CHANGING LANDSCAPES AND CONSUMER PREFERENCES: THE IN-AND-OUTS TO RUNNING A JAPANESE SUPERMARKET IN SINGAPORE

The Japanese presence in Southeast Asia, and more specifically, the cosmopolitan city of Singapore, has been profound. Japanese food culture, in particular, has established itself as a major influence in the country, evident from the abundance of Japanese restaurants, annual Japan-themed food fairs, and the increasing number of Japanese grocery stores. Japanese supermarkets have sprung up all around Singapore, serving not only as a retail platform, but also as hubs of cross-cultural exchange. A notable example of such a supermarket that has a long-standing presence in Singapore is Meidi-ya.

Established in 1980, Meidi-ya Singapore celebrates its 44th Anniversary in 2024. The business, which originated in Japan as far back as 1885, initially focused on ship chandelling, providing provisions to Japanese-registered ships worldwide. Prior to establishing its first overseas branch in 1980, Meidi-ya had already been operating in Singapore through a joint venture company. However, with the rising demand for Japanese products, Meidi-ya officially expanded its operations into Singapore during the peak of Japan’s economic bubble, when many Japanese department stores and major supermarkets sought international opportunities.

Meidi-ya first started its wholesale/distribution services in Singapore during the 1980s. However, after the economic bubble burst and Japan's economy declined, many Japanese distribution businesses in Singapore slowly began to scale back their operations in Singapore in the early 2000s. Daimaru, for instance, which had a presence in the now-defunct Liang Court, decided to withdraw in 2003. Meidi-ya then took over the space, marking the beginning of its retail business. The company’s first retail store officially opened in 2003, and for the past 21 years, Meidi-ya has become a well-known name in Singapore’s retail scene. Most recently, with the closure of Liang Court in 2020, Meidi-ya opened two other outlets, located at Millenia Walk and Great World City.

During the early years of Meidi-ya's retail operations, Japanese foods (Washoku) was still relatively unfamiliar to Singaporeans and the number of Japanese restaurants in Singapore was low. Thankfully, Meidi-ya was situated in the former Liang Court, which during its run, housed a large number of Japanese-related stores. This created a favourable environment for Meidi-ya as its customers were primarily Japanese expats. Over time, albeit slowly, Singaporeans who were interested in Japanese culture or foods started to frequent the area. Around this time, Singapore's economy was starting to show rapid growth and underwent rapid globalisation. By 2010, awareness of Japan had drastically increased, leading to the proliferation of Japanese lifestyle brands like MUJI, Uniqlo, Best Denki and DAISO. The number of Japanese restaurants also grew significantly, increasing locals' exposure and education towards Japanese food culture. The major turning point was in 2013, when Washoku (Japanese cuisine) was recognised as a UNESCO cultural heritage. This milestone boosted awareness among locals, sparking interest in Japanese cooking and ingredients.

Managing Director Hidekazu Kozaki, who has spent most of his career managing Meidi-ya Singapore, shared in an interview that 80% of Meidi-ya’s customers today are regulars, while the remaining 20% are walk-in customers. He noted a shift in the profiles of these walk-in customers - they are willing to pay a premium for quality food. For example, while Singaporeans previously favoured well known soy sauce brands, Mr. Hidekazu observes that there is a growing appreciation for traditional and regional varieties. Customers are now beginning to search for ingredients of higher depth and quality.

There is, however, a slight disparity in the purchasing behaviour between locals and Japanese shoppers at Meidi-ya. While Japanese customers visit Meidi-ya to purchase their daily groceries, Singaporean customers tend to look for specific, high-quality Japanese products that are difficult to obtain elsewhere in the country. Mr. Hidekazu attributes this shift to Singaporeans' preference for eating out, alongside the fact that Washoku is not a local staple. He shared an anecdote that he remembers fondly: Mr Hidekazu met a Singaporean customer at an oil speciality shop in Kyushu, who shared with him that he buys 20 bottles of a specific oil brand every time he visits Japan. This customer explained that he tried this particular oil brand at a Japanese restaurant, enjoyed it so much, and decided to purchase it in bulk whenever he visits Japan, since he is unable to purchase it in Singapore. With this differing demands from local and Japanese customers, Meidi-ya has to now think about a product line-up that best caters to the needs of both parties. However, Mr Hidekazu acknowledged the challenge of identifying the right products while maintaining a sustainable profit margin.

