長崎県立大学東アジア研究所『東アジア評論』
第号（．）

〈研究論文〉

Japanese Foreign Direct Investment­Japanese Retailers in Southeast Asia­*

Atsuji OHARA
Takako OHARA
in Asia, especially Southeast Asia by Japanese retail andⅠ．Introduction

overview of department stores and convenience stores

Under the WTO regime, a significant trend of FDI

in Southeast Asia . Chapter Ⅱ describes five reasons forhighlighted in recent World Investment Reports has

increasing the investment by retail industry. Chapter Ⅲ

been the shift from manufacturing to services. In 1970,

introduce Japanese department stores and conveniencefor example, services FDI accounted for a quarter ofstores in Southeast Asia.

international FDI stock. In 1990, the share increased toabout half, and in 2014, the share of services FDI oninternational stock rose to 64 percent. Particular

Ⅱ．Five reasons to shift FDI to the RetailIndustry

services FDI in developing Asia accounted for 70
percent . Japanese companies also have been shiftingfrom manufacturing sector to service sector.

This paper presents five reasons to increase foreign
direct investment in Southeast Asia by Japanese

Despite the increase in services FDI over the lastretailers.

decade, the literature on the FDI tends to focus onFirstly, Japanese retail market is downsizing

manufacturing FDI . Regarding Japanese FDI, an

because of aging (Figure 1). Although convenience stores

empirical results show that Japanese enterprises tended

exceeded the sales of supermarkets for the first time into choose an economic-oriented rather than a political-

2017, the rate of increase in sales has declined year onoriented city as their investment location, with theyear (Table 1). Department store sales are lower thanconsequence being higher survival likelihoods inonline order sales. Japanese retailers such as

Shanghai than in Beijing. This location choice helped

convenience stores, supermarkets and department

Japanese firms avoid policy uncertainty and politicalstores would like to invest in Asia regions.

hazards in Chinaʼs transition economy .
This paper seeks to present several reasons of FDI*This paper primary presented at the 7th Academic Alliance Exchange Forum, Dong A University, Danang,Vietnam in May 26 2017.
Associate Professor, University of Nagasaki, ohara 2012@sun.ac.jp
PhD Candidate in Business, Nagasaki University, oharatakako@gmail.com−−

長崎県立大学東アジア研究所『東アジア評論』第 号（．）

Aging Speed of Asian CountriesSource: United Nations, World Population Prospects: The 2004 Revision
Population Database.

Table 1. Retail Sales in Japan

Units: JPY billions

YOY

Department
store

YOY

5,090

9.0%

6,145

­1.0%

5,410

6.3%

6,217

1.2%

3.1%

5,860

8.3%

6,212

­0.1%

10,267

3.6%

6,150

4.9%

6,174

­0.6%

10,546

2.6%

6,510

5.9%

5,978

­3.2%

10,648

1.0%

6,940

6.6%

5,953

­0.4%

Super
marketConvenience
store

YOY

2012

9,027

4.4%

9,641

1.0%

2013

9,388

4.0%

9,484

1.7%

2014

9,735

3.7%

9,874

2015

10,2064.8%

2016

10,5072.9%

201710,698

1.8%

YOY

Notes: The sales data of Convenience stores,

Onlinemodel.

Supermarkets and Department stores are in theThirdly, supply chain supports the backbone ofcalendar year. Online data is in the fiscal year starting

retail business (Figure 2). Adoption of an efficient supply

April.

chain between producers and consumers by modernSource: Japan Franchise Association, New Supermarket

large retailers could reduce average transaction and

Association of Japan, All Japan Supermarket association,

information costs of market exchange; generate surplus

JapanDirectfor stakeholders such as producers, farmers, andMarketing Association and, Japan Department Storesconsumers; expand output; and could thereby contribute

Association.

to economic growth and net employment gains.

Supermarkets

Association,Japan

Secondly, Japanese retailers are driven by theJapanese retailers can introduce a highly advanced

search for new customers, specifically among the middle

supply chain and develop local producers and generateclass in Southeast Asia, where they have the advantage

externalities.

of being able to capitalize on brand equity and business−−

Japanese Foreign Direct Investment

Value Chain of Convenience Stores

Table 2. Japanese FDI Position in 2006 and 2016
2006

Total

Units: JPY millions

ManufacturingNon-manufacturing

Total
Asia

534,760
128,021

312,31791,800222,443
36,221% of Non-m

China

36,052

27,994

8,058

22.4%

Asia ex.China
Asia, % of Total

91,97023.9%

63,80729.4%

28,163
16.3%

30.6%­41.6%
28.3%

China, % of Total

6.7%

9.0%

3.6%

­

Asia ex.China, % of Total

17.2%

20.4%

12.7%

­TotalTotal
Manufacturing Non-manufacturing
1,536,091
646,649
889,441% of Non-m
57.9%

