7-Eleven Struggles Over Its China Strategy
Just as the battle for China's convenience store market
is taking shape, 7-Eleven Corporation, the holding company
for the 7/11 franchise worldwide, is struggling over which
companies will get the franchise for the China market.
Business analysts predict that convenience store competition
in China will get white-hot in the second half of the
year, and in the first half of next year. C. Itoh, a Japanese
trading company which holds a significant piece of 7-Eleven
shares, has partnered with Taiwan and China's Ding Xin
food making group to manage Family Mart convenience stores
in Taiwan. Armed with this knowledge, it has already opened
six Family Mart convenience stores in the Shanghai area.
Shanghai already has 3,500 convenience stores in the
greater Shanghai area. Although Taiwan's largest food
maker, President Foods, cooperates with 7-Eleven Corporation
and 7-Eleven Japan, it only has a 14% share in the China
joint venture, and does not participate in management
and operations. For this reason, it has asked for the
franchise in the Shanghai area.
However, 7-Eleven corporation has not been able to come
to a decision over who would own the franchise in the
Shanghai and Beijing areas because so many parties want
it. And all of them are fairly major players in 7-Eleven
Corporation. It is believed that the main Japanese players
in 7-Eleven Corporation, such as Toshifumi Suzuki, who
is Vice Chairman, want 7-Eleven Japan to play a major
role in the China market, instead of partnering with any
Taiwan corporations or local partners.
Dairy Farm of Hong Kong already has rights in Hong Kong
and Guangdong province, and has opened 85 stores in Guangdong.
Taiwan's President Foods has opened 3,200 stores in Taiwan,
and is the most successful convenience store chain on
the island.
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