Chinese Superstore Business

Message from the Chairperson

Ito-Yokado (China)
Investment Co., Ltd.
Hua Tang Yokado
Commercial Co., Ltd.
Chengdu Ito-Yokado Co., Ltd.
Chairperson
Tsugumi Ko

Ito-Yokado’s business in China began with the opening of the Chunxi Store in Chengdu City in November 1997, and in 2021, we marked 24 years of business in Chengdu and Beijing. This success is due to the patronage of customers, support of business partners, shareholders, and local communities, as well as backing from employees, and for this I am truly grateful. During this period, we have adapted to various changes in the business environment based on our Corporate Creed of “trust and sincerity” and “customer first.” Over the past 24 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.”
Due to the COVID-19 pandemic, interest in safety and reliability is no longer limited to products themselves, centered on foodstuffs. Consumers have come to look at noncontact and other sales methods and to stringently watch employees’ customer response. Young Chinese in their twenties and thirties, the so-called digital generation, have become the main players in consumption and now demand high-quality service, including fashion enabling them to express themselves, highly convenient services allowing them to use time effectively and leisure time for engaging in sports and other interests. To meet these needs, we endeavor to sell “看得見的放心” (visibly safe) food products with particular attention to safety and taste, to establish hygiene management systems in factories and production sites, to implement inspection systems, and to regularly check compliance with laws and regulations. In addition, we provide employees with education on such topics as hygiene standards, quality control, and safety-related laws and regulations. We are also making continuous efforts to create comfortable shopping environments in stores by creating child play areas, expanding rest areas, and improving restroom environments; we have restaurants available for use as community areas too. To realize such amenities, 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 making use of information technology are being created one after another. Therefore, we established an e-commerce company in Chengdu in 2017 to advance toward a retail business that integrates brick-and-mortar stores with the Internet. Furthermore, to fulfill our corporate social responsibilities, we will continue to implement measures to reduce CO2 emissions and curb environmental impact and to conduct volunteer activities targeting seniors and children.

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
November 2018 Huafu Avenue Store lifestyle grocery store opens in Chengdu
January 2019 Ito Plaza opens in Chengdu

Company Overview

Chengdu Ito-Yokado Hua Tang Yokado Commercial
Net Sales approx. ¥64,300 million approx. ¥5,100 million
Number of employees 2,795 191
Number of stores 9 stores (Chunxi, Shuangnan, Jinhua, Jianshe Road, High-tech, Wenjiang, Meishan,Huafu Avenue, Ito Plaza) 1 store (Asian Games Village)
Established December 1996 September 1997
Chairman Tsugumi Ko Tsugumi Ko
President Kazumi Kunimi Satoshi Osada
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
  • *Fiscal year ending December 31 (number of stores as of December 31, 2020; number of employees as of February 28, 2021)
  • *Exchange rate of CNY1 = ¥15.48
  • *Net sales does not include value added tax

CSR Initiatives

12 RESPONSIBLE CONSUMPTION AND PRODUCTION

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 the fiscal year ended February 28, 2014, Chengdu Ito-Yokado and Hua Tang Yokado Commercial have been taking steps to create structures for promoting CSR more comprehensively and holding periodic CSR Management 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 an index of the guidelines at the end of this report. The CSR report for FY2020 was published in June 2020, and it was distributed to attendees at the Sichuan Province CSR report presentation meeting and at meetings for the public, as well as being submitted to a CSR Report Conference held in Beijing by the China Federation of Industrial Economics.

Promise to Customers

9 INDUSTRY, INNOVATION AND INFRASTRUCTURE

Quality and Freshness Management

Amid a rise in public interest in the 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 797 employees of Chengdu Ito-Yokado and 60 employees of Hua Tang Yokado Commercial have acquired knowledge 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. The aim is to improve quality, and a representative from Head Office regularly visits stores to check that they are providing products that meet its 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 FY2020, Chengdu Ito-Yokado audited 39 business partners, and Hua Tang Yokado Commercial implemented audits of business partners 8 times. (To prevent the spread of COVID-19, the number of audits was fewer than in normal years.)

