Author: Mei Ling Tan

  • AEON and Thai Airways launches “AEON Royal Orchid Plus World Mastercard” Offering Exclusive World Class Travel Experiences

    AEON and Thai Airways launches “AEON Royal Orchid Plus World Mastercard” Offering Exclusive World Class Travel Experiences

    Recently, Mr.Kiyoyasu Asanuma (Middle), Managing Director of AEON Thana Sinsap (Thailand) Public Company Limited and Mrs.Priyasiri Juathes (2nd from left), Vice President of Product and Guest Experience Department of Thai Airways International Public Company Limited together with Mr.Donald Ong (2nd from right), Country Manager Thailand and Myanmar, Mastercard launched, “AEON Royal Orchid Plus World Mastercard” with the concept of ‘Enjoy the Traveling Freedom’ offering the ultimate travel experiences and superior benefits for both business people and jetsetters. For every 15 baht spend in foreign currency, card member will earn 1 AEON Royal Orchid Plus Reward Point. Card member will also earn cash back for up to 36,000 baht per year from spending in both Thailand and oversea. Moreover, they will get 50% cash back when purchasing a second Thai Airways Business Class Air ticket by using AEON Royal Orchid World Mastercard.

  • Vietnam cosmetics manufacturers face thorny path to develop organic products

    Vietnam cosmetics manufacturers face thorny path to develop organic products

    A report on the cosmetics market released by Kantar Worldpanel shows that 80 percent of urbanites buy at least one beauty care product a year, with one-fourth of consumer spending on personal care items reserved for beauty care products.

    Oriflame, the brand from Sweden, reported a growth rate of 18 percent. L’Occitane doesn’t make public its revenue, but the presence of its products at nearly all shopping malls show its prosperity.

    Multinational conglomerates with factories in Vietnam such as Unilever, Kao and P&G have been thriving with products made of natural materials from Vietnam, such as green tea, cucumber, algae, aloe, honey, ginseng, lemon and pomelo peel.

    Analysts say that though foreign brands are dominating the market segment, Vietnamese cosmetics manufacturers still have opportunities to earn money in the field because they understand the functions of Vietnamese traditional herbs and can take initiative in the material supply.

    Vo Thi Lieu, director of the Vinh Tan Technology Company, which makes skin care products from trom tree (Sterculia foetida) resin, said in the first months after the products were marketed, the company sold VND300 million worth of products and now the sales growth rate is at least 20 percent.

    The company has spent big money to import a production line from Japan meeting GMP standards, with capacity of 43 million products per annum, because it believes the natural cosmetics market in Vietnam has great potential.

    Doan Van Khanh, director of Long Thuan Private Enterprise, said the company earns VND1 billion at least from the sales of pomelo blossom essential oil through online channels alone.

    Meanwhile, Christine Nguyet, director of Skina Cosmetics, said the sales of the company were growing 10 percent monthly.

    Though business has been thriving, Vietnamese manufacturers complain that they find it difficult to scale up their production scale.

    Nguyet said Skina only has enough materials for small production scale. To expand production, the company would have difficulties because it still cannot develop organic material areas, and imports of raw materials will increase the production cost.

    Pham Minh Thien, director of Co May Company, said he harbored a plan of making high-end products such as rice bran essential oil and lotus essential oil. However, the plan is still on paper.

    “In order to make organic products, we will have to find a stable supply of organic rice bran. But it is very difficult to find supply sources,” he said.

  • Overseas Alipay transactions grew fivefold over Labor Day

    Overseas Alipay transactions grew fivefold over Labor Day

    Transaction volumes in Hong Kong grew sevenfold over the previous year, Alipay said.

    Asian markets dominated the list of the top destinations by transaction volumes during the year, accounting for nine of the top ten spots. Thailand, South Korea, Japan, and Macau rounded out the top five. This was followed by Taiwan, Australia, Singapore, Malaysia and the US.

    But the fastest growth was recorded in Canada (16 times), the Netherlands (12 times) and the Czech Republic (11 times).

    Meanwhile average total spend per user increased by 59% over last year to 1,508 yuan ($237), with European destinations accounting for half of the top 10 countries in terms of total per user spend. The highest average was in Spain (7,965 yuan), followed by France and Italy.

    Alipay’s data also show that just over two thirds of users of Alipay overseas were female, while 85% were born in the 1980s or the 1990s.

    Finally, among the 29 countries that support tax refunds via Alipay, South Korea recorded the highest amount in RMB terms, followed by France and Germany.

  • The Shilla Duty Free set to come off MAG in Changi as business improves

    The Shilla Duty Free set to come off MAG in Changi as business improves

    The Shilla Duty Free’s burgeoning reputation as an Asian travel retail powerhouse in beauty is being underscored at Changi Airport, where the company expects this year to start contributing a percentage of revenues rather than the Minimum Annual Guarantee (MAG) it has been paying until now – a sure-fire indicator of improved business.

    “That means we have made a great improvement,” said Hotel Shilla President of Travel Retail Division Ingyu Han. Han said that Shilla has driven a much-improved passenger spend rate as well as implementing various operational improvements at its key Singaporean operation.

    Shilla was awarded the Changi perfumes & cosmetics concession ahead of red-hot competition in late 2013. Although it got off to a difficult and heavy loss-making start, business has improved substantially since. The victory – and learnings – laid the platform for further international expansion in ensuing years.