Asia423,638

242,247

181,392

42.8%

China
Asia ex.China

126,468
297,171

82,916
159,331

43,552
137,840

34.4%
46.4%

Asia, % of Total

27.6%

37.5%

20.4%

­China, % of Total
Asia ex.China, % of Total

8.2%
19.3%

12.8%
24.6%

4.9%
15.5%

­
­

Total, 2016/2006

1.9

1.1

3.0

­

Asia, 2016/2006
China, 2016/2006

2.3
2.5

1.6
2.0

4.0
4.4

­
­

Asia ex.2016/2006

2.2

1.5

3.9

­

2016

Source: Bank of Japan

Fourthly, Japanese retailers are expanding FDI

Lastly, a large number of inbound tourists to Japanfrom China to Southeast Asia. They select diversified

will strengthen brand equity of Japanese retailers andstrategy rather than concentration to China market

products like cosmetics and toiletries.

especially after the China anti-Japanese demonstrationsof 2012. The proportion of non-manufacturing industry indirect investment has increased from 41.6% in 2006 toⅢ．Japanese Retailers in Southeast Asia

57.9% in 2016 (Table 2). The share of direct investment inAccording to the increase of direct investment fromAsia ex. China has increased from 30.6% in 2006 to 46.4%.

Japan, service industry outperforms manufacturing−−長崎県立大学東アジア研究所『東アジア評論』第 号（．）

industry in recent year. However, research in theof the distribution industry has been started forservice industry has not progressed much as compared

distribution business in Europe and the United States. It

with research in the manufacturing industry in Japan .

became increasing as the number of store openings in

Asian researchers are interested in economic impact ofAsia increased as the distribution business in the West

FDI .

became a multinational corporation. Research onThis paper aims to organize the history of Japanoverseas expansion of the distribution industry has beenretailers in Southeast Asia and the reasons for theirstarted for distribution business in Europe and theinvestment in this region.

United States. It became increasing as the number ofRegarding Southeast Asia, Daimaru began instore openings in Asia increased as the distribution

Thailand and advanced to Singapore, Hong Kong, andbusiness in the West became a multinational corporation.

others.
Recently, Takashimaya opened a store in Ho Chi

Although the overseas expansion starts in theMinh City, Vietnam in 2016, and plans to open a store inJapanese distribution industry from the 1960s onward,Bangkok, Thailand in 2017. In addition, Isetan

there is not much research accumulation except for

Mitsukoshi Group is considering opening stores innewspaper and magazine articles. Daimaru has opened

Manila, the Philippines. Research on overseas expansion

stores in Hong Kong in 1960, and in Bangkok, Thailand in

Table 3. Number of Japanese Convenience Stores by Countries
Seven-Eleven FamilyMart
Korea
Thai

9,231
10,268USA
TaiwanChina

LawsonMINISTOP

Total

Change%01,134085

2,462
011,693
11,487

7.1%
7.1%

8,421

0208,423

­1.7%

5,221
2,599

3,1542,177

01,003

065

8,375
5,844

2.4%
18.0%
10.7%

Philippines

2,285

66

30496

2,877

Malaysia

2,225

32

002,257

6.2%

MexicoAustralia

1,835
675

000000

1,835
675

­2.3%
4.5%

Canada640

00064024.5%

Singapore
Vietnam

393
110160000110

393
281

­5.8%
44.1%

Sweden187

000187

2.2%

Denmark
Norway183
153000000183
153

­2.1%
­0.6%

Indonesia

086

360122­53.6%

UAE

130001385.7%

Total

44,340

6,809

1,156

3,133

55,438­22.7%

Source: Seven-Eleven (2017.12.31), FamilyMart (2017.12.31), Lawson (2017.2.28),
MINISTOP (2017.12.31) and Hamamoto Atsushi (2016), ”Ajia niokeru nikkei konbini
no tenkaijyoukyo”, Ajia Keizai kenkyujyo, Nioopon-gata Convenience store
tojyokokutennkai to hinkonnsakugen.

−−Japanese Foreign Direct Investment

1964, Respectively. Matsuzakaya opened a store in

rather than the concentration in China market, 5)

Manila, Philippines in 1966. Since the 1980s, Sogo andIncreasing inbound tourists to Japan will strengthen

Yaohan were developing multiple stores in Southeast

Japanese retailers and productsʼ brand equity.