Provision of Traceability Information

In 2013 Chengdu Ito-Yokado launched sales of “看得見的放心” food products, which are based on the same concept as the Traceable Fresh Foods with a Face of the Producer products dealt 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 FY2020 the company continued to handle “看得見的放心” products and newly developed 17 items in the series, including oranges (four types), watermelon, and pears for fruit, asparagus, carrots, and mushrooms for vegetables, and fresh eggs. These products are popular among customers, whose interest in food safety and reliability is rising.
As a management rule amid the COVID-19 pandemic, the city of Beijing made it obligatory to acquire proof of a negative PCR test when stocking imported frozen food products. In response to this tightening of quarantine inspection rules and sales rules, Hua Tang Yokado Commercial, as a model local enterprise, believes that the safety of customers comes first and thoroughly checks negative certificates. Furthermore, the company continues sales of "放心肉項目" meat products (reliable meat products), which enable customers to confirm the meat producer by using devices installed in sales areas.

The "看得見的放心"brand logo
"看得見的放心" product display

Quality Supervision System and Meetings with Customers

Since 2008, Chengdu Ito-Yokado has appointed 10 customers at each store (5 customers each at Meishan Store and Huafu Avenue Store) to act as quality supervision monitors to help improve its products and stores with the customers’ standpoint. The quality supervision monitors meet at each store twice a quarter to give their opinions, and are encouraged to make proposals on matters that they have noticed at any time. Quality supervision monitors 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, leading to improvement.
In addition to quality supervision monitors, Chengdu Ito-Yokado asked for cooperation from 95 customers and received 871 opinions. Based on these opinions, it reviewed product volumes and took other steps to provide even better products. Other efforts included making home visits to 1,000 customers living in its stores' neighborhoods to ask their opinions. In March, June, and September it conducted customer satisfaction surveys, asking for opinions from 7,435 customers.
Chengdu Ito-Yokado and Hua Tang Yokado Commercial also collect opinions via the Internet, telephones, opinion boxes, and instore conversations. In FY2020, Chengdu Ito-Yokado received 19,101 opinions and Hua Tang Yokado Commercial received 6,845. Based on the opinions received, a series of simple and reasonably-priced bedding products were 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.

Sampling of seasonal food products
Cake-making event
2021_en_CustomerFeedback.jpg

Promise to the Local Community

1 NO POVERTY
4 QUALITY EDUCATION
11 SUSTAINABLE CITIES AND COMMUNITIES

Donations and Stakeholder Engagement

Chengdu Ito-Yokado is involved in providing educational support and in assisting households in poverty. The company makes annual donations to Sichuan University; in 2020 it made donations on 23 occasions, and so far it has supported an aggregate total of 646 students. In FY2020, students studying Japanese at Sichuan University who achieved excellent results were given 72,000 yuan in scholarship, and 20,000 yuan was donated to the Department of Japanese. In addition, since 2007 Chengdu Ito-Yokado has targeted elementary schools for support, selecting four schools and making donations to improve school facilities and equipment for the purpose of assisting less fortunate children. Company personnel visited the four schools and donated stationery and school supplies, physical education equipment, and other items based on the schools' requests. In other efforts, the stores make seasonal visits to local households experiencing poverty, people with disabilities, and elderly people living alone, giving them gifts of living essentials.
Amid the COVID-19 pandemic, the scheduled summer camp of Yu’ai Elementary School and school visits to make donations were cancelled in 2020. Instead, a donation of 50,000 yuan each to Chongzhou Dao Elementary School and Jintang San Elementary School was donated for improving reading room infrastructure, purchasing books, repairing doors and windows that posed a problem to safety, replacing curtains, and so on. In addition, 25,000 yuan was donated to Pengzhou Elementary School for the purchase of equipment for extracurricular activities. In December, uniforms were donated to educational personnel in the Pidu district of Chengdu to help improve their image. A total of 2,816,000 yuan was expended for social contribution activities in 2020.

Reading room at Chongzhou Dao Elementary School
New curtains at Jintang San Elementary School
Donation to Pengzhou Elementary School
(equipment for extracurricular activities)

Volunteer Activities

On the third Wednesday of every month, Chengdu Ito-Yokado employees at every store clean up the areas around the stores. The stores have also set up rest areas where external staff engaged in road cleaning can freely drink water.
Hua Tang Yokado Commercial conducts cleanup activities every day, with employees taking the lead to beautify the neighborhood.

Cleanup activities by employees
Rest area for the external staff engaged in road cleaning

Promise to Employees

4 QUALITY EDUCATION
8 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 rooted in the local community. At Chengdu Ito-Yokado and Hua Tang Yokado Commercial, Chinese store managers have been appointed. For the most part, local employees operate stores: the ratio of Chinese employees in management positions, excluding executives, is 99.1% at Chengdu Ito-Yokado and 98.3% at Hua Tang Yokado Commercial.
In addition, we have been making progress on the appointment of women in China. The ratio of female managers, excluding executives, is 59.5% at Chengdu Ito-Yokado, with female store managers at four of its 10 stores, and 46.6% at Hua Tang Yokado Commercial.