    That development included the beauty business at Macau International Airport in partnership with Sky Connection and, notably, the key beauty & accessories contract at Hong Kong International, which it won ahead of intense competition last year. Shilla will celebrate the Grand Opening of its multi-store network at Hong Kong International, where it trades as Beauty & You, on 28 June.

    Shilla is also the dominant beauty retailer at Incheon International Airport T1 and T2.

    As reported, Shilla posted outstanding results for the first quarter. Hotel Shilla’s travel retail division posted a +30 percent surge in revenues for the first quarter of 2018, to 1,013.7 billion won (US$950 million), while operating profit in the division surged by +182 percent year-on-year, hitting 47.6 billion won (US$44.5 million).

    The company’s airport duty free business delivered a +41 percent revenue rise, while in downtown duty free the increase was +22 percent.

    Regina Hahm Equity Analyst (Cosmetics, Household goods, DFS) at Mirae Asset Daewoo Research Center said: “The overseas duty free business delivered a strong performance in terms of both growth and profitability. Revenue surged +76 percent year on year, bolstered by more meaningful sales from the Hong Kong International Airport operation. Operating loss declined to 42 percent of the 1Q17 level with the help of efficiency gains in the Singapore Changi Airport operation.”

    Commenting on the wider results, Ms Hahm said, “The stellar results were attributable to strong growth and margin improvements across all businesses. The domestic duty free business (key to profits) posted record revenue of 771.5billion won (+19.6 percent year-on-year) and OP margin of 6.5 percent, the highest quarterly level since 3Q15. We believe the main drivers were: 1) the stabilization of travel agent commissions (which became unduly high due to intensified competition); and 2) cost efficiency gains resulting from the company’s enhanced merchandising capabilities.”

  • Vietnam to make $835 million on radical divestment bout

    Vietnam to make $835 million on radical divestment bout

    Drastic state divestment initiative

    The total revenue gained from state divestment activities in 2017 is expected to add at least VND19 trillion ($835.62 million) to the national budget. The above figure was calculated based on the par value of the portion of state capital that is expected to be withdrawn from 135 enterprises this year. However, the value calculated based on the price of shares on the stock exchange can go far beyond VND29 trillion ($1.28 billion).

    Among these, 26 enterprises are operating under the management of particular ministries and government bodies, 109 are local businesses, and four other businesses will be transferred to State Capital Investment Corporation (SCIC) for divestment.

    This is part of Decision No.1232/2017/QD-TTg approving the list of state-owned enterprises marked for divestment during 2017-2020, signed by Deputy Prime Minister Vuong Dinh Hue on behalf of the prime minister, dated August 17, 2017.

    However, this is not the final sum that the state can raise from divestment activities in 2017.

    Le Manh Hung, deputy director of the Enterprise Development Agency under the Ministry of Planning and Investment, said that the Decision No.1232/2017/QD-TTg adopted a drastic mechanism to not only accelerate the progress, but also improve the effectiveness of the work.

    “The prime minister has allowed ministries, related government bodies, and localities to speed up the execution of divestment plans and increase the rate of divestment compared with the approved annual minimum rate based on market developments and the actual situation at enterprises. The active role of ministries, government bodies, and localities to take action is clearly highlighted,” Hung commented.

    Moreover, the number of enterprises marked for divestment in the portfolio only illustrates the minimum target. Ministries and other government bodies may increase the number of enterprises to be divested earlier than planned for each year or propose additions to the list.

    “Apparently, the ultimate principles are still effectiveness, openness, and transparency. In particular, the total revenue from divestments at the end of the period must reach the goal approved by the prime minister,” Hung said.

    A challenging plan

    Looking at the divestment plan for 2017, great pressure is being placed on the shoulders of ministries, government agencies, and localities, especially the Ministry of Transport, the Ministry of Construction, the Hanoi People’s Committee, and the Bac Giang People’s Committee. These government bodies are in charge of divesting state capital in quite a number of businesses (around 7-17 enterprises) in about four months.

    Moreover, during the implementation of the plan for SOE restructuring from 2011 to 2015, the speed of state capital withdrawal had always been slow and could only meet requirements in enterprises with positive business performance.

    Meanwhile, several cases of divestment failed to follow market principles and were undertaken in many other forms, such as debt clearing or debt conversion into capital contribution.

    However, from a market standpoint, these numbers are not too challenging. Quite a lot of names are drawing great market interest. Investors are also keeping their money until a more appropriate rate of divestment is announced.

    Moreover, the principles of divestment have also been well-defined in accordance with market mechanisms. It is possible to divest these businesses in instalments several times, but the rate of divestment must lie in the range of 20-36 per cent of the total capital holding.

    This is the reason why the approved number of enterprises marked for divestment each year during 2017-2020 has surpassed the announced number of 375 enterprises.

    “Allowing ministries, sectors, and localities to actively follow market signals will attract more major investors and increase the feasibility and effectiveness of each sale. Of course, completing the plan remains a remarkable challenge which requires drastic efforts from ministries, related government bodies, and localities,” Hung openly admitted.

    Also, it must be added that the implementation of the divestment plan is part of the government’s goal to open up capital flows and boost growth. Hence, discipline is significantly prioritised.

    Thus, besides the divestment plan of 2017, other divestment plans in the coming years, especially in 2018, should be gradually activated from now to sustain the pace of progress.

    Valuable market opportunity

    It should be noted that the state’s capital holdings in the remaining 375 state-owned enterprises is worth approximately VND108.502 trillion.

