Convenient Healthcare How Japan’s convenience stores are shaping up to care for an ageing population Kazunari Ogawa Deputy Senior Vice President Health Care Division Director LAWSON, INC.

AGENDA 01 02 03 04 ABOUT LAWSON JAPAN’S AGEING POPULATION LAWSON’S HEALTHCARE OBJECTIVES 04 JAPAN’S RETAIL MARKET

1 ABOUT LAWSON JAPAN’S AGEING POPULATION JAPAN’S RETAIL MARKET LAWSON’S HEALTHCARE OBJECTIVES JAPAN’S RETAIL MARKET

Convenience stores have become a social infrastructure ABOUT LAWSON Convenience stores have become a social infrastructure About 11 million customers per day 14,663 stores in Japan as of Mar.2019

LAWSON GLOBAL NETWORK

ABOUT LAWSON GROUP + + 1 ２ ３ 4 1 5 2 ５ ６ 6 4 3 HEALTHCARE LAWSON CONVENIENCE STORE - PHARMACY LAWSON CARE LAWSON + 5 LAWSON STORE 100 2 - FRESH FRUITS - VEGETABLES - ONE COIN SHOP ５ ６ + 6 NATURAL LAWSON 3 4 IN STORE KITCHEN - BEAUTY & HEALTH

MAIN PRODUCTS 1 5 2 6 3 7 4 FOOD HOUSEHOLD GOODS FAST FOOD COSMETICS - Box Lunches - Prepared Foods 5 HOUSEHOLD GOODS FAST FOOD 2 Fried Chicken - Croquette 6 COSMETICS 3 COFFEE MAGAZINES ATM SERVICES PUBLIC PAYMENT 7 4 DESSERT - Roll Cake - Cream Puff

2 ABOUT LAWSON JAPAN’S AGEING POPULATION JAPAN’S RETAIL MARKET LAWSON’S HEALTHCARE OBJECTIVES JAPAN’S RETAIL MARKET

JAPAN’S AGEING POPULATION

JAPAN’S LONG-TERM FUTURE POPULATION CY2050 95 million people Aging rate 39.6% CY2100(Estimate) 48 million people Aging rate 40.6% Source ： Ministry of Internal Affairs and Communications Ministry of Land, Infrastructure, Transport and Tourism

01 02 CURRENT DIFFICULTIES VARIOUS LIFESTYLES PERSONALIZED NUTRITION Active / Sedentary (Inactive) Healthy / Sick or Frail 02 PERSONALIZED NUTRITION Daily diet Nutrition requirements

3 ABOUT LAWSON JAPAN’S AGEING POPULATION JAPAN’S RETAIL MARKET LAWSON’S HEALTHCARE OBJECTIVES JAPAN’S RETAIL MARKET

Large area for easy access LAWSON’S NEW TYPE OF HEALTHCARE STORE ”One Stop Shop” Three Spaces One entrance Large area for easy access Pharmacy Store Consultation Welcoming path OUR CONCEPT This store is very unique because it gives access to various services such as a convenient store, a pharmacy and consultation area for nursing care and nutrition.

NUTRITION CONSULTATION Easy access to food products Personalized advice After consultation, customers will move to the store area quickly and purchase recommended foods Our customers receive personalized advice to help them. Over 65 years our body needs become more delicate. Our dietitian listens and advises our customers on how to have better health.

EASY EXERCISE TITLE HERE Change our mindset TITLE Easy exercise to maintain TITLE

COMFORTABLE SHOES Challenges Market Research “Design Thinking” -- We observed and emphasized the needs of elderly people Finding a Business Partner Company: TOKUTAKE SANGYO ”Ayumi Shoes” Customer Satisfaction and Guarantee If an issue arises with our products, the supplier will re-design the product for the customer. First we tried to sell shoes for elderly people and discovered challenges. 1 2 3 4

DRINK NECESSARY NUTRIENTS EASILY Suitable for the people with Product feature 1 2 3 High calorie in small amount (125ml) Optimally balanced nutritional formula Handy and easy to drink 1 2 3 Unbalanced diet Less appetite No time to eat

Ineffective Product Naming Misunderstood Shopping Purpose Poor Two-Way THINGS WE LEARNED Ineffective Product Naming Misunderstood Shopping Purpose Poor Two-Way Communication Need for Smaller Unit

4 ABOUT LAWSON JAPAN’S AGEING POPULATION JAPAN’S RETAIL MARKET LAWSON’S HEALTHCARE OBJECTIVES JAPAN’S RETAIL MARKET

NUMBER OF LIVING SERVICE FACILITIES Source:Materials SMTRI produced on the basis of data released by the JFA, Japan Post Holdings Co., Ltd., Japan Post Co., Ltd., and the Ministry of Economy, Trade, and Industry

Value of products sold (trillion yen) SALES CHANGES BY BUSINESS CATEGORY 　 Value of products sold (trillion yen) Note:The figure for convenience stores is the value of goods sold (excluding service sales). Source:Materials SMTRI produced on the basis of the Current Survey of Commerce released by the Ministry of Economy, Trade, and Industry

WHO ARE LAWSON’S COMPETITORS? Number of Stores ( As of Mar 2019 ) Business Hours Main Products Convenience Store Food Products Household goods Medicine 24 Hours 365 Days 9:00 – 22:00 (depends on stores) 15,660 56,574 Drug Store

the more beautiful life becomes. ” THANK YOU “ The longer you live, the more beautiful life becomes. ” 　　　　　　　　　　　　　　　　　― Frank Lloyd Wright