Sumitomo Corporation to Launch E-commerce Business in China and Indonesia

Sumitomo Corporation (Head Office: Chuo-ku, Tokyo; President and CEO: Susumu Kato) established Sumisho E-commerce Shanghai Ltd.(Head Office: Shanghai; President: Wataru Kuribayashi; hereinafter "SE Shanghai") in November 2011, and PT Sumisho E-commerce Indonesia (Head Office: Jakarta; President: Taketo Kokubo; hereinafter "SE Indonesia") in February 2012. Through these two subsidiaries, Sumitomo Corporation will launch an e-commerce business retailing consumer goods in China and Indonesia.

Sumitomo Corporation's current e-commerce business
Sumitomo Corporation has been proactively developing its e-commerce business as a key area to its growth strategy, focusing on the domestic market. The activities and growth of this business within Sumitomo Corporation group have been driven by Soukai Drug Co., Ltd. (Head Office: Shibuya-ku, Tokyo; President: Noriaki Komori; hereinafter "Soukai Drug"), an associated company of Sumitomo Corporation. Soukai Drug has been steadily expanding its online sales at the remarkable annual rate of almost 40 percent, significantly exceeding Japan's e-commerce businesses average of 10-20 percent. Currently offering a total of 80,000-plus household items in a broad range of categories from mineral water, health food, laundry/dishwasher detergent and fabric softener to pet care products, the online drugstore expects to post more than 12 billion yen in sales for this fiscal year. Also, the company's performance has been highly regarded, as illustrated by winning the grand prize for the third consecutive year in the "Rakuten Ichiba Shop of the Year" awards, hosted by Japan's largest e-commerce platform operator.

Utilizing online retailing know-how and a product procurement ability cultivated over many years by Soukai Drug, in combination with the logistics functions of the Group, Sumitomo Corporation will enter into e-commerce markets in the emerging economies of Asia, expecting a robust increase in domestic demand in these markets. Following the recent establishment of the two subsidiaries in China and Indonesia, Sumitomo Corporation is planning to expand its online retail business to other parts of Asia and to other regions in the world. Sumitomo's plan is to achieve 100 billion yen in annual e-commerce sales of food and household goods in combined Japanese and overseas markets.

Sumitomo Corporation's plan for e-commerce in China―"Pindian"
China's e-commerce market witnessed an average annual growth rate of 180 percent from 2008 to 2010. This burgeoning market is expected to expand to 8 trillion yen in 2014, almost equivalent to the size of the current Japanese e-commerce market. Through SE Shanghai, Sumitomo Corporation will make its foray into this huge-potential market by opening an online store focusing on luxury and import items, under the brand name of "Pindian," which means a "shop of selected high-quality products." The new online store will launch a trial service mainly in Shanghai in late April 2012, and expand operations to other areas thereafter. The exact opening date will be announced soon.

Sumitomo Corporation's plan for e-commerce in Indonesia
In Indonesia, e-commerce is still in its infancy, but is likely to expand rapidly, driven by the country's strong economic growth and its population of 240 million people. Aiming to tap the tremendous market potential, Sumitomo Corporation will start to offer online shopping service via SE Indonesia mainly in Jakarta in late August 2012, and expand operations to other areas thereafter. The exact opening date will be announced soon.

■Company Profile　　Soukai Drug Co., Ltd.

■Sumisho E-commerce Shanghai Ltd.

■PT Sumisho E-commerce Indonesia