    The list does not include other enterprises under the Ministry of Defence, the Ministry of Public Security, the Ho Chi Minh People’s Committee, SCIC, and other businesses which would perform divestments on their own as requested by the prime minister’s guidelines (Habeco, Sabeco, Central Transport Hospital…). It means the over-VND100-trillion ($4.4 billion) state-owned capital on the list to be sold in the upcoming period is just the minimum.

    It is worth saying that the first opportunity to transform and restructure the portfolio is not only significant, but also very profitable for both domestic and foreign investors who are interested in this market.

    This is the first time the government has published its investment portfolio and the proportion of state capital in SOEs to be sold. In addition, the 2016-2020 equitisation plan approved in Decision No.58/2016/QD-TTg has also been published with the book value of the recovered state equity reaching over VND296 trillion ($13.02 billion). Investors can clearly perceive the need to restructure the state’s portfolio of assets to prepare resources for replacement strategies.

    Investors, however, were not provided with sufficient data to grasp the opportunities offered during the previous bout of state-owned enterprise restructuring, as divestment activities were carried out individually without guidance from an overall portfolio.

    Also, this divestment plan is quite different from the state divestment strategies usually mentioned in 2011-2015. In this period, state-owned corporations and economic groups were forced to divest their investments into five sensitive sectors (real estate, securities, finance-banking, insurance, and investment funds), meaning the sales revenues might be kept in state-owned enterprises. These divestment activities only changed the investment portfolio of SOEs.

    However, this time, together with the promotion of SCIC’s divestment of state capital in equitised firms, the divestment of the remaining state-owned enterprises will actually change the state’s portfolio of assets. In addition, this time, the state seeks to sell its stakes to raise revenue for the national budget, which will be allocated to public investment projects in turn, whereas the revenues from previous divestments could have been held back in the enterprises and might eventually increase the proportion of state capital in the business.

    Inevitably, the distribution of asset accumulation by economic sectors will follow a direction in which the private sector will continue to expand.

    “This is one of the goals pursued by restructuring of state-owned enterprises. This is also the message that the market is waiting for,” said Nguyen Dinh Cung, director of the Central Institute for Economic Management.

  • Hyundai Department Store offers high-tech make-up

    Hyundai Department Store offers high-tech make-up

    Hyundai Department Store’s online mall has launched an augmented reality (AR) service so its customers can virtually try on make-up products.

    It covers more than 20 products from eight beauty brands, including Benefit, Estee Lauder and Shu Uemura. Using an AR image of their face, customers can try on different colour variations. Hyundai says it plans to expand the number of brands to 20.

    “With the virtual make-up service, customers can simply choose items through our app,” says the retailer.

    On its website or app, cosmetics products offering the virtual service appear with a camera sticker on the product page. One click leads the user to the Makeup Plus app, which uses a live video feed to enable customers to see how the product would look on their face from different angles.

    The Makeup Plus virtual make-up app has been downloaded more than 200 million times since its launch in 2015. In Korea alone, the app is used by 500,000 people each month. It was developed by Chinese tech company Meitu.

    “Customers of online shopping malls want fun services and products rather than making a purchase 100 to 200 won cheaper,” says Hyundai Department Store’s e-commerce executive Lee Hee-jun. “We plan to use thehyundai.com to create new shopping experiences that combine offline retail and IT.”

  • QSR and PETRONAS tie-up to open 50 new KFC drive-thru outlets

    QSR and PETRONAS tie-up to open 50 new KFC drive-thru outlets

    QSR Brands Holdings’ wholly owned subsidiary QSR Stores has signed a memorandum of understanding with Petronas Dagangan to gradually open 50 KFC Drive-Thru outlets at Petronas gas stations within the next three years.

    QSR Brands MD Mohamed Azahari Mohamed Kamil says the strategic collaboration provides an excellent opportunity for the quick-service restaurant group to expand its business and restaurant services in Malaysia.

    “While continuing to strengthen our core product and service offerings, we place a great emphasis on our expansion strategies to meet the elevated demands of our customers,” says Azahari.

    QSR has more than 1250 KFC and Pizza Hut restaurants in Malaysia, Singapore, Brunei and Cambodia.

  • EQUIP GLOBAL’S Accounts Payable & P2P Asia Summit Returns to Singapore in July!

    EQUIP GLOBAL’S Accounts Payable & P2P Asia Summit Returns to Singapore in July!

    The common issues found in most companies’ Accounts Payable & Purchasing departments are manual data entry, manual routing of invoices, a lack of visibility in the accounts payable & purchasing processes, and the challenges faced with the management of high volume of hardcopy invoices. Whilst P2P transformation and automation will alleviate a lot of challenges faced, there is still resistance in the adoption process and proven practices on how this can be best achieved.

    The 5th Accounts Payable and P2P Asia Summit returns to Singapore on 31st July to 3rd August 2018 with more strategic case studies specially designed for Heads, Senior Managers, Executives, Analyst in Accounts Payable, Purchasing, Procurement or Procure-to-Pay (P2P). The summit is a 4-day program that focuses on proven strategies in the design and implementation of P2P transformation and the alignment of various departments’ processes and policies to achieve better operational efficiency.

    Expect to hear case studies on how leading companies streamline processes, reduce costs of AP operations, best practices to digitize and automate AP processes so that they are fully integrated within the purchasing processes to help their organizations decrease the time needed for approval process and payment of invoices, eliminate overspend, avoid tax, fraud and regulatory accounts payable risks, transformation best practices and the key considerations and criteria companies should undertake to integrate automation.

    For more information, please visit our website or email us at enquiry@equip-global.com now!

