Challenger's new store tunes in to luxe market

Challenger Technologies CEO Loo Leong Thye and chief marketing officer Loo Pei Fen at Musica Boutique, which has a soundproof room where listeners can compare products.
Challenger Technologies CEO Loo Leong Thye and chief marketing officer Loo Pei Fen at Musica Boutique, which has a soundproof room where listeners can compare products.ST PHOTO: KELVIN CHNG

Musica Boutique in Ion features premium products such as sound systems, headphones

After beefing up its online presence in recent years, home-grown retailer Challenger Technologies, a household name for affordable IT products, has turned its focus back to brick-and-mortar stores.

In view of a growing appetite for higher-end products, Challenger has gone luxe with its newest outfit Musica Boutique in Ion Orchard, which was launched yesterday.

It is focusing on audio products with digital elements that can be hooked up to customers' phones, for example.

The 2,000 sq ft store is touted as a space with a soundproof room where listeners can compare premium brands in one location.

The move comes more than two years after Challenger shut its 53,000 sq ft flagship store in Funan DigitaLife Mall, when the mall closed for redevelopment. The revamped Funan mall is scheduled to reopen by June .

When it closed its megastore in 2016, the company decided to strengthen its online presence with its Hachi.tech marketplace instead of reopening the store.

SEEING, HEARING THE REAL DEAL

The one thing that online shopping cannot do is recreate sound and sight... An iPad's retina display cannot be experienced with another device and it's the same for premium speakers.

CHALLENGER'S CHIEF MARKETING OFFICER LOO PEI FEN

The change in consumer buying behaviour, rise in e-commerce, manpower challenges and high rental costs contributed to the decision.

Challenger chief executive Loo Leong Thye estimates that less than 5 per cent of Challenger's revenue now flows through Hachi.tech, although the initial aim was to cross the 50 per cent mark from online sales within five years. He added that the company is not emphasising online sales as much at the moment.

Challenger now has around 40 stores islandwide and has plans to open new outlets.

With Musica Boutique, the 37-year-old business, which posted a net profit of $4.5 million and revenue of $82.5 million for the third quarter last year, is setting its sights on a different, growing segment.

Since 2014, Challenger said it has seen a rise in customers requesting for mid-to high-end products, or those priced around $200 and above. Some of its products now start at $9.90.

These buyers tend to be 35 years old and above. They are looking for a good sound system for their homes, although younger people appear willing to pay a premium for products such as noise-cancelling headphones as well, Challenger's chief marketing officer Loo Pei Fen told The Straits Times.

Ms Loo noted that stores with dedicated listening rooms tend to focus on just sound systems and may even carry only one brand.

To differentiate itself, Challenger decided to bring its "multi-brand" approach to Musica Boutique, in its first foray into a luxury mall. Its products cost from $500 to over $50,000.

Mr Loo hopes Musica Boutique can contribute meaningfully to Challenger's bottom line in six months, but he did not provide a figure.

"Sound is very subjective," added Ms Loo, who is the CEO's daughter. "Customers have to listen to as many (products) as possible in an accessible environment."

Half of the brands and 80 per cent of the product models that are available in Musica Boutique are not carried in the Challenger stores. These include products from German audio equipment manufacturer Beyerdynamic and French brand Focal.

Explaining the focus on digital products, Ms Loo said: "People consume music on iTunes, YouTube and Spotify, and watch movies on Netflix."

These are areas in which good audio is appreciated, she added.

Despite the popularity of online shopping, Ms Loo is confident that there remains a demand for the company's latest brick-and-mortar presence. "The one thing that online shopping cannot do is recreate sound and sight," she said.

"An iPad's retina display cannot be experienced with another device and it's the same for premium speakers... that's one main reason customers do not approach the principal (seller online) directly."

A version of this article appeared in the print edition of The Straits Times on January 19, 2019, with the headline 'Challenger's new store tunes in to luxe market'. Print Edition | Subscribe