Initiatives in China

Message from Chairman

Ito-Yokado (China) Investment Co., Ltd.
Hua Tang Yokado Commercial Co., Ltd.
Chengdu Ito-Yokado Co., Ltd.
Chairman
Makoto Imai

Ito-Yokado launched its China business with the opening of the Chunxi Store in Chengdu City in November 1997, and in 2018, we marked 21 years of business in Chengdu and Beijing. This success is due to the support of customers, business partners, shareholders, local communities, and employees, and for this I am grateful. During this period, we have adapted to various changes in the business environment based on our corporate philosophy “reliability and sincerity” and “customer first.” During the past 21 years, the Chinese economy has undergone remarkable development, consumer incomes have increased, and the middle class has greatly expanded in size. For the middle class, an “abundant lifestyle” has come to mean a “healthy lifestyle true to oneself.” People now want safe and secure foodstuffs, fashion that allows them to express themselves, highly convenient services that facilitate the effective use of time, and leisure time for engaging in sports and other interests. To meet these needs, we have focused on sales of “看得見的放心” food products with particular attention to safety and taste, hygiene management systems in plants and production sites, inspection systems, periodic confirmation of compliance with laws and regulations, and employee education on hygiene standards, quality control, safety-related laws and regulations and so on.
We are also taking ongoing measures to create comfortable shopping environments in stores by creating children play areas, expanding rest areas, and improving restroom environments, and have restaurants available for use as community areas. To do this, in May 2018, we implemented a large-scale renovation of the Asia Village Store in Beijing, the first since it opened. In the external environment, new services that make use of advances in information technology are steadily being created. In response, we established an electronic commerce company in Chengdu in 2017. We are advancing toward a retail business that integrates brick-and-mortar stores with the Internet. Furthermore, to fulfill our corporate responsibilities, we continue to implement measures to reduce CO2 in order to curtail environmental impact and we undertake volunteer activities targeting seniors and children. Chinese society is changing at a tremendous pace. In the future, we will continue listening to the opinions of local communities and work to be a company that is trusted by local residents and grows in tandem with communities.

China Business History

Year Event
1996 Request to establish superstore received from government of China and Chengdu in Sichuan Province
December 1996 Chengdu Ito-Yokado Co., Ltd. established in Chengdu
September 1997 Hua Tang Yokado Commercial Co., Ltd. established in Beijing
November 1997 Chunxi Store opens in Chengdu
December 2001 Asian Games Village Store opens in Beijing
September 2003 Shuangnan Store opens in Chengdu
December 2007 Jinhua Store opens in Chengdu
November 2009 Jianshe Road Store opens in Chengdu
November 2011 High-tech Store opens in Chengdu
January 2014 Wenjiang Store opens in Chengdu
2014 Then-Chairman Tomohiro Saegusa named an Honorary Citizen of Chengdu, a first for a Japanese manager of a private company
January 2017 Meishan Store opens in Meishan
April 2017 Chengdu Ito-Yokado E-commerce Co., Ltd. established in Chengdu

Company Overview

Chengdu Ito-Yokado Hua Tang Yokado Commercial
Net Sales ¥72,300 million ¥6,800 million
Number of employees 3,150 196
Number of stores 7 stores (Chunxi, Shuangnan, Jinhua, Jianshe Road, High-tech, Wenjiang, Meishan) 1 store (Asian Games Village)
Established December 1996 September 1997
Chairman Makoto Imai Makoto Imai
President Tsugumi Ko Makoto Imai
CSR Promotion Structure CSR Management Committee Corporate Ethics and Culture Committee
Corporate Ethics and Culture Subcommittee Corporate Ethics and Culture Subcommittee
Consumer Affairs and Fair Business Practices Subcommittee Environmental Subcommittee
Environmental Subcommittee
Information Management Committee
  • *
  • The number of employees and number of stores are as of December 31, 2017.
  • *
  • Exchange rate of CNY1 = ¥16.62
  • *
  • Net sales does not include value added tax

