Yaohan (Singapore)



Yaohan, a Japanese department store company, pioneered the concept of one-stop shopping outlets. Their innovative retail strategy that centred on the evolving demands of customers prompted the rethinking of the concept of shopping. The development of Yaohan locally signalled the rising affluence of Singaporeans, and played a critical part in the development of Singapore’s shopping and retail sector.

Yaohan’s opening in Singapore
In 1974, the Yaohan Department Store opened its maiden Singapore store at the newly built Plaza Singapura shopping centre along Orchard Road as part of a joint venture with the Development Bank of Singapore (DBS). Built at a cost of S$13 million, it was then the biggest supermarket-cum-department store, spanning three floors.1 According to surveys, some 955,000 people visited the Plaza Singapura store in one week, attesting to Yaohan’s popularity.2It was Yaohan’s one-stop shopping convenience concept that set it apart from established Orchard Road stores like Cold Storage and Fitzpatrick’s, and prompted a remodelling of their supermarket business.3 The flagship Yaohan store set the stage for the introduction of more supermarkets in Singapore over the next few years.4

Defining the shopping experience

Description
Stocked with apparel, electrical appliances, textiles, toys and other merchandise, Yaohan’s department store at Plaza Singapura was touted as the pioneer for a one-stop shopping experience. The store complemented the supermarket, which boasted a wide variety of local and imported produce, takeaway food as well as a bakery.5 Its merchandise was specially grouped and displayed so as to better attract customers.6 Yaohan was appealing to shoppers as it catered to their demands and centred on a family shopping experience. For instance, the branch boasted a children’s play centre where trained baby-sitters minded toddlers, thereby freeing parents to enjoy their shopping.7 Waiting time for payment was minimised by having 16 supermarket and 19 department store check-out counters.8

Multiple firsts
Services pioneered by Yaohan contributed to its popularity in its heyday. An in-store, open-view bakery was a novel addition that allowed customers to see the chefs at work.9 Yaohan’s staff underwent dedicated service training, manifested in their first-rate service, at a time when most stores did not provide such training for their staff.10 Sensitivity to customers’s needs sustained Yaohan’s appeal to its patrons; apart from child-care, laundry dry-cleaning and instant shoe-repair services were introduced. To help households cope with a busier lifestyle, pre-packed food in family-sized servings (and individual ready-to-cook portions for bachelor patrons) was sold at its supermarkets.11To tap on the high traffic flow at Yaohan’s stores, the first night banking service by the Post Office Savings Bank (POSB), and the first cashless payments service by the Network of Electronic Transfers (Singapore) (NETS) were trialled and implemented at Yaohan’s stores.12

Expansion and development
Yaohan opened its second Singapore store in 1977 at Katong and its third store in 1979 at Thomson Plaza.13 These new branches were a move towards decentralisation by heading out from the city centre, and also aimed to promote Yaohan as a place for the masses. This departed from the image of supermarkets as “only for the wealthy”.14 Yaohan’s new branches were meant to meet the needs of shoppers in the vicinity, including the Ang Mo Kio and Toa Payoh neighbourhoods, and to extend one-stop shopping facilities to these areas.15 Yaohan managed to continue expanding its presence at a fast pace through the late 1970s and early 1980s as it rented rather than bought or constructed its own buildings.

Response to increasing competition
More shopping centres were being built in Singapore even as Yaohan expanded to Bukit Timah, Jurong and Parkway Parade during the early 1980s.16 There was a general increase in the number of supermarkets as many new shopping complexes hosted at least one. More critically, both local and foreign department stores were competing more directly as anchor tenants in shopping centres.17 Yaohan’s one-stop shopping concept was also beginning to be followed by other stores to various degrees.18 These developments caused Yaohan’s initial popularity as a store that served all sectors of society to fade. Furthermore, Yaohan as Singapore’s first Japanese supermarket catered especially to the demands of the Japanese expatriate community here during the 1970s. By the late 1980s, however, other Japanese suppliers like Daimaru had diverted this customer pool from Yaohan’s stores.19

Nonetheless, Yaohan (Japan) president Kazuo Wada pushed ahead with plans to further expand its Plaza Singapura holdings and undertake a mini-mart franchise venture. This was in a bid to double the department store chain’s earnings by 1990.20 A S$6 million revamp of its flagship store in 1985 aimed to enhance the shopping experience for its clients.21 This was in tandem with efforts to branch out towards electronic goods and home furnishings chain stores, as well as a mini-mart franchise.22 In 1990, Yaohan invested in the International Merchandise Mart (IMM), entering into wholesale and redistribution activities to ease sourcing for supplies for their Southeast Asian retail market.23 IMM became the cornerstone for Yaohan’s supermarket strategy as plans were in the pipeline for the opening of another supermarket and an electrical shop in 1992 that would need supplies.24

