liaoning province by the end of 2023, as the engine of consumption in China is further revved up.

"Lawson has been continuously innovating its products and services while joining forces with local brands in Shenyang, a city that's representative of Northeast China and boasts significant resource advantages and concentrated costs, leveraging the latter's local market experience.

"This has further unleashed the potential of Lawson's brand and supply chain advantages, jointly propelling Lawson's rapid development in the region."

The rapid expansion and success, according to Lawson, came on the back of its flexible expansion strategy, improved profitability, breakthroughs in the lower-tier market and clear strategic objectives.

China's retail sales of consumer goods, a major indicator of the country's consumption strength, climbed 7.2 percent year-on-year in 2023, reaching 47.15 trillion yuan ($6.63 trillion), according to the National Bureau of Statistics.

Consumption, the main driving force for economic growth, is expected to maintain decent growth in the next stage as there are many favorable conditions to support its continuous recovery, said Kang Yi, head of the NBS.

China's consumption potential is still huge, said Kang, adding that the super large market with a population of over 1.4 billion, the steady advancement of urbanization and the upgrading of consumption structure have provided broad space for the growth of consumption.

An analyst said the accelerating business layout of foreign retail enterprises in China such as Lawson reflects the confidence of foreign investors in the retail sector amid the sustained and sound development of China's economy.

As a touchstone that enhances core competitiveness of many foreign retail enterprises, the Chinese market has continued to advance the reform of foreign investment measures, said Cui Fan, a professor at the University of International Business and Economics in Beijing.

Emphasizing the need to keep improving the business environment for foreign investment, Cui said accelerated efforts are also required to better protect the legitimate rights of foreign investors while continuously improving the utilization of foreign investment.

With the steady improvement of the income level of Chinese people, consumer demand now leans toward a more personalized, higher-end path, and consumers have put forward higher requirements for market supply. Lawson, therefore, is also making adjustment to better meet the demands of the Chinese consumers.

According to a survey conducted by the China Chain Store & Franchise Association, based on the performance of 59 firms that operated convenience store chains in 2023 spanning 110,638 venues, the segment saw a steady expansion in store numbers, with 13,148 new stores opening, offsetting the closure of 4,076 outlets, resulting in a net increase of 9,072 stores.

The highlight of the survey is the accelerated pace at which top enterprises, boasting over 1,500 stores each, expanded their footprint, accounting for nearly 80 percent of the net increase.

Looking ahead, convenience store enterprises are prioritizing standardization, digitization and online expansion, as 71 percent of the surveyed companies are opting for expansion, with focus on deepening existing market penetration, the survey found.