Same shower gel at a cheaper price? How some toiletries shops are undercutting their bigger rivals
SINGAPORE: A decade ago, local dazzler store British Essential's low prices might have raised eyebrows and fifty-fifty questions about the quality of its products.
But today, the brand has become a genuine culling to bigger pharmacy bondage for many consumers, who are looking to get more bang for their buck especially amid the COVID-nineteen pandemic.
The visitor, which has a network of seven shops, has seen a growing need for its products, according to the company'due south CEO Christopher Lim.
"Right now, specially during this COVID-19 flavor, everybody is on a budget ... so our (store) concept is actually quite welcomed at the moment," said Mr Lim, adding that the company plans to open more outlets.
In the shops, consumers can find a wide range of dazzler and personal grooming products at a discounted price. For instance, a 200ml bottle of shower gel costs as little S$0.xc, compared to a price tag of $two at major pharmacies and supermarkets.
It'due south a like instance at personal and household products retailer Venus Beauty, which operates 29 outlets islandwide.
The company's director Danny Lim shared that the shop'south products are typically priced between 20 and 30 per cent lower than bigger retailers.
He added that while demand for corrective products has dropped amid the pandemic, the visitor is still seeing a healthy demand for daily essentials such equally manus soaps and even healthcare supplements.
Simply with every product priced so depression, how do these shops manage to pay wages, rent, earn profits and fifty-fifty expand to more outlets?
BUYING IN BULK
For smaller retailers similar Venus Beauty and British Essential, ordering a high volume of items is key to their business organization strategy every bit information technology allows them to achieve economies of scale. This refers to the cost advantages that suppliers get, significant that with increasing scale, the toll per particular is cheaper.
While major pharmacies and supermarkets typically order items by the dozens, these companies import items in majority, with quantities measured by pallets or fifty-fifty containers. One pallet tin can hands hold betwixt 600 and 1,200 products, depending on the size of the item, according to British Essential's Mr Lim.
"When we bring in a big quantity (of goods), the cost volition be lower so we give the same concessions to the consumer," he said.
Sales of the products have to move fast to articulate the large quantity ordered, he added.
"That is why we adopt to pass on all the benefits that we get to the consumer because information technology'southward the just style that we can swallow our quantity."
Venus Beauty brings in between iii and five containers of fast-moving items such equally shower gel each month. Co-ordinate to the visitor's director Danny Lim, it takes about a week to articulate a container worth of stocks.
He added that the company has a network of international suppliers that import products into Singapore in majority, which helps to save on costs.
Consumers are besides able to buy products on wholesale terms, allowing them to enjoy bigger discounts.
"Certain things in other countries are a lot cheaper than Singapore, even if you lot just buy it off the shelves instead of buying wholesale," said Mr Lim, adding that Venus Dazzler brings in products from places including Europe, US and Korea.
"For example, if you want to buy a Japanese item, it will be expensive if you purchase information technology off the wholesalers in Singapore, so what we do instead is to buy directly from the (overseas retailer) and then bring it in," he said. "We cut out the middleman."
Cost VS QUALITY
A common concern among shoppers most products that are priced significantly lower than major shops, is that they might be of a lower quality or have minor defects.
However, Acquaintance Professor Stephen Phua from the National Academy of Singapore's constabulary kinesthesia said in some cases, the price differential may but be due to the actual components in the products and may not actually be inferior.
"Different countries may have dissimilar technical or regulatory standards which may result in a toll differential," he said.
"For instance, one country might take stricter and more rigorous regulatory laws for certain products and as a result, the manufacturer may accept to utilise a certain blazon of ingredient or have a college content, which could therefore increment the cost of production," he added.
"And so therefore, when two things come in on the shelves, they wait identical and they're both 18-carat products, it'south merely that they are priced differently."
Pocket-size beauty retailers CNA spoke to besides rejected claims that their products are of a lower quality compared to those sold in bigger stores.
Venus Beauty said information technology regularly inspects the quality and status of the products supplied to them.
"If the production is of depression quality and efficacy isn't there, we don't sell it at all," said Mr Lim. "We either return it to the supplier or we but throw it away – we don't put it on the market."
He added that the company also tries to source products from the aforementioned factories or places of origin that local suppliers get their products from.
"Substantially, we're bringing in the same things. Simply if let's say we accept to choose something that is not similar, we would buy the products from places such as Europe, US or Korea," he said.
"Consumer expectations in those countries are non low, so fifty-fifty if the products come with a different packaging, it'south not probable to exist seen as an inferior product."
For British Essential, which has been in the market since 2003, figuring out which products piece of work and which don't involves by and large trial-and-error equally well as customer feedback.
"Previously, people would remember that considering our prices are and so cheap, it may not be authentic. Merely now, especially considering nosotros've already been in the market for and so long, people know that all our products are very authentic," said British Essential'southward Mr Lim.
"Consumers are too very smart now because they can just check prices online to compare. Information technology's become very transparent," he said.
"We are not the cheapest and we are as well not the expensive one, and then we welcome customers to check the prices. If they are really expensive compared to our competitors, we attempt to adjust them by adjusting our selling price."
Production differentiation is another strategy adopted past smaller retailers.
Dazzler Language, which has 29 retail stores, said it has differentiated itself from competitors over the years by bringing in quality products from US, Europe, Australia, Korea and Japan at an affordable toll.
"Our main customer base prefers products that are more unique, meaning products you can only find in stores overseas every bit well as new products," said the company'southward managing director Jacelyn Loh.
"And so we differentiate ourselves by launching betwixt xx and 30 new products every month, as well equally exclusive brands that you tin can't find anywhere else in Singapore."
But while these shops may be able to capture good need from consumers – peculiarly those who are more sensitive to price changes – they face challenges such as supply disruptions and a express range of products, said Acquaintance Professor Sarah Cheah from NUS Business Schoolhouse's Department of Direction and Organisation.
"Retailers who are non the authorised sellers of a item production or those who use parallel imports may non be able to secure equally broad of a range of goods every bit a regular section shop," she said.
"If it's a relatively expensive item that is currently out of stock at the shop, consumers may consider checking the store a few more times. Simply if they actually demand it urgently, the likelihood is that they volition just become to a regular supermarket to become information technology."
Still, Assoc Prof Cheah said such businesses have a strong value proffer and will go along to thrive in Singapore's market.
"These shops have been around for quite a long time, and people who take supported them will probably continue to support them because there will always be a good ambition for cheaper deals," she said.
"Many people are sensitive to price differentials and it'southward also go a lot easier for people to do price comparisons and to be able to make decisions quite chop-chop due to the Net."
Source: https://cnalifestyle.channelnewsasia.com/singapore/toiletries-prices-pharmacies-retail-venus-beauty-language-295531
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