  • AirAsia ‘working’ to fly to new Palawan paradise

    AirAsia ‘working’ to fly to new Palawan paradise

    AirAsia is waiting for the government to provide the adequate infrastructure so that it can fly to San Vicente, the latest Palawan municipality to catch tourists’ attention. San Vicente’s nearly 15-kilometer white sand beachfront is one of the emerging beach destinations in the Philippines after Boracay Island was closed to tourists in late April.

    As of last month, most tourists would have to take either a chartered flight or a 4- to 6-hour trip by land from Puerto Princesa City to reach San Vicente’s famous Long Beach.

    “We’d like to fly to San Vicente, Palawan but the runway is still short,” AirAsia Philippines President Dexter Comendador told reporters here.

    Comendador said they have been working with the provincial government of Palawan to develop the airport so that more tourists can enjoy the attractions of San Vicente.

    “We’ve been working with them. Our plans are still based on how fast infrastructure can cope, how fast they can lengthen the runway,” he said.

    The search for the next Boracay: San Vicente, Palawan.

    AirAsia, however, is careful not to open too many flights to an island destination that may lead to the exploitation of an area, the airline’s chief Tony Fernandes said.

    “The Borcacay closure was a great eye-opener for us. When we go to a new business destination, we make sure that the infrastructure can take a wave of tourists,” he said.

    The government earlier banned tourists from entering Boracay for 6 months as the island undergoes a half-year clean-up and rehabilitation.

    The island is expected to open by late October, or as soon as the government completes its road widening projects, sewage clean-up, and the recovery of wetlands and forestlands in the island.

  • Netflix partners with Indonesian carriers

    Netflix partners with Indonesian carriers

    Netflix has arranged to participate in the video data plans offered by Indonesian operators XL Axiata, Hutchison 3 Indonesia and Bolt.

    The new plans offer customers either an unlimited or designated amount of streaming of content over Netflix and other participating OTT video providers without incurring additional charges or counting against the plan’s data quota.

    Eligible plans include Bolt’s Ultra Streaming packages, XL Axiata’s Xtra Kuota 30GB plan and Hutchison 3’s Get More plan.

    “We’re thrilled to make Netflix more accessible to consumers in Indonesia through working with Bolt, XL Axiata, and Hutchison 3,” Netflix VP of business development Tony Zameckowski said.

    “Ultimately, Netflix is all about giving consumers the control to watch their favorite shows and movies at home and on-the-go, and expanding these partnerships in Indonesia will delight consumers with the diversity of global content that Netflix has to offer.”

    “With Netflix’s extensive content library of TV series and films, we are offering more mobile video streaming options for consumers through our 4G LTE and 3G networks, as part of our commitment to continuously improve and provide a better experience for our customers,” added XL Axiata CMO David Arcelus Oses.

  • The history of Sasa

    The history of Sasa

    Simon Kwok Siu-ming, chairman and CEO of Hong Kong’s biggest retailer of cosmetics and skincare products, does not hide his tricks to look younger than his 64 years.

    He said: “I use masks [on my face] when I’m watching football. I care about my hair, as hair loss worries men the most. I use quality shampoo, conditioner, and face and body wash, which make me look younger,” says Kwok, who is also a daily user of eyebrow pencils, concealer, sun block and moisturising foundation.

    Kwok is not alone. “Thirty per cent of our eyebrow pencils are bought by men,” he says. This growing obsession with appearances and rising affluence mean Sasa’s customer base now includes, well, almost everyone.

    “In the past, mothers brought their 17- and 18-year-old daughters to our shops, but only allowed them to buy lipsticks and rouge. Eye shadow and heavy make-up were forbidden. Forty- to 50-year-olds did not even use make-up. But now, 11- to 12-year-olds come to buy nail polish themselves, and everyone from teenagers to 70-year-olds is wearing beautiful make-up.”

    And that is good news for Sa Sa International Holdings, a HK$14.7 billion (US$1.87 billion) cosmetics empire with 270 stores selling more than 17,000 products in Hong Kong, Macau, China, Singapore and Malaysia.

    Sasa outlets are a cornucopia of colourful make-up, fragrant perfumes and flashy cosmetics bottles, and the flagship is Sasa Supreme, a snazzy, 20,000 sq ft lifestyle concept store that opened in the prime shopping district of Causeway Bay in 2013.

    Sasa Supreme’s glitz and glamour is a far cry from the first Sasa store – a 40 sq ft outlet in the basement of a Causeway Bay shopping mall. Kwok’s wife, Eleanor Kwok Law Kwai-chun, was working in the store as a saleswoman for Japan’s Kanebo Cosmetics in 1978 when the couple were offered the business for HK$20,000.

    Kwok listened to the advice of his wife, and his devotion to her paid off handsomely.

    “Our entire story started from her decision to take over this small shop,” he says. “We lived in the same building above the shop. She got financial help from her mother and, without any experience [in running a business], we bought it. Within six years, we had rented all the shops in the basement to sell cosmetics.”

    So how did the name Sasa come about? It was what the original business was called.

    “We did not do much business at the beginning and we wanted to change the name. But this would have cost HK$1,000, which was a month’s rent at the time, and we couldn’t afford it. But the name turned out to be perfect, as it’s pronounced the same all around the world.

    “Whether you speak Russian, French, Italian or any dialect in China, it is always pronounced ‘sasa’.”

    When Japanese cosmetics brands first went on sale in Hong Kong in the 1970s, they were not seen as chic enough to be sold in the city’s big department stores, and this provided the Kwoks with an opportunity.

