Latest / The Retail Podcast / Luckin Hits 30,000 Stores | Sephora’s K-Beauty Pivot | Why Seoul is the New Retail Capital | Five Things Friday

Transcript

Luckin Hits 30,000 Stores | Sephora’s K-Beauty Pivot | Why Seoul is the New Retail Capital | Five Things Friday · The Retail Podcast

• 0:00
  Welcome to Five things Friday APAC Edition.
• 0:03
  I'm Reef Quail, managing director of NRF retailers Big
• 0:06
  Show, Asia Pacific and the Middle East as well.
• 0:09
  Welcome. Hello.
• 0:22
  Hello I I had a little you hate. The intro a bit too long, it's
• 0:26
  like. I know I added a little bit into
• 0:29
  the intro. I forgot to say I have I have
• 0:31
  pig personal news this week in that as you probably saw Oh
• 0:34
  Alexi, we are launching NRFNRF retails big show in Middle East.
• 0:38
  Congratulations. And yours truly, he's looking
• 0:41
  after two shows now that will start if I if I disappear down a
• 0:45
  hole and never come out, you'll know why.
• 0:47
  That's OK when I say you're OK. Don't worry.
• 0:51
  I've got the people so. Congratulations.
• 0:53
  Thank you. Very much.
• 0:54
  Yeah, yeah, I've, I've got some sound effects I've never used,
• 0:56
  but I feel like it's appropriate now, but.
• 0:59
  Is it a buying buying? But that's a laugh track.
• 1:03
  Candy. Love a laugh?
• 1:05
  I feel like don't go me. I feel like I'm on an episode of
• 1:08
  Friends, Yeah. That's it.
• 1:09
  Anyway, none of that nonsense. OK, listen, let's get straight
• 1:12
  down to it. You and why don't you kick us
• 1:15
  off? OK, I'm going to talk about how
• 1:16
  Sephora announced a strategic partnership with the pictures
• 1:20
  telling it all before I'm saying it Olive Young.
• 1:23
  So basically, oh, not all good, all good.
• 1:26
  So basically this collaboration will actually see a dedicated K
• 1:30
  Beauty zones curated by Olive Young online and in select
• 1:34
  Sephora stores worldwide from the fall of 2026.
• 1:38
  Now what this is saying is that it is a strong signal that K
• 1:41
  Beauty has moved on from just trend to now becoming a staple
• 1:46
  on the shelf. So we're not talking about just
• 1:49
  importing a few hero SKU anymore.
• 1:51
  We are talking about proper outsourcing, proper curation,
• 1:54
  proper authority. So K pops really brought their
• 1:58
  items onto the shelf now. And you know, with Sephora
• 2:02
  letting Olive Young design these dedicated K his own surprise now
• 2:06
  saying that discovery speed, cultural fluency is more
• 2:11
  important than ever than before. Then it's just European products
• 2:16
  or American products, for example.
• 2:18
  So they've arrived and. This is where two yeah 2 great
• 2:21
  minds think alike because I was all geared up to tell the same
• 2:25
  story. But you installed my Thunder.
• 2:27
  But I've got more. So what's really cool about this
• 2:29
  is that Olive Young have done amazing things in Korea, like
• 2:32
  they're in an incredible retailer and we've been
• 2:34
  targeting them from a while. And we're really quite excited
• 2:37
  to announce that we'll have Yao Lee, the Chief Strategy Officer
• 2:40
  from Olive Young speaking at your APAC this year.
• 2:43
  So we're so I reckon the Chief strategy officer might know a
• 2:46
  little bit about this deal. So I think for me, what's what's
• 2:49
  really cool about this though, and I think you alluded to it,
• 2:52
  Ewan, was this is we're seeing Asia PAC brands go the other
• 2:56
  way. You know, that's cool.
• 2:58
  You know, we're seeing and we've, we've talked about Korean
• 3:01
  as a cultural iconic pop culture leader because in a way, Korea
• 3:06
  is a very, it's a, it's a, it's a bit of a closed off society.
• 3:09
  So they, they operate a bit of a vacuum.
