Dec 10, 2009
Seven & I aims to boost China revenue fivefold
Dec 10, 2009
By Taiga Uranaka
TOKYO, Dec 10 (Reuters) - Seven & I Holdings (3382.T) said on Thursday 10 December it aims to boost its revenue from China fivefold to about $4.5 billion over the next five years, as weak prospects in Japan prompt the country's retailers to seek growth in its fast growing Asian neighbour.
Aeon Co Ltd
Seven & I, Japan's largest retailer, and its domestic rivals such as Aeon Co Ltd (8267.T) are planning aggressive store openings in China, whose strong growth has attracted global industry leaders like Wal-Mart (WMT.N), Carrefour (CARR.PA) and Tesco (TESO.O).
Japanese retailers have been suffering sharp sales declines amid deflation, and the country's ageing population is weighing on their long-term growth prospects at home.
"Japanese retailers have to expand their Chinese businesses, otherwise they cannot survive. Actually, they should have started doing this in earnest a lot sooner," said Naozumi Nishimura, retail analyst at a research firm TIW.
"They have to expand fast now, or they will lose out on major opportunities to other rivals."
China's store-based retail market is expected to grow 9.9 percent to $915 billion in 2009, Euromonitor said, compared with Japan's estimated $985.2 billion, up 5.1 percent from a year earlier.
Seven & I said it plans to increase the number of its Seven-Eleven convenience stores in China by more than five times to 500 locations over the next three years.
The firm, which also runs Ito-Yokado supermarkets, said it aims to boost its China sales to about 400 billion yen ($4.5 billion) for the year ending in February 2015, up from 80 billion yen in the last financial year, a company spokesman said.
Rival Aeon has said it plans to double its number of supermarkets in China to 100 within a few years.
Fast Retailing CEO Tadashi Yanai has said given its vast market potential, he expects to have 1,000 locations for large Uniqlo stores alone in China by 2020. ($1=88.23 Yen) (Reporting by Taiga Uranaka; Editing by Joseph Radford)
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