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Is Sumitomo's Soukai Drug venturing into Malaysia?

August 12, 2013 CK Wong Category : , , , , , , , ,


Soukai Drug's fulfillment operation

We have recently stumbled upon a job advertisement that captured our attention. It says that a leading Japanese integrated trading company with largest online groceries site in Japan is hiring a Marketing Manager for its new e-commerce business here.

You can check the job advertisement here or the screen capture below just in case it is no longer available online.

Japan's largest online grocery hiring in Malaysia

Based on our research and sources, we are quite certain that it is Sumitomo Corporation, a huge Japanese integrated trading company who owns the largest online retailer of household and health-related goods in Japan - Soukai Drug Online Store.

Confused about drugstore? The difference between drugstore and pharmacy is only pharmacies are allowed to sell prescription medicines. Drugstores on the other hand can also sell some grocery items such as instant noodles, drinks for re-hydration and even some cosmetic products at the same time. That's why technically there isn't any online pharmacy, and online drugstore is very similar with online grocery.


What is Soukai Drug?


Soukai Drug Online Store

According to Sumimoto Corporation's business update of Soukai Drug:

Soukai Drug Co., Ltd. is an online retailer of a broad range of household goods, from mineral water, health food, detergents and fabric softeners to home electric appliances, particularly those for beauty care and cooking, including shavers, rice mills and bread makers. Working to build a reputation as the “place for everyday items at low prices,” the web store has expanded its product lineup, which currently comprises approximately 100,000 items in 14 categories, to offer its several million strong customer base.

Yes, that is an impressive selection of 100,000 items, eclipsing Tesco Online Shopping's 15,000 products online. What's more impressive? Soukai Drug online Store had achieved more than RM 400 million sales in 2011, with more than 30% YoY growth.

Soukai Drug is not only selling via its own online store but also setup online stores at Rakuten and Yahoo Shopping. Incredibly, they have won the grand prize from the Rakuten Ichiba Shop of the Year Awards for a record-setting fourth consecutive year from 2009 to 2012. That's means they are the best of 40,000 merchants in Rakuten Ichiba, Japan year after year.

Soukai Drug is Rakuten Shop of the Year from 2009 to 2012
Soukai Drug receiving Shop of the Year Award from Rakuten's CEO, Hiroshi Mikitani


Soukai's global expansion


Malaysia will not be the first target country as Sumitomo's Soukai has already launched its e-commerce business in 2 countries, via joint ventures with well, local Sumitomo Corporation subsidiaries. Soukai started in China by the name of PinStore since April 2012, while Sukamart is launched since December 2012 in Indonesia.

During the launch, Sukamart carries only about 1,000 products (only 1% of Soukai's selection in Japan) and orders are being fulfilled from its warehouse in Central Jakarta, according to DailySocial.


Soukai's potential in Malaysia


Leveraging on Sumitomo Corporation's network, Soukai can potentially broaden its selection of imported goods that are not widely available at other web stores or physical shops. At the time of writing, PinStore (China) carries 921 imported goods while Sukamart (Indonesia) has only 118 products imported from Japan.

At the same time, Malaysia-based online grocer, Presto is already listing 1,123 international products!

To be fair, Sukamart's current products count stands at 4,197 in total, a steady improvement from 1,000 products since its launch 8 months ago.

The reason why we dwell on product counts is because whether you can offer a large selection of products makes or breaks your e-commerce success, especially true for online grocery.

Don't believe? Just read a comment by our reader on our post earlier on Tesco Online Shopping. She would have a much happier customer if Tesco is able to provide wider product range online.

Customer's comment on Tesco Online Shopping

Besides the competition with local online grocers such as Tesco, Presto to even online drugstores like CARiNG Pharmacy, fulfillment will be a big challenge for Sumitomo's Soukai. Just take a look at Tesco Online Shopping in which their distribution and fulfillment rely heavily on their physical outlets cum warehouses.

Photos credit: Sumitomo Corporation

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