    “Three Japanese brands – Kose, Shiseido and Kanebo – took up half the shelves when my wife worked in the store, so she knew Kanebo products very well. When we took over Sasa, the first brand which supported us was Kanebo, so we devoted half our shelves to their products.”

    At first, Kwok helped his wife run the shop until 10pm before going to his regular overnight job as a parking meter repairman for the government. He would care for their baby girl in their store and listen in as his wife sold beauty products to women.

    “I did not have the guts to sell cosmetics [in the beginning] … But my wife asked me to help her out when the shop was busy. At first I blushed [when selling perfumes and cosmetics], but discovered that women valued my opinions,” he says.

    “If I thought a perfume smelled nice, I realised that their boyfriends would like it as well, so I gained confidence. The opinions the customers gave me during the first few years helped nurture my instincts [for this business] – and money can’t buy this.”

    Despite going to bed every night at 3am and only taking a break during the Lunar New Year, Kwok says he was happy working alongside his wife. “I was with her the whole day. We were both workaholics and spent little time with our kids.”

    Sasa is now a household name and shorthand throughout Asia for affordable, discounted cosmetics. It’s a magnet for Hong Kong and Chinese women shoppers in particular, and an essential stop on the itinerary of countless tourists. Kwok attributes the public’s affection for their brand to the company’s sharp eye for a trend.

    “We were the first to introduce Korean brands. My wife and I started watching Korean soap operas a decade ago. We thought the Korean stars were very beautiful, but Korean brands were not popular then.”

    Korean companies now produce some of the world’s most popular cosmetics and, from management and buyers to frontline salespeople, all of Sasa’s 5,000 staff have to keep abreast of the latest Korean make-up trends, identifying the top sellers online and in South Korea’s department stores.

    With the tsunami of e-commerce buffeting bricks-and-mortar retailing, Sasa launched Sasa.com in 2000 and has entered into partnerships with online marketplaces such as Alibaba’s Tmall and JD.com.

    Although Sasa.com has not yet turned a profit, Kwok says losses were reduced last year on the back of improved logistics operations.

    “We have achieved 50 per cent year-on-year savings in logistics costs using big data. We hope [Sasa.com] can break even in two years.”

    With visitors from China accounting for 70 per cent of Sasa’s sales in Hong Kong and Macau, the chain’s fortunes are closely tied to the Chinese government’s tourism policies. The company saw a boom in sales after it introduced the Individual Visit Scheme in 2003, under which travellers from China were, for the first time, allowed to visit Hong Kong and Macau as individuals rather than members of tour groups. This brought an influx of visitors from China to the two special administrative regions.

    Chinese travellers spend an average of HK$700 per store visit, and their spending meant Sasa outlets mushroomed in Hong Kong – its pink and white storefronts dot streets in busy shopping districts like convenience stores.

    The flood of visitors receded in 2015 when it was announced that permanent residents of Shenzhen, the Chinese city bordering Hong Kong, would only be allowed one trip to Hong Kong per week. This led to what Kwok refers to as a “retail slump”.

    However, Kwok sees bright prospects for Hong Kong’s retail sales due to the imminent opening of a cross-border high-speed rail line and the Hong Kong-Zhuhai-Macau bridge – which will make travel from the western Pearl River Delta to Hong Kong much quicker – and the development of the Greater Bay Area, a Chinese government scheme to link Hong Kong, Macau, and nine cities in Guangdong province in an integrated business hub.

    Kwok says that, while the number of visitors from China to Hong Kong has risen in the past few months, as people in China become more affluent they have more travel choices and, during China’s “golden week” national holidays, are more likely to “head to Thailand, Bali and Europe instead” of Hong Kong or Macau.

    However, he believes day trippers, attracted by the improved cross-border transport infrastructure, will boost Hong Kong’s retail industry.

    This is far from the first time Kwok and his wife have faced turbulence. Their first big setback came in 1989 when they lost the original Sasa basement store in Causeway Bay.

    “Our landlord increased the rent from HK$8,500 to HK$45,000. We were earning enough to cover this, but the landlord then rented the store to a business rival. This was around the same time as [the] June 4 [Tiananmen Square crackdown].”

    Dejected, he decided to take a break in Canada, but quickly became bored, and after only three days flew back to Hong Kong to continue the cosmetics business. Then came the true turning point in the Sasa story – Kwok made the risky decision to rent their first street-level shop for HK$120,000 a month.

    “It was a big bet, as the rent was so much higher. We moved into the new place six months before the lease expired on the Causeway Bay shop because we didn’t want to lose our customers to the new tenant. We closed that shop, switched off all the lights, put up relocation notices and stationed part-time staff there to escort customers to the new premises.”

    Business boomed and a stream of street-level Sasa outlets soon followed.

    With global retailers salivating over China, Kwok sees Sasa’s next challenge as conquering the vast Chinese market.

    “We have to combine retail with e-commerce and make good use of technology. Even if Chinese customers don’t come to Hong Kong, we can contact them through WeChat and mail the goods to them. We are doing that now. It’s not very successful [yet], but this is certainly the way to do business in the future.”

  • Luxury brand Burberry boosts profit as turnaround grows momentum

    Luxury brand Burberry boosts profit as turnaround grows momentum

    Christopher Bailey’s last collection for British luxury brand Burberry helped lift the company’s profits by 5 per cent, exceeding analysts’ expectations and signalling a turnaround program is already bearing fruits.

