Author: Mei Ling Tan

  • Globe’s Fintech Subsidiary Mynt Selects Amdocs to Power its Casa Service

    Globe’s Fintech Subsidiary Mynt Selects Amdocs to Power its Casa Service

    Amdocs, the leading provider of customer experience solutions, today announced that Mynt, Globe Telecom’s fintech subsidiary, has selected the Amdocs Mobile Financial Services solution to power Casa – a new service that will enable Mynt to offer retailers a cloud-based, financial-grade, white-label digital money fintech platform, providing retailers with the means to offer a wide range of financial services and generate a new revenue stream.

    The Mynt Casa service, which will be powered by the Amdocs Mobile Financial Services solution, will enable retailers to offer bill payments, money transfers, closed-loop merchant payment solutions and loyalty program management. In addition, a card management feature will support them in issuing a closed-loop companion prepaid card to any customer, even if they do not hold a bank account. Cards will be linked to the user’s mobile wallet account, allowing them to pay for purchases at retail and online stores.

    The Amdocs solution will be deployed on Amazon’s public cloud. Based on a multi-tenant system, it will enable retailers in different locations to be hosted as separate tenants on a centralized platform, wholly managed by Amdocs. Under a five-year software as a service (SaaS) agreement, Amdocs will assume complete responsibility for development, deployment, operation and maintenance of the Amdocs solution via a revenue-sharing model with Mynt.

    “Retailers in emerging markets such as the Philippines need their own e-money solution that allows them to offer financial services such as point-of-sale payments, using cashless methods such as mobile wallets, payment cards and loyalty points,” said JM Aujero, chief sales officer at Mynt. “With Casa’s easy-to-use cloud-based platform, we will be able to provide for this need in a way that is tailored to each individual retailer. At the same time, it will enable them to offer wider financial services, such as third-party bill payments and money transfers without having to invest in new infrastructure deployment and operations.”

    “The ability for retailers and merchants to offer their own financial services solutions is a huge opportunity for mobile financial services providers to drive usage and adoption,” said Patrick McGrory
    , president for Amdocs’ emerging offerings. “Casa, powered by Amdocs’ cloud-based solution, provides superior, retail-specific capabilities, combined with a time-to-market advantage that will enable Mynt to quickly roll out services to its retail partners across the Philippines.”

    Amdocs also separately announced the availability of its Mobile Financial Services Card Management System (CMS). CMS supports any service provider in issuing both closed loop and open loop prepaid and debit cards to their customers, even to those who have no bank account. The card can be linked to a consumer’s mobile wallet with a stored value and/or loyalty point account as the source of funds. They can use the card to pay for purchases at a retail point of sale terminal, withdraw cash from an ATM, or for online shopping.

     

  • Grand Opening of the Second “Lukfook Jewellery” Shop in New York

    Grand Opening of the Second “Lukfook Jewellery” Shop in New York

    Luk Fook Holdings is pleased to announce that the Group opens its new retail shop in New York City. Located on first floor, New World Mall in Flushing, this new shop is the Group’s second retail shop in New York City after opening its first shop in Manhattan. To mark this occasion, the Group hosted a grand ribbon-cutting ceremony on 29 October. Officiating guests including Ms. Toby Ann Stavisky, the New York State Senator, Ms. Grace Meng, U.S. Congresswoman and Ms. Pauline Yeung, co-founder of the Group and winner of Miss Hong Kong Pageant, witnessed this significant moment together with many other guests.

    Mr. Wong Wai Sheung, Chairman and Chief Executive of the Group said, “Adhering to our corporate vision of “Brand of Hong Kong, Sparkling the World”, we have been actively expanding our retail network globally. Currently, the Group has over 1,460 shops in eight countries and regions. With the opening of the second shop in New York, the Group anticipates to further penetrate into the Chinese communities in the overseas market. We will continue to pursue high quality and innovation to enhance our brand competitiveness, and endeavour to provide quality jewellery products and professional services to customers all over the world, in order to build Lukfook as a premier jewellery brand for customers.”

    The Group has tapped into the North American market since 2003 and opened shops in Canada and the United States, laying the foundation for further overseas expansion. The new shop is located in New World Mall, which is one of the largest indoor Asian malls in the northeastern region of the United States. The mall features over 100 shops, offering jewellery, clothing, cosmetics, electronics, world cuisine and many more. With convenient location and easy accessibility, New World Mall is a popular shopping and entertainment hotspot for the Chinese in Flushing and Queens.

    Address: Space Nos. 112 – 116, First Floor, New World Mall, 136-20 Roosevelt Avenue, Flushing, New York, NY 11354, USA

  • Korea’s Eland Aims At Ten Shopping Centers In China In 2016

    Korea’s Eland Aims At Ten Shopping Centers In China In 2016

    South Korean apparel brand Eland plans to develop ten shopping centers in China before the end of 2016. Eland started tapping the shopping center market in China from January 2016. By cooperating with Parkson, the company aims to transfer traditional department stores into city outlets. For the next step, Eland will cooperate with other department stores and shopping malls in China, aiming to open ten shopping centers in this marketplace before the end of 2016. For the year 2017, the company aims to have over 30 outlets and by 2020, they aim at 500 outlets and sales scale of CNY200 billion.

    Eland Group has 56 Newcore Outlets in South Korea. The company plans to bring its successful operating model and experience into China and transfer traditional department stores into city outlets to attract young consumers.

    At present, Eland has opened two shopping centers in China, one cooperating with Parkson in Shanghai and the other cooperating with Hualian in Chengdu. In addition, Parkson previously closed a store in Nanchang in September 2016 and said they will team with Eland Group to implement transformation and upgrades for the store.

  • Private banks lacking scale exit Singapore

    Private banks lacking scale exit Singapore

    Just like real estate is about location, location and location, private banking is about scale, scale and scale – it is what’s needed to cope with the high cost of the business, say industry players.

    Monday’s surprise move by DBS Bank to snap up most of ANZ’s wealth and retail business in Asia for a bargain-basement price of S$110 million, or 0.5 per cent of the S$23 billion of assets under management, once again hammered home the point that scale is needed to run a private bank.

    Over the past two years, eight foreign private banks (ANZ included) have exited or will soon exit Singapore. Of the eight, two were closed by the Monetary Authority of Singapore for anti-money laundering violations. ABN Amro is reportedly the eighth departure, with the Dutch lender soon to sell its Asian private bank.

