Market and Prospect of 7-ELEVEN in China

榮 鈺

一、Brief Introduction of 7-ELEVEN

7-ELEVEN is an international chain of convenience stores that operates， franchises and licenses some 56，600 stores in 18 countries.［1］The chain was known as Tote’m Stores until renamed in 1946. 7-ELEVEN Inc. is headquartered in the US city of Irving， Texas. Its parent company， Seven-Eleven Japan Co.， Ltd.， is located in Tokyo.

The company’s first outlets were named “Tote’m Stores” because customers “toted” away their purchases.［2］Some stores featured genuine Alaskan totem poles in front of the store. In 1946， the chain’s name was changed from“Tote’m” to “7-ELEVEN” to reflect the company’s new， extended hours， 7:00 am to 11:00 pm， seven days per week. The 100th store was opened in 1952， the 1000th store in 1963 and the 15000th store in 1995. In 1963， 7-ELEVEN introduced its first 24 hour store， which subsequently became the norm. Today 7-ELEVEN stores around the world operate 24 hours a day， seven days a week.［3］In November 1999， the corporate name of the US company was changed from “The South land Corporation” to “7-ELEVEN Inc.”.

二、The market condition of 7-ELEVEN in China

（一）The current situation of retail industry

Retail involves the process of selling consumer goods or services through multiple channels of distribution to earn a profit.［4］

Before the 1990s， the department store controls the market. Since the Chinese economic reform， the consumer’s demand has changed and the competition of retail market gets fiercer. The supermarket and convenience store grew more and more quickly， which became an important power of Chinese retail industry. However， due to the different situation of the development， some of the retails are progressing rapidly，and others are also discovering the new pattern to be successful.

Convenience store refers to a store that is near the residential area. This kind of store has long working hours.And it mainly provides convenient goods and commodities，including good service.［5］The variety of commodities is limited. But because of the convenience， the store is still popular in the consumers.

（二）Market positioning of 7-ELEVEN

As a retailer， 7-ELEVEN aims to make people enjoy an easier life. It sells daily equipment which we often use.Also， the price is higher than those common retailers.However， one of its characteristics is that it is available around the clock.7-ELEVEN gains remarkable advantage over other retailers by developing its own difference and meeting customer requirements. But in terms of the whole nationwide，7-ELEVEN only has a few market share， so it needs to develop its competitiveness.

Nowadays， the development of convenience stores gets into a new level only in some big cities like Guangzhou. The 7-ELEVEN requires purchase in a short time and we can buy goods at any time in a day. Besides， the commodities provided in the 7-ELEVEN should be food and daily necessities. The place of 7-ELEVEN should be some cities with a dense population.［6］What’s more， the target group of 7-ELEVEN should be some young students、white-collar workers who pursue agility and convenience. Meanwhile， 7- ELEVEN also needs to set up an efficient logistics distribution system to guarantee diversification and rapid supply of raw materials，which can bring a good shopping experience for customers and occupy a larger market share.

（三）Analysis of 7-ELEVEN

1、Strength

（1） 7-ELEVEN has innovative people-oriented service.It has logistics service so that when you pick up your things you can buy some things at the same time.

（2） The ways we pay our bill are various.

（3） 7-ELEVEN can provide delivery service to customers.

（4） 7-ELEVEN has many unique products which specially made for it .and the suppliers of its products have good reputation

（5） It has its own central logistics service to reduce its logistic fees about 10%.

（6） 7-ELEVEN are franchise， in this way，reputation can be developed very well

2、Weakness

（1） 7-ELEVEN in Taiwan and many other areas can do many daily things， such as pay fees， faxes， but it can only sell things in China. It needs to broaden its service scope.

（2） Too little advertisements in China which lead to its weakness popularity

（3） Compared with specialty stores ，7-ELEVEN cover many products including fast foods ，daily necessities and so on .So its adaptability is weaker than other other shop only sell specific products.

3、Opportunity Introduce new products to satisfy different needs. It is a good idea to introduce more kind of fast food to cater for customers， such curry， sushi and so on.

4、Threat

Too many retailers in the market， the price competition give 7-ELEVEN too much burden， because the retailers have little profits， we cannot decrease our price to achieve target.

（四）Advantages

1、Political

national macro-economic policy support the development of convenience store.After attending WTO， China begin to strengthen commercial laws， making retailer stores more normalize and reasonable.［7］Develop the supervision of market system， provide well consumption environment to customers.

2、Economic

Recently Chinese economic growth swiftly， it is good for stores to develop. Because well economic can promote stores’ long term development. Retail stores are coming into mature period. It can promote 7-ELEVEN to become popular.

3、Social

China has great amount of people which means great consumption.

（五）Sales performance of 7-ELEVEN

1、Product

（1） Product classification：The 7-1ELEVEN sales more than 3000 kinds of daily necessaries ， which can be categorized into two kinds of product:

A. Food products: beverage，fast food，snacks， etc;

B. Non-food product and services :express delivery service、ticket service， etc;

（2） Special product service：

24 hours non-stop business services.

2、Price

（1） Pricing strategy:

A: “Cost plus” pricing policy

B: Charge higher prices than supermarkets

3、Place

（1）The 7-ELEVEN joint distribution center collects goods and sets out goods united according to different regions and commodity groups， Regional division is generally in the vicinity of the central city district 35 km， other local markets is 60 km， setting up a distribution center per region，to achieve high frequency， multi variety， small unit distribution. The 7-ELEVEN got a big space of increasing the whole profit by reducing costs.

（2）Choose the best store location. Set up the store in the range of consumer’s daily life.

三、Business Plan

More 7-ELEVENs can be opened in some big cities like Beijing 、Shanghai. The store location can be near the bus station or metro .Diversified services should be provided，such as customers can pay water bill or telephone bill. Only by providing more convenience can the business of 7-ELEVEN be better.