Japanese convenience store giant eyes PH

Posted at 05/26/14 7:55 AM

Takeshi Niinami, chairman of Japan's Lawson, speaks at the World Economic Forum on East Asia in Manila. Photo by Sikarin Thanachaiary, World Economic Forum

MANILA, Philippines - Japanese convenience store giant Lawson Inc. has set its sights on the Philippines, a move that would further heat up the retail scene in one of Southeast Asia’s fastest growing economy.

Lawson is partnering with a local firm to put up as much as 2,000 convenience stores in the long term, targeting the growing middle class population, its top official said last week.

“The Philippines is very strong in consumption. I am very interested in entering it,” Lawson chairman Takeshi Niinami told The STAR on the sidelines of the World Economic Forum for East Asia 2014.

“We have to have an economy of scale so [Lawson convenience stores] should exceed 1,000-2,000 within a couple of years, depending on how we manage the business with the local partner,” Niinami said.

The Philippines would become the third Southeast Asian country to be tapped by Lawson which has 61 branches in Indonesia and 29 stores in Thailand. The Japanese firms owns convenience store brands Lawson, Lawson Store 100 and Natural Lawson.

“Definitely we have to make this happen within a year,” Niinami said, adding that the aggressive expansion program would be implemented in the next five to 10 years.

As of end-March, Lawson had 11,716 stores in Japan, 389 in China and four in the US.

Niinami said the Philippines will become a major part in the overseas operations of the company which is partnering with a local firm that knows the Filipino taste.

“We export our know-how in small catchment area formats and franchise business that have been accumulated in Japan to other countries,” Lawson said in its website.

However, the Philippines needs to address income disparity to avoid social unrest, said Niinami, who is also an adviser to Prime Minister Shinzo Abe through the Industrial Competitiveness Council of Japan.

“Definitely, this country has to increase the middle class, and I believe that will happen. And the middle income will buy things from Lawson,” Niinami said.

The entry of Lawson would intensify the competition among convenience store chains operating in the Philippines.

In 2012, property giant Ayala Land Inc. entered into a shareholders’ agreement with FamilyMart Co. Ltd. and Japanese conglomerate Itochu for the development and operations of FamilyMart convenience stores in the Philippines. It plans to open 700 branches in the next five years.

For its part, global giant 7-Eleven aims to hit 2,000 stores in the next three to four years from the current 1,049 branches. The Gokongwei family’s Robinsons Retail Holdings Inc. targets to end 2014 with Ministop branches nationwide.lawson