Main Topic: Convenience Stores Are . . . Convenient

Hosts: James Stanworth , Clyde Warden

Taiwan has the highest density of convenience stores on the planet, with one store for less than every 2500 people (the number is difficult to pin down because so many stores open every day)! The main players in this market include President Chain Store Corp. with their 7-Eleven stores, Taiwan FamilyMart Co. stores, Hi-Life stores, and Taiwan Nikomart Co. While prices are higher, and hypermarkets not far away from any convenience store, economic analysis in Taiwan has found that there is a benefit to consumers. Convenience stores like 7-Eleven are replacements for refrigerators, food storage areas, and cooking equipment. In other words, a just-in-time food supply that outsources the whole program.

If having a store on nearly every corner is not convenient enough, stores often undertake promotions such as moving inventory out into the street and handing products to, and taking money from, passersby on motorcycles and in cars. These products will often be a kind of just-in-time last minute purchase on the way home, while the store is able to move perishable product out the door. The first photo here is an example of this, and a classic case of what Clyde calls Inside Out Retailing, which is so common in Chinese cultural settings.

This first example is classic renao (熱鬧) retailing, while inside, stores have set up quiet eating areas and freshly made coffee bars. This approach addresses the peaceful, quiet side of consumers in Greater China, what Clyde has called xianjing (閑靜) marketing. These two approaches address different market segments, but they also address consumers who have seek different formats at different times, depending on their mood and their shopping goals.

Increased emphasis on dining areas is a recent development that has been emphasized in advertising campaigns that combine an emphasis on ready to eat food quality (see videos 3, 5, and 7 below). These combined marketing efforts are aimed to help busy consumers who may not feel comfortable with the idea of eating meals in a convenience store. Coffee shops in Greater China are often about business meetings (formal & informal), but convenience stores are offering the chance to get something quick to eat. This means the experience can be much more basic and rushed, but the mental picture of eating in a rush in a bare-bones location is not very attractive. Thus, the marketing effort on expanding the image--it's not a convenience store, it's a restaurant.

Convenience stores in Greater China are VERY convenient.

Photos:

• 1) Convenience store's signs stick out into streets. 1) Convenience store's signs stick out into streets.
• 2) Light up at night (here with the extra draw of dining area and bathrooms. 2) Light up at night (here with the extra draw of dining area and bathrooms.
• 3) 7-Eleven in Taiwan has evolved from the Japan version. 3) 7-Eleven in Taiwan has evolved from the Japan version.
• 4) Parking and Bathrooms are extra draws (throughout Greater China, bathrooms can be hard to find). 4) Parking and Bathrooms are extra draws (throughout Greater China, bathrooms can be hard to find).
• 5) OK mart (Circle-K), 4th largest convenience chain in Taiwan. 5) OK mart (Circle-K), 4th largest convenience chain in Taiwan.
• 6) Small format shops are typical in cities throughout Greater China. 6) Small format shops are typical in cities throughout Greater China.
• 7) Gifts are sold (on the way to a meeting, this can be convenient). 7) Gifts are sold (on the way to a meeting, this can be convenient).
• 8) Numerous small Mom and Pop shops still survive mostly through channel associations that supply purchasing power (this shop name is the city district with shortened version of convenience store). 8) Numerous small Mom and Pop shops still survive mostly through channel associations that supply purchasing power (this shop name is the city district with shortened version of convenience store).
• 9) Color (Colorful life convenience store). 9) Color (Colorful life convenience store).
• 10) The FamilyMart where James and Clyde got their coffee (Freshly made coffee is advertised at the front). 10) The FamilyMart where James and Clyde got their coffee (Freshly made coffee is advertised at the front).
• 11) Inside, the menu. 11) Inside, the menu.
• 12) The machine and menu take up about 6% of the store space. 12) The machine and menu take up about 6% of the store space.
• 13) Co-branding with Taiwan's leading ready made coffee, Mr. Brown. 13) Co-branding with Taiwan's leading ready made coffee, Mr. Brown.
• 14) Rapidly rotating promotions plaster convenience stores, adding to the renao feeling. 14) Rapidly rotating promotions plaster convenience stores, adding to the renao feeling.
• 15) Co-branding promotions are very common (here an MSN promotion). 15) Co-branding promotions are very common (here an MSN promotion).
• 16) For some extra fee, a small MSN icon can be purchased (ever since a Hello Kitty craze, these promotions have run non-stop). 16) For some extra fee, a small MSN icon can be purchased (ever since a Hello Kitty craze, these promotions have run non-stop).
• 17) The next week, a new icon is available. 17) The next week, a new icon is available.
• 18) The range of drinks is very wide, from water, to juice, to papaya milk. 18) The range of drinks is very wide, from water, to juice, to papaya milk.
• 19) Impulse purchase are available that attract children. 19) Impulse purchase are available that attract children.
• 20) Self-serve dispensers at POP leveled just at child height make it easy to grab (then the parents are stuck and have to buy). 20) Self-serve dispensers at POP leveled just at child height make it easy to grab (then the parents are stuck and have to buy).
• 21) The supply channels are very nimble and quick to respond; here a recent rumor about fake batteries produced in China leads to stickers saying NOT MADE IN CHINA. 21) The supply channels are very nimble and quick to respond; here a recent rumor about fake batteries produced in China leads to stickers saying NOT MADE IN CHINA.
• 22) Promotions out on the street (Inside Out retailing). 22) Promotions out on the street (Inside Out retailing).
• 23) Mr. Bean, a smaller competitor. 23) Mr. Bean, a smaller competitor.
• 24) Gifts lined up along outside wall during a gift giving holiday (very important in Japan, but also in Taiwan and Hong Kong). 24) Gifts lined up along outside wall during a gift giving holiday (very important in Japan, but also in Taiwan and Hong Kong).
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ConsumerCam:

Show Links:

• 7-Eleven Japan, the source of all Asian convenience store success.
• 7-Eleven Hong Kong.
• 7-Eleven Taiwan.
• A food blog, Hungry Girl's Guide to Taipei, shows many of the colorful offering at 7-Eleven in Taiwan.
• OK Mart.
• All automatic convenience stores in Taiwan.

Bottom Line:

• Convenience stores in Taiwan, Hong Kong, and Singapore are everywhere.
• Innovations such as wide product lines in drinks and ready to eat foods have had great success.
• Store designs and locations fit the Asian lifestyle well.
• New formats, such as coffee bars, are constantly being tested out.
• Convenience store prices are higher, but when factoring in other costs, these are reasonable ways to outsource a consumer's food/drink storage, especially when rent prices are high.