    Both DBS and ANZ, Australia’s fourth largest bank, mentioned scale as the reason for the sale. It wasn’t that the business didn’t turn a profit. It did; for FY16, it turned in a cash profit of A$50 million.

    ANZ is not a small player in Asia, and this sale does not signal its retreat from the region, it said. In fact, ANZ regards Asia as core to its strategy of banking large corporate and institutional clients, driven by trade and capital flows, particularly with Australia and New Zealand.

    ANZ Institutional Asia employs 1,490 people across 15 markets in the region.

    But, as ANZ chief executive Shayne Elliott said of the sale to DBS: “In retail and wealth, although we have grown a profitable business in Asia, without greater scale, ANZ’s competitive position is not as compelling.”

    Tan Su Shan, DBS’s group head of consumer banking and wealth management, said Asia continues to clock decent growth rates, so the organic growth outlook for the wealth-management business remains intrinsically intact, despite cyclical volatility.

    She said: “For banks looking to create a sustainable wealth-management business here, there are a few things to consider. Firstly, it is the bank’s ability to build scale, be sustainable and invest for the future.

    “Secondly, banks must be able to serve the local and global needs of Asian clients.”

    DBS has been aggressively building up its private bank business, timing it nicely with Asia’s explosive wealth growth. A joint survey by PwC and UBS last month said that, in Asia last year, a new billionaire was minted every three days.

    DBS chief executive Piyush Gupta said that, with Asia growing at 6 per cent, Europe at 1 and the US, 2, “you’d all give a left arm to be in Asia under the current economic conditions”.

    As Asia is tipped to be the richest region in the near future, private banks in the region need to adapt their business models to meet the growing demand.

    Bahren Shaari, Bank of Singapore’s chief executive, said: “For instance, with the rising cost of doing business, banks need to achieve scale, so further consolidation is inevitable. In the case of Bank of Singapore, we have enough scale to aspire to be among the top three private banks in our core markets.”

    But while Asia has the right conditions to attract private banks, it has to be borne in mind that the bulk of the rich are self-made or entrepreneurial; the joint PwC-UBS survey said about 85 per cent of Asian billionaires are first-generation.

    This means banks need to offer investment-banking services and access to debt and equity markets for clients looking to expand their businesses. They should not just sell wealth-management products or throw rare-whisky parties, which have become fashionable in some quarters.

    A private banker who turned down an offer from a major distiller to host a rare-whisky party said: “My clients are too busy making money to come for the whisky.”

    Credit Suisse, the third-largest private bank in Asia, decided in a strategic review last year to combine investment banking with private banking.

    Francesco de Ferrari, the bank’s head of private banking for the Asia-Pacific, said earlier this year: “The business model that is best suited to Asian clients’ needs is the integrated bank with private banking as a core business and its DNA, but also strong investment banking and asset-management capabilities.”

    So if some foreign banks have decided to exit Singapore, it doesn’t point to foreign banks beating a retreat from Asia.

    DBS’ Ms Tan noted that the largest private banks in Asia are, in fact, Swiss or American: “While some foreign players have left the scene, there are several who are still fairly dominant here.

    “These are primarily the large Swiss and US and banks who have managed to build scale in their private-banking businesses, either through long-term organic growth or through combining their wealth management business with a retail, corporate/investment banking or asset management business.”

    UBS, Citi, Credit Suisse, HSBC and DBS are Asia’s top five private banks. Julius Baer, Morgan Stanley, JP Morgan, BNP Paribas and Deutsche Bank round up the top 10.

    Ms Tan said: “That said, there remains more scope and opportunities for dominant local or regional players like DBS to gain market share as clients here look for customised solutions with a safe and steady name who remains committed to the region and the business.”

  • Chinese mall opens ‘nursery’ room for husbands

    Chinese mall opens ‘nursery’ room for husbands

    A new mall in Shanghai has set aside a space for what it is calling a ‘husbands nursery’, where it hopes bored spouses will hang out while their wives are shopping in the mall, China Central Television (CCTV) reported.

    This ‘husbands nursery’, on the third floor of a shopping mall in Shanghai which opened on October 30, “is equipped with multiple leisure facilities, including magazines in its reading area, and a television,” supposedly for men to relax, CCTV said. But what those running the mall may not know is that Chinese men – the mainland’s biggest online shoppers – will likely be racking up credit card debt sitting in the ‘husbands nursery’ and splurging on themselves.

    “Mainland men are more likely to splurge on themselves when making purchases over the internet than women – who focus more on buying daily necessities,” according to a May 2016 survey.

    The survey was conducted by Ant Financial Services, an affiliate of the Alibaba Group that owns the South China Morning Post. Its findings are contrary to popular perception that it is women who go on shopping sprees, buying cosmetics and clothes. And, the study also found that women are buying more daily household necessities, while men are splurging on personal-care products and leisure goods.

    “Male online shoppers prove to be more hedonistic and the level of online spending by men is higher than women,” Ant Financial said in its report published in May.

    The survey said that women still bought a greater number of goods and services on the internet, but that they were buying more daily necessities for household use. Men’s online spending on entertainment, sports, dining and travel was 26 percent higher than the spending of women, and that women’s online purchases were aimed at running more efficient households.

    Ant Financial conducted the survey in partnership with the China Academy of New Supply Side Economics. The survey was based on data collected by Alipay, China’s online payment giant operated by Ant Financial, which has 450 million users.

  • 7-Eleven offers 24×7 e-commerce service

    7-Eleven offers 24×7 e-commerce service

    Convenience store chain operator 7-Eleven Malaysia is jumping on the bandwagon in e-commerce by offering parcel locker services in some of its outlets to facilitate delivery for online shopping.

    The service is expected to start this month, says 7-Eleven Malaysia chief executive officer Gary Brown at the Asia Pacific Retail Congress in Kuala Lumpur recently.

    The move by 7-Eleven will be seen as a nascent but integral part of an expanding online retail eco-system that is beginning to grow in popularity in Malaysia.

    “An online shopper can choose to get his purchases delivered to a 7-Eleven store most convenient to him. Once it arrives, he will receive a text with a PIN code. Because we are a 24-hour convenience chain, we will be able to offer online shoppers the convenience to pick up their purchases 365 days, 24×7,” he says.

    Brown says the move is to make shopping as convenient as possible and is part of the chain’s evolution in the larger retail space that is not confined to bricks and mortar. It has been around since the 1980s but it was only of late that the convenience chain began went beyond retail to offer payment services.

