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 2019, we marked 22 years of business in Chengdu and Beijing. This success is due to the support of customers, 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 philosophy “reliability and sincerity” and “customer first.” During the past 22 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, 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 child  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 Chengdu, we opened the Huafu Avenue , a lifestyle grocery store  that specializes in food, the first of its kind, in November 2018, and in January 2019 we opened the first SC Ito Plaza  in a mall. In the external environment, new services that make use of information technology are 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 emissions in order to curtail environmental impact and we undertake volunteer activities targeting seniors and children. 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.

              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

              ¥70,500 million

              ¥4,800 million
              Number of employees 3,176 180
              Number of stores 8 stores (Chunxi, Shuangnan, Jinhua, Jianshe Road, High-tech, Wenjiang, Meishan,Huafu Avenue) 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 = ¥15.86
              • *
              • Net sales does not include value added tax

              CSR Initiatives

              • SDGs12 つくる責任 つかう責任

              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 a comparison table of the guidelines at the end of this report. The CSR report for the fiscal year ended February 28, 2019 was published in July 2019, and it was distributed to attendees at the Sichuan Province CSR report presentation meeting and at meetings for the general public and submitted to a CSR Report Conference  held in Beijing by the China Federation of Industrial Economics .

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              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, 2019, Chengdu Ito-Yokado audited its business partners 21 times, and Hua Tang Yokado Commercial audited its business partners 6 times.

              Provision of Traceability Information

              Since2013, 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, 2019, “看得見的放心” products continued to be handled and sales of new pork, fruit, and vegetable Fresh Foods with Traceability products were started in stages. Pork and blueberries were introduced in April and melons were introduced in June, followed by tomatoes, potatoes, bell peppers, and other products. These products have proven popular as customer interest in food safety and reliability rises.

              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, 2019, we began handling new 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

              Since2008, 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, leading to improvement.

              In addition to quality supervision officers, we asked for cooperation from 70 customers and received 50 opinions. Based on these opinions, we reviewed product volumes and took other steps to provide even better products.

              Other efforts included making home visits to 1,425 customers living in our stores’ neighborhoods to ask their opinions. In March, June, and September we conducted customer satisfaction surveys, asking for opinions from 32,250 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, 2019, Chengdu Ito-Yokado received 23,285 opinions and Hua Tang Yokado Commercial received 20,304. 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.

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              A new product taste testing prior to its launch (Shuangnan Store)


              59寫真_食品新商品の説明會.jpg


              A new food product briefing (Shuangnan Store)

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              Promise to the Local Community

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

              Donations and Stakeholder Engagement

              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 2018 it has made 21 donations that have supported 590 students. In the fiscal year ended February 28, 2019, the company donated 20,000 yuan to Japanese language students of Sichuan University and an additional 72,000 yuan to 30 outstanding students. In addition, since 2007 Chengdu Ito-Yokado has targeted elementary schools for providing support, selecting four schools and making donations to improve school facilities and equipment for the purpose of supporting children experiencing poverty. Company personnel visited the four schools and donated stationary 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. In the fiscal year ended February 28, 2019, the company donated a total of 684,000 yuan through these social contribution activities.

              Chengdu Ito-Yokado also holds an annual sports event. The first marathon was held in 2018. A total of approximately 5,000 runners including customers, business partners, quality supervision officers, students from Sichuan University and elementary schools, and Ito-Yokado employees participated. The themes were “the fun of running” and “everyone can enjoy themselves by participating,” and through this event, Chengdu Ito-Yokado conveyed its commitment to supporting the healthy lifestyles of Chengdu residents by providing safe and reassuring products through day-to-day retail sales.

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              Presentation of scholarships at the marathon event

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              Children participating in the elementary school marathon event

              Volunteer Activities

              On the third Wednesday of every month, Chengdu Ito-Yokado 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 and appreciation was expressed 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.

              Cleanup activities by employees

              A water fountain

              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 100% at Chengdu Ito-Yokado and 96.2% 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, was 65.3% at Chengdu Ito-Yokado, with female store managers at five out of the nine stores, and 65.4% at Hua Tang Yokado Commercial.

