AEON moots ‘mall herd immunity’

AEON would be launching its new online platform called myAEON2go on a website and mobile apps next month

by NUR HANANI AZMAN / Pic by TMR FILE PIX

AEON Co (M) Bhd is doubling down on its digital retail offerings to drive business amid challenges for brick-and-mortar stores induced by the Covid-19 pandemic.

Group MD Shafie Shamsuddin said the supermarket chain operator is optimistic that revenue for financial year ending Dec 31, 2021 (FY21), would match its FY20 performance despite the underlying current economic situation.

He said vaccinations, particularly for retail frontline workers, and the group’s digitalisation efforts would support the positive outlook this year.

He emphasised the importance of expediting vaccination among essential and non-essential workers in a mall to drive the economy faster.

“Instead of giving vaccines sporadically, we suggest the government cater to the central point where people are always coming to buy essentials.

We understand the government is focusing on the industry at this moment, but there’s also a need for retail frontline workers to get vaccinated soon, be it essential and non-essential,” Shafie told The Malaysian Reserve.

He said the group has proposed to the government to build “herd immunity at the mall”, and is hoping to get an opportunity very soon to test the concept.

From the landlord and retailers’ point of view, Shafie said a safe environment for businesses to function is critical for employees, tenants, suppliers, promoters, cleaning services, security at the malls and for customers.

“We can’t control the customer, but at least, we are reducing the number of unvaccinated people, so the risk is reduced. This also can improve customers’ confidence and encourage them to get vaccinated,” he said.

AEON has allocated a capital expenditure (capex) of RM251 million this year, with 40% to be used on technology and information technology systems.

The remainder of the capital has been earmarked for renovations, maintenance and remodelling of its mall and stores.

The group targets 15% of revenue to be generated from its e-commerce business in the next five years and 2% for 2021.

While conventional retail remains important, Shafie said AEON is diving into digital transformation to cater to changing consumer needs, dramatically accelerated by the Covid-19 pandemic.

He said AEON would be launching its new online platform called myAEON2go on a website and mobile apps in August this year.

He said the new platform uses the back-end of US-based online bulk retailer Boxed Wholesale that is more user-friendly.

AEON announced a partnership with Boxed Wholesale in February, aiming to utilise the latter’s technology and know-how as it makes significant headway in the digital space and streamlines its existing platforms.

Shafie said AEON plans to launch a marketplace for its tenants to sell their product on the same platform in October and open it to the business-to-business segment by year-end.

“It is very different from other e-commerce platforms because we have a physical mall and stores. So, if you live in Kota Baru, Kelantan, you don’t have to wait longer because we have outlets there.

“That’s bringing speed to delivery and quality,” he said.

AEON will also launch AEON Makan at the end of this year for the tenants in the malls with lower transaction costs as customers can order online and get items delivered.

“We are building our delivery rider base that will cater to both myAEON2go and AEON Makan. We have 300 riders now and hope to get 1,000 riders,” he added.

AEON is looking at 13 new specialist stores, as well as renovating and making rectifications to 11 malls this year.

“We decided not to expand last year. As a result, we only opened one AEON MaxValu outlet instead of six in 2020. This year, we plan to open three to 10 specialist stores, Komai-so Shop, in our existing AEON Mall with capex allocated between RM5 million and RM8 million.

Shafie said the first outlet was supposed to open this month, but postponed due to the Full Movement Control Order.

He said the group might open the maiden store in the next two or three months.

Komai-so is a Japanese lifestyle shop that offers three price options with a digital branch that also provides food and perfume.

Komai-so would compete with other current Japanese-themed stores available in Malaysia, such as Daiso.