CSR Promotion Structure

In recent years, public demand for companies to take a progressive stance on CSR has been rising sharply in China. Under the policies of the Chinese government, CSR implementation guidelines and assessment benchmarks have been formulated, and CSR assessment rankings have been published. Since 2013, Chengdu Ito-Yokado and Hua Tang Yokado Commercial have been taking steps to create structures for promoting CSR more comprehensively and holding committee meetings. The Corporate Culture and Ethics Subcommittee of Chengdu Ito-Yokado established curriculum for an online course that enables employees to acquire operational knowledge and technical awareness to ensure correct corporate behavior. Hua Tang Yokado Commercial’s Corporate Culture and Ethics Subcommittee is returning to the origins of business, working to ensure that all employees are aware of the Corporate Creed and Corporate Action Guidelines. The Environmental Subcommittees at both Chengdu Ito-Yokado and Hua Tang Yokado Commercial seek to save electricity and water and have advanced discussions toward store operations that take energy conservation into consideration with specific targets for reduction. The Consumer Affairs and Fair Business Practices Subcommittee works to promote provision of safe and reliable products and services, which helps to make them even better.

Publication of CSR Reports

In July 2016, Chengdu Ito-Yokado published its first CSR Report, covering its social and environmental activities. In the course of preparing the report, the company referred to the Guidelines on Corporate Social Responsibility Reporting for Chinese Enterprises (CASS-CSR 3.0) developed by the Chinese Academy of Social Sciences and the international Sustainability Reporting Guidelines (G4) of the Global Reporting Initiative (GRI). There is a comparison table of the guidelines at the end of this report. The CSR report for the fiscal year ended February 28, 2018 was published in July 2018, with plans to distribute it to attendees at the Sichuan Province CSR report presentation meeting and at meetings for the general public and to submit it to a conference of the Chinese Academy of Social Sciences.

Promise to Customers

  • SDGs9 INDUSTRY, INNOVATION AND INFRASTRUCTURE

Quality and Freshness Management

Amid a rise in public interest in safety and reliability of food, we provide products using quality and freshness management expertise developed in Japan. Sales staff, product departments, and quality control departments receive education on safety laws and regulations, production and processing standards, hygiene standards, and other aspects. About 370 employees of Chengdu Ito-Yokado and Hua Tang Yokado Commercial have been made aware of safety and quality management.
Chengdu Ito-Yokado employees each receive a copy of the “Standard Operation Manual” to establish a unified standard for production and processes. While improving quality on one hand, a representative from Head Office regularly visits stores to check that they are providing products that meet our standards. Annual third-party audits are also conducted.
Hua Tang Yokado Commercial conducts quality control training for foodstuff employees four times annually to ensure strict compliance with quality control standards.
We also visit our business partners’ farms and factories regularly to see that they are meeting our standards for facilities and equipment, hygiene and production management, inspection systems, individual hygiene, and legal and regulatory CSR. In the fiscal year ended February 28, 2018, Chengdu Ito-Yokado audited its business partners 21 times, and Hua Tang Yokado Commercial audited its business partners 6 times.

Provision of Traceability Information

From the fiscal year ended February 28, 2014, Chengdu Ito-Yokado launched sales of “看得見的放心” food products, which are based on the same concept as the Fresh Foods with Traceability products launched in Japan. Consumers can scan a QR code on these products to confirm on a dedicated website who the farmers are and where and how the products were grown. In the fiscal year ended February 28, 2018, the “看得見的放心” product range was increased further to approximately 22 lines with the addition of eight new lines. These products have proven popular with customers who have a particularly strong interest in food safety and reliability.
In the fiscal year ended February 28, 2015, Hua Tang Yokado Commercial started selling organic foods in cooperation with farmers by establishing rigorous food safety management systems and drawing up annual cultivation plans. In the fiscal year ended February 28, 2018, we began handling hydroponic produce that is cultivated in a safe and secure environment. Furthermore, the company continued sales of “放心肉項目” meat products (meat products that can be consumed with confidence), which enable customers to confirm the meat producer using consoles installed in sales areas.

