INTERVIEW: RICHARD CHANG, SENIOR VICE PRESIDENT – ASIA, COSTCO
1. How do you describe the current retail landscape across Asia Pacific?
Extremely challenging due to increasing rents and losing market share to the e-commerce platform. Most bricks and mortar operators are facing zero or negative comp sales and focusing on seasonal promotional events which result in a short-term sales spike and compressed margins. Coupled with increases in labour and controllable expenses, the road ahead looks rocky.
2. What are the biggest consumer trends that you are seeing?
Greater focus on new businesses such as e-commerce and m-commerce to compete with the more established e-commerce platforms. Many are also looking to enhance the shopping experience with elevated convenience and access to wide SKU assortment.
3. As an international retailer, what have been the lessons for establishing a business in Asia Pacific?
The biggest lesson learned is that Asians are no different than Americans and/or Europeans. Which is to say that all people are looking for value and high quality products at the lowest possible price. Our business plan has little-to-no deviation regardless of whether we're operating in North America, Asia or Europe.
4. What impact is the digital age having on bricks and mortar stores?
We have also launched our e-commerce site in Korea, Taiwan and China. We can see the e-commerce sales potential, however, we view e-commerce sales as incremental to our bricks and mortar. At the end of the day, regardless of the distribution channel, content is still king. As is the need to have cool and unique items.
5. What challenges and issues keep you awake at night?
As an international operator with an emphasis on imported merchandise, we're extremely sensitive to regulatory changes. We work hard to engage with each country’s government to understand their import regulations so that we can have a mutually beneficial co-existence. With food safety, anti-dumping and other trade related considerations, it's becoming more complex. Hence, we hope to achieve a partnership with local FDA and customs agencies.