    7-Eleven Malaysia Holdings Bhd was listed on Bursa Malaysia in 2014. The convenience store chain is controlled by Tan Sri Vincent Tan Chee Yioun, with an indirect stake of 53.59% via HQZ Credit Sdn Bhd. HQZ Credit is the ultimate holding company of Berjaya Retail Bhd – the major shareholder of 7-Eleven.

    Brown says he is seeing a lot of changes in Malaysia’s retail landscape and 7-Eleven, as part of that landscape needs to improve customer’s experience by making it convenient.

    Brown says the company plans to open 200 new stores annually for the next 10 years.

    It opened 500 new stores in the past 2½ years and at the same time, refurbished another 500. The cost of 200 new stores and refurbishing another 200 involves an investment of between RM80mil and RM90mil a year, he says.

    Brown says out of 2,050 7-Eleven outlets, close to 100 stores are located in malls and other managed facilities.

    In Publika, Solaris Dutamas, there are four 7-Eleven outlets, six in Times Square, Jalan Imbi and three in Sg Wang mall. Two out of the six in Times Square operate 24×7.

    “In a high traffic area, for example, in a mall, we need to have more density. In a mall, they operate 12 hours. But when they are outside a mall, but in a managed area, they operate 24×7,” he says.

    Brown says the company is interested to enter more malls. Having a store in a mall makes sense because consumers do not want to walk too far.

    “7-Eleven leverages on what we call impulse satisfaction, or instant gratification,” he says.

    It also offers mobile top-up services and payment of utility bills 24×7 and recently introduced sitting arrangement for that cup of coffee.

    “It is not convenient carrying a cup of hot coffee around,” he says.

    The convenience store operator reported a group revenue for the financial year ended Dec 31, 2015 of RM2.01bil, an increase of 6%, or RM113.2mil, over 2014’s revenue of RM1.89bil.

    The company reported a gross profit of RM59.9mil for 2015 financial year, which translates into a 3% gross profit margin over revenue, which is normal as margins tend to be rather thin for the retail sector. It reported operating income of RM109.7mil, an increase of 2.2% compared to 2014.

    Better merchandise mix

    Its growth in revenue was driven by new stores, an improved merchandise mix and consumer promotion activities, and was achieved despite an ongoing retail market negativity, which explains the need for the company to go into a store expansion mode as well as to offer new services at its 24-hour outlets.

    The company’s store expansion drive of about 200 new stores a year will help grow revenue. Its store count increased by 199 stores or 11.4 % from 1,745 stores to 1,944 stores in 2015.

    On the often quoted view that there is an oversupply of retail space in the Klang Valley and cities like Penang and Johor Baru, Brown disagrees.

    “There is a lot of mall space in the Klang Valley but I would not say there is an oversupply. Malaysians like malls, so they have a role to play, despite the growth in online retail,” he says.

    He says the more pertinent question is what will happen to malls which are not well located and which are not well managed.

    Those that are will continue to grow, thrive and attract tenants. A mall will survive on tenant mix, which drives customer traffic.

    “There may be some fallout if a mall does not have a good tenant mix,” he says.

  • Cambodia Properties Shine in Asean

    Cambodia Properties Shine in Asean

    Asean property markets are promising, with Cambodia offering the most attractive prospects due to strong demand and limited supply, notably in Phnom Penh.

    Aliwassa Pathnadabutr, managing director of property consultant CBRE Thailand, said prime residential property for rent in the Cambodian capital has posted the highest yield among all sectors at eight percent per year. Selling prices remain relatively low, but rents are high.

    “Demand for rental in Phnom Penh is driven by expatriates working for multinational companies set up in the city,” she said. “Asking rents are high as those companies are willing to spend on good accommodation for their staff.”

    With strong demand and a limited supply of only 5,500 units, the apartment sector has an occupancy rate of between 80 to 90 percent while rent per square meter is 700 to 1,000 baht (about $20 to $28).

    Rent for a one-bedroom serviced apartment is around 40,000 to 50,000 baht per month ($1,141 to $1,426), the same rate for a unit in Bangkok.

    But the average selling price for a high-end unit is only 110,000 baht per square meter, lower than Bangkok’s 200,000-300,000 baht.

    She said the selling price per square meter for a high-end residential unit in Phnom Penh is lower than that in Bangkok due to lower land costs. Construction costs, however, are close to those in Bangkok as most of the construction materials are imported from Thailand.

    For the high-end segment, the average selling price is 110,000 to 170,000 baht per square meter. For middle-end condos it is 93,000 baht and 24,000 baht on average for the affordable segment.

    The foreign ownership quota in Cambodia’s residential sector is higher than Thailand’s, with up to 70 percent of total units at a project. But foreigners are not allowed to buy ground-floor or basement units. Foreigners are also allowed to set up a company with 100 percent ownership.

    However, Thai investors should be cautious if they want to jump on the bandwagon as Phnom Penh’s residential supply will reach 25,000 units in 2018 from only 5,000 units this year, Ms. Aliwassa said.

    Investing in a condo for rent in Phnom Penh is attractive for individual investors. The major investment buyers in the city are Taiwanese, Chinese, Singaporean, South Korean and Japanese.

    “If Thais want to get in on the act, they should do so now or at the beginning of the boom as there will be a large volume of new supply being completed in the next two years,” added Ms. Aliwassa.

    She said office and retail spaces in Phnom Penh are limited but demand is strong so the occupancy rate is quite good. The city’s office supply totals around 280,000 square meters, compared with 8.4 million square meters in Bangkok.

    For C-grade office space, occupancy is as high as 90 percent due to a lower monthly rent of $10 to $15 per square meter. Rent for B-grade office space is $16 to $25 with an occupancy rate of 85 percent while A-grade rent stands at $28 with an occupancy rate of only 40 percent, compared with $30 in Bangkok.

    Another attractive investment in Phnom Penh is retail, as Thai brands are very popular among Cambodian consumers. Successful Thai retailers in Phnom Penh now include Major Cineplex, Fuji and S&P restaurants.

    Nonetheless, the retail property market in Phnom Penh is quite small compared with Bangkok. The current retail space in Phnom Penh totals 680,000 square meters, which accounts for less than 10 percent of Bangkok’s total retail area of seven to eight million square meters.