• 3:11
  So when they produce stuff, it's unique.
• 3:13
  It's, it's, it's different to what is out in the mainstream
• 3:16
  and it has its own style. And so that the ability to
• 3:19
  create in a vacuum is, has actually served them very, very
• 3:22
  well in Korea's, you know, it permeates through many, many
• 3:24
  different, many, many different lanes.
• 3:26
  But to, to, to be able to strike this deal where you see KA world
• 3:31
  leader in K beauty curating their own zone.
• 3:33
  So Sephora is really providing real estate both online and in
• 3:37
  store and distribution. And, and now we're going to see
• 3:40
  major, we're talking big markets here.
• 3:43
  So you know, we're talking the back as as the UN said, the back
• 3:46
  half of of of this year, all of the US, all of Canada, Hong
• 3:50
  Kong, Singapore, Malaysia, Thailand and then into 27 we're
• 3:54
  talking yeah, that's the back half of this year.
• 3:57
  Now this is massive, you know to to roll out full Omni channel
• 4:01
  experiences in the US and Canada in the back half of 26 for all
• 4:04
  of you, what a what an amazing deal and what what how?
• 4:08
  Amazing deal for who? Actually, you think amazing deal
• 4:11
  for Sephora or amazing deal for Olivia?
• 4:13
  Well, I don't, I, I think, you know, I think if you think of
• 4:15
  Sephora, you know, they are iconic.
• 4:18
  Their brand codes are super strong.
• 4:20
  You know, the black and white stripe, those things that you
• 4:23
  know are Sephora. I think their retail experiences
• 4:25
  are really from a beauty point, they're pretty 2nd to none,
• 4:28
  right. But you know, what it does is it
• 4:30
  stretches Sephora into another area and to bring in other IP
• 4:34
  that's unique, not them is, is, is pretty cool.
• 4:37
  I mean, when we're talking about curation and not just random
• 4:40
  brands, they're basically Sephora now is getting to define
• 4:44
  with Olive young what defines what is hot in K beauty.
• 4:48
  And that that that's a that gives Sephora a real leadership
• 4:51
  position in K beauty as well, which they didn't have, right.
• 4:54
  And to bring to this collaboration with Olive young,
• 4:56
  Olive young obviously could sell a lot more gear.
• 4:58
  We'd expect that, right? But Sephora stretches its brand
• 5:01
  to an authority in an area that hasn't has an absence in you
• 5:03
  know, as you and says it's no longer a trend.
• 5:06
  It is a vast channel to marker in the beauty category.
• 5:10
  That's fantastic. It's amazing, but.
• 5:12
  I'm just thinking if I'm always young, I'm going to open a store
• 5:15
  next to every Sephora that's introduced to me two years old.
• 5:23
  I am I We can ask. We can ask Olive Young.
• 5:25
  You can have that conversation when you meet.
• 5:27
  Yeah, Lee. As an NRF impact, absolutely in
• 5:31
  June, don't forget. Yes, correct.
• 5:34
  Moving on to another strong brand in the region, Luck in
• 5:37
  Coffee has opened this week. They're 30,000 store, which is
• 5:42
  from a, from a W perspective, it's just staggering to even
• 5:46
  imagine the, the infrastructure that you need to open 30,000
• 5:51
  stores across the the APAC region.
• 5:54
  Obviously they've expanded into the US as well and you know, I
• 5:57
  expect to have global domination for them, but what, what this
• 6:01
  sort of shows is that you can have China's domestic brand
• 6:04
  dominance obviously is key for them. 30,000 stores.
• 6:07
  Congratulations to them. Their original flagship store
• 6:10
  was in Shenzhen and I can only we're not that I don't think
• 6:14
  they're here yet in, in Europe. I know they're in the US.
• 6:16
  They're. Different very much in Asia,
• 6:18
  Cheaper. They're everywhere.
• 6:19
  Our curiosity Have either of you had one of their coffees?
• 6:22
  Yes, I have it. Absolutely, Absolutely.
• 6:25
  Why was it? I can't.
• 6:26
  You can't not. You can't not.