Decline
Takashimaya department store entered the local retail scene in 1993 with the opening of its flagship store at Ngee Ann City that emphasised on the lifestyle concept rather than merchandise. Their new retail approach demonstrated that stores which could not keep pace with changing trends would be left behind.25 The slated new Yaohan store in Marina Square in 1996 was a belated attempt to keep up with the trend of concept stores targeted at a narrower customer base.26 Moreover, Yaohan was plagued by financial woes. In the 1990s, rentals increased as property prices shot up. Yaohan’s approach of keeping operating costs low by not constructing its own shopping complexes now caused its financial debts to balloon due to rising rental costs.27 This was worsened by its rapid pace of expansion in opening chain stores and franchise outlets.28

Closure
As a result of these problems, Yaohan had to reduce its operating costs and its Bukit Timah branch was the first to close in 1996.29Yaohan (Japan), the parent company overseeing its operations in Singapore, was declared insolvent in 1997. Thereafter, its Singapore operations were wound up as the company entered judicial management.30


Timeline
1974: Yaohan department store started operations at its maiden outlet in Plaza Singapura.

1977: Katong branch (at Sea View) is opened.31
1979: Thomson Plaza branch opened. This was Yaohan’s second-largest branch after Plaza Singapura.
1981: Bukit Timah branch is opened.
1983: Jurong branch is opened. Yaohan moves Katong operations from Sea View complex to Parkway Parade shopping centre.
1985: Flagship store at Plaza Singapura revamped.
1990: Investment in IMM.
1996: Bukit Timah store shuts in September.
1997:
Yaohan declared insolvent in Japan. Yaohan’s holdings in Singapore lose their credit-worthiness. Plaza Singapura flagship store shuts in June.

1998: Last Yaohan branch in Thomson Plaza ceases operations.



