Why retail powerhouse FJ Benjamin is bullish on growth in Southeast Asia

FJ Benjamin, a leading brand management company in Singapore with a portfolio of more than 20 iconic brands including Cole Haan, Marc Jacobs, Rebecca Minkoff and Guess, is back in the black after announcing a full-year profit of $3 million in FY22.

“Our results tell the story, it’s definitely been a turnaround period for us, after October and November last year, things really turned around strongly in all markets,” Nash Benjamin, CEO of FJ Benjamin, told Inside Retail.

Benjamin went on to explain that in Malaysia, 90 per cent of its business is based on domestic consumption, with the remaining 10 per cent coming from its operations in the Genting Highlands tourist area. 

In Indonesia, its business is almost 99 per cent based on domestic consumption. While in Singapore, almost 30 per cent of its business comes from tourists and things are picking up gradually.

“In Singapore, the markets are slowly opening up, arrival numbers are progressively getting better, but it’s still not where it should be. Nonetheless, with planned events like Formula One in September as well as concerts and conventions, things will get better,” he said.

Things are picking up

2022 has been an eventful year for FJ Benjamin, with the MZ Skin brand being pushed into Singapore, Malaysia and Indonesia, and Cole Haan being introduced to Singapore and Malaysia.

Benjamin explained that the company is always on the lookout for products that can make a difference to its customers. The pivot to health and skincare began two years ago and, so far, it has had a positive impact on the bottom line.

“We feel this is going to be an important segment. Consumers are a lot more aware about hygiene and wellness, and there’s a lot more disposable income being spent in this area,” he noted.

Still, Benjamin is quick to temper expectations by stating that the company is monitoring the current global economic dynamics and is being cautious about its future plans.

“We are aware of the economic headwinds and the geopolitical issues in the region, as well as high inflation rates and high interest rates too, I get all of that,” he stated.

So far, he has not noticed any drop in consumption, but the company is ready with contingency plans to manage the situation in the case of a downturn.

“We have ways of managing costs, inventory purchases, and so on. We are constantly monitoring our business every day to see how we can mitigate any issues. But I think once China opens up and allows tourists to travel freely, there will be improvements,” he said.

The online factor

Back in April 2021, the company inked a partnership with Southeast Asian e-commerce marketplace Lazada to further boost online sales.

According to Benjamin, it took several months to get the integration process on the right track as the company had some standalone websites for Lazada to manage as well.

“It took a while for the integration to get through, there were issues of resources on both sides, so it took a little bit of time, but now we’re beginning to see it move nicely,” he added.

Benjamin said that Lazada really understands consumption patterns, demographics and consumer characteristics, while FJ Benjamin really understands product branding and merchandising, so from his perspective, it’s a good partnership. 

Online shopping has of course accelerated during the pandemic.

“In Singapore 7 per cent of our business is online. In Malaysia, it’s about 3 per cent, and in Indonesia, it’s about 11 per cent. Indonesia is interesting for us, as we cater to at least 80 million of their population who can afford our price points,” he noted.

 In fact, purchasing habits are fairly similar across FJ Benjamin’s three main markets of Singapore, Malaysia and Indonesia.

“The luxury business is very strong. A lot of the very wealthy people couldn’t travel in Singapore and all they did was shop. So we are still seeing a strong performance in this area,” he said.

Interestingly, the company has been branching out to its own line of retail shops for watches. It currently has 12 Watchzone outlets in Indonesia, and Benjamin hopes to expand these outlets to around 20 or 30 in the near future.

“We’re going to be launching our own mono site for Watchzone in the online space soon, and this is going to be quite exciting to develop our own business on our own retail platform,” he stated.

The future beckons

Benjamin is cautiously bullish about the prospects of the company in the coming years. When it comes to Singapore, Malaysia and Indonesia, he feels that the focus will always be on local consumption.

“Singapore is a little different, and we have 14 stores here, while in Indonesia we have 80 stores, and in Malaysia about 50 stores. In Singapore, it’s a small market, with high costs, and we are dependent on tourists, so the risk factors are a little higher,” he said.

The company is continuing to invest in its online strategies to target Gen Z and Millennials with potent customer relationship management (CRM) and data analytics tools.

“While the online business is still relatively small, it will continue to grow. It’s a convenience for young Millennials and they like shopping online,” he noted.

Fundamentals matter

Benjamin believes the omnichannel approach is here to stay. Around 30 per cent of the company’s online purchases are picked up in stores.

“When customers come to our stores, there is an opportunity to upsell products as well. Online shopping is here to stay, it’s a channel that works, and even though it’s small, we cannot disregard it, it’s important,” he stressed.

In a related development, property developer Far East Organisation took a further 9.3 percent stake in FJB, bringing their share to 16.7 percent earlier this year.

The Benjamin family remains the biggest shareholder of the company, followed by the Far East Organisation.

“This was a strategic investment, and we spoke about the prospects of adding new businesses in the future, so this was a value add to the group as a whole,” he explained.

Benjamin summed up the mood by reiterating the need to be very focused on what the company is trying to achieve.

“You’ve got to be focused in our business, we’ve got to be cautious given all the issues we have in the world today, but of course the main thing is to grow the business and grow the company, that’s our plan,” he concluded.

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