Mustafa Centre launches online site with over 3,000 products to draw new customers

SINGAPORE – One-stop shopping complex Mustafa Centre, known for its extensive range of items, has launched its online site in response to customers’ requests.

Acknowledging that it is entering the online space later than its competitors, Mustafa said its focus is on ensuring the new service will be financially sustainable while learning from the lessons of other online retailers.

It will start by putting up a fraction of its overall offerings online and will not offer same-day delivery yet as it calibrates how to allocate its manpower.

Customers had been requesting an online site for years as they want convenience, Mustafa boss Mustaq Ahmad told The Straits Times.

“Many of them still want to buy from Mustafa, but they also want the option to shop from home, so we decided it’s time to make it happen and give them what they’ve been asking for.”

Besides serving regulars, Mr Mustaq said this will help Mustafa reach a new audience – those who have never visited and have yet to experience what the storied brand has to offer. It currently draws about 15,000 physical customers on average daily, with more on the weekends.

The 24-hour shopping centre in Syed Alwi Road has become a destination for locals and tourists alike, who pick up anything from gold and watches, to snacks and souvenirs at all hours of the day.

It first opened its doors in 1971 in a shop in Campbell Lane, before gradually scaling up along Serangoon Road and in Serangoon Plaza, and opening at its current location in 1995.

Mustafa’s website, shopmustafa.sg, was launched on Oct 28. The orders currently come up to about $200 each on average, said Mr Ronnie Faizal Tan, who heads overseas projects at Mustafa. He declined to disclose the number of orders.

He noted that consumers are ordering bigger items like electronic appliances and bulk orders of groceries online, as these can now be delivered. One customer ordered seven multi-cookers as Christmas gifts, while another, a cafe owner, ordered 48 one-litre packets of organic milk.

The range of 3,000 products available online currently is a fraction of the 500,000 products that are sourced globally and sold at Mustafa’s six-storey physical retail space.

Besides daily essentials, groceries and household items, the online range includes shoppers’ perennial favourites like perfumes and chocolates, as well as speciality products such as those by Indian dairy giant Amul and other international brands.

There are plans to add about a thousand new products each month.

Mr Mustaq said he decided in August to take the business online, given that the store already had some of the operational infrastructure and some 1,200 staff on its payroll that it could draw on.

In the early stages of this new service, around 10 staff – mainly cashiers now turned pickers and packers – have been assigned to online operations. They will gather customers’ orders from the shop’s six storeys, said Mr Tan.

Delivery fees are currently $10 for orders below $150, and free for orders over $150.

While the business has future plans for automated packing and its own fleet of delivery riders, these will be rolled out “if demand grows and the business expands”, said Mr Tan.

This “store-as-warehouse” fulfilment model is common, especially when retailers test online channels, noted Ms Felicia Wee, course chair of Temasek Polytechnic’s diploma in marketing.

“It’s a pragmatic start, leveraging their existing inventory and retail footprint,” said Ms Wee.

“But sustainability will depend on scaling as orders ramp up, costs of pick-and-pack, accuracy, delivery speed and logistics become more critical.”

With Mustafa entering the competitive e-commerce space after so many years, Mr Mustaq’s main priority is remaining profitable.

ST understands that items bought online cost a little more than they do at the store.

“Many (major) online players lose money, but we don’t believe in that,” Mr Mustaq said. “From day one, we must be profitable. Our prices cover real costs, (because) we want the business to be sustainable.”

Mr Tan added: “(Going online now and not sooner) also means we have learnt from the mistakes of other players, in terms of logistics, and picking and packing... the industry has become very matured already.”

Experts like Ms Wee said that Mustafa’s move online “shows a recognition that physical retail alone is no longer enough, and even established names must evolve”.

Going up against players who made the pivot to online offerings during the Covid-19 pandemic several years ago, this move could also allow Mustafa to “come up with a more refined strategy... where they can avoid pitfalls, focus on what works, and hit the ground with a clearer value proposition”.

Mustafa’s move online, while late in the game, is not too late for some customers.

Stay-at-home mum Adelia Mazlan, 34, said that her considerations when shopping for groceries are competitive pricing, accessibility and convenience.

As a resident in Canberra, a neighbourhood in the north of Singapore, the 30-minute journey to Mustafa is not the most convenient for the mother of two young children.

“But if what I’m looking for today – like these big packets of cheese for my nephew’s birthday party – are available online, it will be much easier to just get it off the website and I don’t even have to make the trip down,” she told ST on Oct 31. “This is much more worth it than buying multiple smaller packs from the (supermarket) closer to home.”

Some customers like homemaker Michelle Rodrigues, 50, lamented how Mustafa was shut for an extended period during the Covid-19 pandemic. It did not ride the wave like other large supermarket and department store chains to pivot online either, prompting customers to look elsewhere, she said.

The Mustafa regular, who visits at least twice a month for more than two hours each time to shop for large orders of milk, rice and other groceries, welcomed the move despite saying she is not an online shopper.

“There’s a lot of bulky stuff that I buy, like cartons of milk and bags of rice, some of which I donate,” said Ms Rodrigues.

She added that she found the prices at Mustafa to be generally cheaper than elsewhere, but will assess if the online store’s prices are worth the convenience.