    Despite limited supply, the monthly rent for prime malls remains low at only 1,200 baht per square meter, compared with 3,000 to 4,000 baht in Bangkok.

    Although Phnom Penh’s luxury segment has a limited supply, it might be too soon to enter the market as the segment is very small and Cambodian consumers are not ready to accept luxury prices, said the consultant.

    “Besides checking local regulations, investors should consider the balance of costs, prices and returns. If one of them is too high, the rest will fall down just like in Myanmar where land costs are very high,” added Ms. Aliwassa.

    Tony Picon, managing director of property consultant Colliers International Myanmar, said all commercial properties in Yangon are attractive with high occupancy rates since supply is limited and demand is strong.

    “New supply is difficult to enter as regulations are unclear and land costs are steep,” he said. “But opportunities in Myanmar are high as its GDP is the highest in the region at 8.3 percent. The country also boasts abundant resources.”

    Suphin Mechuchep, managing director of property consultant JLL Thailand, said Vietnam is an interesting investment destination as its economy is picking up, purchasing power is strong and the government is spending on infrastructure projects.

    “All segments in Vietnam’s property market have bottomed out in the past two years as middle-income earners prefer spending on IT, mobile and technology,” she said.

  • Zhouheiya fast food chain to list in Hong Kong

    Zhouheiya fast food chain to list in Hong Kong

    The initial public offering of Zhouheiya, a Hubei province-based fast food chain known for its spicy-braised duck neck and other ready-to-eat snacks, opened for subscription in Hong Kong, looking to raise up to HK$3.3 billion ($425.7 million).

    The braised food producer and retailer, scheduled to make its trading debut on Nov 11, will sell 424 million shares at an indicative range between HK$5.8 and HK$7.8 apiece.

    Founded in 2002 in Wuhan, Hubei province, Zhouheiya beefed up its business footprint in 38 cities across 12 mainland provinces with 715 self-operated retail stores.

    Executive Director Hao Lixiao told a news conference in Hong Kong on Monday that the company is always looking to expand into the Hong Kong and Macao markets. However, he didn’t reveal a detailed timeline, adding that the firm still deals with the local licenses, not to mention that product research and the buildup of sales networks also takes time.

    Zhouheiya’s Hong Kong IPO highlighted an industrywide trend of mainland duck-food manufacturers floating public shares. Competitors like Jiangxi Huangshanghuang Group listed in Shenzhen back in 2012, while Hunan Juewei has been stuck for more than two years in the Chinese mainland’s clogged pipeline of IPOs.

    “Such a trend indicates that growth of mainland duck-food chains has somewhat run into a bottleneck which pushes them to raise capital via public listings as a growth booster,” said Zhu Danpeng, a researcher at the China Brand Research Institute.

    With rival Hunan Juewei being trapped in a big logjam of mainland IPO filings, Zhouheiya’s decision to join in a cluster of mainland food companies floating in Hong Kong appears to be a time-saving move.

    Choosing Hong Kong as a listing destination helps companies jump the long IPO queue in the Chinese mainland, but low valuation in the Asia’s financial hub remains a sure thing. In particular, Hong Kong investors still view food stocks listed there as generally expensive options, which may explain why some believe shares of Zhouheiya are priced a bit too high, said Hannah Li, a Hong Kong-based strategist with UOB Kay Hian.The IPO logjam that has long beset mainland catering companies accessing mainland capital markets was spotlighted when high- and mid-end restaurant chain Xiao Nan Guo Restaurants Holdings, and hotpot chain Xiabu Xiabu turned to Hong Kong to list in 2014.

  • HKMA grants stored value licences to eight more issuers including PayPal

    HKMA grants stored value licences to eight more issuers including PayPal

    The Hong Kong Monetary Authority (HKMA) said on Friday that it had granted stored value facilities (SVF) licences to eight more issuers including Paypal Hong Kong Limited, bringing the total to 13.

    “We are pleased to see companies with diverse backgrounds offering a variety of SVF products which will enhance retail payment convenience in Hong Kong,” said Howard Lee, Senior Executive Director of the HKMA.

    The implementation of a supervisory regime by the HKMA will strengthen public confidence in using stored value products and services which, in turn, will encourage innovation in the local retail payment industry, Lee said.

    The other issuers granted licenses are 33 Financial Services Limited; Autotoll Limited; ePaylinks Technology Co., Limited; K & R International Limited; Optal Asia Limited; Transforex (Hong Kong) Investment Consulting Co., Limited; and UniCard Solution Limited.

    The city’s de-facto central bank granted the first batch of licenses to SVF issuers such as Alipay Financial Services (HK) Limited in August.

    The Payment Systems and Stored Value Facilities Ordinance started operation on Nov. 13 last year and provided a one-year transition period for application for SVF licences.

    Upon the expiry of the one-year period, it will be illegal for any person, unless being exempt, to issue or operate SVF without a license, the HKMA said.

  • Thailand takes a long-term gamble on Isaan region

    Thailand takes a long-term gamble on Isaan region

    If all goes according to plan, Thai Prime Minister Prayuth Chan-ocha will make a media splash next year with the launch of a 60 kilometer stretch of dual-track train line between Nakhon Ratchasima and Khon Kaen provinces in northeast Thailand.

    Work on the short spur — part of a larger project to upgrade the region’s freight transport to Thailand’s main deep sea port — is being speeded up to be completed before the next election. But whether the planned publicity stunt will win Prayuth’s coup-installed government popularity in the country’s poor northeast region remains to be seen.

    Prayuth’s government is banking on heavy investments in infrastructure to both stimulate growth during the current economic doldrums and strengthen Thailand’s competitiveness in the future. While most economists concur that the expenditure on infrastructure is long overdue, some say a lot more could be done to help the country’s rural poor in the short term. And most of Thailand’s rural poor live in the country’s northeastern region, known locally as Isaan.

    Isaan was the only region to reject the draft of a military-guided constitution in the Aug. 7 referendum, with 51.4% of the people voting against it compared with a nationwide 61.40% endorsement. Isaan, accounting for one third of Thailand’s 67 million population but only 10% of its gross domestic product, is also the power base of the Pheu Thai Party, whose de facto leader is Thaksin Shinawatra, the populist politician and the present regime’s number one enemy. Prayuth and his officers originally came to power after a May 2014 coup, toppling Thaksin’s sister, former Premier Yingluck Shinawatra.

