Its first new store is expected to open in Q2 this year and will mostly likely be located in the republic’s heartlands.
We previously reported in 2019 that Welcia-BHG is planning to open 29 outlets in Singapore in five years’ time. It currently operates 10 stores, of which, four were opened last year, despite COVID-19.
Its first outlet last year was opened in July, right after Singapore's COVID-19 circuit breaker restrictions ended in June.
The company subsequently opened a store each month up till October, namely in White Sands Pasir Ris, Jurong Point, Orchard MRT station, and Raffles City Shopping Centre.
“The more we expand, the more our brand becomes well-known, the landlord [of the shopping malls] has also started to take notice of us and we are getting more proposals from them [on the store locations],” director of Welcia-BHG Singapore, Masato Ishii told NutraIngredients-Asia.
Its sales last year were largely driven by hygiene products, especially hand sanitizer and face masks, while vitamin C and skincare products have also fared well.
The expansion was however, not without its challenges.
As a result of the circuit breaker and the outbreak of COVID-19 among construction workers, the company faced a shortage in manpower, which affected the amount of time required to construct and open its stores.
“We usually need four weeks to complete constructing our stores, but at that time, it took six weeks.”
Nonetheless, the company will still devote most of its resources to offline retail at a time when brands and retailers are focusing on online growth due to lockdown and safe-distancing concerns.
At the moment, the company’s e-commerce presence is only on Shopee and digital marketing efforts on Facebook and Instagram.
Ishii said the customer service provided via offline retail offered unique advantages not seen in online retail.
For example, it relies heavily on front-of-store displays, where there are clusters of prominent product display to direct consumers’ attention to new or popular items.
As most of its products are imported from Japan, the retail stores also provide leaflets for certain items or on-shelves messages that explain the products’ function in English.
“Our retail store is the only resource that the customers can feel the difference between us and the other retailers.
“On the e-commerce, the customers don’t feel any difference, except for the price, it is a very simple price war… Our core business is still our retail stores.”
Heartland Vs City
Last year, Welcia-BHG’s stores in the residential areas have fared better than those in the downtown regions, since a large number of people were working from home.
“[Stores] in the city area are being affected the most. A lot of people are working from home, so there is declining foot fall. It is affected by the work from home policy.
“But in the housing areas, the sales are increasing, because that's where the human traffic is.
“[Overall], as compared to 2019, the sales for last year was down but was still better than the industry average,” Ishii said, citing national retail statistics.
Retail sales index in the cosmetics, toiletries and medical goods industry fell 35.4 per cent in Dec 2020 as compared to Dec 2019, according to the Singapore Department of Statistics.
To play the offline retail strategy right, Ishii said the company would focus on locations with good human traffic, such as those near MRT stations.
Weight management in focus
The demand for immune related health foods such as vitamin C has been slowing down, but that of weight management is picking up.
The demand for vitamin C peaked between April and June last year, and some products were even out of stock. Well-performing brands included Blackmores and local brands Vitahealth, PrincipleNutrition, and Holistic Way.
“It was in high demand until June, but after that sales have started to slow down [and is now back to normal levels].”
On the other hand, there has been a greater uptake in weight management products.
Diet Maru from Eishin Pharmaceutical took the top spot for the category last year.
Ishii noticed that the product was made famous in Singapore after it was recommended by Chinese influencers.
While there are several items under the Diet Maru brand, the bestselling product in Singapore last year was the one that aimed at alleviating water retention, he pointed out.
Other brands such as Shinya Koso, an enzyme-based product which was only introduced in last December, are also fast gaining traction.
Onaka, a “tummy fat burner” pill, also a certified Food with Function Claim (FFC) in Japan, is another product that has been performing well, he said.
“People are starting to gain weight when they work from home and they looked to health supplements to reduce their weight,” he said.
The retailer also saw good uptake in green vegetable juice, a powdered beverage made from barley leaves, as well as manuka honey, with the latter especially popular amongst women who are middle-aged and above.
The company will continue to bring in more product SKUs, especially Japanese brands this year, across its portfolios.
