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Japanese retailer MUJI is set to open its first Cafe&Meal outlet in Singapore come September.

The 122-sqm self-service cafe will open at Paragon shopping centre at Orchard Road on Sep 5, next to the existing MUJI store, which will be undergoing a revamp as well.

This will be Cafe&Meal MUJI’s 5th outlet outside of Japan, in addition to its 23 outlets across Japan.

According to a statement from MUJI, the concept behind the cafe’s menu is, “Simple food is delicious”.

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Entrepreneurs are forgoing the idea of setting up a physical store as more consumers prefer the convenience of shopping online and collecting the items at a suitable place or having it delivered to them.

The current trend of shopping via social media channels has become increasingly popular, said Syahwal Nizam Hj Yani, owner of social media-based business Macam-macam Sale Brunei.

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Five years ago, when Ariane Zagury and her husband were relocated to Hong Kong for work, she was disappointed at not finding designer labels that appealed to her fashion sense, despite Hong Kong’s trendy vibes.

Leaving her banking career to get her feet wet in fashion, Ariane, 34, set up her first fashion concept store, Rue Madame. With her store, she has since introduced many European and US labels to the Hong Kong market to address the lack of fashionable and feminine, but wearable, labels available there.

In April this year, Ariane brought her label, together with French fashion brand, American Vintage to Singapore. Both stores are now located at Takashimaya Shopping Centre.
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TWO’S COMPANY

Fashionistas, be prepared for an online stampede in a few weeks. Hundreds of women will be poised and ready to do battle online. Those who hit the “Add To Cart” button fast enough will be able to grab a limited-edition 20-piece collection of ready-to-wear clothes, including fit & flare skirts and shift dresses.

Indonesian fashion designer Tex Saverio, whose flamOboyant creations have been worn by singer Lady Gaga and reality TV starlet Kim Kardashian, is one- half of the creative brains behind this collection.

The other half is Love, Bonito, a home-grown online retailer run by Ms Rachel Lim, 28, and Ms Viola Tan, 31. Just like Sweden has H&M and America has Forever 21, Love, Bonito is the local version of fast fashion, catering to 20somethings who want trendy wear without having to break the bank.

Even with Saverio’s name on the collection, every piece is under $ 200. Dresses, shoes and bags in Love, Bonito’s catalogue range between $ 28 and $ 89.

Co-owner and founder Lim, who heads the design, creative and marketing teams, draws the line between their offerings and cheap online stores. “We want to give customers value for money, so we pay close attention to everything, right down to the finishing.”

The former trainee teacher with no formal training but oodles of passion for fashion design heads the design team, which turns out wearable outfits. They look at fit and form themselves, rather than leave it to the manufacturer. “We try on all the clothes we design, and bend, stretch and try reaching for stuff to make sure it’s a good fit. We pick materials that are comfortable for the heat in Singapore.”

Every four days, the team puts out eight to 12 new designs, which include sexy bodycon dresses, jumpsuits, bags and shoes – all tagged with the motto “Empowering Confidence Through Style”.

Ms Tan, also a former teacher who now heads its business development, finance and logistics team, adds: “We don’t skimp on fabric or workmanship. Our sell-out launches are a testament to our customers’ satisfaction level and faith in us.”

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Retail brands still flock to Singapore retail because it offers not just hordes of shoppers but also regional exposure and myriad business opportunities.

Mr Vincent Soh, orchard-gateway’s chief executive, told The Straits Times: “It is a place where you want to expand your brand’s presence overseas, especially in the context of South-east Asia.”

Having a shopfront in Orchard Road, the glitziest part of town, not only boosts a brand’s presence but also attracts potential business partners in the region.

These could be corporate clients who may be potential franchisees and business partners, said Nanyang Technological University’s Dr Lynda Wee, an adjunct associate professor specialising in retail management.

A recent ranking by global property adviser CBRE showed Singapore is second only to Tokyo in the retail business, having attracted 58 new retail brands last year, just shy of Tokyo’s 63.

The report also noted Singapore’s capacity to showcase new brands was boosted by orchardgateway, Orchard Road’s newest mall with a fashion slant, and the Shaw Centre’s recently renovated retail section.

Singapore test bed

Singapore is ideal as a test bed for brands looking to break into South-east Asian markets.