    Bailey has stepped down as chief creative officer – and earlier as CEO – and his swansong for the brand, a rainbow-tinted collection released in February, received rapturous reviews from the fashion press.

    Incoming CEO Marco Gobbetti paid tribute to Bailey, praising his final collection and saying the designer had left the company with an “incredible legacy”.

    The new head of design, Riccardo Tisci, will reveal his inaugural offer in autumn.

    Stronger domestic sales underpinned a 2 per cent rise in Burberry’s global revenue to £2.66 billion (US$3.6 billion).

    Gobbetti said the results showed his strategy to revitalise Burberry was paying off.

    “In November, we set out our multi-year plan to re-energise our product, our communication and the experiences customers have of our brand to deliver sustainable long-term value.  We have made good initial progress, our plans are on track and we are seeing positive early signs from our retail and wholesale customers.”

    In the new 2019 financial year, Gobbetti is on track to achieve a cumulative £100 million in cost savings.

    “In a year of transition, we are pleased with our performance as we began to execute our strategy.

    While the task of transforming Burberry is still before us, the first steps we implemented to re-energise our brand are showing promising early signs.  With Riccardo Tisci now on board and a strong leadership team in place, we are excited about the year ahead and remain fully focused on our strategy to deliver long-term sustainable value.”

  • The secret to Savage x Fenty’s success

    The secret to Savage x Fenty’s success

    Rihanna’s highly-anticipated, size-inclusive lingerie line Savage x Fenty marked the latest addition to the superstar’s sprawling fashion and beauty empire.

    Avid buyers who visited the Savage x Fenty site at midnight were placed in a queue system that could not keep up with demand: fans had to wait as long as two hours and/or enter the queue multiple times before they could freely browse and purchase products from the collection.

    Developed in partnership with TechStyle — the subscription-oriented parent company behind Kate Hudson’s Fabletics and Kim Kardashian’s ShoeDazzle — Savage x Fenty features 90 pieces of lingerie, sleepwear, and accessories in multiple shades and sizes, including four themed capsule collections titled On the Reg, U Cute, Damn and Black Widow.

    All items are priced under $100 apiece, with the option to sign up for a $50 annual subscription program for exclusive early access to product launches and limited-edition items.

    “Savage is really about taking complete ownership of how you feel and the choices you make,” Rihanna told Vogue last week. “Basically making sure everybody knows the ball is in your court.”

    From her multimillion-dollar cosmetics line Fenty Beauty to her iconic collaborations with Puma and now her Savage brand, the singer is setting new standards for brand partnerships in the music industry — all while working on a new reggae album. Forbes estimates that the star banked $12 million in 2017 (one-third of her pre-tax earnings that year) from her fashion ventures.

    Fenty Beauty — notable for featuring 40 different shades of foundation to accommodate different skin tones — racked up $27 million in earned media value within just one month of launch. Annual revenue for Fenty Beauty is on track to surpass those of rival lines like Kylie Jenner’s Kylie Cosmetics and Kim Kardashian’s KKW, according to Slice Intelligence.

    Is the business backed by her music success? A rep for Rihanna declined to comment, but sources tell Billboard that Roc Nation’s CEO/co-founder Jay Brown is one of her secret weapons, overseeing her deals.

    Rihanna first signed with Roc Nation’s management arm in 2010, and later joined the firm’s in-house label imprint in 2014; Roc Nation hired new president of management Phil McIntyre just a few weeks ago, allowing Brown to turn even more of his focus on Rihanna, sources say.

    But because Rihanna is leveraging her own brand to sell her products, she is directly involved in every step of the design and manufacturing process, and goes above and beyond to pull back the curtain for her fans — visiting facilities, picking out color palettes, filming DIY makeup tutorials and regularly seeding previews of upcoming products on her Instagram account, which boasts 62.5 million followers as of press time.

    “One thing that’s always stood out to me is how unapologetically human Rihanna is,” Aleesha Smalls-Worthington, senior brand director, marketing & e-commerce at Scotch Porter and former digital marketing exec at Iconix Brand Group and Roc Nation, tells Billboard. “Whether in person or on social media, that element of humanness is still missing from a lot of relationships and interactions. Many celebrities set up their business objectives based on the 10 million views or $10 million in sales they want in return. Rihanna’s ‘return’ is simply what her fans want from her: inspiration, aspiration, a piece of Ri. That in all-caps spells HUMAN.”

    A huge competitive advantage for Rihanna in the current brand landscape is her focus on diversity and inclusiveness in her products. According to Slice Intelligence, African-American, Hispanic and Asian shoppers comprise the largest proportions of Fenty Beauty’s customer base, while white shoppers are the brand’s smallest consumer group.

    Rihanna’s successful launches with brands like Puma and TechStyle also highlight a key discrepancy between the high-end fashion brands that artists tend to cite in their lyrics — e.g. Gucci, Louis Vuitton, Valentino — and the types of deals that actually lead to meaningful, sustained revenue for artists and a closer, more accessible relationship with fans.

    “Every single artist I’ve talked to wants a Gucci deal,” Marcie Allen, president of music experiential agency MAC Presents, tells Billboard. “Guess what? Unless you’re The Rolling Stones, your fans can’t afford Gucci. Most of the artists coming up today are younger, and their key fan demographics are Gen-Z and millennials. Last time I checked, my stepdaughter who’s Gen-Z is not going out and buying a Gucci bag. I tell these artists, you can wear Gucci all you want, but you also need to work with brands your fans can afford.”

