Analysis of Lawson’s entry into Singapore’s market

Analysis of Lawson’s entry into Singapore’s market

翟啸雨

（东南大学·江苏南京·210000）

1. Executive summary

With the acceleration of the pace of life, convenience stores have sprung up. The emerging retail formats produced under this mode began to develop rapidly in the early 20th century and have become one of the most competitive retail formats in the world. Convenience stores originated in the United States. In Japan and Taiwan, the characteristics of convenience stores have been developed to maturity. After 1990, Japan's local convenience store market basically reached saturation. At the same time, with the growth of demand in foreign markets, many Japanese convenience store brands began the process of internationalization, and Lawson convenience store is one of the most successful convenience stores. Taking Lawson convenience store in Japan as the research object, this paper analyzes the possibility of Lawson convenience store entering the overseas market according to the relevant theories of international marketing. The overseas market selected in this paper is the Singapore market. At present, the situation of Singapore convenience store market is that 7-Eleven convenience store is dominant. Lawson has a great chance of success to share benefits with 7-Eleven convenience store. Therefore, the article subpides the potential consumer base by analyzing the general environment of the Singapore market and proves the correctness of Lawson's entry into the Singapore market.

2.Introduction to the Singapore market and analysis of Lawson’s market entry strategy

2.1 Singapore convenience store format

Singapore's supermarket and convenience store system is composed of hypermarkets like Carrefour, mini supermarkets, convenience store chains and gas station chains. Among them, 7-Eleven and cheers are the main convenience stores, occupying the main market share. Although the price of most of their goods is more expensive than that of large supermarkets, they are also loved by many young and middle-aged consumers because of their convenient characteristics such as opening 24 hours and being seen everywhere.

Overall, Singapore's small and medium-sized convenience stores have been growing in recent years, mainly due to the rapid increase in the number of convenience stores in residential areas and gas stations. At the same time, the number of traditional retail stores is decreasing, and a small number of grocery stores have joined the ranks of convenience stores. In this environment of rapid growth of convenience stores, traditional stores must also develop towards modernization in order to gain a foothold. In the future, more traditional stores will become convenience stores as a response to the market share occupied by domestic and multinational large supermarkets.

Singapore's small convenience store market is mainly occupied by 7-Eleven and Cheers, of which 7-Eleven occupies the main market share. In 1981, 7-Eleven convenience store entered the Singapore market and was loved by people as soon as it opened. With the growth of consumption level and demand and the recognition of this 24h business mode, 7-Eleven has developed rapidly. Therefore, Lawson, also a representative of small 24h convenience stores in Japan, can also have the chance to succeed in the Singapore market where demand continues to grow.

2.2 Lawson's market entry strategy

If Lawson wants to enter the Singapore market, this paper suggests opening stores in Singapore through joint venture.

The first reason is that the investment amount of Lawson can be reduced and some investment risks can be reduced through joint venture, so Lawson can use more funds for investment and construction in other aspects. For example, Lawson can use more money to decorate stores or open more stores directly.

The second reason is that investment through joint ventures can better adapt to different market needs, while the investment of a single investor often can not take into account the needs of multiple aspects, nor can it better understand the local cultural customs. Therefore, Lawson's cooperation with a company in Singapore is a good way to solve these problems. A good example is that Lawson opened stores in China and cooperated with Chinese enterprises. Chinese cooperative enterprises know that Shanghai’s people love sweet food, so Lawson developed many sweets that meet the taste of Shanghai’s people. At the same time, Lawson took care of Chinese consumers' pursuit of health and did not make food too sweet. Finally, this strategy achieved great success.

The last reason is that the joint venture can effectively expand Lawson's sales channels, because each investor has its own sales channels. When two or more companies cooperate, each company's sales channels can be shared or linked, so Lawson's sale scale can expand rapidly.

In general, this paper believes that the joint venture is one of the best ways for Lawson to enter the Singapore market.

3. International marketing strategy analysis

3.1 Analysis of Singapore's broad environment

3.1.1 Demographic force

In 2020, the total population of Singapore was about 5.68 million, including about 4.04 million citizens and permanent residents. Singapore has a land area of only 791.1 square kilometers, and its population density has reached an amazing 7796 people / square kilometer. It is the second most populous country in the world. The high population density makes it easier to form social networks, and the word-of-mouth of goods will spread faster, so people will have more social consumption demand. Therefore, once Lawson enters the Singapore market, it only needs a small amount of marketing expenditure, which could achieve good results.

