As a former core member of the product development teams at 7-Eleven and Yaoko, Jun Chikano has led over 200 private-label projects and created multiple classic products with more than 15 years of continuous sales. His insights blend conceptual rigor with hands-on case studies, offering valuable lessons for retail practitioners.

Jun Chikano opened by emphasizing that the core premise of product development is always to think from the customer’s perspective. In the fiercely competitive retail markets of China and Japan, the real gap between companies lies in how deeply they understand customer needs.

Yaoko’s success is highly representative. As the publicly listed retailer with the longest streak of revenue and profit growth in Japan, its core strategy rests on three pillars:

1. Local adaptation—designing business models based on demographic characteristics. For example, in Saitama Prefecture, where the age distribution differs significantly between the north and south, Yaoko abandoned cheaper unified advertising and instead implemented segmented campaigns to attract customers more precisely.

2. Organizational restructuring—redefining “headquarters” as a “support center,” establishing a system in which HQ serves the front line to better respond to customer needs.

3. Horizontal integration—boosting efficiency and profitability by finding multiple cross-category uses for the same raw ingredient.

Take mackerel as an example. Traditional Japanese trading companies only sell the middle portion as fresh fish. Chikano’s team creatively adopted a “whole-fish utilization” model—using the middle for fresh sales and the ends for bento ingredients, purchasing directly from suppliers to reduce costs while minimizing factory waste.

Similarly, addressing Japan’s high fruit prices and inconvenience in handling, Yaoko developed bagged cut fruit, using trimmings to make fruit smoothies—meeting customer needs while controlling costs.

Regarding individual product development, Jun Chikano believes the industry has moved from the era of functionality and differentiation into the era of “happiness value”—whoever can make customers feel happiness will win in competition.

For example, supermarket coffee once served purely functional needs like quenching thirst; later it became a quick break during work; and today it symbolizes a quality lifestyle. Following this logic, Yaoko developed its “cloth drip” iced coffee, giving cold coffee the same rich aroma as hot coffee.

This product was named “a fragrant iced coffee carefully extracted from luxuriously ripened beans.”

Chikano emphasized that great products must satisfy four dimensions: “tasty, sellable, profitable, and original”—none of which can be compromised.

• “Tasty” requires tight control of ingredients, formulas, and manufacturing processes, grounded in trend forecasting.
• “Sellable” means defining a clear “ideal store image” and targeting customer pain points—rather than following competitors blindly.
• “Profitable” requires full-chain cost management, taking supply chain functions back from trading houses, similar to Uniqlo’s SPA model, to maximize margins.
•  “Original” demands breaking industry boundaries, connecting unconventional resources, and turning the “impossible” into opportunities.

To achieve these four dimensions, product developers must possess three core qualities—awareness, willingness, and influencing ability—alongside the foresight to “see the past, grasp the present, and anticipate the future.”

Chikano noted that Japan has long faced declining birth rates, aging demographics, and rising single-person households—a trend now beginning to appear in China as well. This is reflected in industry signals such as rapid growth in frozen foods, a category already worth 1.3 trillion yen in Japan, while China’s frozen-food market still has enormous potential.

Thus, companies should proactively design products and services for small households. To illustrate this, he shared the “single-banana” development case.

While at 7-Eleven, Chikano noticed that bananas were consistently slow-sellers. After investigation, he found the issue lay in packaging: bananas were sold in packs of five for 100 yen. Despite being cheap, they were hard to finish and inconvenient to carry, so consumers avoided them.

To solve this, the team proposed selling single bananas at the same price—100 yen. Although seemingly expensive at first glance, it was actually competitive when positioned as a breakfast item compared with rice balls. “Banana for breakfast” also aligned with rising health trends.

However, to successfully sell a single banana for 100 yen, stronger justification was needed. The team traveled to high-altitude plantations in the Philippines to secure better-quality bananas, pre-cut and pre-packed locally to control costs, and educated consumers through sampling and packaging about why “high-altitude bananas are sweeter.” This strategy ultimately drove annual sales to 5 billion yen.

True product strength begins with the customer perspective and is realized through value-chain innovation. From “whole-fish utilization” to the “single banana,” these small entry points reflect precise insight into trends and needs—the core driver of future retail growth.

Consider one data point: the beverage category sees tens of thousands of new SKUs introduced each year, but only 10–20% survive through the year, and fewer than 1% become true top sellers.

If everyone knows the importance of good products, why does this happen?

The root issue is the disconnect between philosophy and execution. Most companies claim to be “user-oriented,” but in execution they drift toward “market-oriented”—focusing less on consumer value and more on what sells. This leads to homogenized imitation, over-engineering, and excessive SKU expansion.

According to Ryan Ren, GenBridge’s product development expert, the hardest part of product innovation is “building the capability and mechanism for continuous innovation.” Drawing on his experience in FMCG operations and investment, he discussed innovation bottlenecks, case studies, and GenBridge’s accumulated methodologies.

He emphasized that product innovation is fundamentally the recombination of information. Effective development requires deep historical knowledge and the ability to break cognitive inertia to form new combinations.

To achieve this, teams must take a “time-machine perspective”: studying products across countries and historical stages to build a knowledge base, then reconnecting product attributes to user needs to unlock imagination and enable category extension.

So what defines a good new product? Ryan Ren believes a good product must meet three criteria: precise targeting, memorable differentiation, and strong profitability.

• Precise targeting: identifying positioning and real user needs.
• Memorability: creating a standout feature as a mental anchor.
• Profitability: ensuring healthy pricing and margins through supply-chain optimization.

All three are indispensable.

The goal of understanding innovation is to build a suitable, efficient, and repeatable mechanism. Only then can companies avoid short-lived hits and maintain sustained competitive strength.