Recently, FamilyMart released its consolidated financial results for March to August 2024. During the reporting period, FamilyMart's operating income reached 257.5 billion yen (equivalent to 11.212 billion yuan), a decrease of 1.4% over the same period last year; operating profit was 51.7 billion yen (equivalent to 2.452 billion yuan), a slight increase of 0.1% year-on-year; Net profit increased significantly, reaching 65.4 billion yen (equivalent to 3.102 billion yuan), a year-on-year surge of 98%.
FMCG learned that Kensuke Hosomi, president of the family, explained the reasons for the sharp increase in net profit at the results conference. He pointed out that, on the one hand, thanks to the successful implementation of the digital strategy, the company's three newly established companies in the retail media sector have already started to make profits. On the other hand, FamilyMart's business restructuring in China has also been completed, bringing a one-time gain of 31.6 billion yen (equivalent to 1.5 billion yuan) to the company.
As of the end of August 2024, FamilyMart operates a total of 24,386 stores worldwide, including 16,273 in Japan and 8,113 overseas. Kensuke Hosomi also mentioned that although the number of FamilyMart stores in China has decreased before, it has added 100 stores in the past few months, showing signs of business recovery. After the completion of the business restructuring, FamilyMart has accelerated its expansion in the Chinese market. According to information from FamilyMart's official account, since June, FamilyMart has rapidly opened new stores in Nantong, Foshan, Changzhou, Huzhou, Shaoxing and other places, usually opening 5 to 6 stores at a time. The number of new stores disclosed by the official account has reached about 43, mainly in the new first-tier and second-tier cities.
In addition, according to the franchise briefing plan released by FamilyMart on October 8, East China will be its main expansion area, and it is planned to hold briefings in six cities, including Shanghai, Nantong, Suzhou, Wuxi, and Hangzhou. Southern, Southwestern, and North China also plans to set up in 3, 1, and 2 cities respectively, and FamilyMart will continue to expand in second-tier cities across the country.
For the past 20 years, FamilyMart Japan has operated in the Chinese market through a joint venture with Tingxin Group. However, with the intensification of market competition, the contradictions between Japan Family and Dingxin Group in terms of business direction and profit distribution began to appear. In 2019, Japan FamilyMart took Tingxin to court because Ting Shin Group tried to reduce the brand usage fee from 1% to 0.3% or less, and had not paid the license fee for 7 months, hoping to terminate the cooperation between the two parties. Tingxin Group refuted the accusation, claiming that it had paid the brand licensing fee and was not in arrears. In addition, there is an opinion that the royalties charged by Japan families are much higher than those of competitors such as 7-Eleven.
The lawsuit ended in defeat for the entire Japan family. According to reports, there are differences in business philosophy between Chinese and Japanese families, with the Japanese side having doubts about the strategy of Chinese mainland families entering second- and third-tier cities, while the Chinese side holds the opposite opinion. In March 2024, Tingxin Group reached a restructuring agreement with FamilyMart Japan for the further development of FamilyMart in Chinese mainland. According to the agreement, the two parties will establish a new joint venture company to operate stores in East China, while the markets in South China, North China and Southwest China will be operated and expanded by Tingxin Group, and will be opened in the future on a franchise basis.