How One of Asia’s Biggest Retailers Is Reinventing the Way It Sells

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0:00Retail in Asia is moving at breakneck speed.

0:03Margins are tighter. Consumers are changing. Competition is everywhere.

0:08The pace of change in retail is probably the highest I've ever seen it.

0:13Behind the supermarket shelves, pharmacies and convenience stores millions rely on each day,

0:19DFI Retail Group is navigating relentless disruption.

0:23If you're not looking for new ways to serve your customers, you're going to get left behind.

0:34Behind many of Asia's everyday shopping experiences is a company

0:38consumers never see - DFI Retail Group.

0:43One of the region's largest retailers, it operates thousands of outlets across

0:47supermarkets, convenience stores, health and beauty, home furnishings and restaurants.

0:54Serving millions of customers, it's navigating a

0:57landscape reshaped by e-commerce, rising costs, and shifting consumer demand.

1:03At the helm is CEO Scott Price, a veteran in the industry.

1:08So, Scott, you've got over 30 years of experience in retail

1:11and the consumer package business here in Asia. What is it about this

1:16part of the world that excites you, that's made you stay for so long?

1:19Well, I think it starts first with the people. Early in my student life,

1:23I lived in Japan and fell in love with Asia and so the complexity of North Asia, Southeast Asia,

1:28the people, and then just the second part of such a huge difference in terms of economic growth

1:34and opportunity serving that kind of a complex portfolio, I just find intellectually interesting.

1:39You like complexity?

1:40I love complexity.

1:42DFI Retail Group operates across five core retail segments in Asia. In food,

1:48it runs supermarket brands like Wellcome, Market Place,

1:51and 3hreesixty in Hong Kong, alongside a growing portfolio of own-brand products.

1:57In convenience, it operates 7-Eleven stores

2:00across the region. Its health and beauty business includes Guardian and Mannings.

2:05In home furnishings, it operates IKEA stores in several Asian markets.

2:10And through Maxim’s, it brings global food and beverage brands like Starbucks,

2:15Shake Shack and The Cheesecake Factory to Asia.

2:18Connecting it all is Yuu, DFI’s customer rewards and data platform,

2:24linking millions of shoppers across its ecosystem.

2:28Together, it forms one of Asia’s largest retail networks. At a

2:32time when pressures on retail continue to grow.

2:36You know, retail has always been challenging. Today you've got to deal with e-commerce pressure,

2:42you've got to deal with weak consumer sentiment, geopolitics, cost of inflation.

2:46Is this the toughest operating environment you've seen or has retail always been tough?

2:52I've been in Asia 35 years. I think the pace

2:56of change in retail is probably the highest I've ever seen it.

3:00First is just simply the current economic environment is really tough,

3:03right? Interest rates, inflation.

3:06The second is just the geopolitical situation causes quite a bit of supply chain stresses.

3:12But we have some macro trends like the aging of populations and how they consume. And then the

3:17pace of technology change means that, you go back 30 years ago, there were Western

3:22big boxes in every single market. They're all gone because people just don't shop that way.

3:28There used to be giant fulfillment centers to deliver e-commerce in

3:32two days. Those are declining because people now want instant commerce. So,

3:37the ability to pivot and make a profit is much harder I think now than it was 30 years ago.

3:43Geopolitics never seems to go away. There's always this concern about

3:48what it would mean for the impact of oil and how it would feed through to

3:51the retail consumer at the end of the day. Is this constantly on your radar?

3:56It is. And for mass retailer - Look, we're daily essentials. We

4:00are not luxury. There's insurance in that because no matter what happens,

4:04people have to eat. They're going to shower, for the most part every single day. So,

4:07we're quite protected in the sense that we're going to have a solid demand.

4:11What our challenge is as a mass retailer is to make sure that we are lowest cost

4:15so that we have the opportunity to bring the lowest prices down to our customers.

4:19So, that means that as we think about our country of origin where we source,

4:22we source more than 50 countries around the world. As a result,

4:25we always have to have the ability to pivot very quickly to protect that pricing to customers.

4:31That ability to pivot is already playing out across the business.

4:35Over the past year, DFI has made two strategic moves.

4:39In Singapore, it sold the supermarket business

4:41for 125 million Singapore dollars, or about 93 million U.S. dollars.