    Prayuth, using his sweeping powers under an interim constitution, has fast-tracked at least 20 megaprojects that will cost the country an estimated 2 trillion baht ($57 billion) over the next six years. Of that amount about 10% will be spent in Isaan — primarily on a new motorway linking Bangkok to Nakhon Ratchasima, Isaan’s largest city, and an expanded dual-track train link connecting Khon Kaen, Isaan’s second largest city, to Nakhon Ratchasima and on to the port of Laem Chabang on the eastern seaboard southeast of Bangkok. A single track already exists, but is too congested to serve as an efficient freight link for the Isaan region to transport its main crops to markets abroad. A third megaproject, a so-called Sino-Thai high speed train between Bangkok and Nakhon Ratchasima, has yet to receive cabinet approval.

    “The fact that the government is seriously interested in infrastructure is something, anyway, because if you trace the history we haven’t been investing enough in infrastructure here,” said Somchai Lertlarpwasin, director of the Bank of Thailand’s North Eastern Regional Office. “If the government puts 200 billion baht in the region over six years, it’s over 2% of the gross regional product in the northeast, so it means that you’ve lifted up GRP by 2% already, not even accounting for the crowd-in effects.”

    Retail boom

    There have been some “crowd-in” effects already. Nakhon Ratchasima, also called Korat, is fast becoming a shopping paradise for people in the region and from farther afield in neighboring Cambodia and Laos. All three of Thailand’s largest Bangkok-based department store chains have invested in massive outlets in the city, which will boast 1 million sq. meters of retail space by late next year.

     

    The Mall has had an outlet in the city since 1996, and recently invested 100 million baht to build an extension that includes a “Snow Zone,” treating Issan customers to a winter wonderland of ice skating, sledding and snowball-throwing. The Mall’s expansion was driven by increased competition, the advent of the ASEAN Economic Community earlier this year and the government’s approval of the new motorway to the capital which will halve travel time to Korat to around 2.15 hours.

    “Korat’s prospects are bright. If the government had not committed to investing in infrastructure it might have been harder to persuade the board to invest in the expansion,” said Preecha Limoua, general manager of The Mall’s Nakhon Ratchasima Branch. The department store’s Snow and Ice Planet is proving a new tourist attraction for the city. “Cambodian families are already coming here to see the snow. It is the only snow in Isaan.”

    Terminal 21, owned by Siam Retail Development, will open a 250,000 sq. meter outlet in December, boasting the city’s first observation tower on the outside and a replica of the Eiffel Tower on the inside. Central Group plans to open a Central Grand Plaza outlet with 320,000 sq. meters of retail space in September 2017. The Mall Korat, with its snow zone extension launched in October, now occupies 360,000 sq. meters. There is also a Makro, eight Tesco-Lotus convenience stores and several Big C locations, while Sweden’s Ikea and Japan’s Aeon are both reportedly looking for locations in the city.

    Klang Plaza, a local department store chain that opened its first outlet in Korat 50 years ago, has three outlets already and is investing in a fourth near the city’s railway station. The local chain, which operates under the motto “The Korat Department Store,” is not afraid of the upmarket competition from Bangkok, given its strategy of concentrating on supermarkets and stationery supplies and keeping its outlets within walking distance from Korat’s city communities. “Korat can handle 10 department stores,” said Pairat Manasilp, vice president of Klang Plaza Company.

    Korat grows, Issan flounders

    Korat province has a population of 2.7 million people, and a GDP of about 250 billion baht, the highest in Isaan. Only 250 kilometers northeast of Bangkok, Korat is an obvious gateway to the northeast and a logistical hub. It is already an industrial hub. U.S.-based Seagate Technology Company has a huge HRD disk drive factory in Korat, employing more than 12,000 people. The province is best known, however, as a hub for food processing using Isaan’s main commercial crops — rice, tapioca and sugar. Isaan accounts for half of Thailand’s exports of the three crops, which employ more than 700,000 Isaan families.

    In the long run, the dual track rail line running from Khon Kaen to Laem Chambang will provide a vital and cheaper transport link for these commodities that could make them more price competitive abroad.

    “The problem with Thailand is transportation costs. We don’t have efficient transport like trains,” said Hassadin Suwattanapongchet, president of the Nakhon Ratchasima Chamber of Commerce. Rail currently accounts for only 2% of Thailand’s goods transport, although freight is about half the cost of road transport per ton and is less polluting.

    Work has commenced on the dual track line, but it will take four to five years before the connection to Laem Chabang port is completed. “That’s a long time. People cannot imagine what it will be like in five years, so if the government can last for five years some people will be grateful,” Hassadin said. Villagers to be displaced by the new motorway have long opposed the project, but their opposition has been silenced by Prayuth’s edict.

    While Korat’s prospects look bright, the rest of Isaan is still suffering. Since last year, the region’s farmers have been hit by a triple whammy of declining demand for their commodities in China, low commodity prices worldwide and drought.

    All commodity prices except sugar are down, while sugar cane has also suffered in the aftermath of the 2015-16 drought. The price of tapioca, which is exported mainly to China, has dropped from 2.30 baht per kilogram last year to 1.40 baht now. Other than short-term measures, such as paying cash to farmers to compensate for low prices, the government has seemed stumped by the challenges facing regional agriculture. For instance, the Federation of Thai Tapioca Growers has been urging the government to strengthen efforts to promote of the use of tapioca in ethanol fuel and plastics, but so far, the official response has been slow.

    The region’s rice, tapioca and sugar cane farmers were the target of populist measures under the previous two elected governments designed to boost their incomes. A controversial rice pledging scheme under Yingluck’s government, promising to buy rice at 40% above market prices, was particularly popular but crashed down in scandals over corruption allegations. It seems unlikely that Prayuth’s transport projects, due for completion years from now, will win him similar kudos. The former Army Commander-in-Chief has made it clear he would be willing to become prime minister after the next election, albeit as an appointed one.

    “The government can invest in the motorway, or a high-speed train, or whatever, but the fact remains that most of the people here are farmers and the price of their crops — rice, tapioca and sugar — are low, so the people will have no money to drive cars on the motorway, or ride the high speed train, or shop in department stores,” said Pornchai Amnuaysap, senior adviser to the tapioca growers’ federation. “They will just stay at home and try to survive.”

  • Record demand for New Zealand avocados in Korea

    Record demand for New Zealand avocados in Korea

    The death of Thailand’s long-serving monarch may be affecting the buying behaviours of Thai consumers but export group leader AVOCO says any shortfall of New Zealand fruit sold will be more than made up in AVOCO’s other markets.