    In fact, for artists with avid online followings, making products more affordable could actually lead to more aggregate spending and income, not less. According to Slice Intelligence, Fenty Beauty consumers spend an average of $471 annually on makeup, outpacing shoppers of Kat Von D who spend $371, KKW shoppers who spend $278 and Kylie Cosmetics shoppers who spend $181 — a testament to how an eye for diversity and accessibility, plus unparalleled cultural clout, equals an unstoppable driving force for business.

    Normally, music partnerships with fashion brands involve the artist and their team receiving a flat fee or commission to license music for advertising, and/or to be featured in official ambassador programs that brands already have in place. Depending on the turnaround time, payments can start as low as $10,000 for one to two days of production and social posts.

    But deeper, more integrated deals like the ones Rihanna and Roc Nation are brokering also involve equity and royalties on unit sales, in addition to steep upfront fees. Sources tell Billboard that A-level artists can command advances as high as $2 million for each branded clothing and footwear line, plus anywhere from a 7- to 15-percent cut of gross sales.

    “If I can do your job better than you, I can’t hire you. That’s a waste of my money and time,” Rihanna said at Vogue’s Forces of Fashion conference in October 2017. “But if you have something to offer, I know there’s an expertise that I can respect and I put people in place based on what their strengths are … I’m only as great as my team, and I pay very special attention to that.”

    Rihanna was first appointed as Puma’s creative director and global ambassador for the brand’s women’s collections in Dec. 2014. Her first branded sneaker, launched in May 2016 for $140 a pop, sold out in just 35 minutes.

    Though Rihanna’s appointment with Puma arrived amid a flurry of other corporations hiring celebrities as creative directors and chief creative officers, in a mutually desperate attempt to increase brand exposure — Lady Gaga and Polaroid (2010), will.i.am and Intel (2011), Alicia Keys and BlackBerry (2013), Justin Timberlake and Bud Light Platinum (2013), Nick Cannon and RadioShack (2015) — Rihanna retained her branding power even as most “creative directorships” proved to be unfeasible and shut down within just a few years.

    “From the artist’s perspective, the title of ‘creative director’ is actually very limited,” Mara Frankel, senior creative director, brand partnerships at Atlantic Records, tells Billboard. “Brands aren’t going to change their entire media-buying strategy to suit what artists are looking for, and artists are not really meant to work for brands in that way because they want to focus on being in control of their own music and art. This can lead to a less authentic relationship, which could be why some of these deals didn’t work out in the long term.”

    Part of Rihanna’s outsized branding success comes from her reputation and devoted following online. According to Nielsen Music’s N-score talent tracker — which assesses endorsement potential for U.S. celebrities across 10 attributes, and which brands rely on to maximize ROI on their campaigns — Rihanna outranks the average music celebrity on marketability with an overall N-Score of 78, compared to the music average of 65. On the “Stylish” and “Trendsetter” attributes in particular, Rihanna outranks much of her competition at 48 and 35 respectively, compared to the music norms of 26 and 19.

    In addition, Rihanna fans are 3.7 times more likely to purchase from Rihanna herself than from other celebrities, according to research from The NPD Group — which reflects a wider trend across the industry of artists becoming the new influencers of note for retailers. “It used to be that all these fashion houses were seeding their products only with social-media and YouTube influencers, but now, there’s a huge paradigm shift towards artists,” says Allen. “You used to see an actor or model like Kate Moss as the face of a Gucci campaign, not Harry Styles.”

    The major labels are growing their own brand partnership teams, which are dedicated to securing strategic deals for their artists that drive both visibility and market share. The types of deals range from product placements in music videos and sync licenses for commercials to private events and tour sponsorships. Fashion has become one of the hottest partnership targets, as clothing and beauty brands naturally cover an expansive amount of real estate, from social media and TV campaigns to billboards and brick-and-mortar stores — compelling some industry experts to call retail “the new media.”

    While some in-house label departments handle merchandising and e-commerce directly for their artists, like Universal Music’s Bravado, third-party fashion deals continue to flood the marketplace like never before. SZA, Metro Boomin, Future and Cher have all appeared in Gap commercials over the last nine months.

    Justin Timberlake debuted his branded Air Jordans during his Super Bowl Halftime Show performance in Feb. 2018; just this week, Nike launched another special-edition Air Jordan shoe with Travis Scott. Gucci recently tapped Harry Styles as the face of its upcoming tailoring campaign, while Lil Yachty, A$AP Rocky and Joey Bada$$ all have their own capsule collections with Nautica, Guess and Urban Outfitters, respectively.

    “The landscape is extremely competitive right now,” says Allen. “I am pitching artists to brands every single day and telling them, ‘Listen, in two months, you won’t be able to get this artist for less than half a million dollars. If you don’t jump on this artist now, you will not be able to afford them down the line.’ My biggest advice to brands is to listen to your peers in the industry, and not to underestimate the importance of being part of an artist’s career when they are on the rise.”

    Of course, no one celebrity or even a large management company like Roc Nation can pull off an entire product launch alone, which is where TechStyle comes in as an invaluable partner for Savage x Fenty.

    In a similar vein, Fenty Beauty is tapping into Kendo Holdings, a division of French conglomerate LVMH that has incubated products with other celebs like Kat Von D, for manufacturing and distribution.

    In the fragrance world, Parlux Fragrances handles manufacturing and distribution for Rihanna and Jay-Z, while Elizabeth Arden handles logistics for the likes of Shawn Mendes and Britney Spears — the latter of whom still makes an estimated $50 million from fragrances alone every year.

