A taste of Japan keeps Don Don Donki bustling despite pandemic; 2 new Singapore stores planned
- Don Don Donki will open a new outlet next month in Tampines, and another in the northeast region by early next year, taking the number of stores in Singapore to 12
- Eventually, it plans to open “20 to 30 stores” here
- It sees manpower as the longer-term challenge but believes that its unique company culture can attract workers
SINGAPORE: Japanese retailer Don Don Donki plans to open two more stores in Singapore over the coming months, as its eclectic offering of all things made and designed in Japan continue to attract shoppers.
Sales have been steady despite the COVID-19 pandemic, store strategy division director Mak Hanawa told CNA. Its wide array of Japanese food and merchandise – from fresh produce and ready-to-eat meals like sushi and baked sweet potato to make-up and household items – offer travel-deprived Singaporeans a taste of Japan, he said.
“We try to show unique and interesting items to all the Singapore customers,” he told CNA. “The demand is there and the acceptance of our (offering) is also there.”
“Japanese items (are) unique for Singaporeans and now especially during the pandemic with people not able to travel abroad and to Japan, I think that's the main reason we are doing okay,” said Mr Hanawa from Pan Pacific Retail Management (Singapore).
Pan Pacific Retail Management is the overseas subsidiary of Pan Pacific International Holdings, which owns and runs famous discount store chain Don Quijote, also popularly known as Donki in Japan.
Don Don Donki is the offshoot of Don Quijote in other parts of Asia and since its first store in Singapore in 2017, the retailer has been steadily ramping up its presence. With demand holding up, two new stores are in the works, Mr Hanawa said.
Don Don Donki’s 11th store in Singapore will open next month at Tampines 1 mall, while its 12th will be located in the northeast region and will be ready by early next year.
This will come on top of the three stores it opened over the past year or so – in HarbourFront Centre, Downtown East and Suntec City – despite the pandemic.
Don Don Donki said its sales rose 55 per cent year-on-year in 2020, and expects another increase of 25 to 30 per cent this year on the back of new store openings.
CHALLENGES OF COVID-19
Still, the retailer has its share of challenges amid the protracted pandemic.
The ever-changing public safety measures meant that it had to “react very quickly” to adjust its operations, be it crowd control, dine-in related rules at its food courts or cleaning protocols if its stores were visited by confirmed COVID-19 cases.
The on-off tightening of curbs during the “heightened alert” periods was also challenging, with fluctuating sales making it difficult to manage inventory, said Mr Hanawa.
It also had to grapple with shipment delays amid port congestions and a shortage of shipping containers due to the pandemic.
Don Don Donki receives about 10 to 15 containers of goods each month, given how its stores carry more than 90 per cent of products that are imported directly from Japan, Mr Hanawa said.
The delays were a big problem for perishable goods, he added, recalling how an entire container of fruits and vegetables had to be discarded after arriving in Singapore one month later than scheduled.
Some popular items also ran out temporarily last year, such as instant noodle packs from famous ramen chain Ichiran.
“(They) were sold out quite quickly and even though we (placed our orders), we couldn’t receive the product on time and we were out of stock for quite a long time,” said Mr Hanawa.
To cope, the local team had to make quick changes in product selection and resorted to other modes of transport, such as air freight, despite the higher cost. It also developed a network of local suppliers for certain products to act as “insurance” during the uncertain period.
Asked how confident it is in keeping prices low if other operating costs continue to increase, Don Don Donki said it relies on its “strong buying power” back home to get the best price for goods.
It then ships the goods directly to its warehouse in Singapore, bypassing middlemen like wholesalers and importers. “I think that’s the best way to lower the cost of our goods,” said Mr Hanawa.
The company is also not too worried about rent.
Since opening its first store in Orchard Central about four years ago, the retailer has seen high footfall. With that, it has been approached by many malls offering attractive rental rates.
And with new tenants hard to come by, landlords have also become more open to negotiation, Mr Hanawa said, noting that rents for its new stores have seen a 10 per cent decline.
The bigger challenge for its operations in Singapore is manpower.
Don Don Donki now employs 770 people, including part-timers. It also has a pool of 100 temporary workers to fill roles such as temperature screening. But it will need more as it pushes ahead with expansion.
“We want to hire Singapore people,” said Mr Hanawa. “We believe that local people should run the local business and that's the main goal for us.”
The Japanese firm hopes its continued expansion here can convince people that there are opportunities for career development in the retail industry.
Mr Hanawa raised the example of a local employee who joined the firm three years ago as a retail associate, but is now a store manager handling 50 to 100 workers.
Don Don Donki also has a unique culture that is unlike other retail chains, he added.
“We give them the authority to think about the (store) layout, product selection and also how much to set the price. That’s all up to them,” he said.
“We give them the authority for pretty much everything and they enjoy this, which is a little different compared with other regular chains.”
"20 TO 30 STORES"
Mr Hanawa said Don Don Donki plans to open more stores in Singapore.
“We really want to open up more stores – 12 is not enough we feel. I cannot say the exact number but 20 to 30 stores (is what) we are thinking.”
The company has a similar goal to ramp up its presence in other Asian markets. It opened its first store in Macau last week, and has eight outlets in Hong Kong, two in Thailand, as well as one each in Taiwan and Malaysia.
“We have plans to expand not only one store, two stores. We want to open up 10 stores, 20 stores for each country. Singapore was the start,” said Mr Hanawa.
Don Don Donki customers throng the stores not only for interesting products at affordable prices, but for how shopping there feels like a maze-like experience with goods stacked on floor-to-ceiling shelves. This strategy is described on the company’s website as enabling customers “to have fun while (they) shop, much like being on a treasure hunt”.
"Our team is committed to continue sourcing for more products to fill the aisles (so that) customers will always find something interesting in this treasure hunt within our stores,” said Mr Hanawa.
Adding to the experience is colourful in-store signs, a blue penguin mascot called Donpen and an unending earworm of a theme song.
“A great grocery shopping experience will be something that Don Don Donki will continue to deliver to our shoppers,” he said.