The “看得見的放心”brand logo

“看得見的放心” product display

[Third Parties] Third-Party Audits : The system will be regularly audited by specialist third-party organizations to enhance the transparency of food safety and quality, fertilizer management and so forth. Safety and Quality : Products will be checked by setting proprietary standards for product safety and quality (taste and freshness). [Source region] Growing environment : Chengdu Ito-Yokado selects farmers who are farming in good environments and will work together with them to improve the farming environment further. Fertilizer Management Together with growers, Chengdu Ito-Yokado works to ensure proper management of fertilizers, agrichemicals and other chemicals and reduce their use. [Ito-Yokado] Improvement Efforts : Together with farmers, Ito-Yokado works to make continuous improvements and regularly reports on these activities. [PCs and Mobile Phones] Disclosure of Information : Information about farmers and where and how products were grown will be disclosed on product packaging, the看得見的放心 website and mobile site, in-store POP displays, and elsewhere.

Quality Supervision System and Meetings with Customers

Since the fiscal year ended February 28, 2009, Chengdu Ito-Yokado has appointed 10 customers at each store to act as quality supervision officers to help improve its products and stores with the customers who actually shop at the stores as the standard. The quality supervision officers meet at each store once a quarter to give their opinions, and are encouraged to make proposals on matters that they have noticed at any time. Quality supervision officers commented on the use of mobile phones by employees during work, and a new rule on the use of mobile phones during work was established to improve the situation.
In addition to quality supervision officers, we asked for cooperation from 70 customers and received 175 opinions. Based on these, we reviewed product volumes and took other steps to provide even better products.
Other efforts included making home visits to 5,809 customers living in our stores’ neighborhoods to ask their opinions. In March, June, and September we conducted customer satisfaction surveys, asking for opinions from 29,016 customers.
Chengdu Ito-Yokado and Hua Tang Yokado Commercial also collect opinions via the Internet, telephones, opinion boxes, and instore conversations. In the fiscal year ended February 28, 2018, Chengdu Ito-Yokado received 18,336 opinions and Hua Tang Yokado Commercial received 13,953. Based on the opinions received, a series of simple and reasonably-priced bedding products was created, and the products have been well-received by customers. We value customers’ opinions and we are establishing systems to create stores that reflect their wishes.

Chunxi Store: Customers taste test a new salad at a customer dialogue event

High-tech Store: Employees make breakfast sandwiches at a customer dialogue event

Promise to the Local Community

  • SDGs1 NO POVERTY
  • SDGs4 QUALITY EDUCATION
  • SDGs11 SUSTAINABLE CITIES AND COMMUNITIES

Donations

Chengdu Ito-Yokado is involved in providing educational support and in supporting households in poverty, among others. The company makes annual donations to Sichuan University, and as of 2017 it has made 20 donations that have supported 560 students. In the fiscal year ended February 28, 2018, the company donated 20,000 yuan to Japanese language students of Sichuan University and an additional 72,000 yuan to 30 outstanding students. Moreover, prior to Children’s Day, the company donated 15,000 yuan to each of six Ito Friendship Elementary Schools to assist with activity expenses for Children’s Day. The company also held summer camp events over two days and one night in which children enjoyed the experience of managing a store for a day and visiting a museum.
Again this year, the company donated printers to the Jintang Sanliecun Friendship Elementary School and received thank you letters from the school and its students. In other efforts, the stores make seasonal visits to local households experiencing poverty, people with disabilities, and elderly people living alone, giving them presents of living essentials. In the fiscal year ended February 28, 2018 the company donated a total of 1,614,000 yuan through these social contribution activities.

Donations for Outstanding Students

Participants in the summer camp event

Volunteer Activities

During the fiscal year ended February 28, 2018, Chengdu Ito-Yokado personnel visited local households in poverty, disabled persons, and elderly people living alone to give them daily necessities on the occasions of the Spring Festival, the Dragon Boat Festival, the Mid-Autumn Festival, and the Double Ninth Festival. On Wednesday of the third week of every month employees at every store clean up the areas around the stores. At the Jianshe Road Store, cleaning personnel were presented hand cream at the end of the year to express appreciation for their work. The store also created sites where cleaning personnel can drink water free of charge.
Hua Tang Yokado Commercial conducts cleanup activities every day, with employees striving to lead neighborhood beautification efforts.

