Rosen Delisted Convenience Store "Sweeping Waves" _ Sina Finance

Source: Beijing Business Daily

The topic of the delisting of Rosen, one of the three largest convenience store giants in the world, attracted attention. On May 26, the reporter of Beijing Business Daily learned from all parties that under the background of the imminent delisting of Japan Rosen, Rosen's business in China was still open as usual. Rosen said that the change was only equity change and investment strategy adjustment. It can not be ignored that while Rosen's digital transformation is difficult, the transformation of the industry into the stock market has led to limited new growth, and the cross industry competition brought by supermarkets and e-commerce platforms has impacted Rosen's market position, which also indicates that the convenience store market is undergoing a new round of elimination. The analysis points out that under the multi-dimensional "squeeze", Rosen has not much time left. If you want to break through, you need to strengthen your own advantages and attract consumers through fresh food, digital operation and other ways.

　　 Delisting is imminent

After delisting, Rosen's whereabouts became the key. In response to the dispute of "Rosen delisting", the reporter of Beijing Business Daily learned from people close to Rosen that this matter has little impact on Rosen's business in China. At the same time, Rosen's Beijing franchise hotline and store staff said that they had not received any notice of business suspension or closure. The reporter visited the Rosen store in Beijing and found that the store is operating normally at present, and there is no shortage of goods.

Previously, Japan Rosen announced that it was expected that the company would delist on July 24 after the extraordinary general meeting of shareholders was held in July. It is understood that "delisting" here refers to the delisting of Rosen's stock. Ms. Zheng, President Office of Rosen China, responded to the media that "this is an internal equity change and investment strategy adjustment of Rosen in Japan, which will not affect our normal operation".

In March this year, the State Administration of Market Supervision announced the case of KDDI Co., Ltd. acquiring Rosen's equity. It is pointed out that this transaction involves KDDI's acquisition of 50% of Rosen's shares. Before the transaction, Rosen was under the sole control of Mitsubishi Corporation. After the transaction, Mitsubishi Corporation and KDDI will respectively hold 50% shares of Rosen and jointly control Rosen.

Rosen was founded in the United States in 1939. After obtaining the franchise license from the United States in 1975, he opened his first store in Japan. In 2000, Rosen was listed on the Tokyo Stock Exchange and Osaka Stock Exchange simultaneously, and it has been listed for 24 years. KDDI, the acquirer, is a Japanese telecom operator whose founder is Kazuo Inamori, known as Japan's "god of business". As early as 2019, KDDI had started capital cooperation with Rosen, and officially announced in February this year that it would launch a tender offer for Rosen.

According to the official website of Rosen in Japan, by the end of February 2024, Rosen has about 22000 stores worldwide and about 6300 stores in China. At the same time, Rosen also said that it would continue to accelerate its development in China, with the goal of breaking through 10000 stores by 2025.

　　 Profitability blocked

Although the delisting of stocks does not affect the operation of stores, this adjustment also exposes the huge pressure Rosen faces in the operation and transformation. In the announcement released on the official website of Rosen, Japan, the company mentioned that in addition to the intensification of the competitive environment and diversification of consumer demand, the industry it belongs to is also facing a severe situation of rising costs of raw materials, labor, logistics and other costs. Rosen of Japan believes that "this transaction will help improve the value of the company".

Rosen first entered China in 1996. Today, Rosen has been in China for 28 years. It is worth noting that Rosen China achieved full year profit for the first time in 2020, but failed to maintain it until the performance from March to May 2023. The profit reached 200 million yen, and the loss in the same period last year was 2.8 billion yen. It can be seen that even though Rosen has set up a dense network in China, the profitability of its stores is still to be stabilized.

At the same time, the competition in China's convenience store market is intensifying. Rosen wants to compete for market share with 7-Eleven and Family Store, which are also from Japan. The rise of Chinese local chain brands and the popularity of instant retail also make Rosen more stressed. According to the Top 100 list of convenience stores in China in 2023 released by the China Chain Store Association, as of 2023, Meijia has the largest number of stores in China, with 33848 stores, and Rosen, with 6330 stores, ranks fifth.

An insider in the convenience store industry told the Beijing Business Daily that at present, the domestic convenience store industry has entered the stock market. The brand has to face the horizontal competition of local convenience stores and mom and pop stores, as well as the cross industry competition from supermarket online business and instant distribution e-commerce platform.

At the 2024 China Convenience Store Conference held on May 17, Samake Shixiu, president of Rosen China, said frankly that at present, Rosen's customer flow and the number of pieces in each order are increasing, but the customer price is declining. He also said that the value of physical stores had been reassessed, and the decline in sales was more due to the competition around community housing, such as the platform promotion of Tiao Yin, the diversion of takeout, the impact of snack discount stores and other factors.

　　 Find new growth points

The convenience store market is growing, and the challenges faced by brands are also increasing. According to the statistics of China Chain Store Association, in 2023, the sales of convenience stores nationwide will be 424.8 billion yuan, with a year-on-year growth of 11%. The number of convenience stores will reach 320000, with a year-on-year growth of 7%. Among them, in 2023, China's Top 100 convenience stores will have 182412 stores in total.

The above insiders of convenience stores believe that the two factors currently restricting the development of convenience stores are the impact of online platforms and industry saturation. "Online shopping is becoming more convenient, and consumers' shopping behavior is also shifting to online". He said that convenience stores should make differentiated content, such as fresh food that is difficult to cover online, strengthen the layout through supply chain construction, and at the same time, customize consumption content around the needs of surrounding communities to improve the profitability of individual stores.

Faced with the pressure of industry competition, convenience store brands have tried to seek new growth points and take advantage through digital transformation and fresh food. In April this year, 7-11 convenience store opened the first canteen in China in Guangzhou. This store has enlarged the hot food area on the basis of the original one, and at the same time, it has added a hall food area, focusing on the products made, baked and fried on the spot. The parent company of 7-11 Convenience Store, Qiheyi Holding Group, pointed out that 7-11 Convenience Store will redefine its target customer group and value proposition, and increase the proportion of food in the store to meet local needs.

The convenience store brand has fully built its own brand of health products, daily necessities, coffee and other categories. In the future, it will also combine new technologies such as drone delivery and AI empowerment in its fifth generation convenience store. At the beginning of 2024, Meiyijia officially entered the business transformation stage to carry out organizational and talent innovation. Rosen hopes to accelerate the digital construction through cooperation with KDDI, and use KDDI's digital technology to improve the operational efficiency of stores, expand network sales and other new businesses.

Wen Zhihong, an expert in the chain industry, believes that the acquisition of telecommunications enterprises may support and improve Rosen's digital operation, but the final effect of the acquisition remains to be seen. He also said that for convenience store chain enterprises, whether it is the front end store operation, the development and optimization of commodity structure, or the back end supply chain construction, digital operation capacity, all need to focus on improving, and develop according to the market situation and local conditions.

Beijing Business Daily reporter Liu Zhuolan Hu Jingrong

When the stock market recovers, open an account first! Intelligent fixed investment, condition sheet, individual stock radar... for you>>