Sasa's exit from SG: Lack of innovation or tough retail scene?

Cosmetics retailer Sasa International has officially exited the Singapore market, after closing all 22 retail stores here. According to Sasa, it will be shifting its focus on core markets such as Malaysia, Hong Kong and Macau SARs, Mainland China, as well as its eCommerce business. The group’s performance in Singapore has been less than satisfactory for many years, and has recorded losses for six consecutive years. This was despite its attempts in restructuring the local management team and enhancing store display and product mix.

Apart from beauty retailers, consumers in Singapore have seen other brands packing up and exiting the market. These include brands such as Chili's and Carrefour.

Speaking to Marketing previously, Lies Ellison-Davis, non-executive partner at Kantar Consulting said that drivers of lacklustre retail sales often revolve around inconvenient store location, a concept or assortment that is no longer relevant, or service that is no longer in line with customer expectations. Agreeing with the statement by Ellison-Davis, Sulian Tan-Wijaya, executive director, retail & lifestyle of Savills (Singapore) said Sasa has failed to keep up with current trends in beauty and what customers look for in terms of merchandise and shopping experience for several years. Comparing it to Sephora, which also houses a collection of beauty products by international brands, she explained that consumers stepping to Sephora are greeted by an "endless range of exciting products" and with every visit new items and brands are being introduced.

"Singapore shoppers are savvy, they do their research online and they are always keen to experiment with new beauty products. Sephora understands this better than anyone else. Even Watsons have evolved, sourcing brands from Japan and Korea, and even creating experiential sections within some of their stores," Tan-Wijaya said.

While she was not able to justify Sasa's decision to focus on Malaysia instead, Tan-Wijaya added that it Sasa most likely feels that customers there are "less demanding and less 'in the know'", and prefer to stick to more traditional brands.

Meanwhile, to combat this, the Infocomm Media Development Authority (IMDA) rolled out a retail industry digital plan last year for retailers to enhance customer experiences and facilitate in-store and online shopping.  In addition, IMDA looked to enable SME retailers to exploit advanced platforms such as omni-channel and digital marketing to extend their reach and grow their brand, to meet growing customer expectations and demands.