Promise to Employees

  • SDGs4 QUALITY EDUCATION
  • SDGs8 DECENT WORK AND ECONOMIC GROWTH

Store Management by Local Employees

Since opening our first stores in China, we have been actively appointing local employees with the aim of developing stores that are deeply tied to local communities. At Chengdu Ito-Yokado and Hua Tang Yokado Commercial, Chinese store managers have been appointed. For the most part, stores are operated by local employees: the ratio of Chinese employees in management positions, excluding executives, is 97.6% at Chengdu Ito-Yokado and 87.8% at Hua Tang Yokado Commercial.
In addition, we have been making progress on the appointment of women in China. The ratio of women in management positions, excluding executives, was 59.9% at Chengdu Ito-Yokado, with female store managers at two out of the seven stores, and 44.5% at Hua Tang Yokado Commercial.

Employee Data (As of December 31,2017)

Chengdu Ito‒Yokado Hua Tang Yokado Commercial
No. of employees 3,417 197
Part-time employees 267 1
Full-time employee turnover 17.0% 14.5%
Ratio of Chinese employees in management positions (%) 97.6% 87.8%
Ratio of women in management positions (%) 59.9% 44.5%
Number of employees with disabilities 44 9

Placing Importance on Gratitude, Inspiration, and Motivation

In 2017, Chengdu Ito-Yokado celebrated 20 years in business. To mark this significant milestone, the company held 20th anniversary commemorative ceremonies for local communities, conducted customer appreciation sales, and held parties for employees to express gratitude and raise morale.
The parties were attended by some 5,000 employees from each of the Chengdu Ito-Yokado stores and their invited family members. The events enabled the company and employees to celebrate 20 years of business and express their gratitude to one another. The participants affirmed spirit of gratitude, inspiration, and motivation, on which Chengdu Ito-Yokado places particular importance, and sang and danced in unity to express their commitment to making the company even better in the future.

An employee appreciation party

A dance pledging to practice gratitude, inspiration, and motivation toward customers

Practicing Gratitude, Inspiration, and Motivation
(1) Courtesy and an attitude of gratitude towards customers
(2) Products and stores that inspire customers
(3) Customer service that motivates customers

Human Resources Development

Training programs have been enhanced to boost the motivation of local employees and enable them to demonstrate their abilities to the fullest. In the fiscal year ended February 28, 2018, Chengdu Ito-Yokado enhanced the curricula of its correspondence programs for improving employees’ primary qualification capabilities and workplace operation skills and added other operational and functional curricula (form production, packaging, meat products, register operation) to foster human resources who can undertake the five strategies (Topic Strategy, Product Strategy, Private Brand Strategy, Service Strategy, and Made in Chengdu Strategy). We introduced an online remote education system to facilitate training with enhanced content at remote sites.
Furthermore, practical skills training sessions are open for all employees to observe if they wish, even if they are not undertaking training, and they are able to learn directly from the lecturer. We also hold in-store operational skills contests and have even had on-site customers score employees to select winners, encouraging employees to improve through friendly competition. At Hua Tang Yokado Commercial, on Monday of the first week of each month, awards are presented to outstanding employees and to the department of the month to motivate employees. Furthermore, five employees from each store are commended and awarded as “service stars” for providing service at or above a certain standard. The recipients may be full time, part time, or tenant sore employees.

Operation skills contest (Chengdu Ito-Yokado)

CSR Education

In 2017, Chengdu Ito-Yokado established an action plan related to CSR and moved toward implementation. During this fiscal year, particular efforts were put into waste processing: a specialized waste sorting company was invited to conduct training on waste sorting, and in-store trash bins were changed to receptacles that allow waste to be sorted. We value limited resources and convey the important of effectively using resources.
Hua Tang Yokado Commercial focused its efforts on developing human resources capable of acting in accordance with the Corporate Creed and Corporate Action Guidelines by holding internal control conferences, management conferences with each company, training conferences, and so on. Employees were trained on compliance with the “reliability and sincerity” aspect of the Corporate Creed and the social requirement that we remain a trusted company.

Self-Recommendation System

In the fiscal year ended February 29, 2016, Chengdu Ito-Yokado began operating a Self-Recommendation System as a show of respect for the autonomy of employees and to provide an outlet for their motivation. The system is for employees who have worked for the company for at least one year, and allows them to put themselves forward as candidates for the jobs they seek.
Applicants who pass assessments are assigned to their desired workplace after a training period. In the fiscal year ended February 28, 2018, 2 people were assigned to their desired workplace out of 8 applicants.

