SINGAPORE — When Ms Tay Shan Min, 53, found out that cosmetics chain Sasa was closing all its stores in Singapore, her first thought was to head to an outlet and stock up on her favourite makeup product from Danish cosmetics brand Gosh.

Sasa is the only retailer selling that brand in Singapore.

“I quickly posted on Facebook and told my friend that the highlighter crayon we like may not be available any more… It’s very sad. I’m going to miss that Gosh highlighting crayon,” Ms Tay, a retiree, said.

In a filing to the Hong Kong stock exchange on Monday (Dec 2), Hong Kong-based Sasa International announced its exit from the Singapore market. All 22 stores in Singapore would close “as soon as possible” and 170 of its employees will be retrenched.

The company said that it has decided to focus on Hong Kong, Macau, mainland China and Malaysia, as well as its e-commerce business.

Retail experts told TODAY that high rental costs, a lack of premium branding and competition from online stores were the main reasons the chain was unable to survive in the very competitive beauty industry in Singapore.

BRANDING

The analysts generally agree that Sasa — which opened here in 1997 — lacks the branding that its upscale competitor Sephora has managed to build up. Sephora entered the market here in 2008.

Associate Professor Lawrence Loh, from the National University of Singapore Business School, said that Sephora also benefits because it is part of the luxury retail conglomerate LVMH group.

“There is value attached to that, whereas Sasa is on lower kind of value proposition," Assoc Prof Loh said, adding that it is closer to brands found in the neighbourhoods of public housing estates.

Mr Lucas Tok, a lecturer on retail at the Singapore Polytechnic, said that Sasa failed to resonate with the evolving tastes of its consumers because, unlike Sephora, it did not undertake massive marketing strategies.

For example, Sephora got international pop icon Rihanna to make a surprise appearance in its stores here in October last year to celebrate the anniversary of her cosmetic brand Fenty Beauty, which the chain sells.

Sasa’s inability to price items in its stores at a higher tier, due to its less-than-premium branding, was compounded by the high rental and manpower costs it has had to fork out, since most of its 22 stores are located in shopping malls.

“It’s just an ordinary store located in a high-cost location,” Assoc Prof Loh said.

Mr James Fong, manager at Nanyang Polytechnic’s Singapore Institute of Retail Studies, said that the potential for growth in Singapore is not strong due to its high costs and mature market.

“I think for Sasa, it wants to focus more on growth markets, such as China,” he added.

REVAMP EFFORTS ‘TOO LITTLE, TOO LATE’

Experts noted that Sasa did try to revamp its stores by bringing in new brands, such as Korean and Japanese beauty brands, and by changing its store design, but these measures were probably too little, too late.

Mr Samuel Tan, the chair of diploma in retail management at Temasek Polytechnic School of Business, said some of the challenges that Sasa faced were low brand loyalty, changing consumer preferences and their access to similar products elsewhere.

And these problems were not solved despite restructuring efforts.

In addition, because of the lack of marketing strategies the company employed, the new products brought in by Sasa lacked credibility among consumers, Mr Tok said.

While Korean beauty trends might have picked up in popularity in recent years, Mr Tok said that Singapore consumers still tend to prefer brands that are more internationally known.

The closure of Sasa's stores, however, came as a surprise to Ms Ruth Shirley Janarthanam, 24, who has been frequenting its shops about once every three months for the last 10 years.

The public relations associate said that she would head to Sasa just to check out the latest beauty brands. Among them were brands that were niche and not widely available, such as The Balm and Wet and Wild.

On the other hand, Ms Cindy Wong, 28, a compliance executive, said that she has never heard of the array of brands that Sasa carries.

She stopped shopping at the chain about two years ago after the particular cleanser of a Japanese beauty brand, which used to be available only at Sasa, was brought in by Japan lifestyle store Tokyu Hands.

“Sasa brands are not so well-known. So I don’t really bother to go. I don’t know where they come from,” Ms Wong added.

ONLINE COMPETITION

Competition from e-commerce is undoubtedly a major factor behind Sasa’s failure to continue in Singapore, the analysts said.

Ms Wong said that while she used to head to Sasa to buy her facial masks, in addition to her cleanser, she now buys them through e-commerce website Qoo10.

Sephora is very much a brick-and-mortar cosmetics chain as well, but Mr Fong said that it has managed to successfully integrate its online and offline shopping segments, unlike Sasa.

For example, Sephora mobile applications would push notifications to a customer when he or she is near a Sephora physical store.