    Thailand is in official mourning following the death of King Bhumjbol Adulyadej on October 13. Popular tourism events have been cancelled and entertainment has been banned for 30 days as Thai people closely observe this period as a sign of respect to the 88-year-old monarch who ruled for seven decades. With fewer people dining out and industries temporarily shutting down, export activity to Thailand has slowed, says AVOCO and AVANZA’s market manager for Thailand, Carwyn Williams.

    “Sales have definitely changed and we are keeping a close eye on what impact this event will continue to have on avocado export volumes to Thailand,” says Mr Williams. “Correspondence has been difficult as business takes a back seat for Thai people during this time. This illustrates the importance of having a diverse range of export markets and the silver lining for us is that we can direct more fruit to our strong performing Korean market.”

    Shipments of New Zealand avocados to South Korea have reached an industry high with 209,000 trays planned for export this season. Worth about $6 million to the total industry, it is three times the volume exported last year.

    The greater volume reflects the industry’s larger national crop in 2016-17 but more importantly the work AVOCO has put in, under its AVANZA brand name, to promote New Zealand avocados and drive consumption in Asia.

    After a short crop of 2.5 million trays last season, about 5.1 million trays will be exported in 2016-17 – exceeding the previous record of 4.5 million trays two years ago.

    AVOCO will handle the bulk of New Zealand’s crop and this season will export about 3.1 million trays, with 83% destined for Australia. The remaining 17% will be sent to various Asian markets, including Japan, Thailand, Singapore, India and Korea and marketed under the AVANZA brand.

    AVANZA is responsible for 85% of all NZ exports to Korea this season, shipping more than 7000 trays a week over a 25-week supply window. Compare that to last year when AVANZA’s total contribution was just over 65,000 trays.

    Changing diets and promotion of avocados as a healthy food option means the superfood is in demand more than ever in Korea, which has a population of 50 million people. Korean imports of avocados between January and August this year from all origins, including Mexico and the US, was 347,000 trays – an 83% increase on avocado imports during the same eight month period in 2015.

    It’s likely New Zealand avocados will make up about half of all avocado imports this year to Korea where AVANZA market manager Martin Napper says retail and wholesale buyers can’t get enough of the fruit.

    “Korea has been a rapidly growing market for avocados. Two years ago, New Zealand shipped close to 72,000 trays to Korea – anymore and the market could tip over very quickly. But this year, we’ve received unprecedented interest. Avocados have just hit a nerve.”

    Korea, unlike other Asian markets, prefers large size fruit, which gives AVOCO a valuable supply avenue outside Australia for fruit above a certain size profile. The larger size premium fruit (16/18/20/24ct) is retailing for NZ$4 per piece this season which Mr Napper considers to be a “reasonable price point”, given the nature of the product and the inclusion of duties.

    New Zealand’s Free Trade Agreement ratified with Korea in September last year saw the 30% tariff on New Zealand avocados drop to 24% at January 1. The tariff drops 3% annually until it is eliminated in 2024. Mr Napper says that while the duty is still a hindrance to AVANZA, currently accounting for up to US$10 for every bulk carton shipped to Korea, demand for avocados continues unabated.

    “There’s recognition that healthy food items command a premium price and consumers are prepared to pay that.”

    While other New Zealand exporters have shipped fruit to Korea in small volumes in recent years, AVANZA has led the way in developing the market, partnering with similarly health-focussed brands at retail events designed to raise awareness about the health benefits and versatility of New Zealand avocados. This year, they’ve partnered with Korea’s second largest dairy company, Maeil Dairies, to cross-promote smoothies using avocados and soya milk. By the season’s end, Koreans will have taken part in more than 1000 in-store demonstrations promoting AVANZA avocados since 2014.

    AVANZA has also collaborated in the market with the Avocado Industry Council which has helped to promote New Zealand avocados on a website designed specifically for a Korean audience. The NZAIC Korean website offers recipe ideas and fruit handling information to inspire and educate the Korean consumer. It has also engaged Korean celebrity chef Hong Shin Ae to front tasting events and meal demonstrations using avocados.

    “The AIC has also undertaken social media research to better understand the buyer behaviours of consumers throughout Asia. That information is fed back to us to tailor our own marketing strategies to reach our targeted consumer, which in Korea is a woman, aged 20-45. She values health and beauty and makes all the household buying decisions.”

    Additionally, AVANZA has made efforts to educate retailers handling the fruit. Technical consultants Colin Partridge and Jerome Hardy have visited Korean retailers to instruct them on techniques to ripen fruit correctly which have been critical to boosting sales. Supermarkets have been encouraged to put ripe, ready-to-eat fruit on display alongside hard, green fruit – a strategy that can result in a 300% increase in sales because people buy more often and consume the day of purchase.

    “Displaying ripe fruit is a step forward by retailers who would never have done that even two years ago due to perceived wastage. But they recognise now that avocado is an important retail category for them and any wastage will be more than offset by increased sales,” says Mr Napper.

    “It’s one of the experiences we’ve taken out of our market presence in Japan where New Zealand avocados are more established. We’ve noticed the difference these strategies have but timing is everything and Korean retailers are recognising now that avocados are a growth category for them and they’re worth the investment.”

    Nearly 800 avocado growers across Northland and the Bay of Plenty supply AVOCO. Harvesting got underway in the Far North in late-August and will continue until February.

  • Qlik and Esri Singapore join forces to redefine visual analytics

    Qlik and Esri Singapore join forces to redefine visual analytics

    Qlik, a leader in visual analytics, today announced its technology partnership with Esri Singapore, the country’s leading Geographic Information System (GIS) technology provider.

    The collaboration will see Esri Singapore and Qlik working together to educate industries on the benefits of synergising geographic and spatial analytics.

    Smart mapping: making intelligent decisions with geographic information

    Esri’s ArcGIS Online is a collaborative, cloud-based technology platform that allows users to easily create, share and access content rich maps, applications and data. The technology collects location information contained within an organisation’s data and translates static data into useful, intelligent maps. Different locations have unique characteristics, and organisations need to identify, qualify and understand the connections between people, places and events. When mapping analytics is combined with a powerful visual analytics platform, organisations can add a new dimension to the practice of analysing information by translating complex datasets into the universal language of smart maps.

