Japanese convenience store rivalry extends to mobile payment apps

FamilyMart and 7-Eleven Japan are using mobile payment technology to compete with each other and attempt to manage the country's labor shortage.

FamilyMart has added a QR code and wallet to Famipay, an existing coupon app that has been downloaded about two million times. FamilyMart hopes to reduce its employees' workload through cashless payments. Meanwhile, 7-Eleven Japan has launched 7pay to reach the chain's 22 million daily customers.

Both chains are marketing the payment services with voucher rewards, according to The Japan Times.

James Delano/Bloomberg

Three chains dominate the convenience store industry in Japan: 7-Eleven Japan, a unit of Seven & I Holdings Co. Ltd that operates 20,904 stores in Japan; FamilyMart, a unit of FamilyMart UNY Holdings Ltd. that operates 16,430 stores in the country; and Lawson, which has a network of 14,681 stores in Japan.

Japan has been experiencing a growing labor shortage since the 1990s due to a steady drop in the working-age (15-64) population, and an unemployment rate in Japan that is below 3%. The convenience stores in Japan are viewing cashless payments and self-checkout as ways to mitigate the shortage.

In December, 7-Eleven Japan opened a pilot store in Tokyo that uses facial recognition to authenticate self-checkout service. Lawson announced in April that it was expanding a self-checkout pilot from 1,000 stores to its entire network, attributing the move to Japan's labor shortage. This move is an acceleration from its statement last December when it reported that it had planned to pilot self-checkout in about 1,000 stores by the end of 2019.