    SEE ALSO : Off-White opens second Hong Kong store, launches capsule line

    “What Rihanna’s doing right now is creating a dominating mix of products that she knows she has the right to be a resource and creative authority for,” says Smalls-Worthington.

    “You have a lot of celebrities trying to put a square peg in a round hole, but Rihanna’s going wide and deep in a smart way: carefully studying her consumers and how they express themselves across multiple touch points, and delivering on that expression in an inclusive way, without forcing anything. Her products are empowering people to express their best versions of their best selves — to get a piece of Rihanna without sacrificing who they are as individuals. She’s set herself up in a way such that she is it, and her consumers also want to be it. And I don’t think she’s done yet.”

  • Cellini Jeweler and High Horology Salon Opens New Flagship on Park Avenue

    Cellini Jeweler and High Horology Salon Opens New Flagship on Park Avenue

    Cellini, a New York landmark and one of the world’s leading independent jewelers, celebrated the grand opening of its new Park Avenue flagship store on Tuesday, May 15th with an intimate private reception. Located at 430 Park Avenue, the inviting new store opened its doors to customers, VIPs, and influencers. Greeted by Cellini Founder and President Leon Adams and his team, guests were welcomed to discover the beautiful salon-like space, filled with the most precious jewelry, gems, and timepieces from more than 30 of the world’s top watchmakers.

    The grand opening event represented only the latest chapter in the 40-year history of Cellini. The impressive new 2,300 square foot midtown location echoes the grandeur of the store’s beginnings in 1977, when Leon Adams opened his first showroom in the famed Waldorf-Astoria Hotel. It was here that Cellini established its reputation as New York’s premier jeweler.

    Cellini, always a true visionary retailer, has chosen an unparalleled midtown location that promises to bring together the next generation of the world’s most discerning shoppers in New York’s emerging new luxury corridor. In its new, expanded Park Avenue flagship, Cellini retains the impeccable quality, elegance, and gracious service that have long defined this independent store, translated into an immersive new location.

    “Our goal is to offer the very best in one location, so our patrons can compare and discover jewelry and watches that they simply can’t get anywhere else. And if our customers don’t see the jewelry they are looking for, we are equipped to make it for them. We have access to some of the rarest gems on Earth: diamonds and gems of all shapes, sizes, and colors. We regularly create Cellini signature jewelry pieces incorporating these important gems, tailored to meet and exceed our customer’s dreams,” remarked Leon Adams.

    Cellini’s visitors marveled at the multitude of lustrous pearls and the dazzling array of important color gemstones like Burmese rubies, Kashmir sapphires, and color-changing alexandrite. Guests were also treated to a glimpse of one of the most prized gems on Earth, Cellini’s extremely rare, radiant-cut chartreuse diamonds. In their new flagship store, Mr. Adams and the Cellini team will continue to offer custom jewelry design services, from selecting the right stone to designing a custom jewelry setting that best complements the gem’s most scintillating attributes.

    Guests took in the extraordinary scope of the store’s jewelry collections, which extends beyond Cellini’s signature creations to exceptional jewelry crafted by some of the world’s top jewelry designers. The array of designs offers something to satisfy every taste, from the Old-World craftsmanship of Carrera y Carrera, Fabergé, and Wellendorff, to the modern artistry of Pippo Perez, Sutra, and Victor Velyan.

    Budding watch aficionados, seasoned timepiece collectors, and enthusiasts all experienced the breadth of Cellini’s phenomenal horological collection. The elite watch brands on display included historic watchmaking maisons such as Girard-Perregaux, Jaeger-LeCoultre, and Vacheron Constantin, as well as independent watchmakers who first got their start in America at Cellini, such as A. Lange & Söhne and De Bethune. Guests of the grand opening event also got the first glimpse of rare new timepieces, including the US debut of the Bovet Recital 22 “Grand Recital,” as well as new pieces by MB&F, Greubel Forsey, Urban Jürgensen, Laurent Ferrier, H. Moser & Cie, and Urwerk.

    “Quality is foremost in everything we do at Cellini,” remarked Adams, a statement that defines the next chapter for Cellini at its new Park Avenue flagship. Irresistible jewels, sophisticated horology, dedicated staff, and an inviting new venue ensure that this venerable New York jeweler will redefine the standard of quality on Park Avenue.

  • Aeon Mall Hai Phong Le Chan breaks ground

    Aeon Mall Hai Phong Le Chan breaks ground

    Aeon Mall Vietnam has started construction work on a mixed-use complex in the port city of Hai Phong, its third outlet in the north.

    A groundbreaking ceremony for Aeon Mall Hai Phong Le Chan was attended by Vietnamese Prime Minister Nguyen Xuan Phuc. Covering 9.3ha, the mall is the sixth of its kind for Vietnam, and is scheduled to be opened in 2020. It is expected to generate about 2500 jobs.

    The Japanese company expects its mall to attract more than 13 million visitors a year, from not only Hai Phong but also nearby provinces.

    The groundbreaking ceremony coincided with the 63rd anniversary of the establishment of the northern Vietnamese city. “We are honoured to be one of the key projects to celebrate this occasion,” says Aeon Mall Vietnam general director Iwamura Yasutsugu.

    Aeon Mall Vietnam, which has two outlets each in Hanoi and Ho Chi Minh City, and another in the southern province of Binh Duong, plans to have a total of 20 locations by 2025.

    Its first Vietnamese outlet, Aeon Tan Phu, opened in Ho Chi Minh City in 2014.