Matsumotokiyoshi spreading drugstore network in Taiwan with target of 100 stores

20, Sep. 2019

Taichung Yizhong Store of the Matsumotokiyoshi drugstore chain opens on Sept. 17 in Taichung City
Taichung Yizhong Store of the Matsumotokiyoshi drugstore chain opens on Sept. 17 in Taichung City

By Mao Sugawara

TAIPEI, NNA - Japanese drugstore chain operator Matsumotokiyoshi Holdings Co. has opened its first Taiwan outlet outside Taipei – in the provincial city of Taichung – as the group aims to expand its network in Taiwan to 100 stores in 10 years.

The new outlet, “Taichung Yizhong Store,” opened on Tuesday in the city’s North District as Matsumotokiyoshi’s fifth store in the island. The group is also scheduled to open a store in the cities of Taoyuan and Hsinchu this year, said Yasunori Hayashi, general manager of Matsumotokiyoshi (Taiwan) Co., the group’s joint venture.

Matsumotokiyoshi is determined to distinguish itself from other drugstore chains by featuring ample varieties of uniquely developed products and imported items, and by expanding its lineup to include foods and daily necessities, he said.

As Taichung Yizhong Store is located opposite the National Taichung University of Science and Technology, its main target is young people. It has the largest selling space among the chain’s stores in Taiwan, Tomoyuki Kataoka. the Taiwan unit’s marketing manager, said.

Unlike the others, it has a section devoted to foods including cup noodle ramen. It is also selling a footcare product, jointly developed with Japanese healthcare and drug maker Lion Corp., for the first time in Taiwan, according to Kataoka.

The cosmetics section on the second floor was crowded mainly with women only half an hour after the store opened its doors. “It’s great that I can get things that I could buy only in Japan before,” a female student in her 20s said after buying a shampoo on her way to school. Another woman in her 20s said, “I’ve been to Japan and I am familiar with the store brand. This place is brighter inside than other drugstores.”

The general manager, Hayashi, said the move to Taichung has been under consideration for some time. “We have decided on the move as we came across an ideal property. It is in the middle of a busy district and has a heavy traffic of people similar to that of Taipei, and yet the rental fee is lower than in Taipei so we can easily make a profit,” he explained.

The store is located in Yizhong Street, a popular shopping area dotted with department stores and private preparatory schools. There are four drug stores within a radius of 200 meters. But Hayashi said, “Our competitors are not the other drugstores but Japan’s Matsumotokiyoshi.”

Many of the store’s customers have been to Japan and are able to compare the lineup and prices with the chain in Japan. “They can now buy things in Taiwan which they used to buy while traveling in Japan. We want to emphasize that rarity value,” he said.

Hayashi cited as his firm’s strengths a wide range of imported items, an array of unique products jointly developed with makers, low-priced Japanese private brand goods, and a product lineup suited to the needs of customers.

Hayashi said there is a business model that is rampant at drugstore chains in Taiwan whereby makers buy up shelves to display their products and pay commission fees to the drugstores. In this way, the stores can secure sources of revenue, but medium-sized and small makers that cannot pay commission fees find it difficult to get their products displayed.

In contrast, Matsumotokiyoshi stores display products mainly by category, making it easier for customers to compare products, he said. The Taipei chain is selecting products that have proven popular among Taiwan visitors to the group’s stores in Japan.

Matsumotokiyoshi aims to expand its overseas business by focusing on the needs of customers outside of Japan in the same way it does for inbound customers. As part of this endeavor, the group is preparing to introduce “point cards” usable in both Japan and Taiwan next year.

Suburban roadside stores planned

Matsumotokiyoshi opened its first Taiwan store in October 2018 and now has four stores in Taipei. Under its long-term plan to establish 100 stores in 10 years, it is experimenting with different locations and store layouts among its first 10 outlets, according to Hayashi.

By selecting the most effective formats, it will expand the chain to 30 stores, spreading to the southern district including Kaohsiung sometime after 2020. After the 30th outlet, it plans to start establishing roadside stores along trunk highways, which can be accessed by motor vehicles and motorcycles.

Adjusting to the ageing society

The chain is also considering expanding its target age groups in accordance with the graying of Taiwan’s society. It is seen as increasingly important to choose between medical institutions and drugstores in anticipation of a deterioration in the health insurance system.

The chain also aims to establish a new form of drugstore in Taiwan by enriching its lineup of medical goods and daily necessities. It had been expecting women in their 20s and 30s to be its main target, Hayashi said.

But the fourth store, which opened in August this year, has been drawing a wide range of age groups, leading the chain to realize that “daily necessities sell well at a location close to where the customers live,” according to the general manager. The chain also plans to add popular health foods to its lineup.

Matsumotokiyoshi (Taiwan) Co. General Manager Yasunori Hayashi speaks in an interview in Taipei on Sept. 17 about his company’s business strategy in Taiwan.
Matsumotokiyoshi (Taiwan) Co. General Manager Yasunori Hayashi speaks in an interview in Taipei on Sept. 17 about his company’s business strategy in Taiwan.