Welcia-BHG: J-beauty products to drive growth

Date : 05 March 2021

Francis Ramos

Senior Retail Analyst

Welcia-BHG Singapore is now selling more health and beauty products that are made in Japan.  The firm would like this focus on J-beauty to be its competitive advantage over other drugstores in Singapore.

Tough 2020 for Welcia-BHG and plans for expansion in 2021

Welcia-BHG Singapore is a joint venture between AEON subsidiary Welcia Holdings and Chinese retailer Beijing Hualian Group (BHG).  The retailer currently has ten stores in Singapore, and plans to open five more this year.  It has been growing since it entered the market in 2017, but overall sales dropped last year due to the pandemic.  Although it was able to grow its stores located in residential areas in 2020, those in the commercial areas have been hit badly as people have been working remotely from home.

Focus on beauty brands made in Japan

The retailer would like to differentiate itself from competition by importing more Japanese brands across various product categories.  Since Japanese beauty is generally more sophisticated, Welcia-BHG plans to educate shoppers in-store, and has trained its staff to give customers the same level of service as Japanese drugstores.  Welcia-BHG’s director, Masato Ishii, commented, “Singaporeans like made-in-Japan brands.  They want high-quality products and they have a lot of trust in Japanese brands.  We will increase the percentage of Japanese items in the store non-stop.” 

Japanese brands to address challenges of different categories

There are various challenges faced by the multiple beauty categories that Welcia-BHG carries:

  • Skin care sales are on the rise, due to acne and irritation induced by wearing of masks.  This has prompted Welcia-BHG to stock well-known Japanese brands that have been developed for sensitive skin such as Curel, Freeplus and D’Program
  • Sales of colour cosmetics remain to be low as people have been staying at home.  But the retailer has identified that people still want to beautify themselves when they are wearing masks outside, and apply something to the part of the face that remains visible. To address this need, the retailer has run a big promotion with K-Pakette eyeliner, which has exceeded their expectations.  This has made Welcia-BHG consider similar promotions of relevant products in the future
  • Its hair care business has continued to grow steadily and has resisted softening, despite the pandemic.  This is due to sales of novel brands from Japan that other health and beauty retailers do not stock, such as &honey and Lux Bio Fusion Black edition, a range developed by Unilever exclusively for Welcia Japan.  In the coming months, the retailer intends to increase its inventory of hair products from Japanese brands
 

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