              Employee Data (As of December 31,2018)

              Chengdu Ito?Yokado Hua Tang Yokado Commercial
              No. of employees 3,176

              180

              Part-time employees 448 1
              Ratio of Chinese employees in management positions (%) 100% 96.2%
              Ratio of women in management positions (%) 65.3% 65.4%
              Number of employees with disabilities 47 10

              CSR Education

              In 2018, Chengdu Ito-Yokado established a CSR action plan 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. Through these measures, we value limited resources and convey the importance 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 and sincere 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, 2019, 74 people were assigned to their desired workplace out of 115 applicants.

              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, 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 use 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 training, and they are able to learn directly from the lecturer. We also hold 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. 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. All full time, part time, and tenant store employees are eligible.

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              Operation skills contest (Chengdu Ito-Yokado)

              Human Resource Development and Training

              Classroom Training

              To enhance the skills and responsibility of personnel in all position and ranks and create teams with independent thinking, action, and motivation, internal educational organizations undertake four types of training, with a total of 1,940 employees taking courses. Of this number, 466 were executives and 76 were recently promoted to supervisor. Internal instructors conducted classes with a focus on company policies, worksite execution capabilities, teamwork, and other topics.

              e-Learning

              In order to standardize training for all employees, the company disseminated corporate policies in a timely manner, and develop human resources able to work autonomously, internal organizations implemented a 70-hour curriculum in 2018. The curriculum included 11 hours on company policies and the Corporate Creed, 16 hours on fundamental education, 11 hours on specialized knowledge, and 32 hours on technical knowledge.

              In 2018, the e-learning curriculum was reviewed and skills training was enhanced with the addition of basic knowledge concerning fresh meat, cash register training, knowledge needed by supervisors, and so on. A total of 13,317 employees including Head Office employees at nine stores, self-supporting employees , mannequins , and temporary employees participated in e-learning, and the program was used a total of 1,1 million times.

              Promise Regarding the Environment

              • SDGs7 AFFORDABLE AND CLEAN ENERGY
              • SDGs13 CLIMATE ACTION

              Energy-Saving Initiatives

              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. Refrigeration and freezer systems with EMS artificial intelligence are adopted at new stores, and we invest in energy-saving equipment. In back rooms, we displayed posters encouraging employees not to use electricity wastefully. We also introduced dishwashers that can recycle hot water and took measures to save 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, leading to a reduction in electricity consumption per store to 87.7% of the previous fiscal year’s level. As a result, CO2 emissions were reduced by to 91.3% of the level in the fiscal year ended February 28, 2018, and energy use per store was 98% of the previous fiscal year’s level. The non-paper  initiative implemented since the fiscal year ended February 28, 2017 has resulted in a reduction of 1 ton of paper compared to the fiscal year ended February 28, 2018, a reduction of 486,000 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

              2016 2017 2018
              Number of stores 6 7 8
              Energy consumption (standard coal tons) 8,984 12,067 13,516
              Electricity consumption (MWh) 83,110 83,110 89,743
              Gas usage (1,000 m3) 620 670 670
              Water usage (1,000m3) 827 965 884


              Hua Tang Yokado Commercial

              2016 2017 2018
              Number of stores 2 1 1
              Energy consumption (standard coal tons) 3,418 1,414 1,434
              Electricity consumption (MWh) 19,255 7,189 7,241
              Gas usage (1,000 m3) 4,490 380 35
              Water usage (1,000m3) 130 125 41

              Award History (FY2019)

              Chengdu Ito-Yokado and Hua Tang Yokado Commercial received the following awards in the fiscal year ended February 28, 2019, in recognition of its various initiatives.

              Chengdu Ito-Yokado

              Chengdu Business Council?Sichuan Trade Council?

              Award Name Presenting Organization

              17th Outstanding Business/Outstanding Team Award of the 2018  Chengdu New Year Shopping Fair

              Chengdu Retailers' Association

              Fiscal 2018 Wuhou District Outstanding Corporate Taxpayer

              Wuhou People’s Government

              Fiscal 2018 Top 10 Ranking of Modern Commerce & Trade Businesses by Taxes Paid

              Wuhou District Government

              Chengdu Leading Economic Business Enterprise

              Chengdu City Government

              2018 Award for Fengshang

              Chengdu Economic Daily

              Miniblock Commercial Assessment Innovation Award SINA Corporation


              Hua Tang Yokado Commercial

              Award Name Presenting Organization
              FY2018 Class A Tax Payment Reliability Company Chaoyang State Taxation Bureau
              2018 Leading Companies with Safest Production Systems Chaoyang District Xiaoguan Subdistrict


              Initiatives in China

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