4:48In mainland China, it closed all its Mannings stores,

4:51while maintaining an online presence through Chinese e-commerce platforms.

4:57We had about a hundred stores of our Mannings Health and Beauty in China. As we looked at

5:05what it takes to win, we had to be 2,000 stores to have the scale to be able to win in China.

5:10As I thought about our use of capital, I would rather put that capital in Southeast Asia,

5:14which has a longer term, I think, headway for the business moving forward in Southeast Asia.

5:21Are you done with your divestments?

5:23Good question. We constantly keep an eye on the portfolio, but the reality is Asia is not

5:30monolithic. It's massively diverse and also, it's quite fragmented and therefore you can't

5:35just have a single food format in one market and make the scale to pay for your technology,

5:41pay for your digital execution and pay for your cost of operations in back office.

5:45So, it makes your job a lot harder.

5:47It makes it more interesting, I wouldn't call it harder, but I am really pleased with the progress.

5:52You know, we have 20 million customers a week that come through our stores. And I

5:57like to always tell the team, there is never a perfect day in retail,

6:00somewhere a customer was disappointed. So, we constantly have to be focused on how we improve.

6:06Health and beauty is now DFI's strongest business. With more than 1,500 stores

6:12across Asia, from Guardian in Southeast Asia to Mannings in Southern China,

6:18CEO Scott Price's challenge is staying ahead of changing consumer habits.

6:24I joined him at one store in Hong Kong to see how the company is adapting.

6:29So over the last 2 years, we pivoted from commodities that you can buy everywhere

6:34like shampoos etc, to really functional value and it's this trend of wellness,

6:39people want to invest, even though they're careful with their dollars,

6:41they want to invest in wellness. They want to feel better.

6:44To tap into that trend, Mannings is testing a new concept in Hong Kong, the Chinese Wellness Hub.

6:52Here, customers can consult traditional Chinese medicine practitioners or step

6:57into a health pod, where basic health indicators can be measured in minutes.

7:02Blending traditional practices with modern retail,

7:05it's not just about prevention anymore, but insight.

7:10This wellness pivot, how much is it about getting that data? Is

7:13data collection now becoming a core asset of the company?

7:16The way you protect the bottom line for shareholders is you create your

7:19own digital revenue that has a higher margin. Data is the core to that. Data is to me the

7:25future of retail brick-and-mortar becoming an omnichannel player.

7:29So, you have to have not only the data, but you have to monetize the data with customers.

7:33Have you been able to monetize the data?

7:34We have. We have. We've started that process. We're being able to sell insights to vendors

7:38and importantly, customers are giving us permission to sell more products to them,

7:42so we capture a greater share of wallet.

7:45To scale that effort, DFI is leaning on AI and its Yuu loyalty platform,

7:50using shopper data to sharpen merchandising and drive spending.

7:56When you invest in AI, is it about cost cutting or creating new business?

8:00So, there are three areas that we look at. First off is personalization. The second area is just

8:05around cost management. The third area is really around running a better business. For a shopper

8:10like yourself, Christine, if you were to go to the shampoo aisle in a Guardian store in Singapore

8:14and you were to stand there, you're looking at it trying to decide, okay, which one do I buy?

8:19There's a massive amount of thinking and logic and

8:24decision-making

8:25decision-making, that goes into that, and it relies upon the experience of an

8:29individual. The more we're able to use AI to help that person make better decisions,

8:35one, it helps the customer, but two, it improves our overall margin and therefore profitability.

8:40Is your investment in AI paying off?

8:42It is.

8:43What does the future look like? Will AI become your margin story or your growth story?

8:48Both. I think it has to be both. The one thing that probably keeps me up at night

8:53a little bit on this AI, is disrupting the traditional approach to digital. So,

8:59Agentic AI and creating a personal assistant, the idea that an individual will have a

9:06relationship with an agentic personal assistant that says, "Look, I need eggs.

9:12I want an appointment with the dentist and can you make sure there's a car ready to pick up

9:17the kids at 9:00 a.m." And the reality is that basically disrupts the relationship

9:23that each one of those service providers has with customers today. With that goes loyalty,

9:29with that goes access to data. So, there is going to be this arms race for retailers to understand

9:35in that agentic world, how do you ensure you maintain that relationship with the customer.

9:40And will you be leading that race?

9:41We're going to try really hard.