Global brands need to curate their merchandise and services to suit Asian tastes, said Dr Wee. “With success, they can roll out to other Asian cities. Singapore is a place for them to prototype, improve and curate… experimenting till they get it right.”

Mr David Tang, chief executive of Metro’s retail business, said many Western brands want to expand in Asia and others want to come as the growth is here.

He added: “I’m not so sure about the word ‘test bed’ but brands either go straight to China or they come and establish a regional market here.”

Brands opening here include jeans maker American Eagle Outfitters (AEO), arriving on June 19, and French label American Vintage, which recently opened at Takashimaya Shopping Centre.

Mr Kareem Gahed, AEO’s vice-president – Asia-Pacific and global country licensing, described the Singapore market as vibrant, and said “the Asia-Pacific channel is an immense opportunity for AEO”, being one of the brand’s most developed zones outside North America, with a presence in multiple countries.

He said: “Singapore’s strategic geographic location and economic strength solidify its position as the gateway to the South-east Asian market and further increase AEO’s presence within the region. The market in Singapore is diverse, with a vibrant mixture of locals and tourists, and thus fits the brand personality of AEO.”

The mature retail market in Singapore provides strong infrastructure and support for brands like AEO to enter the market with confidence, he added.

When retailers see others coming into Singapore, it builds the country’s reputation as an attractive retail destination.

“It does help put Singapore under the global spotlight to be selected as a pilot launch pad outside the brand’s home country,” said Ms Lynne Lim, Asia-Pacific business head at Red Scout, an online trainer for those in beauty and fashion retailing. She cited Louis Vuitton’s flagship store at The Shoppes at Marina Bay Sands, the first floating boutique in the world and the biggest boutique in South-east Asia.

Ms Lim said having “such publicity can have positive spillover effects into other related or support sectors of our economy”.

Mr Soh added that if businesses are coming to a country to invest, there are many other factors such as political stability which matter, and Singapore is still an overall attractive destination.

Challenges

But setting up shop in Singapore is no guarantee of success, possibly given low sales and rising rents.

Cult lifestyle retailer Goods of Desire closed its shop in Clarke Quay in April, a grim end to the Hong Kong brand’s first foray overseas. Japanese fashion label Lowrys Farm left in February.

They followed a string of international retailers ceasing operations last year, including Japanese lifestyle store Francfranc, skincare brand Fancl and mid-tier fashion brand River Island.

Malls in Orchard Road are experiencing slowing shopper traffic as tourist numbers have declined.

For example, tenants of the one-year-old orchardgateway – which has two diagonally facing buildings on either side of Orchard Road – have reported slow shopper traffic. However, for the past six months, the complex, with a net lettable area (NLA) of 170,000 sq ft, has grown to an average 11.8 shoppers per month per sq ft (psf), up from 8.8 in its first six months.

Wisma Atria reported that it attracted 26.6 million shoppers last year, or about 17 shoppers per month psf in retail NLA of about 127,000 sq ft, for instance.

The Atrium@Orchard – with a retail podium that is an extension of Plaza Singapura – reports 25.4 million shoppers a year, or about 15 shoppers per month psf in retail NLA of about 137,000 sq ft.

Retail experts, however, noted that heartland malls provide stiff competition as they offer the same brands, sometimes with even bigger and better-stocked outlets.

The oft-heard comment from locals who live away from Orchard Road is that they can often find many of the same masstige – mass prestige – retail brands in the heartland malls, so there is no real need to go shopping at Orchard Road, Ms Lim said.

This rings true for personal assistant See Chiew Yen, 50, who said: “I have no preference for shopping at either area because heartland malls like Jem have big brands too.”

On the other hand, there are still tourists who are drawn to the bright lights of Orchard Road, empty stores notwithstanding.

Ms Kim Wyatt, 48, from New Zealand, was unfazed by the largely empty Centrepoint, which is undergoing renovation. “It’s the first mall I’ve been to and it’s so big. I’m enjoying my shopping experience… Singapore is an attractive city – clean and efficient.”

Attracting shoppers and brands

Orchard Road is still the most popular shopping location, said CBRE’s report, so it’s up to the retail industry and even government bodies to keep the buzz going.

orchardgateway’s Mr Soh pointed out that empty-looking malls may not indicate a dire situation. “High shopper traffic in a mall doesn’t necessarily equate to high spending. Similarly, lower shopper traffic doesn’t equate to less spending. It depends on the nature of the trade, such as luxury or mass-market goods.”