At present, Meidi-ya carries a variety of products and ingredients, which can be roughly broken down into: fresh produce (40%); groceries (20%); local groceries (10%); alcohol (10%); prepared foods like sushi (15%) and household items like shampoo, etc (5%). Interestingly, Mr Hidekazu shared that fresh Japanese produce, such as wasabi, milk and Japanese fruits are no longer considered new or exciting to locals. Additionally, Japanese fruits are facing tougher competition. While they are recognised for their sweetness and delicious taste, Japanese fruit varieties grown in neighbouring countries are gaining increased attention for their improved quality and competitive pricing. For example, Japanese vegetable varieties cultivated in Cameron Highlands such as those by "Chitose Agriculture" are doing very well. Grown by Japanese farmers, these vegetables are reasonably priced and trusted by consumers, contributing to their popularity.

Japanese agriculture associations are continuously working to promote their fruits into supermarkets like Meidi-ya to penetrate the Singaporean market. While it is understandable that these fruits come with a higher price tag due to their premium quality and air transportation costs, Mr. Hidekazu feels that Japanese producers are still primarily focused on their domestic consumers, despite their export efforts.. He believes that producers must recognise the importance of creating a product designed for the Singapore market instead of blindly exporting items made for Japan's domestic market.

Mr. Hidekazu shared another valuable experience he had. Previously, Meidi-ya launched Akita rice sold in small 200 gram packages. The product was extremely popular among locals and had sold out even before the promotion ended. This result surprised the Meidi-ya team as the same product had underperformed in the Japanese market. From this, Mr. Hidekazu realised the importance of packaging sizes when introducing new products to foreign markets. He acknowledges that it might be difficult for producers to tailor their products to different markets, but hopes that producers will understand the importance of adjusting their products accordingly. For example, strawberries from Japan tend to arrive in packaging intended for domestic consumption. Taking a Singaporean consumer's perspective, Mr. Hidekazu feels the quantity of strawberries could be reduced to make it more enticing for local customers.

While Japanese fruits still have a place in the gift market, Meidi-ya feels it is necessary to reconsider their positioning as everyday products. Instead, the company will be shifting its focus towards frozen foods and Ready-to-Eat meals. Since COVID-19, there has been a steady rise in home dining trends with more people opting to purchase meals outside and bring them home. Starting in April last year, the number of ready-made meal offerings at 7-Eleven outlets has increased. Given this shift, Meidi-ya plans to prioritise selling frozen foods, particularly vegetables and seafood, as importing meat products may be more challenging.

Other staples like Japanese rice continue to sell well, indicating a strong penetration into Singaporean households. Thinly sliced chilled meat is also popular, as it is typically only available in Japanese supermarkets. In line with evolving consumer trends, health-conscious choices are becoming more prevalent, with lean cuts of Wagyu now preferred over marbled ones. When it comes to processed foods, there is less emphasis on bulk purchases, but there is growing demand for handmade or artisanal products, rather than well-known name-brand (NB) items.

When on the lookout for new ingredients or produce, Meidi-ya's purchase team often vies for the most popular or trending products that are in demand. They carefully study local preferences and look for products that resonate particularly well with Singaporean customers. Despite this, the safety and reliability of a product are still deemed the most important factors to consider when purchasing. Ultimately, Meidi-ya strives to bring in high quality, safe products that reflect Japan's dedication to craftsmanship and excellence.

Prior to the COVID-19 pandemic, Meidi-ya had actively organised seasonal Japan Fairs that featured unique produce from specific regions of Japan. However, since the pandemic, the supermarket has been limited to holding fairs featuring products from Hokkaido, Kochi and Nagano Prefecture. The main issue with organising these seasonal fairs is the cost. If it goes on for too long, people lose interest. Mr. Hidekazu believes that the optimal duration is one week. Ideally, he wishes to keep fairs short and simple, featuring only one or at most, two brands at a time. Additionally, back when Meidi-ya was still located in Liang Court, live demonstrations were very well received. However, now that Meidi-ya is positioned more as a supermarket, live demonstrations have become more challenging due to space constraints at the current store locations.

Regarding Hokkaido, Meidi-ya operates the "Dosanko Plaza" at the entrance of its Millenia Walk store under a business outsourcing agreement. They have a deep connection with Hokuren (An organisation founded in Hokkaido, specialising in supplying safe and secure Hokkaido agricultural and livestock products), which explains why they are able to promote Hokkaido products on a long term basis. The Kochi seasonal fair, on the other hand, is heavily supported by the prefectural government, while the Nagano Prefecture fair is organised by an individual who has been coordinating it for years. Overall, Mr. Hidekazu acknowledges the significance of holding such seasonal fairs with plans to revisit how they can be better organised in the near future.

