---
title: "Leaving 7-Eleven and FamilyMart Behind, Lawson China Marches Toward 10,000 Stores"
description: "When foreign convenience store chains lower their proud heads. The term '10,000 stores' is no longer rare, with Mixue Bingcheng in tea drinks, Luckin Coffee in coffee, and Meiyijia in convenience stores. But for foreign brands, cases of setting and steadily pursuing a 10,000-store goal are few. Lawson is one, aiming for '10,000 stores in China by 2025.' Despite the pandemic's impact on offline retail, Lawson has maintained rapid expansion, adding 1,175 stores in 2022, second only to Meiyijia among top 10 brands, and achieving its first profit in China in two years."
author: "任彩茹"
publisher: "New Distribution"
email: "zhaobo258@gmail.com"
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published: "2023-08-24"
language: "en"
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# Leaving 7-Eleven and FamilyMart Behind, Lawson China Marches Toward 10,000 Stores

> When foreign convenience store chains lower their proud heads. The term '10,000 stores' is no longer rare, with Mixue Bingcheng in tea drinks, Luckin Coffee in coffee, and Meiyijia in convenience stores. But for foreign brands, cases of setting and steadily pursuing a 10,000-store goal are few. Lawson is one, aiming for '10,000 stores in China by 2025.' Despite the pandemic's impact on offline retail, Lawson has maintained rapid expansion, adding 1,175 stores in 2022, second only to Meiyijia among top 10 brands, and achieving its first profit in China in two years.

When foreign convenience store chains lower their proud heads. The term '10,000 stores' is no longer rare, with Mixue Bingcheng in tea drinks, Luckin Coffee in coffee, and Meiyijia in convenience stores. But for foreign brands, cases of setting and steadily pursuing a 10,000-store goal are few. Lawson is one, aiming for '10,000 stores in China by 2025.' Over the past two years, offline retail has been hit by the pandemic. 7-Eleven, which entered China around the same time as Lawson, has expanded slowly, and FamilyMart even showed contraction in 2022, with a net decrease of 134 stores. Lawson, however, maintained a rapid pace—adding 1,175 stores in 2022, with growth second only to Meiyijia among top 10 brands. In July last year, Lawson opened its 5,000th store in China, and a year later, that number surpassed 6,000, nearly matching Starbucks' store count in China. Beyond scale, Lawson's March-May 2023 results, released last month, showed China operations achieved an operating profit of 200 million yen (approximately 10.3 million yuan), the first profit in two years, compared to a loss of 2.8 billion yen in the same period last year. Prior to this, Lawson China achieved its first full-year profit in 2020, becoming the first Japanese convenience store brand to achieve overall profitability in China, ahead of 7-Eleven and FamilyMart, but failed to sustain it due to renewed pandemic impacts. In the not-so-glamorous convenience store business, Lawson China's rapid expansion and renewed profitability make it a model for foreign convenience store brands aiming for 10,000 stores in the local market.

**Going to Lower-Tier Markets with a 'Flexible' Posture**

Lawson's flexibility in expansion models has long been praised and is a key contributor to its rapid growth. Previously, building fresh food supply chains was time-consuming and costly, with long profit cycles, and unfamiliarity with regions made Japanese convenience stores, which tightly control supply chains, slow to expand locally. But Lawson successfully overcame these challenges. Specifically, Lawson adopted models like regional licensing and large-area franchising early on to enter unfamiliar territories. For example, it allied with Zhongbai Group in Hubei and Hunan, and with Chaoshifa in the Beijing-Tianjin-Hebei region, leveraging these local enterprises' warehousing and logistics systems, supply chains, factory resources, and market familiarity to achieve rapid coverage of unfamiliar markets. Today, Wuhan Zhongbai Lawson, established in 2016, has opened 639 stores, and Shenyang Lawson, established in 2019, has opened 656 stores. A more recent example is Sichuan, a market controlled by local giant Hongqi Chain, where Lawson entered through this method. In 2021, Lawson acquired all equity of Sichuan 'WOWO Supermarket,' fulfilling its 'Sichuan dream' through a 'rebranding' approach. As of the end of June this year, 'Chengdu Lawson' had opened 846 stores. A franchisee in Hunan said that choosing Lawson was partly due to its brand image, but more importantly, trust in Zhongbai's endorsement. '7-Eleven in Hunan is also jointly operated with a local enterprise, but Zhongbai's scale, reputation, and state-owned background are more convincing.'