Promise Regarding the Environment

  • SDGs7 AFFORDABLE AND CLEAN ENERGY
  • SDGs13 CLIMATE ACTION

Initiatives to Reduce Greenhouse Gas Emissions

Concern over air pollution and other environmental problems is growing in China, and as the government also establishes policies as a leading environmental nation and tightens regulations, Chengdu Ito-Yokado and Hua Tang Yokado Commercial are working to reduce their environmental impact through measures such as installing energy-efficient equipment. New stores were fitted with the latest, highly-efficient refrigeration systems, and we invested in energy-saving equipment. In back rooms, we displayed posters encouraging employees not to use electricity wastefully. We also worked to save water through measures such allowing frozen items to defrost naturally rather than using running water.
Chengdu Ito-Yokado conducted training on energy saving and performed comprehensive training and management for the Head Office and store employees on conserving electricity in particular, resulting in a reduction in electricity consumption per store to 92.5% of the previous fiscal year’s level. In addition, CO2 emissions in logistics were reduced by to 90.1% of the level in the fiscal year ended February 28, 2017. Energy use per store, however, increased by 15.0% year-on-year, and we will investigate future responses. The non-paper initiative implemented since the fiscal year ended February 28, 2017 has resulted in a reduction of 2.45 tons of paper compared to that fiscal year, a reduction of 561,500 sheets.
Hua Tang Yokado Commercial works to reduce its environmental impact by gathering products centrally before sorting and delivering them to each store. By continuously operating this scheme, the company contributes to reducing CO2 emissions by cutting the number of delivery vehicles, easing urban traffic congestion, and preventing noise and atmospheric pollution.

Chengdu Ito-Yokado

2015 2016 2017
Number of stores 6 6 7
Energy consumption (standard coal tons) 9,886 8,984 12,067
Electricity consumption (MWh) 78,582 83,110 89,743
Gas usage (1,000 m3) 200 620 670
Water usage (1,000m3) 747 827 965

Hua Tang Yokado Commercial

2015 2016 2017
Number of stores 5 2 1
Energy consumption (standard coal tons) 4,340 3,418 1,414
Electricity consumption (MWh) 24,765 19,255 7,189
Gas usage (1,000 m3) 448 4,489 380
Water usage (1,000m3) 177 130 125

Award History (FY2018)

Chengdu Ito-Yokado and Hua Tang Yokado Commercial received the following awards in the fiscal year ended February 28, 2018, in recognition of its various initiatives.

Chengdu Ito-Yokado

Award Name Presenting Organization
“Closest to Consumers” Award (Jinhua Store) Chengdu Retailers' Association
2017 Chengdu Chinese New Year Shopping Season Award:
Most Suited to Chengdu, Most Stylish, Most Suited to New Year, Closest to Consumers, Sales Floor with the Most Product Explanations
Chengdu Retailers' Association
Fiscal 2017 Tax Payment Grand Prize State Taxation Bureau of Wuhou District
Fiscal 2017 “Top 10 Tax Payments by Modern Commercial Trading Field” State Taxation Bureau of Wuhou District
Shopping Fair “Favorite Sales Area” (High-tech Store) Chengdu Business Council
2017 Contribution Prize Sichuan Trade Council
Model Store for Safe and Reliable Consumption (Jianshe Road Store) Chengdu Administration for Industry and Commerce
FY2017 Citizen Service Award
Fiscal 2017 Retailer Best 10:
Award for Contribution to Differentiated Experience-Based Sales Areas and Areas that Facilitate Purchasing Annual Public Benefit Contribution Award
Chengdu Retailers' Association
FY2017 China Model Commercial Assessment Ranking, “Popular Store with a Good Reputation” Award Huaxi City Daily
Chengdu Star Model: Commercial Popularity Ranking Top 3 Sichuan Online
Chengdu Commercial Popularity Ranking Top 10 Sichuan Daily
National Fashion Tri-Cities Fashion Industrial Zone Commerce and Industry Leader Award Toutiao

Hua Tang Yokado Commercial

Award Name Presenting Organization
FY2017 Class A Tax Payment Reliability Company Chaoyang State Taxation Bureau
2017 Leading Companies with Safest Production Systems Chaoyang District Xiaoguan Subdistrict

Initiatives in China