Business Supermarket’ Gains Global Attention: The Surprising Popularity of “That Product”

There are 14 stores in Vietnam!

“Gyomu Super,” also known as “Gyo-Su,” offers a wide range of products, including wholesale ingredients, original items manufactured by their own group, and products directly imported from around the world, all at low prices.

The number of franchise stores has expanded to 1,077 nationwide (as of September 2024), and sales have been steadily increasing. According to a report by its parent company, Kobe Bussan, the consolidated earnings for the period from November 2023 to April 2024 showed a net profit increase of about 36% compared to the same period last year, reaching approximately 12.3 billion yen. This marked the highest ever for a half-year period.

What many don’t know is that Gyomu Super has also expanded overseas. In Vietnam, they operate 14 stores nationwide. They also have two stores each in Hong Kong and Malaysia. Additionally, products are exported to countries such as Thailand, Singapore, Cambodia, the United States, and New Zealand.

How does the overseas Gyomu Super differ from its Japanese counterpart? What products are particularly popular? To find out, we spoke with Satoshi Nishida, an executive in charge of Kobe Bussan’s overseas business division.

The store was forced to close due to a severe lockdown caused by the COVID-19 crisis. 

The first overseas store of “Gyomu Super” opened in Vietnam in 2019. While the number of stores grew after that, they were forced to close during the strict lockdowns of the COVID-19 pandemic.

However, after the pandemic subsided, the stores made a full recovery. Currently, there are 14 stores in total in Hanoi, Da Nang, and Ho Chi Minh City. However, according to Mr. Nishida, the company’s overseas business is still in an experimental phase. “Vietnam has only just gotten on track. The overseas business is still in its testing stage,” he said. Because of this, while some information about the overseas stores can be found on the website, detailed information has not been disclosed.

Furthermore, overseas stores are not directly managed, nor are they operated under a franchise model like in Japan. Instead, they operate under a licensing agreement, in which local partner companies manage the stores using the company’s intellectual property rights such as trademarks and patents.

“With franchise agreements, it’s common to provide management know-how to franchisees. However, overseas, due to differences in national character, religion, and other factors, it’s extremely difficult to apply Japanese management methods directly. We decided to entrust the local people with the management, which is why we chose the licensing model,” explained Mr. Nishida.

In Hong Kong, the stores are branded as “Gyomu Super,” while in Vietnam and Malaysia, where Japanese text cannot be displayed due to regulations, the stores are labeled as “GYOMU Japan.” The products are supplied by Kobe Bussan and shipped from Japan.

A luxury supermarket in the local market!

The biggest appeal of “Gyomu Super” is its “reasonable prices.” But does this hold true overseas as well?

“The local partner companies already had a favorable view of Japan’s Gyomu Super, so they naturally understood and sympathized with our concepts such as ‘Everyday low price’ and ‘Better products at lower prices.’

With that in mind, we have told them to sell the products we provide at the lowest prices anywhere, and they make sure to adhere to that request.

However, because of import costs and customs duties, a product that costs 100 yen in Japan might end up costing 200 to 300 yen locally. Additionally, each country has different average incomes, so there are significant differences in how prices are perceived.

For example, the average income in Hong Kong is not much different from Japan’s, but in Vietnam, it’s around 500,000 yen annually, which is about 50,000 yen per month. So, for the local people, Gyomu Super products are considered luxury items. In Vietnam, Gyomu Super could be seen as a ‘high-end supermarket,’ which may differ quite a bit from the image that Japanese people have of it.”

Additionally, Gyomu Super in Japan is known for its “boxed display” system, where products are often displayed in their original boxes to create a sense of value and improve employee efficiency. However, this practice differs overseas.

“Overseas, most products are displayed on shelves. Stacking boxes doesn’t necessarily increase sales, so displaying items on shelves is more efficient. Furthermore, due to the ‘high-end supermarket’ image, the sense of bargain is not something that is emphasized.

That said, we still hang promotional materials from the ceiling and put up Gyomu Super banners at the storefront, just like in Japan. We also confirm the shelf arrangements in advance and make any necessary adjustments if there’s something that feels off, so people familiar with Gyomu Super shouldn’t feel any discomfort.”

