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Business practice by Japanese Consumer Co-operatives. Conference on Strategic Business Alliances among Co-operatives 5-6 September 2011. Japanese Consumers’ Co-operative Union. Contents. 1. Rapid Change of Japanese Society 2. Co-op Business Outline 3. Business Federations

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business practice by japanese consumer co operatives
Business practice by Japanese Consumer Co-operatives

Conference on Strategic Business Alliances among Co-operatives

5-6September 2011

Japanese Consumers’ Co-operative Union


1. Rapid Change of Japanese Society

2. Co-op Business Outline

3. Business Federations

4. Conclusion

rapid change of japanese society
Rapid change of Japanese society

*Japanese population is deacreasing and fast-aging while world population increases, resulting in quantitative reduction of markets

*More than half of the households consist of one or two members

*Increase of dual-income households and advancement of women’s participation in the society

*Increase of low income households

demographic change in the world
Demographic change in the world

The world population will increase to more than 2.5 billion by 2050.

*Increase of World population

In twenty-five years from 2000,

The world population is expected to gain an additional 1.8 billion

(04 demographic shifts by UN)

*Decrease of Japanese population

  • The advancement of aging society
  • Rural migrant to cities
changes in japanese population
Changes in Japanese population

In 2005, Japanese population started to decline

changes in family composition
Changes in family composition

By 2010, about 50% households became a family of one or two

(Unit:10,000 households)

  • Others
  • One person household
  • Only husband & wife
  • Single mother/father
  • Standard family
changes in aging ratio
Changes in aging ratio

By 2050 the percentage of senior citizen will be 35.9 being the highest in the world

distribution retailing
Distribution & Retailing

Situation of retailing in Japan

Business to sell commodities or goods purchased from producers (or wholesalers) directly to consumers

Family-owned shop

Fish store, greengrocery


Stores mainly sell food

Convenience store

Department store


(Store, Home Delivery)

Home center

Specialty store

Cloth, electronics, camera



* All business types consist of self-service style stores, except family owned shops

brief history of the retail industry
Brief history of the retail industry
  • Late 1970s-1980s
  • Rise of GM stores & first open of CVS Seven-Eleven(1974)
  • 1990s
  • Bankruptcy of some established GMS companies
  • Slow down of economic growth
  • Retail industry entered the competitive age
  • Rise in consumption tax from 3% to 5% (1997)
  • Japanese retailers expanded business overseas
  • Large scale stores opened in the suburb (expansion of SC)
  • 2000s
  • Intensive business maneuvering & development of new types
  • of business
  • Number of CVS stores exceeded 10 thousand
  • Foreign retailers vigorously entered Japan.
foreign retailers in japan
Foreign retailers in Japan

Toysrus (toys), the US, entered in 1993

Costco (wholesale for members), the US, in 1999

Wal-Mart (supermarket), the US, entered in 2002

Metro (wholesale for members), Germany, in 2002

Tesco (supermarket), the UK, entered in 2003

IKEA (furniture), Sweden, entered in 2006

japanese big players
Japanese Big Players




Co-op Market Share: 5.2%(Food)

*Food retail (Source: The Food Journal) 2008 data

co op values mission
Co-op values & mission
  • Our values and principles drive the
  • way co-op do business
  • We do business to enrich members
  • life and create a mutually beneficial
  • society
co op values mission1
Co-op values & mission
  • We offer products that lead to
  • solutions of various issues centering
  • around food and daily life
  • We promote mutual understanding
  • between producers and co-op
  • members
co op values mission2
Co-op values & mission
  • We aim to build a society that is
  • friendly to the environment and to
  • the community on the basis of
  • mutual support
  • We provide full information services
  • that serve as tips for reasonable and
  • healthy lifestyle

▼Co-op Social & Environmental Activities

  • Social Activities
  • pursuing food safety
  • dietary education
  • disaster aid support
  • consumer problems
  • 2. Environmental Activities
  • environmental preservation
  • activities tackling climate change
  • “my bag campaign”
co op members
Co-op members
  • Co-op members’ three major roles to play
  • Investing (share capital)
  • Patronizing (using co-op facilities)
  • Participating (in management and co-op activities)
  • *Restriction on consumer co-ops by co-op law
  • Japanese consumer co-ops can do business only with co-op members.
outline of consumer co op
Outline of Consumer Co-op

Number of JCCU member co-ops

596 co-ops

(Community retail co-op: 151)

Total membership

26.31 million

(Community retail: 19.03mil.)

Total business amount


(Community retail: $31.49bil.)

*Market share in Food 5.2%


Who is Co-op Member?   ~from Co-op member attitude survey~

①Increasing of pension generation(more senior)

②Slower growth of household income(decrease)


Child raising38%

Senior 56%

Child raising 64%

Senior 35%

Adverse change: senior and child raising

Who is Co-op Member?

business outline

Co-op Stores

Home Delivery Service

Business Outline
  • Retailing
  • Catalogue & Internet Business

Clothes, Furniture, Household, Gifts, others

  • Welfare Business

Nursing-care service, Medical service

  • Co-op Insurance

Medical, Life, Fire 7.1 million policyholders

  • Others

Housing, Travel, Funeral service, etc.

co op store overview
Co-op Store overview

Co-op Kanagawa

Co-op Kanagawa

Toyota Co-op

Osaka Izumi Co-op

home delivery business
Home delivery business
  • Merit:
  • household budgeting becomes easier
  • impulsive shopping is kept to a
  • minimum since members must plan
  • their purchases ahead of time
national business federation j c c u
National Business FederationJ.C.C.U.

JCCU develops / provides

  • CO・OPbrand products
  • Catalogue marketing
  • Internet infrastructure
  • Logistics network
  • Management guidance
  • Training & Education
co op tele shopping retailing through catalogue internet
Co-op tele-shopping(retailing through catalogue &internet)
  • Domain:
  • 1. Clothing
  • 2. Household appliances
  • Number co-ops engaged: 115
  • Mode of distribution: home delivery
  • Supply to 7.3 million members at
  • one delivery
  • Turnover: 84.8 billion yen (2010)

Co-op tele-shopping

(retailing through catalogue &internet)

  • Domain:
  • 3. Gift Items
  • Number co-ops engaged: 17
  • Mode of distribution:
  • home delivery & store
  • Supply to 2.1 million members
  • through home delivery
  • For store delivery: supply 190,000
  • Turnover: 7.5 billion yen (2010)
distribution channel
Distribution channel

Information flow

Member co-ops


Supply report


Order Placement


Each DC of JCCU delivers the products to the member co-ops

CEC: ordering, account & payment confirmation function


Logistics network

~ JCCU Distribution Centers~

Tohoku 1


Kanto 7


Kyushu 4

regional business federations
Regional business federations











Pal system




business federation
Business Federation

Advantage of business federation:

1)Reduce operational & management cost

2) Share facilities

3)Develop co-op products to be used

by all members

4) Cost reduction by volume efficiency

5) Share information in case of accident

6)Promotion of effective logistics

challenges in co op business
Challenges in Co-op Business

1) Assuring product safety

2) Improve quality of integration within each business federation

3) Acceleration of cost reduction in all the business alliance

4) Competitive store operation

5) Building supply chain management structure

6) New Marketing strategy to meet the changing society