Matsumoto Kyoshi now has over 1,600 stores in Japan.
Japanese drugstore operator Matsumotokiyoshi will expand into Hong Kong and Vietnam as increasingly health-conscious consumers in these markets are expected to fuel demand for Japanese nutrition supplements and cosmetics, Nikkei reported.
The company said its Vietnam operations would be run in partnership with Ho Chi Minh City-based Lotus Food Group. According to a statement made by Matsumoto Kiyoshi Holdings on July 16, the two parties have reached a basic agreement for the development of their drugstore business in Vietnam
While no specific timeframe for the opening of the business was disclosed, Matsumoto Kiyoshi Holdings said that it is in talk with Lotus Food Group for the detailed development of the stores in the country.
"Vietnam is an emerging market, so there's plenty of room to open new stores," a representative of the Japanese company was quoted by Nikkei as saying.
Matsumotokiyoshi has been pursuing overseas expansion. It had 33 stores in Thailand and three in Taiwan as of the end of June, and also plans to expand to Hong Kong by turning a market-research business established in 2007 into a wholly owned subsidiary. It has announced an establishment of its subsidiary, Matsumoto Kiyoshi (HK) Co., Ltd., in Hong Kong, for market research purpose in mid July. It will buy the entire stake from Matsumotokiyoshi President Kiyoo Matsumoto by the end of July.
While acknowledging that Hong Kong is a mature market, the drugstore operator still sees promise, given the number of customers from greater China who seek out Japanese products.
Matsumotokiyoshi gave no specific time frame for store openings in Hong Kong and Vietnam but said the impact on earnings for the fiscal year ending March 2020 will be minimal.
People walk past a Matsumotokiyoshi pharmacy in Tokyo, Japan. (Photo: Shutterstock)
Matsumoto Kiyoshi Holdings said that the distribution and retail market of healthcare and pharmaceutical products in Vietnam is growing rapidly, thanks to the increasing middle income class and a stable economic growth in recent years. "Health goods and medical services" was among the top six spending categories in the country last year, according to a report released in June by market research firm Euromonitor.
In addition, there is a large prospect for the spread of the Japanese-style drugstore businesses that distributes health and beauty products in Vietnam. The company is expecting further growth in this segment when there are great demands for Japanese cosmetics and health products among local tourists who have visited Japan.
Vietnam is among 17 countries in the so-called "pharmerging" markets, a group of countries that are expected to be the pillars of the global pharma industry, according to U.S. information technology firm IMS Health. Its drug market is expected sustain growth of 10 percent annually for the next five years.
It grew at 16 percent a year in 2015-2018, with sales currently topping $10 billion, a report by global research firm Business Monitor International showed.
The country still imports over half of its drug needs, especially of patented drugs. In the first six months of this year its imports were worth $1.52 billion, up 11.9 percent year-on-year, the General Statistics Offic reported.
Matsumotokiyoshi has been pursuing overseas expansion as its home market shrinks. The chain had 33 stores in Thailand and three in Taiwan as of the end of June.
Founded in 1932, the company is targeting at promoting the expansion of a business format that increases its specialisation in health and beauty to cater to market needs, along with the omni-channel strategy responding to the diversification of consumer behavior.
It boasts a large selection of health and beauty products, including medicine, make-up, cosmetics and oral hygiene products as well as supplements and is Japan’s largest drugstore operator with over 1,600 stores.