The best-selling product and surprisingly popular products that are being used in unexpected ways.

The customer base is primarily made up of middle-upper customers who seek high-quality products, even if they are more expensive.

“In Vietnam, there are many Asian customers, including Koreans and Chinese, but the majority are local Vietnamese customers. Additionally, there are Japanese customers who come to purchase the original products they used to buy in Japan.

The local customers likely don’t fully understand the concept of ‘business’ in ‘Gyomu Super’, but in stores near Japanese, Chinese, or Korean restaurants, the staff sometimes use the products for their own ingredient sourcing. However, the majority of customers are general shoppers.”

The products sold are the same as those in Japanese Gyomu Super stores, with familiar items like frozen foods, seasonings, canned goods, private brand (PB) frozen desserts, ready-to-eat meals, and pickled items.

Although some items are sourced independently by local partner companies, about 70-80% of the products are from Gyomu Super.

Gyomu Super offers a variety of original PB products made in its own factories both in Japan and abroad, which are highly popular with its fans. The PB products are also highly rated overseas.

As for best-selling products, the most popular items are “Frozen Sanuki Udon” and “Silver Sesame Dressing,” both made in Gyomu Super’s own factories in Japan. “Nabe no Moto” (hot pot base) is also a year-round favorite.

“In all the countries where we have stores, as well as those where we only export products, the best-selling item is ‘Frozen Sanuki Udon.’ Udon is widely accepted around the world and is commonly used in both dining out and at home. The product’s price and quality are also well appreciated.

In countries like Vietnam, Hong Kong, and Malaysia, where hot pot culture is prevalent all year round, udon is very popular, and ‘Nabe no Moto’ also sells well. Among these, ‘Chicken White Soup Soy Sauce Hot Pot’ and ‘Yosenabe’ are particularly popular.

While hot pot bases are available in most Japanese supermarkets overseas, many are national brands (NB). Our hot pot bases are made by our own group factories, so they are about 30-40% cheaper than the others.

As for ‘Silver Sesame Dressing,’ it’s used more as a dip sauce, like for shabu-shabu, rather than as a typical salad dressing. Because of this, even though we have other dressings like green perilla and Caesar, the Silver Sesame Dressing is overwhelmingly the top seller.”

Nutrition education is the issue for the future.

In addition to OEM products like “Frozen Natto,” “1-liter Bottles of Soy Sauce,” and “Umami Seasoning,” surprisingly, “cooking oil” is also popular. Nishida-san analyzes that the reason for their success is that these products are Japanese-made yet affordable.

“For example, our own imported overseas PB products, such as Italian pasta sauce, also sell steadily, but the real popularity lies with products made in Japan. I think the strong image of ‘Japanese food is safe’ plays a role in this.”

However, this doesn’t mean that overseas products don’t sell. Many customers are drawn by the reassurance of “Gyomu Super Quality” when purchasing.

“We label the products sold at overseas stores to make it clear that they are imported from Japan, so customers can shop with confidence.”

In the future, Nishida-san emphasizes that “food education” is necessary to expand stores in countries with different food cultures:

“For example, Japanese people know that ‘men-tsuyu’ (noodle soup base) can be used not just for noodles but for stir-fries, donburi, and other dishes. But locals may only know it as something to use with noodles, and they can’t imagine other uses.”

By promoting Japanese food culture and using social media for branding, sales could increase even further. “Food education is one of the challenges moving forward.”

In Vietnam, the partner company operates 14 stores and is also involved in wholesale and online businesses, which helps spread Gyomu Super’s products across the country. They plan to expand stores in Vietnam and are considering various possibilities, including franchise expansion.

“Our company’s model aligns better with creating many small stores rather than large-scale ones. In rapidly growing economies like Vietnam, we think expanding the number of stores is the way to go.”

Nishida-san believes that the “Vietnam model” could be applied to nearby countries like Cambodia and the Philippines, but for now, the focus will be on increasing the number of stores in Vietnam.