Go to Sumitomo Corporation in North, Central and South America Site.
close

Global Cases

Retail business in Asian countries contributes to safe and comfortable living by supporting wellbeing and good eating

Taiwan / Vietnam

Expanding into Asian markets

The history of Sumitomo Corporation Group’s retail business dates back more than half a century. It opened the predecessor store of its supermarket chain Summit in the 1960s, and its first Tomod’s drugstore in the 1990s. Summit and Tomod’s are fully-owned subsidiaries, and are today the two flagship brands of Sumitomo Corporation’s retail business. It is mainly through Summit and Tomod’s that Sumitomo Corporation has been conducting consumer business on an ongoing basis, maintaining and strengthening its contact with consumers.

Sumitomo Corporation also takes its retail know-how overseas for the full-scale deployment of its retail business in Asian markets. In 2012, the first Tomod’s drugstore overseas opened in Taiwan, where the opening of three more stores followed on an experimental basis before gradual expansion of the number of stores, which today stands at 44 across Taiwan(as of April 30, 2019.)

In Taiwan, the company in June 2018 also invested in Simple Mart, a local supermarket chain with nearly 700 stores. The role of Sumitomo Corporation is to enhance the value of the Simple Mart by employing the marketing and store design know-how acquired through the operation of Summit. Simple Mart aims to increase the number of its stores to 1,100 by 2021.

Tomod’s has both mall and free-standing stores across Taiwan
Simple Mart is a chain of small stores typically with a sales space of about 100 square meters, dealing mainly in non-perishable foods

Making shopping an entertaining experience for local people

In 2018, Sumitomo Corporation’s retail business entered the Vietnamese market as well. There, the retail brand is Fuji Mart, which aims to offer people in Vietnam the quality of Japanese supermarkets.

Forming joint ventures with local partners is Sumitomo Corporation’s preferred method of retail business participation in Asian markets. This model involves the Sumitomo Corporation Group conducting marketing and store design, while entrusting supply chain building and store management to local partners with expertise in local business practices and logistics.

Comprehensive drugstores like Tomod’s, with extensive product ranges, are still new to many parts of Asian countries, where the habit of enjoying everyday shopping at modern supermarkets has yet to take root. A major challenge for the Sumitomo Corporation Group is to let consumers feel the fresh and appealing shopping by proposing store styles unique to Japan.

The first Fuji Mart store is a two-story building, offering 8,000 product categories including fresh food and household goods

Practical retail experience leveraged overseas

Understanding local food culture and consumer sentiment, and tailoring store design and merchandising accordingly is an important commitment. This kind of localization is conducted by diligently observing shopper behavior first-hand, listening carefully to local staff feedback, and closely watching competitor movements.

A powerful strength of the Sumitomo Corporation Group in this regard is the practical retail experience of group employees. Sumitomo Corporation’s Lifestyle & Retail Business Division has many employees with practical retail experience involving direct communication with customers. Their ability to quickly and accurately access the retail operation and learning about their customers, honed by experience at the front line of retail, is applied to the group’s retail business overseas.

The product range includes many types of fruit, confectioneries, dietary supplements and other foods imported from Japan
Some deli foods and bread are prepared in-store to offer safe and reliable food products

The four aspects valued by our overseas projects

The Sumitomo Corporation Group’s overseas retail business emphasizes the following four aspects: “Commitment,” “Hands-on management,” “Retail-operation know-how,” and “Keep challenging.”

“Commitment” involves staying committed without giving up in the face of adversity. “Hands-on management” means that the group dispatches employees from Japan to build and nurture stores in partnership with local staff, rather than simply providing funds and know-how. “Retail-operation know-how” is the know-how the group has established through long time retail operation in Japan. “Keep challenging” means that the group will remain open to technological and other fresh innovations in retail.

A major goal of the group in addition to expanding its business in Taiwan and Vietnam is to enter markets in other countries and regions in Asia. The global network the group has built to date is expected to become a powerful asset in opening new stores overseas.

The Sumitomo Corporation group looks forward to consistently driving operational improvement overseas, optimally leveraging its experience to date, and continuously taking on new retail challenges in Asia markets.

Sampling, still relatively new in Vietnam, helps introduce local people to Japanese food and cooking methods
The stores have a larger range of deli food than local supermarkets, and also have dining spaces for enjoying them on the spot

May 2019

Keyword

  • Living Related & Real Estate Business
  • East Asia
  • Asia and Oceania
  • Retail Service Operations

Related Cases

Top