Employee Data (As of the end of December 2020)
Chengdu Ito-Yokado Hua Tang Yokado Commercial
No. of employees 2,924 199
No. of part-time employees 85 23
Ratio of Chinese employees in management positions 97.8% 96.7%
No. and ratio of women in management positions (excluding executives) 360(59.5%) 54(46.6%)
No. of female team leaders (ratio of female team leaders) 213(59.1%) 13(44.8%)
No. of female section managers (ratio of female section managers) 107(29.7%) 26(41.9%)
No. of female division managers (ratio of female division managers) 23( - %) 15(60.0%)
No. of female corporate officers (ratio of female corporate officers) 4( - %) 0(0.0%)
No. of employees with disabilities 51 10

CSR Education

In FY2020, special attention was devoted to the reduction of plastics. In order to switch to degradable plastic shopping bags, responsible personnel from Chengdu Ito-Yokado attended the 21th IE Expo China, a trade fair for environmental technology, as well as a degradable forum organized by the China Chain Store & Franchise Association, to obtain information on such issues as the domestic production of degradable plastics and degradable standards. In addition, the company produced an educational video for internal use to deepen the understanding of employees and informed customers through posters displayed in stores and in-store broadcasts. Chengdu Ito-Yokado also actively publicized its use of degradable plastics outside the company.
In November 2020, Hua Tang Yokado Commercial and Chengdu Ito-Yokado jointly switched to shopping bags, called Super-Bags, made from degradable plastic. These degradable Super-Bags are provided at 2.0 yuan per bag, 6.7 times more than the previous shopping bags, which cost 0.3 yuan per bag for the largest size. At the same time, we are putting a lot of effort into the sale of eco-bags.

Self-Recommendation Program

In the fiscal year ended February 29, 2016, Chengdu Ito-Yokado began operating a Self-Recommendation Program as a show of respect for the autonomy of employees in order to provide an outlet for their motivation. The program 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.

Human Resource Development Programs

Training programs have been enhanced to boost the motivation of local employees and enable them to demonstrate their abilities to the fullest.
Chengdu Ito-Yokado conducted education on improving employees' primary qualification capabilities and workplace operational skills as well as other functional curricula (form production, packaging, beef products, register operation). It uses an online remote education system to facilitate training with enhanced content including at remote sites.
Furthermore, practical skills training sessions are open for all employees to observe if they wish, even if they are not undertaking the training, so they are able to learn directly from the instructor. It also holds in-store operational skills contests and operate a program where on-site customers score employees to select winners, encouraging employees to improve through friendly competition.
In FY2020 Hua Tang Yokado Commercial implemented special education programs on such themes as the Corporate Creed and management philosophy, store assistance, and customer service on three occasions. By having everyone read together the Corporate Action Guidelines at the president’s general meetings held every Monday, the company endeavors to increase understanding of its stance. Training related to everyday customer service is implemented using the morning and afternoon assembly. Staff who receive words of praise (including not only full-time employees but also part-time workers, tenant store employees, cleaners, and security guards) are commended at weekly store morning assemblies for all staff, which serves to raise overall motivation.

Customer-greeting training at a store’s morning assembly for all staff
(Hua Tang Yokado Commercial)
Lecture on the Corporate Creed and management philosophy (Hua Tang Yokado Commercial)

Human Resource Development and Training

Classroom Training

To pass on the Ito-Yokado ethos and foster human resources befitting Ito-Yokada, in 2020 we held classes on 523 occasions. These classes were divided into 11 subjects in accordance with the three themes of passing on Ito-Yokado’s corporate culture and ethos, training to improve skills, and the strengthening of customer service. An aggregate total of 8,881 employees attended the classes. (Of them, the number of executives totaled 1,065 persons, and the number of employees who were promoted after receiving the training was 186 persons.)

  • *Due to the need to prevent the spread of COVID-19, difficulties arose in the implementation of face-to-face education, job advertising for new employees, special knowledge training in collaboration with outside parties, and so on, and we had to revise frequency and number of classes.

e-Learning

To respond to the needs of young employees, share company policy more efficiently, and develop human resources capable of working autonomously, we strengthened e-learning in 2020, implementing it 57 times in total. Course content, frequency of implementation, number of viewers, and number of views were as follows: corporate culture and company policy—18 times, 13,897 viewers, 166,764 views; skill improvement—39 times, 5,578 viewers, 83,382 views. The aggregate number of employees receiving correspondence education, including both stores and head office, totaled 13,897 persons (company employees and tenant store employees), and the number of views was 250,146.

