7-Eleven Thailand Affiliate Joins Bidding War
For China Franchise
Four Asia-based 7-Eleven affiliates are in a bidding
war to capture the China franchise. The four companies
are the current 7-Eleven affiliates for Japan, Hong Kong,
Taiwan and Thailand. The global master franchise holder
which will benefit from this bidding war is 7-Eleven of
the United States.
7-Eleven has done well in Asia because of the highly
concentrated urban population. Modern families are usually
too busy to go out and do shopping, and often shop at
their nearest convenience store. As a result, average
sales per square foot, the main metric for retail sales,
are higher in Asia than in the same store chain in Europe
and the US.
Currently, Japan has the largest number of 7-Eleven stores,
with more than 9,000, followed by the US (5,600 stores),
Taiwan (3,200 stores) and Thailand (2,310 stores). Right
now, there are only a few 7-Eleven stores in China's Guangdong
province which are operated by the Hong Kong franchise.
This situation will change as soon as the China franchise
holder is selected.
Up until very recently, the Japan, Taiwan and Hong Kong
franchise holders were the only companies fighting for
the China franchise. That has now changed, with Thailand's
Charoen Pokphand Group's 7-Eleven affiliate joining the
fray. Boosted by the fact that it is now the fastest growing
affiliate in number of stores opening annually, it has
expressed its interest in the China franchise, and made
an internal presentation to 7-Eleven of the US. Currently,
it has 2,310 stores in Thailand, and plans to have more
than 3,000 stores in two years.
Its revenue in Thailand in the first nine months of 2003
had increased 37 percent year on year to 44.7 billion
baht, with net profit rising 28 percent to 1,019 million
baht. Third quarter net profit was 262.5 million baht,
an increase of 87.4 percent from the same period last
year.
The Charoen Pokphand Group has more than 15 years of
experience in China, mainly in the animal husbandry and
feed business.
It is not known when the China franchise will be selected,
but it will most likely be within the next six months.
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