Japan to Get Web-Based Convenience Store

Two major Japanese convenience store operators and two of the country's most aggressive Internet investment firms have announced plans to form a joint venture to operate an Web-based supermarket.

Convenience store companies Sunkus & Associates and Circle K Japan Co., in conjunction with Softbank Corp. and Hikari Tsushin Inc, plan to launch what they are calling e-Convenience Co. Ltd., in the Tokyo area in April. The new company will accept customer orders to its stores through a Web site for fast fulfillment and delivery. It is the first time that such a large-scale delivery service has been offered by convenience stores in Japan.

Convenience stores are numerous and very popular here, especially among single people and those with late work hours. Between them, Sunkus & Associates and Circle K Japan own some 7,000 such stores across Japan.

Sunkus & Associates owns 20 percent of the new company, Softbank and Hikari Tsushin each have 10 percent, with Circle K Japan and supermarket owner Uny Co. holding 5 percent each. Speed Group, a little-known Tokyo-based company with links to Softbank and Hikari Tsushin, will own the remaining stake.

Company officials said here today that they are aiming for sales of 600 million yen (US$5.71 million) during the first year of operations. A 500 yen charge will be levied on all orders under 10,000 yen in size to help pay for the service.

With sophisticated distribution networks and telecommunications networks already in place and a 24-hour operating day, Japan's 50,000 convenience stores are seen as key players in the emerging e-commerce market, either through their own services or as collection points for the services of other companies. The stores already offer payment of utility bills and have expanded beyond selling basic food products to include books, magazines, compact discs, computer games, hot food and in some cases even have on-site automatic teller machines.

The news comes less than a week after rival Seven Eleven Japan Co. Ltd. unveiled plans to form an electronic commerce joint venture with seven other companies. [See "Seven Eleven Japan, Others to Launch E-Commerce JV," Jan. 6] Called 7dream.com K.K., the company will concentrate on delivery of content through in-store multimedia terminals. The machines will be able to produce music on MiniDiscs, print digital images and produce travel tickets on-demand as ordered through the service.

Sunkus & Associates, in Tokyo, can be contacted at +81-3-5445-3430 or at http://www.sunkus.co.jp/ .

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