Strategies of Japan Supermarkets in Hong Kong

6715 Words Jun 10th, 2011 27 Pages

Strategies of Japanese Supermarkets in Hong Kong
Yukiko Kawahara Chinese University of Hong Kong and Mark Speece Asian Institute of Technology, Hong Kong Introduction
As business becomes increasingly internationalized, it is no surprise that many large retailers have expanded beyond the borders of their own countries. In Hong Kong, which is an international city, many local retailers have expanded abroad, and many retailers operating in the territory come from Europe, North America, Japan, and other East Asian countries. Japanese retailers, in particular, have been very successful in Hong Kong, and Japanese supermarkets are a very important element of food retailing in the territory. Saturation of the home
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Among stores in Hong Kong, Yaohan, Uny, Jusco, and Seiyu fall into this category. In Japan, these GMS department stores tend to locate in the suburbs, and they have also expanded to medium and smaller cities. Land was much cheaper here, and the Large Store Law initially did not restrict the establishment of large stores in suburbs as much as in city centres. The law was strengthened in 1979, and expansion of the GMS was curtailed. However, because of different location strategies, GMS chains contain many more stores than traditional department stores. They also tend to rely somewhat more heavily on their supermarkets (Table I). To cope with the Large Store Law and spiralling land prices, GMS stores, in particular, have invested heavily in small convenience and small speciality stores. They now own most of the large convenience and speciality retail chains in Japan[6]. Many stores, including Tokyu and Seibu, have also begun diversifying into non-store retailing methods[7]. However, until the Large Store Law was relaxed in 1993, there was little opportunity in Japan to establish large new department stores, with their attached supermarkets. These department store/supermarket complexes are the core business for both the traditional and the GMS

Store Seiyu Jusco Uny

Retail sector GMS GMS GMS

Number of stores in Japan 201 172 118 7 6 3 17

Food as percentage of sales 38.1 38.8 39.6 17.5 22.0 18.1 15.2

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