Purchase Power: Andrew Lim
The nostalgic charms of department stores are still big business. In Malaysia, the SOGO brand occupies a particularly high rung of the industry ladder, and Deputy Chairman Andrew Lim says the greatest challenge is maintaining relevance.
The great appeal of department stores comes from their ‘a little bit of everything’ format. While ecommerce and online shopping have lessened their market share, the idea of a ‘one-stop shop’ in the physical world still holds value among shoppers.
One of the most impressive in the sector, and one that truly represents that department store mix, is Malaysia’s SOGO.
Originally a joint venture between SOGO Corporation of Japan and Pernas of Malaysia, SOGO is a blend of Japanese omotenashi hospitality and Malaysian open-heartedness, stocked with some of the biggest and best brands in beauty, fashion, homewares and accessories.
And the man that has pulled all these elements together is KL SOGO Deputy Chairman Andrew Lim. In 2002, Lim was a successful lawyer and longtime legal director of SOGO of Japan when he was made aware that the Japanese wanted to exit from their overseas investments.
"When it opened, KL SOGO was the largest department store in South-East Asia," Lim tells The CEO Magazine. "There was a vision of Malaysia becoming a shopping paradise in the early 1990s, and KL SOGO seemed to embody that."
By 2000, that vision had diminished somewhat, but not in Lim’s mind.
"When the Japanese wanted to exit that year, I put up my hand and organized a management buyout for them."
In collaboration with
Prestige Group of Companies
Two years later, Lim’s team stepped into ownership of KL SOGO and began to turn the shopping center’s fortunes around.
"What is the key factor in entrepreneurship? Basically, you have to be in the right place at the right time, and hopefully you’re the right person and you’ll be able to capitalize on the right opportunities," he explains.
Lim says that the challenge of seizing the plum chance was indeed daunting and it took faith and gumption. "To take on KL SOGO wasn’t as easy as it seems today," he says. "At that time, it wasn’t making profits and there was a heavy property burden. Those were the challenges."
Today, SOGO features three outlets across Malaysia, all of which boast more than 400 top brands. Throughout SOGO’s 30 year history, it has amassed a significant swathe of awards and accolades and has become beloved by Malaysian shoppers and international visitors.
Such has been SOGO’s success that, in November 2023, it opened a store under the Seibu Malaysia brand inside The Exchange TRX in Kuala Lumpur.
"Seibu TRX is niched as a five-star department store in Malaysia," Lim says. "And we’ve got a few other locations we’re considering for expansion. It’ll all depend upon the economic circumstances as we move forward."
Although Lim has taken a step back into the SOGO Board as Deputy Chairman, in his private capacity he has acquired 50 Giant grocery stores from DFI of Singapore. "In the food and grocery business, there’s a lot of room for Giant to expand," he says.
Family Values
Lim knows business expansion depends upon economic circumstances and having a strong team. "You need to have a very good team. Everybody knows this," he says. "But it’s not easy to put together a cohesive, united team. It’s always one of our biggest challenges in retail, how to get the right people to work together and further the objectives of our common good.
"In the old days, Chinese entrepreneurs ran their companies as family-based entities," he continues. "Western countries tend to de-emphasize such relationships because they want to professionalize management, but in an Asian context, we recognize family ties.
"The top person takes care of everyone as if they’re all in the family. It’s the best method of organization for our region and our Asian cultural heritage."
"There was a vision of Malaysia becoming a shopping paradise."
With this in mind, the SOGO team does a lot of group travel and team building. "We’ve been to London, New York, Paris, Istanbul, Moscow, Vienna, Switzerland and more," Lim says.
"If our managers achieve their budgets, they’re rewarded with a study trip overseas. We find this bonding is ice-breaking. People become human and friendly and don’t simply speak to each other across the table according to employer–employee lines."
This human touch is something SOGO strives to carry across to its in-store experiences. "If there’s no human interaction in the retail formula, it’s just buying and selling, which has no personal flavor at all," Lim says.
"If you’re coming to a store and someone recognizes you and you have a customer relationship experience, you’ll always want to come back. You’ll be recognized and treated like our personal guest. That’s the highest level of Japanese omotenashi hospitality."
Lasting Friendships
Similarly, deep, rewarding relationships are fostered between SOGO and its esteemed brand partners, such as Bonia Corporation of Malaysia and Prestige Group of Singapore. "Between ourselves and our closest brand partners, we don’t even sign agreements. We just shake hands. Our words are our bonds," Lim says.
"And when you have such a close knit and friendly relationship with brand partners, both sides will plan and move dynamically and act in the best interests of each other."
In the department store business, where everything is made available for sale, it’s common for relationships to be forged among multiple primary players in each sector.
"As time goes on, there’ll be ups and downs in the economic cycle," Lim says. "In the good times it’s very easy to be friendly, but when the economic downturns come, can you still maintain your friendship and business relationship? Those are the challenges. If you can do that, you’re lifelong friends."
"Our words are our bonds."
The future presents a series of imperative changes for the traditional department store. As SOGO undertakes its digital transformation journey, Lim says there are still many challenges to face up to, but the transformation itself is the reward.
"Some of us are progressing successfully down the road, others are struggling with the challenges. No one company can say, I think, that they’ve totally mastered every aspect of the digital transformation, because digital transformation is in itself transforming every moment of the day."
While SOGO and its contemporaries have to deal with AI and computer algorithms in terms of operational efficiencies and marketing strategies, Lim says the learning curve is steep, but it is crucial to continue learning and adapting.
"Everybody wants to do it, everybody is spending money on it. Our generation of retailers know we must make ourselves relevant to the current generation of digital citizens. The more we learn about them and what makes them tick, the more relevant we can be to them. I think that’s the key to all retail relationships today."
In collaboration with
Prestige Group of Companies
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