Tangs creative director Christelle Vaillant feels emerging labels could have higher appeal. She said: “These brands are in more exclusive, hard-to-find locations, and the majority of their customers are niche audiences… so your average shopper or tourist may not realise these brands are, in fact, available in Singapore.”

Mr Soh agreed, noting there are “destination retailers” with a loyal following. Local names have also done well at orchardgateway, including men’s multi-label store Sects Shop, multi-label street-wear outlet Actually and Superspace, the home to many fashion labels and a hair salon.

In other words, these shoppers know what they want and head directly for the shop. “They also have online stores, which complement the brick and mortar stores. Those familiar with the online store like to go down to get a feel of the product. Those who aren’t will in turn be introduced to the online store,” said Mr Soh.

Department stores and retailers are upping their game as well. Metro launched its online shopping website in January, Tangs has an e-store, and by the end of the year, customers will be able to shop online at Robinsons.

And there is no denying that the game is getting tougher.

Mr Eric Tong, assistant director of the retail business group at Far East Organisation, which owns malls such as Orchard Central, said brands need to constantly evolve and “move beyond functional products to one that has an experiential and emotive connection with consumers to gain a foothold and success”.

Orchardgateway is doing its part with its glass link bridge and lighted signage, for instance. It also reaped more gross floor area when it was redeveloped under the Orchard Road Redevelopment Commission (Ordec). Ordec was set up by the Urban Redevelopment Authority to encourage innovation to existing properties.

Mr Soh said: “We should look at cities such as Tokyo, Hong Kong and Seoul, and see why they have that buzz. For a long time, we’ve been trying to understand why and how they create that buzz, and how to do that in Singapore.”

 

– Mr Kareem Gahed, American Eagle Outfitters’ vice-president – Asia-Pacific and global country licensing

Singapore – Get a copy of The Straits Times or go to straitstimes.com for more stories.

In Retail Asia – Retail News Singapore

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Metro Holdings is exploring online shopping as one way to tackle the challenging retail environment.

It outlined the strategy as it unveiled an 82.7 per cent dive in fourth-quarter net profits to $ 7.6 million, owing partly to a lower contribution from an overseas project.

Chairman Winston Choo said: “The retail scene in Singapore is very challenging… part of it is due to a falling rate of tourist arrivals, rentals have gone up and manpower is always a problem. And another aspect is the online shopping challenge.”

Metro Online, the company’s new online shopping website, was launched in January this year, and has made a “small contribution” so far, the group said.

The property development and investment group cited the retail division’s higher operational and overhead costs, mainly arising from the new Metro Centrepoint store, for its weaker showing.

A writedown of property, plant and equipment of $ 8.8 million at Metro Centrepoint affected the retail division’s overall performance.

“Metro Centrepoint’s revenue was not up to expectations and… Metro has taken precautionary measures by making the provision to adjust the value of the assets to the current trading level,” said a Metro spokesman.


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A survey by cloud-based Internet performance company Dyn showed that more than 85 per cent of consumers surveyed globally cite clear differences in the kind of experiences they have when shopping in stores, online, and on their mobile devices. Asia-Pacific consumers are divided: those in Australia, Malaysia, and Singapore prefer the service and experience of shopping both online and via their mobiles; consumers in China, Hong Kong, and India for now prefer shopping online, and mobile shopping, unsurprisingly, remains a very distant third.

Mobile shopping in Asia is ripe for improvement

 

Consumers surveyed in China and India appear to be the most progressive when it comes to this. Only four in 10 of those surveyed globally make at least a quarter of their purchases on their mobile devices; in China, however, nearly 80 per cent do, followed closely by consumers in India (65 per cent).

Bain & Company said that 80 per cent of Chinese consumers who bought online last year made at least one purchase from a smartphone; 20 per cent are weekly mobile shoppers. The greatest increase in mobile shopping is expected to come from China and India.

Asia Retail Consumers expect a lot from mobile shopping

Consumers are not cutting retailers any slack for a less-than-stellar mobile experience. More than 85 per cent of all consumers surveyed expect the same quality and speed of performance when shopping on mobile devices as they do when shopping online.

