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e-Magazine (For the Japanese version of this article)

Series: Understanding Japan through Key Words (Part 17) JETRO-Convenience Store Collaboration on TPP Market Development [Date of Issue: 29/February/2016 No.0252-1000]

Date of Issue: 29/February/2016

Series: Understanding Japan through Key Words (Part 17)
JETRO-Convenience Store Collaboration on TPP Market Development

The Japan External Trade Organization (JETRO) and a number of major convenience store chains plan to work together to develop overseas markets. With agreement finally reached in the Trans-Pacific Partnership (TPP) negotiations, these stores and JETRO aim to accelerate the pace of expansion into Malaysia, Vietnam and other countries where the TPP will ease restrictions on foreign capital, as well as growing Japanese product sales through Japanese convenience store networks. JETRO and the convenience stores are currently engaged in working-level consultations with an eye to designing their first package of specific collaborative measures before the end of March 2016.

In November 2015, the Japanese government adopted the TPP-Related Comprehensive Policy Framework. The government's basic policy is to use the elimination of duties and liberalization of investment rules that will occur once the TPP is ratified as stepping stones to expanding business opportunities for Japanese companies worldwide. Within that framework, METI has positioned joint government-private sector overseas expansion of the convenience store industry as one pillar among those areas under METI jurisdiction. A council to promote JETRO- convenience store collaboration was launched in January 2016.

The first meeting of the council was attended by the heads of Seven Eleven Japan, FamilyMart, Ministop and Lawson along with JETRO Chairman Hiroyuki Ishige, while METI Minister Motoo Hayashi was also present. At the meeting, Minister Hayashi stressed that TPP members account for 40 percent of world gross domestic product (GDP), with the TPP creating a massive economic zone that absorbs 30 percent of Japan's exports. He expressed strong hopes for the new JETRO-convenience store initiative as a means of opening markets.

The cooperation planned by JETRO includes gathering information on the distribution situation and on potential local partners in those countries where Japanese convenience stores are hoping to set up. Information on products manufactured by Japanese small and medium enterprises (SMEs) and medium-ranked firms will also be supplied to the convenience stores, focusing particularly on food products, soap, exercise books and other miscellaneous products, with support for test sales in Asia to commence before the end of FY2016.

The agreement reached in the TPP negotiations in October 2015 should mean, for example, that Malaysia relaxes its restrictions on foreign companies investing in the distribution industry. Foreign investment in local convenience stores has been banned in the past, but if the TPP goes into force, it will open the way for capital investment up to 30 percent. This should give foreign firms a greater degree of management freedom.

In Vietnam, restrictions on foreign firms setting up convenience stores and supermarkets will be subject to a completely overhaul. More specifically, economic needs testing (ENT), which requires Japanese, US and European distributors to undergo licensing procedures for each new outlet they intend to open beyond the first one, will be eliminated after a five-year grace period once the TPP goes into force. This will enable Japanese firms to pursue more nimble store strategies in Vietnam, a growth market with a population of 90 million people.

(original article : Japanese)

*This article was written by a specialist journalist.
(For the Japanese version of this article)


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