Japan focus: Retailer Welcia-BHG sees more J-beauty offerings in Singapore as key for growth

Welcia-BHG Singapore is a joint venture between AEON subsidiary Welcia Holdings and Chinese retailer Beijing Hualian Group (BHG).

Since it entered the market in 2017, the company has experienced steady growth. Despite the impacts of the COVID-19 pandemic, it managed to unveil more brick-and-mortar stores, growing its retail footprint to 10 outlets across the island.

According to director Masato Ishii, overall sales for the company have been down compared to 2019 because of pandemic-related shifts and economic downturns.

For instance, traffic at its city-based stores were hit quite badly as most Singaporeans began to work remotely from home. On the flipside, Welcia-BHG outlets in the residential areas of Singapore experienced a high volume of traffic.

Regardless, the firm believes there is still a lot of opportunities for growth in the market and plans to unveil more than five stores in Singapore this year.

Growth drivers

According to Ishii, skin care was one of the top-performing categories for Welcia-BHG and was only outperformed by the hygiene category as sales of hand sanitisers, hand wash and protective face masks are in high demand given the COVID-19 situation.

Currently, sales of skin care are still on the rise. Ishii believes this is being fuelled by new skin concerns such as mask-induced skin irritation and acne.

Furthermore, the company stocks well-known Japanese skin care brands that have been developed for sensitive skin issues such as Curél, Freeplus and D’ Program.

Aside from sensitive skin products, the firm has observed demand for skin care that focus on self-care, such as facial masks.

Hair care is another category that has resisted the impact of the pandemic and has continued to grow steadily since 2019.

Ishii believes that the hair care category has done well because it has brought in novel brands from Japan its competitors do not stock, such as &honey and Lux Bio Fusion Black Edition, a range developed by Unilever exclusively for Welcia Japan.

To continue growing the hair care category, the company intends to increase the hair care SKUs, with a focus on getting more Japanese brands.

Japan-made focus

Ishii elaborated that firm’s strategy was to differentiate itself from the competition by importing more Japanese brands across all categories.

“Singaporeans like made-in-Japan brands. They want high-quality products and they have a lot of trust in Japanese brands. From now on, we will increase the percentage of Japanese items in the store non-stop.”​

In addition to products, Ishii said it was the firm’s mission to bring the best of Japanese service to its consumers.

“Japanese products can be hard to understand [for Singaporeans] so it is mandatory for us to create POP marketing that can explain the products. We also have well-trained staff that are understand the products well and can give customers a Japanese level of service.”​

Pandemic challenges

The firm hopes this ‘made-in-Japan’ strategy will also help to boost the colour cosmetics category which has unsurprisingly seen a decline in sales since the outbreak of COVID-19.

“Compared to two years ago, cosmetic sales have been terrible. You don’t see many customers in store looking for cosmetics. But we do know that customer have a need. They still want to look good even while wearing masks,” ​said Ishii.

With this insight, the company has focused on sales promotion focusing on make-up products.

“Normally, we don’t do many cosmetic focused promotions, but this time we had to concentrate on such promotions. Our first big cosmetic promotion was with K-Pakette eyeliner. It was the first time we had such a big cosmetics promotion and it was very successful,”​ said Ishii.

According to Ishii, the K-Palette promotion exceeded expectations by well over 100%. This has prompted the retailer to create more sales promotion to drive make-up sales.

Despite the decline of the make-up category, the firm intends to follow its strategy for skin and hair care and expand its offerings for the category with more Japanese brands.