Owned by Singapore-based distributor LUXASIA, escentials claimed to be the only multi-label luxury and niche beauty omni-retail concept in SEA.
The retailer offered some of the most coveted luxury labels in beauty, including Penhaligon's, Bjork & Berries, By Terry, Maison Francis Kurkdjian, Acqua di Parma, Bvlgari, Van Cleef & Arpels and more.
After more than 15 years and three stores in Singapore, the company was starting to grow its regional footprint beginning with the launch of a retail store and an online shopping platform in Malaysia.
Karen Ong, chief commercial officer and regional managing director of LUXASIA, told CosmeticsDesign-Asia that the firm has been eager to embark on its regional expansion.
“We have had a lot of feedback from the brands asking for an ultra-luxury and niche beauty platform in SEA… A number of brands are seeing that this is the ideal way forward, especially for the SEA market, whose local operating context presents significant complexities.”
However, the company was delayed the past two years because of the COVID-19 pandemic.
While the region was still grappling with the pandemic at the moment, it was nonetheless still an opportune moment for escentials to expand its footprint.
The company was still seeing strong demand for luxury goods and has observed high spending on luxury items across the region as consumers actively trade-up to luxury goods.
Furthermore, with a number of retailers, brands, and distributors exiting prime locations, companies have an opportunity to snap the spaces up at lower rental costs.
“Although SEA may be going through a difficult time, we absolutely believe in the top luxury brands and retail. Opportunities arose, such as in the Suria KLCC shopping mall, and we grabbed them... we strongly believe that the time to invest and expand is now,” said Ong.
The firm’s confidence to expand was underscored by the success of escentials has displayed in recent years.
The retailer has grown at a CAGR of close to 25% since 2016 and was one of LUXASIA’s best-performing units during the pandemic.
This success was attributed to the company’s five-year omnichannel transformation plan that started in 2017.
“The omnichannel capabilities we have cultivated and enhanced throughout these five years have enabled us to quickly pivot to online commerce…We were thankful that when the pandemic struck, we were ready as we had already invested a lot of hard work and resources into building up these capabilities in the first three years,” said Ong.
The company also implemented new initiatives to counter the effects of the pandemic, such as over-the-phone beauty consultations, bespoke personal shopping as a well as call-and-collect service.
Growing its footprint
With a fast-growing middle-class, increasing consumer sophistication and increasing mobile penetration to name a few, Malaysia was the “right market for the first step” in expansion, said Ong.
The premium beauty market in Malaysia was expected to grow by 11% in 2021, and at 10% CAGR for the next five years.
“It’s truly ready for both an omnichannel luxury beauty experience – a consumer base which values and engages optimally both online and offline and growing sophistication, leading to strong appreciation of ultra-luxury and niche brands,” said Ong.
At the moment, e-commerce accounts for 20% to 30% of LUXASIA’s Malaysia business. This, said Ong, represented more than 310% growth compared to the previous year.
For 2022, the company has planned to further its regional expansion into Vietnam and Thailand, where it has observed similar market trends, such as the rising interest in luxury goods from a fast-growing middle-class.
The luxury beauty segment in Thailand and Vietnam makes up 28% and 58% of the market respectively.