This expectation for consistency resonates strongly throughout the Asia-Pacific. It is highest in China, where 98 per cent of consumers surveyed want the same quality and speed of performance when shopping on their mobile devices as they do when shopping online. The majority of consumers surveyed in Malaysia (91 per cent ), Hong Kong (90 per cent), India (90 per cent) and Singapore (89 per cent) agree.
This article was first published on May 20, 2015.
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The Singapore retail market is the second hottest target market in the world for global retailers, according to a recent study by research firm CBRE.

Second only to Tokyo, Singapore saw 58 new entrants over the course of 2014 – double the number reported in 2013. Food and beverage operators were the most active with expansions, followed by retailers of mid-market apparel and accessories such as sports goods, ladies fashion, footwear and handbags.

Despite strong competition from new suburban clusters, the study also found that the Orchard Road strip continues to be the most popular shopping location for retailers, with the recent completion of new complexes such as Shaw Centre and Orchard Gateway paving the way for further expansion.

One such retailer, for instance, is American sportswear company Under Armour, which opened in Orchard Gateway last May.

According to Under Armour South-east Asia chief marketing officer Adrian Chai, the brand strategically chose Singapore as its regional hub due to the city’s central location that facilitated travel and logistics to neighbouring countries.

Orchard Gateway presented “a natural opportunity” as it is the newest mall in the area with direct access to the MRT network, Mr Chai added. The brand now has two more outlets in Collyer Quay and Tampines.

Among luxury brands seeking a first home in Singapore, the Shoppes at Marina Bay Sands ranked as the top choice as the retail complex is known for proactively upgrading its tenant mix and offers a steady stream of affluent-shopper traffic from its enclosed gaming resort, the study said.

Besides housing over 170 luxury and premium brands, the complex recently underwent a three-year retail remix, and emerged with an assembly of 15 luxury duplex and triplex stores for brands such as Dior and Gucci, many of which are the brands’ largest stores in Singapore.

However, the study also found that amid the surge of new retail entrants to Singapore, some consolidation of networks occurred in the second half of 2014 due to declining visitor numbers from mainland China, sluggish retail sales growth and manpower shortages.

As a result, new brand entries will decelerate, retailer networks may shrink and future entry into the market may take longer, CBRE said.

Outside of Singapore, Tokyo boasted the highest number of new retail entrants on the list, with 63 setting up shop last year, despite mixed signals from the Japanese economy and a hike in the country’s sales tax to 8 per cent last April. Abu Dhabi, Taipei and Dubai ranked third, fourth and fifth on the list respectively.

Additionally, the study found mid-range fashion retailers to be the most active globally, accounting for over 21 per cent of international expansion, followed by luxury and business fashion retailers at 20 per cent.

In Asia specifically, luxury and business fashion retailers drove 24 per cent of the region’s business expansion, followed by coffee and restaurant retailers at 22 per cent.

Of the 334 leading international brand retailers from the 61 countries and 189 cities polled, 79 per cent of Asian brands said that they would continue to target their own region for expansion, while 41 per cent of American retailers have also set Asia as their priority for expansion.

CBRE Asia-Pacific regional managing director and head of brokerage services Manish Kashyap said that it was “not surprising” that Asia features heavily on the list of target cities for new retailer entrants, with six out of the top-ranked 15 cities coming from the Asian region.

“The core elements of globalisation, technology and demographic change are continuing to have a dramatic impact on the retail business, encouraging global retail expansion. As retailers look to drive market share and raise their brand profile, they will continue to expand and look for opportunities beyond their home territories,” he added.

This article was first published on May 20, 2015.
Get The Business Times for more stories.


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Your retail salary survey is probably wrong. I just got another salary survey in my inbox. It was very well done and probably took a great deal of time to create. It is also very misleading. The salary surveys that I see being created and distributed, and sold, give the impression that you can pay what is being paid in the market right now. This is the case only if you are looking for average employees. You are looking for top talent.

The fact is, however, that if you are reading this you are not looking for average employees. The average employee in China does not speak English, she does not work in a foreign firm, she does not think outside the box, understand western reporting structures, go to a top university, or have a chance of getting hired into your firm.  When is the last time a hiring manager asked for a “really average candidate?” You are looking for the cream of the crop in China and you are going to be very frustrated if you use a salary survey to create your budget.

Keep recruiting till you find the best retail talent that Asia has to offer, ask them how much they are earning, and you will know how much they are worth to your competition. Now you can decide how much they are worth to your organisation.

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