• 6:28
  It's, it's, it's, it's they are probably in Singapore, but I was
• 6:31
  in, I was in China last week in Zhuhai, which is in in Macau,
• 6:34
  southern China. Yeah.
• 6:35
  And it's almost luck in coffee in China.
• 6:38
  It's almost, it's almost a staple brand you see on every
• 6:41
  retail strip. You know it's that prevalent.
• 6:43
  Yeah, and I think their their, their expansion into Tier 2,
• 6:47
  Tier 3 and commuter hubs is sort of, you know, they want to be
• 6:52
  the staple coffee throughout the whole day in terms if you're
• 6:55
  going to work, you can grab 1, you want to grab your afternoon
• 6:57
  snack, you can grab 1. So absolutely phenomenal growth
• 7:01
  and. So we're not interested to see
• 7:02
  that for your for the Aeon malls in Malaysia and I mean you luck
• 7:07
  in coffee would have to be an anchor tenant or one.
• 7:09
  Yeah. Well, not anchor, but definitely
• 7:12
  they're in most of our malls. And you know what I find really
• 7:14
  amazing about all this coffee chain is the way they train
• 7:18
  their people and the people culture that they have.
• 7:21
  And I I think that's worth one whole trend on his own where
• 7:25
  let's see how to cover that in the next round.
• 7:26
  Reef coming on to you, Sir. Well, we all thought that
• 7:30
  inflation was over and life was good, interest rates were going
• 7:33
  to get lower and the sun would come out and we could all walk
• 7:36
  down the yellow brick road together.
• 7:37
  But unfortunately that's not happening.
• 7:39
  So in Australia we saw a huge Black Friday, Cyber Monday sales
• 7:44
  period. It was incredible.
• 7:45
  But December wasn't so good. November, December was now as
• 7:48
  good. In fact, you and you, it was the
• 7:50
  month it was down and, and we're seeing inflation really start to
• 7:55
  creep up again. So earlier this week the Reserve
• 7:58
  Bank put interest rates back up again, no, after buffer
• 8:00
  dropping. And so that's it.
• 8:02
  But and, and it's Australia, it's Asia PAC is not is not even
• 8:06
  at the moment. Japan is suffering from a bit of
• 8:08
  a obviously we've had a change of government in Japan.
• 8:11
  Yeah, we've had we've had a bit of a currency crisis and
• 8:14
  inflation is not really cranking there as well.
• 8:15
  Their interest rates are much lower, but they're they're
• 8:17
  looking at interest rate hikes as well now.
• 8:20
  And their Reserve Bank side, it's no, a lot of the other
• 8:23
  markets aren't. In fact, I would say China's
• 8:27
  pretty steady, Southeast Asia's pretty steady S South Korea and
• 8:30
  Singapore probably probably going to be cutting sure.
• 8:33
  And same with New Zealand, but it's not even, it's still not
• 8:36
  even in this region. So and Australia and Japan are
• 8:39
  in the case of either just putting up or they've got
• 8:41
  imminent rate rises to come. So it's going to be very
• 8:44
  interesting to see how the next thing plays out because that
• 8:47
  when we have a rate rise, consumer confidence hits and
• 8:49
  hits at retail, you know, so it's, it's, it means we're
• 8:53
  having a bit of a lumpy recovery, I think.
• 8:54
  OK, Well, listen, sticking with the consumer, I I believe you've
• 8:58
  got a consumer story for us, Ewan.
• 9:00
  Yes, I do. I want to talk about convenience
• 9:03
  snacking. It kind of look messy like what
• 9:05
  you're seeing here, but it is quite I.
• 9:07
  Don't, I don't need any more. I don't need any more convenient
• 9:10
  snacking, by the way. I don't need any convenient
• 9:12
  we're. Talking about young people, I
• 9:13
  think the way you snack and the way young people have
• 9:16
  convenience snacking is completely different.
• 9:20
  So what I'm trying to say is that food is no longer planned
• 9:22
  around just breakfast, lunch and dinner.
