Retail in Japan and Malaysia


In the midst of all this is termed as Asia’s richest market that is Japan. Japan has the World’s second largest economy; it also has the world’s most rapidly aging population. The Japanese retail market is highly fragmented, with a majority of the stores run by small business owners. Post World War II economic recovery began in Japan with the reconstruction of cities centered around Railway stations as trains were the most important means of connecting cities to rural areas and delivering cargo. The railway stations thus became distribution centers and community gathering places. That made them desirable sites for commercial complexes.

The rate of retail development varies widely across the Asia-Pacific with Japan taking the lead in the highest number of modern trade stores relative to the size of its populations. There are nearly 700 such stores per million people in Japan, placing the country way ahead of India, for example which has three per million.

Modern trade, particularly of the convenience store (c-store) format, has undergone rapid development in the Asia Pacific in the past few years. Of the more than 9393,000 newly opened self service stores here, nearly half are convenience outlets, with Japan leading by sheer numbers, Taiwan by density and China by its dramatic growth rate.

According to Shopper Trends, a study by the Nielsen Company, c-stores are the fastest growing grocery store format in the more developed markets of South Korea, Hong Kong, Singapore and Taiwan, not counting Japan. The high consumer acceptance of the format reported shows 80% of urban shoppers in Taiwan, Japan, Thailand and Hong Kong patronizing such outlets each month.

It is interesting to note that the Japanese visit convenience stores as often as they shop, at supermarket – three times a week with two thirds tending to shop for groceries on their own The frequency is among the highest in the region, after the rate in Vietnam, and not par with that in the Philippines. This high frequency is accompanied by multiplied format shopping.

Among Japanese retailers convenience stores are the forerunners in trying to integrate e-commerce into their business strategies. Japan has about 36,000 convenience stores, which play an indispensable role in people’s daily lives. The biggest is Seven Eleven, which has 8,000 stores. Japanese convenience stores are noteworthy for their ability to introduce technical innovations. They were among the first to introduce a point of sale system to analyze sales trends and encourage manufacturers to develop new products, stimulating consumer demand. Slow moving merchandise is taken off the shelves and replaced with new product after as little as one week. Moreover, convenience stores not only sell merchandise but also offer such services as the collection of public utility payments. Convenience stores also provide ticket reservation services. As they are spread throughout the country and as most of them re open 24 hours a day, they have become important community centers. Deregulation in the past decade has changed the face of retailing in Japan.

Japan regulates its retail environment with the large Scale Retail store Law which has been applied to control and adjust the hours of large scale retail stores. Apart from this there exists the Anti Monopoly Law, which prohibits private monopolies, unreasonable trade restraints and other unfair business practices. It also regulates international agreements and contracts that restrict competition.


In Malaysia, the wholesale and retail sector falls under the supervisor of the Ministry of Domestic Trade and Consumer Affairs (MDTCA) through the Committee on Wholesale and Retail Trade. It restricts the foreign involvement in certain retail formats, depending on size, and lays own specific parameters on selling and the size and location of the stores.

In 2007, retailing witnessed another year of faster value growth, with one of the main reasons being the success of the Visit Malaysia Year 2007 campaign. The campaign was launched was launched by the Malaysian Government in conjunction with the nation’s 50th anniversary of independence, with the target of bringing in 20 million tourists into Malaysia. The rising number of tourist arrivals contributed to a livelier retailing environment in 2007. According to data published by Ministry of Tourism Malaysia, tourism shopping accounted for over a quarter of overall tourism earnings in 2006.