CHALLENGES OF COVID-19
Still, the retailer has its share of challenges amid the protracted pandemic.
Ever-evolving public safety measures meant it had to “react very quickly” to adjust its operations, whether it was crowd control, rules related to dining at its food courts, or cleaning protocols if its stores were visited by confirmed cases of COVID-19. .
Intermittent border tightening during “heightened alert” times has also been a challenge, with fluctuating sales making it difficult to manage inventory, Hanawa said.
It has also had to deal with shipping delays amid port congestion and a shortage of shipping containers due to the pandemic.
Don Don Donki receives around 10 to 15 containers of goods each month, given that his stores carry more than 90% of products imported directly from Japan, Hanawa said.
Delays were a big problem for perishables, he added, recalling how an entire container of fruits and vegetables had to be thrown away after arriving in Singapore a month later than expected.
Some popular items were also temporarily sold out last year, such as the instant noodle packs from the famous ramen chain Ichiran.
“(They) were sold out pretty quickly and even though we (placed our orders) we couldn’t get the product on time and we were out of stock for quite a long time,” Hanawa said.
To cope, the local team had to quickly change the product selection and resorted to other modes of transport, such as air freight, despite the higher cost. It has also developed a network of local suppliers for certain products to act as “insurance” during the uncertain period.
When asked how confident he is in keeping prices low if other operating costs continue to rise, Don Don Donki said he relies on his “strong purchasing power” in his country. to get the best price for the goods.
It then ships the goods directly to its warehouse in Singapore, bypassing intermediaries such as wholesalers and importers. “I think this is the best way to reduce the cost of our products,” Hanawa said.
The company isn’t too worried about the rent either.
Since opening its first store in Orchard Central about four years ago, the retailer has seen heavy footfall. With this, he was approached by many shopping malls offering attractive rental rates.
And with new tenants hard to find, landlords have also become more open to negotiation, Hanawa said, noting that rents for his new stores have fallen 10%.
The biggest challenge for its Singapore operations is the workforce.
Don Don Donki now employs 770 people, including part-time. It also has a pool of 100 temporary workers to fill roles such as temperature control. But he will need more as he moves forward with the expansion.
“We want to hire Singaporeans,” Hanawa said. “We believe that the local people should run the local business and that is the main goal for us.
The Japanese company hopes its continued expansion here can convince people that there are career development opportunities in the retail industry.
Mr. Hanawa gave the example of a local employee who joined the company three years ago as a retail associate, but is now a store manager and takes care of 50 to 100 employees. .
Don Don Donki also has a unique culture that differs from other chain stores, he added.
“We give them the power to think about the layout (of the store), the product selection and also the pricing. It all depends on them, ”he said.
“We give them authority for just about everything and they appreciate that, which is a little different from other regular channels.”