9:43You're hopeful.

9:44I am hopeful.

9:45You’re still operating about one thousand 7-Eleven stores,

9:48We are.

9:48in the mainland. Is China still strategically an important market for DFI?

9:53It is. And, I think that as long as you've got the right proposition with the right price and value,

9:58you know if you go back five, seven years before Covid, and you look at what was the reasonable

10:04value that somebody was willing to pay for a breakfast, it's now discounted by 60%. So,

10:11we're winning, for example, in the breakfast occasion. We're now, near-

10:16That specific?

10:17We now have probably 50,000, Guangdong only, this is Shenzhen and Guangzhou for the most part,

10:23only at this point, with those 1000 stores. 50,000 morning daily orders of click and

10:29collect where people go online as they get on the train, the bus, etc, they pay renminbi 990

10:34and they come pick up their coffee and their bun at the 7-Eleven on their way to the office.

10:38That's a service that wouldn't have really been material or meaningful five, seven years ago.

10:43It sounds like you know your Chinese consumer very well.

10:45You have to, to be able to maintain those number of stores profitably.

10:49Sustainability is another critical challenge for DFI. It’s targeting a 50% cut in emissions by

10:552030, and net zero by 2050. The toughest work? Not in stores, but deep in the supply chain.

11:04The hardest area to do this, and we're not alone in this, is agricultural commodities. For example,

11:12this is Asia. Rice is our biggest carbon footprint, and most people don't understand

11:17that the high level of water that is used in rice creates an enormous carbon footprint. So,

11:22we've actually worked in Thailand to create a very low carbon by creating through, in essence,

11:29basic technology, a low water use of rice, and we now sell that in our stores. So,

11:35we're focused for that scope three, that net zero by 2050, areas around coffee, rice,

11:42beef and pork. Those are areas where we can bring technology in ways to be able to bend the curve,

11:48but we do that in a way that's low cost because our customers won't pay a penny more. Therefore,

11:52we're able to do that and bring back to them, great, sustainable products at the same price.

11:57What do you see as your biggest execution risk in your net zero journey?

12:01The fragmented agricultural markets of Asia. If you're dealing with a very

12:06large-scale agricultural entity in the United States or Australia or Germany,

12:12they have the wherewithal and the money to invest in the technology.

12:17This is Asia, Southeast Asia markets where you still have high levels of emerging middle class,

12:24very small farms, they don't have the technology. So, I think the challenge

12:28is that governments need to step up and help in this journey. We can't afford

12:33as a single retailer to do that on our own. How has Asia shaped the way you lead as a CEO?

12:39Early in my career, one of the mistakes that I made because of the complexity Asia,

12:45was I mistook English fluency for business savvy.

12:49You mistook English fluency?

12:51Yes, because very fluent people can appear smart. And what I understood was some of the

12:57more reticent in English were actually the smartest business-people in the room. And so

13:02for me that is one of the important things in in Asia is that each market is competitively

13:08different and English language should not be confused with the ability to make progress.

13:14The second is there is no Asia. The economies even in North Asia between Japan in China in

13:20Hong Kong and Korea are wildly different, let alone comparing them to Indonesia or Vietnam. So,

13:26how do you create scale across very different cultures and very different economies is what

13:32I think it makes Asia so unique and for me a lot of fun to do business in.

13:36So, at this stage of your career, Scott,

13:38what matters most to you? Is it growth, resilience, or impact?

13:44Well, I would say I'm at the sunset of my career because I've tried to retire, failed miraculously.

13:51When your wife tells you to go get a job, that tells you you probably have retired too early.

13:55So, this being my last job, what's important for me is leaving behind a team-member legacy

14:02of individuals who have felt like they have not only served a purpose but also

14:09bettered themselves. And you know it's no longer, it doesn't have to be about me,

14:13I have no more career aspirations, and that is freeing in the sense that there

14:17isn't a next job that I'm trying to work towards with my own personal ambition.

14:21I'm done with that, and there is a lot of then almost sense of personal purpose that says I

14:31want to create the best possible team members that I can during this last period of my career.

14:37So, it's all about impact.

14:38Yes. I guess that's a good way to put it.

14:41Scott, thank you so much for talking to me.

14:43Thank you.

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How One of Asia’s Biggest Retailers Is Reinventing the Way It Sells

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