Japanese alcohol has seen a surge in popularity in recent years. Meidi-ya has opened liquor stores located at Millenia Walk and Takashimaya, with Mr. Hidekazu adding that the popularity of Japanese Sake amongst locals is steadily increasing. This growth could be attributed to the rise in Japanese restaurants, greater exposure as locals travel to Japan , and Sake-related events and campaigns held in Singapore every year. Singaporeans tend to have different drinking habits when compared to their Japanese counterparts. While Japanese people prefer to pair their food with Junmai Sake, Singaporeans enjoy Junmai Ginjo, a different type of Sake with a distinct character. Their preference for unique and flavourful Sake has grown, leading to an increase in popularity in other varieties as well.

Most of Meidi-ya's customers who purchase liquor tend to be in their 30s and 40s, with many of those who attend the weekly tasting events falling within this age group. These customers tend to seek out alcohol that can be easily shared with friends. Interestingly, while the Millenia Walk outlet attracts more discerning working professionals, the Takashimaya branch sees a higher proportion of female customers who express a strong demand for party drinks. Products with a strong backstory tend to perform better here.

Despite competition from larger entities such as Don Don Donki, Mr. Hidekazu is proud to share that Meidi-ya has maintained its competitive edge. Japanese producers, especially smaller ones, often struggle to meet the large order quantities demanded by larger retailers, making them a better fit for Meidi-ya’s scale. Meidi-ya has developed a seamless importing system that supports smaller producers in bringing unique products. Additionally, with Meidi-ya Japan’s background as an exporter, there is already a well-established logistic infrastructure in place to efficiently work with smaller companies.

This system enables Meidi-ya to experiment with a curated selection of interesting Japanese products without having to face problems stemming from inadequate logistics. For example, Meidi-ya is currently introducing products from specialised farms in Japan, such as Kira Farm in Kyoto. The company aims to expand its product line up from such dedicated producers. It is, however, difficult to predict a product’s performance until it reaches the market. Instead of putting up barriers, Mr. Hidekazu believes in first presenting these products to customers,observing how they react, then adjusting accordingly based on feedback.

While it has been Mr. Hidekazu’s dream to introduce more unique products into the Singaporean market, Japanese customers will always be their core audience. Balancing the needs of both local and Japanese customers is essential as Meidi-ya continues to curate products that resonate with both target groups.

As Meidi-ya continues into its 45th year, much has changed over the past few years. Mr. Hidekazu notes that interest in Japan and its food culture seemed to have peaked just before the COVID-19 pandemic hit (in 2018-2019). However, it is difficult to pinpoint the exact peak, as it coincided with a surge in demand for supermarket products during the pandemic. Since 2022, food culture has shifted. Following the reopening of borders and the influx of travellers to Japan, people’s purchasing behaviour has also changed. For example, since snacks can be bought at supermarkets in Japan for far cheaper prices than in Singapore, major Japanese snack brands have seen sales halved in the Lion City. While Japanese fast-food chains seem to remain stable, mid to high range restaurants are struggling as an increasing number of Singaporeans are starting to prioritise cost-effectiveness it seems more affordable to travel to Japan for an authentic meal. In contrast, Ready-to-Eat dishes continue to perform well, even though sales of fresh foods have declined post-pandemic. The culture of eating out has remained largely unchanged.

The future is always uncertain, as Mr Hidekazu notes. 2025 is expected to be a challenging year for Meidi-ya.. Amidst this uncertainty, the company plans to expand its offerings and explore new opportunities. For example, a “dashi bar” is being considered, offering a platform to create more opportunities and platforms for people to try authentic Japanese food. Additionally, one of Meidi-ya's upcoming goals is to showcase more specially curated products in their stores. Mr. Hidekazu wishes to build good rapport with long-established Japanese brands with the goal of introducing their products to the Singapore market. Mr. Hidekazu recognises that while introducing unique products is important, profitability remains key for producers, and Meidi-ya is committed to lowering the barriers for these brands to enter the Singaporean market.

When it comes to customers, Mr Hidekazu is hopeful, too. He has received many requests from local customers to hold location-specific events, such as a Ginza Fair, Nihonbashi Fair, or Dotonbori Fair. To further interact with these locals, Meidi-ya will also ramp up their social media marketing efforts, hold future campaigns, and gain new fans. With regard to the retail outlets, Mr Hidekazu explains that plans are in place to shine a spotlight on Japanese foods. Currently, the Great World outlet acts as a satellite shop, strongly characterised by its focus on its varied selection of Japanese foods. Meanwhile, Millenia Walk currently functions as a general supermarket that caters to the masses' needs. In the near future, the company intends to shift more focus on Japanese food offerings at their Millenia Walk outlet.

Mr. Hidekazu is deeply grateful for all the support they have garnered from customers in the past few decades. He promises that Meidi-ya will always strive to make the food culture in Singapore more exciting, and hopes that customers will continue to give Meidi-ya their fullest support in the coming years.