The world's largest convenience store franchiser, 7-Eleven, is seeking to duplicate its Japanese success story in China. However, it could be a bumpy road as its path appears to be riddled with hurdles.
Embarking on a franchising system, the US-based 7-Eleven Inc which is 70 percent owned by Ito-Yakado Co, Japan's biggest retailer, is currently seeking proper licensees for its China operations.
Analysts caution that China's restrictions on foreign-invested retailers and the country's overheated retail sector bodes ill for 7-Eleven.
However, the convenience store operator is unfazed, pointing to the country's rising affluence and increased consumer spending.
Taiwan-based Uni-President Chain Store Corp, a subsidiary of food manufacturer Uni-President Enterprises Corp, has been licensed to operate 7-Eleven outlets in Beijing. Uni-President has a permanent franchise agreement with 7-Eleven Inc to run stores in Taiwan.
The Beijing joint venture, invested by Ito-Yokado, Uni-President and Beijing Shoulian Commercial Group, had hoped to open the capital's first 7-Eleven outlet on July 11. It also planned 20 outlets by the end of this year.
To date, not a single 7-Eleven store has materialized in Beijing. Insiders say the plan was suspended because of a dispute over licensing fees between the Beijing venture and 7-Eleven's US headquarters.
"We haven't reached a consensus on the fee for using the 7-Eleven brand," said an unidentified official with Ito-Yokado. "Technical problems stopped us from getting the operations license."
Pei Liang, deputy secretary of the China Chain Store and Franchise Association, believes 7-Eleven would be unlikely to expand rapidly due to restrictions on foreign-invested retailers.
Shanghai is widely expected to be 7-Eleven's next stop after Beijing.
(Source: Shanghai Daily)
