Japanese convenience chain Lawson is losing its confidence in China, scaling back ambitious expansion plans for the market.

Lawson had previously announced plans to open 10,000 stores across China by 2020 on top of its existing 384. However, the retailer now says it is likely to take an extra five years to reach that target.

It says the Chinese government is not doing enough to boost consumption. It has been losing its lustre in China in the previous years due to rising labour and rental costs. Its stores in Shanghai, Chongqing and Dalian lost a combined $29.2 million in 2012.

“The government of China should focus more on consumption, instead of investment,” said Takeshi Niinami, CEO of Lawson.

Niinami said the company is hoping to achieve profitability in China within five years.

Meanwhile, it is planning to invest further in Indonesia, where it currently has 63 stores. It also plans to open a regional headquarter in Thailand, where it has 22 stores.