As for race, Chinese account for more than 70% of Singapore's total population. The high proportion of Chinese also means that most of Lawson's potential consumers are also Chinese, and the Chinese themselves are already very familiar with the brand of Lawson. Because Lawson has opened stores all over the country in China, most Chinese will not know nothing about this brand, so Lawson can quickly expand its reputation and save its marketing cost based on this advantage.

3.1.2 Political-legal force

In order to attract foreign investment, the Singapore government has formulated a series of preferential plans for foreign enterprises and merged enterprises, including comprehensive investment incentive plan, international / regional headquarters plan and M & A plan.

In addition, the Singapore government does not set special restrictions on foreign investment industries, nor does it have a negative list of investment. In principle, foreign-funded enterprises and domestic enterprises are treated equally and use the same laws and regulations.

Finally, there is no foreign exchange control in Singapore. Residents and non-residents can freely remit or remit Singapore dollars, and can freely buy and sell Singapore dollars in the foreign exchange market. There is no restriction on the remittance of enterprise investment income outside Singapore and there is no need to pay special taxes.

The above series of policies are very friendly to Lawson's entry into the Singapore market. Lawson can freely carry out various businesses in the Singapore market, demineralize its own sales channels, and use various policies to seek benefits.

3.1.3 Economic force

Singapore is a highly developed capitalist country. Its GDP in 2018 was about US $360 billion, and its per capita GDP was about US $64000, ranking among the top ten in the world. There is an obvious positive correlation between per capita GDP and household consumption. High per capita GDP means high consumption and high demand level.

Singapore also has a high per capita savings rate. In 2020, Singapore's savings rate reached 53.8%. On the one hand, the majority of Singapore's population is Chinese, and the Chinese have the habit of saving money. On the other hand, it is also due to the rapid development of Singapore's economy, which has greatly improved people's income. Although the savings rate is high, the total income is also very high, Therefore, the high savings rate will not affect the overall consumption level.

So, the good economic environment provides a stronger basis for Lawson to enter the Singapore market. Higher demand also means that the market may still be in an unsaturated state. Once Lawson enters the Singapore market, there may be a situation in which the supply of popular goods exceeds the demand.

3.2 Market segmentation and target market

3.2.1 Demographic segmentation

In terms of age, people in the age group of 20-40 have a faster pace of life, need this small convenience store open 24 hours more, and they can afford it. In terms of race, Chinese are more receptive to Lawson than non-Chinese. In terms of income, middle-income people are more likely to go to small convenience stores than high-income and low-income people.

3.2.2 Geographic segmentation

The target market chosen by Lawson is mainly represented by the urban middle class. In view of this positioning, Lawson first locks in the first tier business districts of first tier cities or other cities when entering the Singapore market, opens the market, wins reputation, and then radially marches into the surrounding towns.

3.2.3 Psychographic segmentation

According to psychological factors, the target population can be pided into two categories. One is the people in the upper class who pursue a quality life. They pay attention to the quality of products. Perhaps they are more inclined to go to large high-end supermarkets for shopping than small convenience stores. When conditions are limited, they may also come to small convenience stores to buy goods. The second category is the middle class. They work all day to live, so their time is tight. They need the convenience of this small convenience store, and they can afford it.

3.2.4 Behavioral segmentation

According to behavioral factors, potential consumers can be roughly pided into two categories. One can be called small convenience store enthusiasts. This kind of people often patronize convenience stores and are loyal customers of small convenience stores. The other kind of people are random consumers. Their emotion towards convenience stores is neutral. They go to small convenience stores because they happen to have this demand.

3.2.5 Target market

In terms of the above elements, this paper believes that the people most likely to go to small 24h convenience stores are the people aged 20-40 who have the ability to consume and have a fast pace of life. In order to save time, they are likely to often go to convenience stores to buy goods.

4. Conclusion

On the whole, Singapore treats foreign enterprises with loose politics, excellent economic development and reasonable population structure, which are very conducive to Lawson's entry into the Singapore market. And through the market segmentation theory, the article explores that the people who are most likely to become potential consumers of Lawson are those aged between 20 and 40.

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