    Additionally, by integrating location information with data in real-time, businesses can unearth relationships, patterns and trends that would otherwise remain hidden. Esri’s ArcGIS Online maps are compatible with both QlikView and Qlik Sense. The Qlik Sense extension is available on Qlik Branch – a collaborative workspace and open exchange that provides customers, developers and partners simplified access to the open and powerful APIs of Qlik solutions. “More than 80 per cent of our business data is location related. From understanding your customer information and their behaviours to managing chronic illness, pandemic patterns, and even business impact due to accessibility of transport networks – location essentially links different sets of business information together to provide executives with better informed decision making.

    Through our partnership with Qlik, we aim to help organisations understand the value of letting users see their data in new and provoking ways, allowing them to develop actionable plans to address real-world challenges, said Thomas Pramotedham, Chief Executive Officer, Esri Singapore. “From retail sales performance to urban planning, being able to seamlessly merge intelligent mapping with visual analytics is critical to smart, data-driven decision-making. Qlik is proud to partner with Esri Singapore to promote the benefits of combining mapping technology and visual analytics for organisations to drive better decision making. We look forward to pursuing more innovative projects together in the future,” said CK Tan, Product Marketing, Qlik Asia Pacific.

  • Chinese firm plans to process re-fresh cod products for Shanghai retail

    Chinese firm plans to process re-fresh cod products for Shanghai retail

    Beiyang Jiamei Seafood, a Chinese processor switching its business from exports to imports, plans to expand into re-fresh products for the domestic market.

    The company, which is based in Qingdao, hopes to start processing re-fresh, packaged cod products for retail in Shanghai early next year, said Peng Song, its general manager.

    “We have in mind selling re-fresh cod and redfish. I think cod, both Atlantic and Pacific, can be very big in the Chinese market,” he told.

    If this model works, it could then be applied in other Chinese cities, he said. “I think we would be the first company in China to do this,” he said, during the China Fisheries & Seafood Expo.

    The company is also starting to sell frozen cod products into Chinese retail, wholesale and foodservice.

    “For the big, longline Pacific cod, we cut it into steaks. For the Atlantic cod, we make loins, portions and J-cuts,” he said. “I do think this item will boom in China, in a very short time.”

    Chinese in coastal cites do eat Pacific cod, he said, as the same species that is caught by Russians and American vessels is also in Chinese waters.

    But, the species is not sold as “cod” and consumers are unfamiliar. “The catching is inconsistent, so people do not like to promote it. The species may not be new, but to name it Pacific cod, Atlantic cod, that is new,” he said.

    The company is also putting the Marine Stewardship Council (MSC) logo on its cod retail bags.

    “We now have most of our products MSC approved. I think that is the future,” said Song.

    “The MSC is also fully traceable, from catch-to-plate. That is a powerful message for the Chinese consumer, who is worried about food safety,” he said.

    Promoting the traceability angle of the MSC logo is the best way to expand in the China market, he said, due to the concerns over food safety in China.

    Shift to domestic sales

    Beiyang Jiamei now generates around $35 million from domestic sales, as well as the same amount from re-processing and exporting.

    For the re-processing business, cod, haddock and arrowtooth flounder are the main species, he said.

    The company only started doing domestic sales in 2011. Beiyang Jiamei is selling into wholesale, into retail and foodservice, and also via online stores on JD.com and Tmall.

    Beiyang Jiamei’s main brand is “Sea Mix”, but it also has another for families, “Dinosaurs”. Also, the company is launching a high-end brand, “Prime Catch”, for crab and other more expensive items.

    A big focus of the domestic business, including e-commerce, is coldwater shrimp. Beiyang Jiamei imports around 5,000 metric tons of coldwater shrimp a year.

    Due to the quota cuts for coldwater shrimp in Canada, the company is now importing more vannamei from Ecuador and also red shrimp from Argentina.

    “We use coldwater shrimp to open the door to the supermarkets. Then, we try and introduce our other products to them. Coldwater shrimp will remain the most important item to us,” he said.

    “Needless to say, the high prices of coldwater shrimp mean vannamei has taken a share of the market,” said Song.

    “The price is RMB 91.50 ($13.53) per kilogram. This is the same price as L1 [Argentine shrimp] or 30/40 from Ecuador,” he said.

    “In China, if you entertain a guest, you want the bigger size to create a good impression”, meaning the vannamei and Argentina shrimp has a strong appeal, he said.

  • Russian chocolate, beer and baby food companies aim to conquer Asia

    Russian chocolate, beer and baby food companies aim to conquer Asia

    Every time Chinese President Xi Jinping visits Russia, he asks for some Russian ice cream. As a result of this craving, Russian President Vladimir Putin presented a whole box of ice cream to his Chinese counterpart at the G20 summit.

    Chinese tourists share their leader’s love for Russian ice cream so much that there are rumors that China is planning to build its own Russian ice cream factory. Consumers from across Asia are increasingly buying Russian food products thanks to a recent growth in exports from Russia.

    Chocolate

    Alyonka, Babaevsky and Rossyia chocolate bars, which are popular among tourists, are now being exported to Asia.

    “Alyonka is the most popular brand of chocolate that is being sold in China, but Babaevsky and Vdohnovenie chocolate bars are also becoming popular,” says Denis Usalev, marketing manager of Uniconf, which owns all three brands, and is the largest confectionery holding in Eastern Europe.

    He adds that sales of Alyonka grew six-fold year-over-year in China in 2015 and the company expects to see even more growth in 2016. Chinese consumers can buy Russian chocolate through ecommerce platforms as well as in local shops.

    Russian companies are also looking beyond China, and are obtaining Halal certification to compete in Muslim countries in Asia.

    Waffles and biscuits

    The Russian confectionary industry is developing new products specifically for the Asian market to cater to local tastes.

    “Korovka waffles with milk and chocolate fillings is our main driver of sales in China,” says Usalev. “Also around 50 per cent of Alenka biscuits are exported to China.”

    The Jubilee sugar cookies brand was launched in early 1913 and gradually became very popular in Russia. In 2007, Mondelēz International Inc acquired the brand and renamed it to belVita Breakfast. In 2015 belVita Breakfast biscuits were introduced in China and Indonesia . The company has become a global breakfast icon, with sales growing at about 20 per cent annually over the last few years.