Author

Kenneth Goh



References
1. DBS goes into $13mil joint venture store. (1974, July 13). The Straits Times, p. 17. Retrieved from NewspaperSG.
2. Soh, S. L. (1975, December 23). Outdoor ads make a colourful return. The Straits Times, p. 16. Retrieved from NewspaperSG.
3. Ortega, B., & Fong, V. (1984, February 19). Orchard Road: The chameleon. Singapore Monitor, p. 43. Retrieved from NewspaperSG.
4. Plaza Singapura to house a $13m supermart. (1974, February 17). The Straits Times, p. 5. Retrieved from NewspaperSG.
5. Plaza Singapura to house a $13m supermart. (1974, February 17). The Straits Times, p. 5. Retrieved from NewspaperSG.
6. Tong, Y. T. (1987, May 3). Retailers unfazed by arrival of more Japanese stores. The Straits Times, p. 14. Retrieved from NewspaperSG.
7. Mok, S. P. (1974, July 30). $13m shopping complex opens in September. The Straits Times, p. 12; Retailing no longer a simple business. (1981, October 2) The Straits Times, p. 23. Retrieved from NewspaperSG.
8. Shimizu, H. (2008). Japanese firms in contemporary Singapore. Singapore: NUS Press, p. 210. (Call no.: RSING 338.8895205957 SHI); Page 16 Advertisements Column 1. (1974, September 14). The Straits Times, p. 16. Retrieved from NewspaperSG.
9. Tong, Y. T. (1987, May 3). Retailers unfazed by arrival of more Japanese stores. The Straits Times, p. 14; Shopping in comfort and pleasant style under just one roof. (1980, April 6). The Straits Times, p .15. Retrieved from NewspaperSG.
10. Tong, Y. T. (1987, May 3). Retailers unfazed by arrival of more Japanese stores. The Straits Times, p. 14; Lee, V. (1985, August 1). Service with courtesy comes in two styles. The Straits Times, p. 12. Retrieved from NewspaperSG.
11. Ho, M. (1986, April 17). New moves to lure the supermarket shopper. The Straits Times, p. 1. Retrieved from NewspaperSG.
12. POSB starts night banking service. (1978, December 19). The Straits Times, p. 15; 14 to take part in June experiment. (1985, March 16). The Straits Times, p. 12; Soh, D. (1986, January 16). A tentative start to a cashless shopping era. The Straits Times, p. 10. Retrieved from NewspaperSG.
13. Yaohan plans for more branches. (1977, November 10). The Straits Times, p. 11; A third Yaohan store. (1978, March 15). The Straits Times, p. 17. Retrieved from NewspaperSG.
14. Soh, S. L. (1976, August 24). Supermarts come to our doorstep!  The Straits Times, p. 16. Retrieved from NewspaperSG.
15. Soh, S. L. (1976, August 24). Supermarts come to our doorstep!  The Straits Times, p. 16; $80,000 glitter to be store's main attraction. (1979, January 14). The Straits Times, p. 11. Retrieved from NewspaperSG.
16. Yaohan rents new store at Katong. (1982, March 6). The Straits Times, p. 19; Teng, J. L. (1980, September 19). Shopping for business. The Straits Times, p. 6. Retrieved from NewspaperSG.
17. What makes a winner. (1984, March 1). The Straits Times, p. 14. Retrieved from NewspaperSG.
18. Gabriel, M. (1982, November 21). Island shopping paradise takes shape. The Straits Times, p. 12; Retailers strike back. (1993, March 28). The Straits Times, p. 1. Retrieved from NewspaperSG.
19. Shimizu, H. (2008). Japanese firms in contemporary Singapore. Singapore: NUS Press, p. 211. (Call no.: RSING 338.8895205957 SHI).
20. Tong, Y. T. (1986, June 27). Yaohan enters minimart field. The Straits Times, p. 25. Retrieved from NewspaperSG.
21.
Tong, Y. T. (1986, August 4). Hot battleground for retailers in Orchard Road. The Straits Times, p. 17. Retrieved from NewspaperSG.
22. Tong, Y. T. (1985, June 25). Yaohan unveils expansion plans. The Straits Times, p. 36. Retrieved from NewspaperSG.
23. Shimizu, H. (2008). Japanese firms in contemporary Singapore. Singapore: NUS Press, pp. 210–211. (Call no.: RSING 338.8895205957 SHI); Siow, D. (1990, February 5). Yaohan has whooping $1.4b to put into investments. The Straits Times, p. 31. Retrieved from NewspaperSG.
24. Yaohan plans to open two more stores in S’pore. (1992, March 17). The Business Times, p. 4. Retrieved from NewspaperSG.
25. Chai, K. W. (1991, July 21). Japanese firm to introduce new shopping concept to Singapore. The Straits Times, p. 7; Other Japanese stores in Singapore. (1993, August 6). The Straits Times, p. 9. Retrieved from NewspaperSG.
26. Lam, J. (1996, August 26). Yaohan to launch new-concept stores with sharper focus. The Business Times, p. 3. Retrieved from NewspaperSG.
27. Shimizu, H. (2008). Japanese firms in contemporary Singapore. Singapore: NUS Press, p. 211. (Call no.: RSING 338.8895205957 SHI); Rashiwala, K. (1996, July 17). Unlisted retailers also battered in industry downturn. The Straits Times, p. 38. Retrieved from NewspaperSG.
28. Koh, E. (1997, December 23). Pioneering supermarket chain caves in to tough times. The Straits Times, p. 43. Retrieved from NewspaperSG.
29. Ang, W. M. (1996, December 17). Yaohan Orchard to close with planned cutbacks. The Business Times, p. 1. Retrieved from NewspaperSG.
30. Koh, E. (1997, December 23). Pioneering supermarket chain caves in to tough times. The Straits Times, p. 43. Retrieved from NewspaperSG; Shimizu, H. (2008). Japanese firms in contemporary Singapore. Singapore: NUS Press, pp. 62, 207. (Call no.: RSING 338.8895205957 SHI)
31. Foo, M. K. (1983, August 11). From Yaohan Katong, it’s goodbye till December. Singapore Monitor, p. 4. Retrieved from NewspaperSG.



Further resources
Good buys bring much cheer to department stores. (1981, April 12). The Straits Times, p. 23. Retrieved from NewspaperSG.


Koh, A. (1982, November 21). Superstores of the future. The Straits Times, p. 13. Retrieved from NewspaperSG.

Pow-Chong, G. (1983, December 11). A parade of shoppers on opening day. The Straits Times, p. 14. Retrieved from NewspaperSG.

Rashiwala, K. (1997, October 10). Major S’pore retailers in talks to buy over Yaohan. The Straits Times, p. 81. Retrieved from NewspaperSG.

Wado, A. (1992). Yaohan’s global strategy: The 21st century is the era of Asia. Hong Kong: Capital Communications Corp.
(Call no.: RSING 338.761 WAD-[BIZ])

Why the supermarts will draw crowds. (1975, January 31). The Straits Times, p. 17. Retrieved from NewspaperSG.

Yaohan. (1978–). Yaohanews. Singapore: Author.
(Call no.: RSING q338.761658871095957 YS)



The information in this article is valid as at 29 January 2014 and correct as far as we are able to ascertain from our sources. It is not intended to be an exhaustive or complete history of the subject. Please contact the Library for further reading materials on the topic.

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