AEON to focus on digitalising operations

This follows the new measures announced in the recently tabled Budget 2019


Supermarket retailer AEON Co (M) Bhd will be focusing on digitalising its operations in order to lower management costs, following the new measures announced in the recently tabled Budget 2019, which include higher minimum wages.

AEON Asia Sdn Bhd MD Shinobu Washizawa — who is also AEON Co MD — said the group will work on boos- ting productivity levels, as well as going cashless in order to reduce operational costs to mitigate the impact of higher minimum wages.

“We want to boost the productivity of both our permanent workers and part-timers. We will also focus on going cashless, as this will reduce the need for cash-related manpower such as cashier positions,” he told reporters at a press briefing in Kuala Lumpur recently.

Finance Minister Lim Guan Eng last Friday said the minimum wage would be increased to RM1,100 from RM1,050 previously, starting Jan 1, 2019.

“The higher minimum wage will likely affect operations, so we have to consider how to lower management costs. We can do this by digitalising operations, as this results in greater cost savings,” AEON Credit Service (M) Bhd MD Kenji Fujita (picture) added.

AEON Credit, a non-bank financial services provider, has developed an e-wallet it dubs the “AEON Wallet”, as well as the AEON Member Plus Visa Card, both of which will be officially launched today.

The new initiatives are aimed at consolidating the three membership cards of AEON Co, AEON BiG (M) Sdn Bhd and AEON Credit under one platform, thus allowing members to shop within the AEON group and earn reward points with just one card.

The AEON Member Plus, which functions as a prepaid or e-money card, is touted as an upgraded AEON member and AEON BiG member card, with improved member benefits.

It is also tied to the AEON Wallet, hence members can opt to use the physical card or the wallet on their smartphones to make payments, top-up and collect or convert reward points.

“We believe the e-wallet and card will promote the cashless movement initiated by the central bank, and provide greater convenience by consolidating all cards into one common member card.

“This initiative will also make payments faster at checkout, while allowing customers to enjoy more benefits such as greater collection of points that can be converted to cash. Having one card for all members also makes it easier for us to have group-wide promotions,” Fujita explained.

The group aims to convert its existing members to the AEON Member Plus Visa membership over the next two to three years.

It presently has around six million members across AEON BiG, AEON Co, and its own members.

The annual membership fee stands at RM12, although the first year will be free of charge as part of the group’s promotions. 

Over RM10 million was spent on developing the mobile wallet and the corresponding new infrastructure, with the software and hardware for the wallet usage now available at some 3,500 AEON cashier locations.

Meanwhile, AEON BiG MD Masayoshi Masuda said the supermarket retailer is confident of posting positive results for 2018, despite the effects of the re-introduced Sales and Services Tax (SST) in September.

“It has been tough after SST, yet all our stores are showing improvements across the board. So, we should see a huge improvement (in sales) for 2018 compared to 2017,” Masuda said.

Washizawa added that the company has not been greatly impacted by SST due to its efforts to launch many promotions.

The retailer presently has 22 stores in Malaysia, including one new branch opened this year.

“This year, we carried out refurbishment and upgrading works at five outlets, while last year we did seven outlets. In 2019, we plan to refurbish four more,” Masuda added.

AEON BiG is a subsidiary of Japan-based AEON Co Ltd, which also owns AEON Co and AEON Financial Service Co Ltd. AEON Financial Service, in turn, is the parent of AEON Credit.