• 9:24
  It's planned around gas. So is it a Bund between
• 9:28
  meetings? Is it a cup of noodles after gym
• 9:30
  or a protein drink while you are commuting from one to another or
• 9:33
  a late night snack, for example, or a three AM, 4:00 AM need for
• 9:38
  food. So snacks are doing the work of
• 9:40
  meals in a very strange way. They are the the, the size.
• 9:45
  I mean, the way that they are filling up people, young
• 9:48
  people's life is more, I don't know if it is higher in
• 9:53
  nutrition. I definitely think most of it is
• 9:55
  sold saying that it's higher in protein, it's got more fibre.
• 9:58
  It's sold that way. But you know, it's fast food.
• 10:01
  So it's really strange. But it's definitely more warm,
• 10:03
  more hearty. So it does give them that
• 10:06
  fullness without feeling, you know, without really charging
• 10:10
  themselves out with the right nutrients.
• 10:11
  I I feel. Yeah.
• 10:12
  So they're ready to eat and how convenient.
• 10:15
  What kind of minimal prep, what kind of minimal cleanup, what
• 10:18
  kind of minimal thinking the young people that you do when
• 10:21
  they want to eat, I think those things are in consideration.
• 10:24
  And you're right, a lot of retailers aren't really thinking
• 10:26
  about how this is hitting them just about, yeah.
• 10:28
  But when it does come, it's going to be quite bad.
• 10:31
  So I do think that most retailers better start paying
• 10:33
  attention to what convenience stacking or what eating mean to
• 10:36
  young people. OK, cool, fantastic.
• 10:38
  So in closing, I have a little pop quiz for you according to
• 10:42
  ChatGPT. So I this is you know, I don't
• 10:45
  know how much research has gone into this.
• 10:47
  I'm going to give you 3 characteristics, but apparently
• 10:50
  there is one city in the region that is setting the standard for
• 10:54
  stores and tell me which ones you think it is.
• 10:57
  They've got a camera first, store design policy, culture
• 11:00
  before conversion. So they focus on our
• 11:03
  installations, fashion, music, gaming, crossovers.
• 11:06
  I'm looking at, you know, mixed uses such as cafes within retail
• 11:11
  and exhibition hybrids. And they've got fast cycle
• 11:13
  retail experimentation. So you know, lots of pop ups.
• 11:17
  So the culture of like 2 to 8 weeks, you're getting a regular
• 11:20
  set of pop ups and they've been successfully enough, maybe this
• 11:25
  will give it away. They've been exporting it very
• 11:28
  well. We know the answer.
• 11:29
  Dan is definitely #3 who? Who?
• 11:31
  I think do. You.
• 11:33
  Know, I think it's in Korea. Yeah, it's Korea.
• 11:35
  It's Seoul, so. Apparently.
• 11:38
  Soul is now the flagships retail store Mecca for design and
• 11:43
  experience. I have, you know, again,
• 11:46
  according to chat TPT, but it's basically there from a customer
• 11:51
  experience perspective. There are now more stores with
• 11:55
  the key ingredients that we talk about popping up in Seoul.
• 11:59
  Yeah, yeah. And I don't know again whether
• 12:01
  that's accurate or not, but yeah, Seoul is the the flagship
• 12:06
  retail experience store. Yeah, we talked about General
• 12:08
  Monster the other week, actually, when we talked about
• 12:10
  what they're doing and they talk about their.
• 12:12
  Yeah. That comes to mind.
• 12:13
  Gentle monster. Yes.
• 12:14
  Yes. Yeah, customers, as the
• 12:16
  customers are almost as audience are like going to a gallery.
• 12:19
  The light, the scent, the design features.
• 12:22
  It's about, it's not about pressure to transact.
• 12:25
  It's actually about, you know, dwell time and.
• 12:28
  I really don't know why this is person who's never asked.
• 12:31
  What are they selling actually? Lucky I've never said that.
• 12:42
  All right, I'm just too old for convenience snacking.
• 12:44
  That's all I've got to say. Yeah, too many carbs.
• 12:47
  Listen with that. Thank you so much and I look
• 12:50
  forward to seeing you both next week.
• 12:52
  Awesome. Take care.
• 12:53
  Thank you.