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Convenience store chains draw up different plans for Chinese market

03/03/2024 04:01 PM
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A 7-Eleven convenience store is seen in this CNA file picture.
A 7-Eleven convenience store is seen in this CNA file picture.

Taipei, March 3 (CNA) Two major Taiwanese convenience store chains have announced very different plans to help them adapt better to local conditions and create an optimal business model for the Chinese market.

President Chain Store Corp. said on Feb. 26 that it was planning a 700 million Chinese yuan (US$97.2 million) capital increase to inject funds into its 7-Eleven operations in the city of Shanghai and Zhejiang province.

The company's 7-Eleven operations incurred losses of NT$160 million (US$5.07 million) in Shanghai and NT$137 million in Zhejiang, according to its financial reports covering the first three quarters of 2023.

Market analyst Lee Shi-chen (李世珍) pointed out that the company's plan to increase investments in its Shanghai and Zhejiang operations indicated its optimism that new strategies will help it succeed in the Chinese market.

As of January, the company has 251 7-Eleven stores in Shanghai and has had a presence in the city since 2009. It has 141 stores in Zhejiang following its debut in the eastern Chinese province in 2007.

This starkly contrasts with its presence in Taiwan, where there are projected to be more than 7,000 7-Eleven stores by the end of 2024.

Meanwhile, Taiwan FamilyMart Co., Ltd. announced on Feb. 29 that it would be reducing investment in its Chinese operations, to enhance efficiency.

FamilyMart, in collaboration with the Taipei-based Ting Hsin International Group, has been operating chain stores across nine Chinese cities since 2003. Under its new plan, the company will focus its investments solely on four cities -- Shanghai, Suzhou, Wuxi, and Hangzhou -- while leaving the remaining cities under the management of Ting Hsin.

A market analyst, who declined to be named, said that FamilyMart has expanded too rapidly since its debut in China in 2003 and has faced challenges, particularly since the onset of COVID-19.

With the Chinese consumer market increasingly dominated by e-commerce and delivery services, FamilyMart may have decided to shift its focus to the eastern China market, the analyst suggested.

(By He Hsiu-ling and Lee Hsin-Yin)

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