Since its born, the drugstores were welcomed by consumers leading to their fast growth.
In Japan, after 1955, Higuchi, Kokumin, and Segami took the lead in chain stores, most of which were developed from pharmacies near train stations.
Another opportunity was that in the early 1990s, the bursting of the bubble economy made the consumption behavior of ordinary Japanese consumers more pragmatic and more price-sensitive. Coupled with the severe business environment facing the downward adjustment of drug price standards since the 1990s and the price reduction requirements from medical institutions, it has made expansion and business efficiency a top priority. In the sluggish economic environment, chain pharmacies started by providing relatively low-priced medical supplies, and then developed to provide cosmetics and general merchandise, which are gradually being welcomed by consumers.
Main sales channels of Japanese drugstores
Japanese drugstores are mainly sold in pharmacies, while Japanese drugstores are very mature. According to data from the Japan Chain Pharmacy Association, Japanese chain drugstores reached 20,631 in 2019, and the total sales of cosmetics in chain drugstores In recent years has exceeded 70 billion yuan. In addition, the concentration of Japanese chain drugstores is high, about 70%, and the Japanese drugstores are also very competitive correspondingly, thus they often sell products through promotion.
As competition increases and homogeneity becomes more and more serious, traditional Japanese drugstores represented by Kiyoshi Matsumoto have begun to show a decline in performance. Traditional shops are getting farther and farther away from young people, and transformation is imminent. Some drugstores that have difficulty operating are gradually being integrated by stronger drugstores.
In fact, the reform of Japanese drugstores has begun. Whether in terms of store image, brand structure, beauty services, etc., it is younger, more fashionable, and less luxurious. Compared with traditional Japanese drugstores with crowded and messy displays, the business model has almost completely subverted.
Surprisingly, compared to the dominant drugstores and relatively high-end cosmetics stores, Japanese e-commerce channels seem to be still in the infancy, and cosmetics e-commerce sales account for a relatively low proportion.
It is reported that the main online shopping platform in Japan is Amazon, and the proportion of cosmetics online sales is only about 10%. On the one hand, because most housewives in Japan did not go to work earlier, they had plenty of time to go to physical stores to buy products. On the other hand, the ubiquitous Japanese drugstores are everywhere and have better services. For consumers, it is more convenient and faster to buy products in physical stores. Furthermore, compared to the Chinese market, logistics costs in Japan are also higher. This limits the development of Japanese e-commerce channels to a certain extent.
The blooming of Japan’s e-commerce
At present, for new brands, the first choice to test the products is e-commerce. This will help in the collection of consumers’ evaluations and use experience of new products. At the same time, mobile payment has gradually emerged in Japan. In order to attract Chinese tourists, some stores have already connected to Alipay and WeChat and other internet payments. As young consumer become mainstream, the development of e-commerce will soon usher in an explosive period.
Last September, Japan’s leading drugstore Matsumoto Kiyoshi closed 50 stores in one month due to the epidemic. According to Matsumoto Kiyoshi’s financial report for the second quarter of 2020, because of the reduction of tourists, the adjustment of store opening hours and the reduction of local consumers going out, the group’s cosmetics sales fell by 23% year-on-year; net profit fell by 40.5% year-on-year.
In a short term, the tourism industry unable to recover which push the Japanese retail industry to look for new growth and cooperate with overseas platforms.
The transformation of Japanese drugstores
Relying on the “Saas technology + e-commerce supply chain + marketing” model, LinkieBuy has successfully won the hearts of Japanese drugstores. Japanese offline drugstores, led by Sapporo Drug Co., Ltd. and Tsuruha Drug Co., Ltd., have signed cooperation agreements with LinkieBuy.
In terms of the SAAS system, LinkieBuy is committed to creating a one-stop cross-border service solution, empowering offline drugstores in Japan with mature e-commerce technology, and construct a cross-border e-commerce platform covering multiple channels such as mini programs. China Unicom Customs interface, easy to complete cross-border commodity transactions.
LinkieBuy personalizes and customizes independent cross-border mini program for brands. With rich marketing methods, and refined user operation systems for Japanese drugstores, it helps in user acquisition, promotion, and conversion.
On September 20th, Tsuruha Drug formally signed a cooperation agreement with LinkieBuy. After more than a month of preparatory work, more than 500 SKU products were prepared for its online store mini program. On October 20th, LinkieBuy officially launched Tsuruha online drugstore as planning, through dedicated online planning and operation, it achieved great sales performances.