Beyond easier access to franchisee trust, joint ventures with local enterprises also offer consumers more convenience, subtly expanding audience size. A Wuhan resident praised the Lawson-Zhongbai cooperation as 'an absolute win-win,' noting that many local units issue shopping cards for holidays, mostly Zhongbai cards, which can also be used at Zhongbai Lawson, giving him a good impression and experience with Lawson.

Deep binding with local enterprises, plus a more diversified franchise model, has also helped Lawson enter the vast lower-tier markets. As a business with strong 'imported' attributes, convenience stores were initially tightly bound to 'urbanites,' but facing scale competition, going downmarket has become a 'required move.' Lawson, now with 6,000 stores, leads foreign brands in downmarket penetration. Social platforms are full of 'Lawson check-ins' from fourth- and fifth-tier cities, with bloggers in Guanghan, Sichuan, and Xingcheng, Liaoning, marveling that 'small counties have Lawson stores.' In developed regions like Jiangsu, Lawson has even gone down to towns. Behind this, Lawson's 'large franchisees' have reached the city and county level, cooperating with Hualian Supermarket in Jiangyin and Huakai Group in Cangzhou, solving store location and warehousing issues in a lighter way.

Looking back at the expansion, in early 2022, Lawson China Director Zhang Sheng stepped down from his role as executive director in Japan. Some questioned that 'Zhang Sheng's rapid expansion in China conflicted with the Japanese management's cautious approach to expansion.' However, as early as a 2021 earnings call, Lawson Group President Sadanobu Takemasa, when discussing China performance, said, 'We will maintain profitability and strive to open more than 10,000 stores,' and in terms of specific methods, 'including partnering with local companies, Lawson is considering various ways to conduct business.' Clearly, there has long been consensus between Chinese and Japanese management on the desire for scale.

In contrast, local convenience store star 'Bianlifeng' has been continuously contracting in recent years. Bianlifeng's digital story once sparked market imagination, but its pure direct-operated model left it passive during economic downturns. After an initial cash-burning period, scale and performance failed to keep up, and it remains mired in layoffs and store closures.

**At the Forefront of the Youth Marketing Battle**

Lawson has been established for nearly 50 years and has been in China for 27 years, but it never seems to show signs of aging. On the contrary, a supplier in the daily chemical industry said that 'knowing how to play and market' is Lawson's label. According to 36Kr's incomplete statistics, Lawson conducted more than ten IP collaborations in the past two months, including joint product launches, themed stores, and co-branded events, with partners like the popular Eggy Party, Time Agent, Luo Tianyi, Meiyi Liya, and Tianguan Cifu. In these activities, anime and games appear most frequently, and Lawson's official account avatars on various platforms are also anime-style, firmly grasping the 'traffic code' of young people and parent-child consumers. For example, in the collaboration with the game 'Mr. Love: Queen's Choice' at the end of last year, the IP-themed store featured large character posters and stickers, and offered wafer cookies with corresponding designs, as well as small merchandise like card holders. Many bloggers on Xiaohongshu posted that after rushing to the themed store, merchandise was already sold out. Collaborations with Genshin Impact and Eggy Party had similar 'blockbuster effects.' Entering young people's worlds in ways they like has helped Lawson build a loyal customer base. As of April 2023, Lawson China had 28 million members, accounting for 30% of all customers.

Strong partners and large franchisees, along with endless IP collaborations and themed stores, have to some extent formed the foundation for Lawson's rapid expansion. But in this fiercely competitive industry with entrenched local players, it is far from the time to 'rest easy.' To truly achieve the 10,000-store goal by 2025, it must step out of its comfort zone and open up more blank areas. With Meiyijia, Tangjiu, and Linji as representatives, a host of local brands have gradually entered the thousand-store scale after years of accumulation, and have developed unshakable capabilities in localized services. For example, Tangjiu's Shanxi specialty foods and utility bill payment services have long been the confidence to keep foreign brands out. Currently, Lawson is still very weak in Guangdong, has not yet entered Shanxi, which has a high density of convenience stores, and is largely blank in Henan, Shandong, and other provinces.

Besides Lawson, other foreign brands are also gearing up for expansion. On July 12, FamilyMart's first fifth-generation store (Fahuazhen Road) opened in Shanghai, and the company simultaneously released the 'Partner Plan C,' which aims to lower investment for franchising FamilyMart, clearly signaling its intention to expand. In the next phase, competition between rapidly expanding foreign convenience stores and local brands will undoubtedly intensify. For Lawson, how to maintain speed, scale, and the just-turned profit are issues that cannot be relaxed.

(Cover image source: Visual China)


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