Asia and China. Since then, due to the management

This paper also mentions the case of Japanesecrisis caused by the nonperforming loan problem indepartment stores and convenience stores in Southeast

Japan, overseas stores were forced to contract andAsia. 7-Eleven has the highest share of among Japanesewithdraw.

convenience stores. The fact that the number ofRecently, inbound tourism to Southeast Asia andJapanese convenience stores are declining in Europe andChina, Japan has increased, and the service balance ofthe US is expected to compete with local AsianJapan is in surplus in 2016. For Takashimaya and Isetan

companies even in Southeast Asia in the near future.

Mitsukoshi, inbound touristsʼ shopping is also increasing,

We would like to make competition with local

together with Asian stores, they are enhancing brandcompanies and comprehensive case study as a future

power in Asia and synergy effects are expected. Of

research topic.

course, the fact that income in Southeast Asia and China
improves due to industrialization and promotion ofAnnotation
UNCTAD (2015),, UNCTAD (2016),.
UNCTAD (2016),.
Ramasamy, Bala, Yeung, Matthew (2010), “TheDeterminants of Foreign Direct Investment inServices”,, Vol.33, No.4.
Ma, Xufei, Andrew Delios (2007), “A new tale oftwo cities: Japanese FDIs in Shanghai and Beijing,1979-2003”,, Vol.16,
No.2.
There are some case studies retailers inSoutheast Asia. Nguyen, Phuong (2017), “Analysisof retail market in Vietnam Case : Vingroup”,
Master Thesis submitted to Helsinki Metropolia
University,
Supasansanee,Latika
andKasiphongphaisan,
Patthaveekarn( 2009 ) ,“Logistics Management in Retail Industry : Acase study of 7-Eleven in Thailand”, Master
Thesis submitted to Jönköping University, Ma,Xufei, Andrew Delios (2007), “A new tale of twocities: Japanese FDIs in Shanghai and Beijing,1979-2003”,, Vol.16,No.2.
Sato, Yukihito (2009), “Strategic Choices ofConvenience Stores Chains in China: 7-Eleven andFamilyMart,China Information. Vol. 23, No. 1,
Anh Le Viet (2007), “FDI-Growth Nexus inVietnam”,, Vol.31.

exports, and Asian branch in Japanʼs distribution
business is deeply involved.
Because Seven Eleven closed stores in Indonesian,overseas convenience stores decreased by 22.7% sinceone year ago (Table 3). However, Seven Eleven stillaccounts for 80% of overseas expansion convenience
stores. FamilyMart has relative strong network in China,Vietnam and Indonesia.
The fact that the number of Japanese convenience
stores is declining in Europe and the US is expected tocompete with local Asian companies even in Southeast
Asia from now on. We would like to make this a future
research topic.

Ⅳ．Conclusion
This paper describes five reasons that Japaneseretailers investment in Southeast Asia. 1)Aging society
in Japan and downsizing Japanese markets, 2)Theyexpect to grow the middle class in Southeast Asia, 3)thedevelopment of supply chain, 4)Diversifies strategy−−長崎県立大学東アジア研究所『東アジア評論』第 号（．）

References
Anh Le Viet (2007), “FDI-Growth Nexus in Vietnam”,, Vol.31.
Hamamoto Atsushi (2016), ”Ajia niokeru nikkei konbini
no tenkaijyoukyo”, Ajia Keizai kenkyujyo, Nioopongata

Conveniencestore

tojyokokutennkai

tohinkonnsakugen.
Ma, Xufei, Andrew Delios (2007), “A new tale of twocities: Japanese FDIs in Shanghai and Beijing, 19792003”,, Vol.16, No.2.

Nguyen, Phuong (2017), “Analysis of retail market inVietnam Case : Vingroup”, Master Thesis submitted
to Helsinki Metropolia University.
Ramasamy, Bala, Yeung, Matthew (2010), “TheDeterminants of Foreign Direct Investment inServices”,, Vol.33, No.4.

Sato, Yukihito (2009), “Strategic Choices of Convenience
Stores Chains in China: 7-Eleven and FamilyMart,. Vol. 23, No. 1,Supasansanee,LatikaandKasiphongphaisan,Patthaveekarn (2009), “Logistics Management in RetailIndustry : A case study of 7-Eleven in Thailand”,
Master Thesis submitted to Jönköping University.
UNCTAD (2015),.

UNCTAD (2016),.

−−