    Healthy snack bars

    The organic food market segment has been growing rapidly for years. In 2015, Take a Bite was launched in Hong Kong, China and Singapore. The Russian company relied almost exclusively on retail sales in local super markets, but today buyers can purchase Take a Bite from the TMALL online store.

    Another Russian healthy food brand ECO botanica, which is owned by Uniconf, is also looking to tap into the Asian market.

    “Sales in China grew tenfold in the first nine months of this years,” says Usalev. Next month we will launch the ECO Botanica store on the Alibaba platform.”

    Baby food 

    The leader in the baby food market in Russia, Frutonyanya has also entered the Chinese food market.  “We’ve already received two 40-feet containers of Frutonyanya products and are now waiting for the third one,” says Artem Zhdanov, co-founder and marketing director of UChina, which is helping the Russian baby food company enter the Chinese market.

    “The first consignment went to our Chinese partners, distributers, trade platforms and a food exhibition to enhance brand recognition and to promote the brand name.”

    The company has more than 200 products including fruit drinks, jellies, desserts, fruit puree, milk and milkshakes. It will launch a separate line for pregnant women and breastfeeding mothers.

    Beer

    Baltika, a favorite of former U.S. Ambassador to Russia Michael McFaul, became the first Russian beer to be exported to Asia. It is now available in Vietnam and Malaysia.

    The Russian beer brewer, Ochakovo established licensed production in Japan in 2016. Since July 2016, the company has been supplying three types of canned beer. Ochakovo has also launched beer exports to China.

  • Swedish retail giant H&M opens 18th Philippines Store in Centrio

    Swedish retail giant H&M opens 18th Philippines Store in Centrio

    Swedish retail giant H&M Hennes and Mauritz, Inc. has opened its 18th store in the Philippines at Ayala Centrio Mall in Cagayan de Oro City.

    H&M Country Manager for South East Asia Fredrik Famm leads the countdown for the ribbon cutting of their Centrio Store

    H&M Country Manager for South East Asia Fredrik Famm leads the countdown for the ribbon cutting of their Centrio Store

    Over a thousand excited shoppers queued as early as the day before to be the first to see only its second store in Mindanao after Davao.

    The crowd lines up to get a glimpse of the new store

    The crowd lines up to get a glimpse of the new store

    H&M Cagayan de Oro has more or less 1,500 square meters of store space and opens regularly from 10am-9pm.

    It carries a full assortment of H&M products including ladies, men’s, kids, shoes, accessories and lingerie, and also has complete sports, denim and underwear departments for both men and ladies.

    Ed Montalvan and other media are given a quick tour of the store prior to its 27 Oct opening by AList Dir Cybill Guynn (RMB, NPN)

    Ed Montalvan and other media are given a quick tour of the store prior to its 27 Oct opening by AList Dir Cybill Guynn (RMB, NPN)

    Alert environment-conscious shoppers will find an array of Conscious and sustainably-produced products, and will be delighted to avail of the option to donate used clothes for a discount voucher they can use for their next purchase under H& M’s Garment Collecting Program..

    Fredrik Famm, H&M Country Manager for South East Asia, sees a lot of potential in his assigned region, especially the Philippines.

    Fredrik Famm, H& M Country Manager for South East Asia, fields queries from the media with Danreb Mejia, H&M Head for Communications & Press

    Fredrik Famm, H& M Country Manager for South East Asia, fields queries from the media with Danreb Mejia, H&M Head for Communications & Press

    “By the end of the year we will have around 20 stores in the Philippines,” Famm said an exclusive media interview prior to the 27 October Centrio store opening. “We have big plans for the coming years given the country’s growing population, growing middle class, growing disposable income, and growing fashion interest.”

    “We’ve been in the Philippines for exactly two years since October 2014,” he said. “It’s been an amazing journey, we’ve been very well received, so we now have 18 stores in the country, it’s been a very quick expansion, and Filipino customers have embraced us in an amazing way.”

    The country’s robust economy has obviously been the driver for the store’s fast expansion.

    “We see a lot of potential in the Philippines, there is a lot of fashion interest, we see that segment is growing very quickly, and we see we have something to offer that is not yet fully present in the market,” Famm said. “We offer fashion, quality and price, and our products are made in a sustainable way. We think we can manage this mix better than most of our competitors.”

    H&M Centrio offers the same fashion at the same price you find in H&M stores all over the world

    H&M Centrio offers the same fashion at the same price you find in H&M stores all over the world

    H&M has sold out collections and there have been long queues whenever they open a new store. Apparently, fashion conscious Pinoys who’ve been abroad have been delighted to find the same merchandise at the same prices in H&M’s Philippine stores.

    “The fashion you see in Cagayan de Oro is the same that you can see in London, Paris, New York,” Famm stressed. We believe fashion is global and everything travels fast these days via internet and social media. We want customers to have the same experience when they enter our store in Cagayan de Oro as what they experience when they enter a store in Europe or US.”

    Thus, the chain has experienced sold out collections and long lines whenever they have opened a new store in the Philippines.

    Centro Mall Manager Natalie Mae Crisostomo (left) with Veronika Spanikova , H&M Construction Manager for South East Asia & Joy Tan, Construction Project Manager for H&M Philippines (photo by Mike Banos, NPN)

    Centro Mall Manager Natalie Mae Crisostomo (left) with Veronika Spanikova , H&M Construction Manager for South East Asia & Joy Tan, Construction Project Manager for H&M Philippines.

    “We want Cagayan de Oro customers to be able to find the same fashion in bigger cities in Europe and the US. We have the same collections everywhere and we build our stores the same way,” he added.

    Providing fashion for every age group at affordable prices has endeared the store to fashion conscious Pinoys eager to make their own individual fashion statements.

    “We believe customers are looking for the same fashion all over the world. Looking at the diversity that we have, everyone must be able to dress their own personality,” Famm said.

    “Every day you have new fashion arriving in the store, and that’s what makes us extremely competitive.  We want customers to find something new every time they visit us so customers should be able to come back every week and find something interesting.”

    Pinoy shoppers who’ve shopped in H&M stores all over the world will be further delighted to know they’re paying the same prices for the same merchandise they’ve been buying aboard.

    Souvenir shot with Danreb Mejia, H&M Head for Communications & Press

    Souvenir shot with Danreb Mejia, H&M Head for Communications & Press

    “We aim to have the same prices all over the world except for local differences due to customs duties, taxes, logistics, or exchange rates, but more or less we have the same price levels especially within the Philippines,” Famm assures.