The Booming Business of Japanese Drugstores

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Japanese drugstores have become a crucial part of daily life in Japan and a sought-after shopping destination for visitors. Their ability to blend affordability, variety, and convenience has propelled them to international recognition.

Jun Takahashi

March 10, 2025

2Min Reads

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Image courtesy of joban

Japanese drugstores, known as "kusuriya" or "yakkyoku," have evolved far beyond simple pharmacies. They are now major retail destinations, offering a vast range of products, from health and beauty essentials to daily household items and even food. Their success is driven by a combination of convenience, product diversity, and competitive pricing. This article explores the growth of the Japanese drugstore industry, its business strategies, and its global expansion.

The Growth of the Japanese Drugstore Industry

In Japan, drugstores have transformed into multi-category retailers, attracting both locals and tourists. The industry has seen significant growth due to factors such as:

Aging Population: With Japan having one of the world's oldest populations, demand for health-related products, including supplements and over-the-counter (OTC) medicines, continues to rise.
Tourism Boom: Before the COVID-19 pandemic, Japan welcomed millions of tourists annually, many of whom sought high-quality Japanese skincare, cosmetics, and health products.
Diversified Product Range: Unlike Western pharmacies, Japanese drugstores sell a broad mix of goods, including cosmetics, snacks, beverages, and daily necessities, making them one-stop shopping destinations.
Image courtesy of terencetoh
Key Players in the Market

Several major companies dominate the Japanese drugstore industry, each offering unique business models:

Matsumoto Kiyoshi: Known for its bright yellow signage and extensive selection of cosmetics and health products, this brand is popular among tourists and locals alike.
Welcia: A leader in healthcare-focused stores, providing prescription and OTC medications, along with daily essentials.
Sugi Pharmacy: A well-established chain that integrates pharmacy services with convenience retailing.
Tsuruha Drug: A major retailer with stores across Japan and a growing presence in other Asian markets.

Business Strategies for Success

Japanese drugstores implement various strategies to maintain their dominance:

Competitive Pricing & Discounts: Many stores offer tax-free shopping for tourists and regular discounts for local customers.
Omnichannel Retailing: Major drugstores have expanded their reach through e-commerce, allowing customers to order products online and pick them up in-store.
Exclusive & Private Label Products: Many chains develop their own in-house brands, offering high-quality, affordable alternatives to popular items.
Strategic Store Locations: Drugstores are commonly found near train stations, residential areas, and tourist hotspots, maximizing foot traffic.
Image courtesy of livejapan
Global Expansion

With their popularity soaring, Japanese drugstore chains are expanding internationally. Some key trends include:

Expansion in Asia: Countries like China, Thailand, and Indonesia have seen an increase in Japanese drugstore branches catering to locals and Japanese expatriates.
E-commerce Growth: Many Japanese drugstores now ship internationally, allowing customers worldwide to purchase their favorite products online.
Partnerships with Foreign Retailers: Some brands collaborate with overseas retailers to distribute their products in local markets.

Looking ahead, Japanese drugstores are expected to continue innovating, leveraging digital transformation, and expanding globally. Their ability to adapt to market trends while maintaining high-quality, affordable products ensures their ongoing success.