Promise Regarding the Environment

7 AFFORDABLE AND CLEAN ENERGY
12 RESPONSIBLE CONSUMPTION AND PRODUCTION
13 CLIMATE ACTION

Energy-Saving Initiatives

In 2020, the Chengdu municipal government proposed the creation of low-carbon scenes as a priority, and in June government officials conducted surveys of the Shuangnan Store, Jianshe Road Store, Jinhua Store, and High-tech Store. The data collected at each store was used as base data in preparation for the building of low-carbon commercial facilities in Chengdu. In December, Ito-Yokado stores were selected as low-carbon models, and we concluded a contract with the Chengdu municipality, promising to continue to expand the use of energy-saving equipment and reduce our environmental load.
Hua Tang Yokado Commercial, meanwhile, controls store temperatures through the rationalized operation of air-conditioning systems. By adjusting the operating time and area covered by air conditioners as necessary in response to weather and temperature changes, it reduces the consumption of gas and electricity. Hua Tang Yokado Commercial requests a facility management business to keep track of store temperatures carefully, so it can constantly detect temperature changes and adjust the operating modes of air-conditioning equipment accordingly.

Chengdu Ito-Yokado
FY2018 FY2019 FY2020
Number of stores 8 9 9
Energy consumption (standard coal tons) 13,516 13,150 13,553
Electricity consumption (MWh) 89,743 99,836 105,439
Gas usage (1,000 m3) 670 667 540
Water usage (1,000m3) 884 853 888


Hua Tang Yokado Commercial
FY2018 FY2019 FY2020
Number of stores 1 1 1
Energy consumption (standard coal tons) 1,434 1,549 1,434
Electricity consumption (MWh) 7,241 8,106 7,924
Gas usage (1,000 m3) 350 380 335
Water usage (1,000m3) 41 60 55

Award History (FY2020)

Chengdu Ito-Yokado and Hua Tang Yokado Commercial received the following awards in FY2020 in recognition of their various initiatives.

Chengdu Ito-Yokado
Names of Award Presenting Organization
Sichuan Province Excellent Service Company Sichuan Provincial Government
2020 Chengdu City Excellent COVID-19 Response Company Chengdu Retailers' Association
2020 Chengdu City Leading COVID-19 Response Company Chengdu Municipal Government
Outstanding COVID-19 Response Company COVID-19 Prevention and Control Command
Wuhou District 100 Highest Corporate Taxpayers 2020 Wuhou District Government
Wuhou District Best 10 Commerce and Trade Companies 2020 Wuhou District Government
FY2020 Wuhou District Outstanding Corporate Taxpayer Wuhou District Government
Wuhou District Priority Company 2020 Wuhou District Government
Best 10 Leader Companies 2020 Chengdu Retailers' Association
Social Value Contribution Award 2020 Chengdu Retailers' Association
Top Seller in National Chain Store Business Contest China Chain Store & Franchise Association
Chengdu Best in a Million Employees Business Contest Award 2020 Chengdu Retailers' Association
West Triangle Corporate Social Responsibility Best Practices Award 2020 Fengmian Newspaper and the Research Center for Corporate Social Responsibility of the Chinese Academy of Social Sciences
CCFA Chain Store Brand Green Practice and Green Supply Chain Award 2020 China Chain Store & Franchise Association
Chengdu-Chongqing-Shuangcheng Economic Circle Brand Contest 2020: Innovative Brand Fengmian Newspaper
Popular Chengdu Commerce Overall Evaluation 2020: Business Leader Award Chengdu Shangqing Newspaper Agency
Chengdu’s Contribution to Eradicating Poverty 2020: Chengdu Social Responsibility Contribution Award Chengdu Daily Newspaper
Hua Tang Yokado Commercial
Names of Award Presenting Organization
FY2020 Class A Tax Payment Reliability Company Chaoyang State Taxation Bureau
FY2020 Leading Companies with Safest Production Systems Chaoyang District Xiaoguan Subdistrict
Certificate of Gratitude for COVID-19 Response from the Beijing Municipal Government Commerce Bureau, Beijing Municipal Government

Initiatives in China