Retail News CRM

Author: Mei Ling Tan

  • Retail sales in Japan rise by 1.7 percent

    As per industrial data released on Wednesday, Japan has witnessed economical growth after months of stagnation. The country’s industrial output increased 1.5 percent on month, and inventories fell 1.5 percent on month and 4.8 percent on-year.

    Japan’s retail sales also rose by 1.7 percent on-year in November, however, sales of large retailers were down by 0.3 percent on year. The manufacturing industry is meanwhile expected to grow 2 percent in December and 2.2 percent in January.

    The country released revised figures earlier this month, showcasing that its gross domestic product (GDP) for the July-to-September quarter grew 1.3 percent on-year.

    Izumi Devalier, Head of Japan economics at Bank of America-Merrill Lynch said, “We’re now down to levels we saw pretty much at the time of the VAT value-added tax hike. So, inventories are very lean, which means that we should some pretty strong production numbers in the months ahead.”

    “While domestic demand still lacks strength, a pick-up in exports is driving up production. Output will likely continue recovering moderately ahead,” said Takeshi Minami, Chief Economist at Norinchukin Research Institute.

    Growth in exports and factory outputs is offering the country’s economy a boost, while also encouraging policymakers to pull the country’s economy from stagnation.

    Further, the data released showed that Japan’s core consumer price index including oil products dropped 0.4 percent on-year.

    Such a drop has been recorded for the ninth straight month in November.

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  • Mobile Research Starts The Purchase Cycle; 78% Buy Within The Day

    Mobile Research Starts The Purchase Cycle; 78% Buy Within The Day

    Once a consumer starts researching products on their smartphone, the actual purchase of a product is pretty close behind.

    In the U.S., the final purchase is most likely to occur in a physical store, which is not the case in some other countries.

    While different countries have varying degrees of penetration, the smartphone is considered the most important device for retail research by almost a third (30%) of all retail shoppers, according to a new report.

    The Global Mobile Path to Purchase study was conducted by xAD and Millward Brown and examined shopping behaviors in five countries (U.S., U.K., Germany, China and Japan).

    The importance of the smartphone as a research tool for retail purchase varies by country, with the device taking on more importance than desktops in China. Here’s the breakdown of where mobile is the most important device for shopping:

    • 50% — China
    • 44% — Japan
    • 32% — United Kingdom
    • 31% — United States
    • 29% — Germany

    There are a wide range of items that people are shopping for on phones. Consumers in Japan and China use phones for grocery shopping way ahead of other countries. In China, 88% of consumers use phones for grocery shopping, and 63% of consumers in Japan.

    By contrast, just over half (57%) of U.S. consumers use their phones for grocery shopping, with clothing and apparel talking the top spot. Here’s what consumers in the U.S. use their phones for when shopping:

    • 58% — Clothing and apparel
    • 57% — Grocery
    • 41% — Electronics
    • 39% — Home goods and improvement
    • 37% — Beauty and wellness
    • 31% — Games and entertainment
    • 23% — Sports and leisure

    While more consumers in Japan make purchases on their phones, U.S. shoppers head to the store for that final purchase. For example, 67% of consumers in the U.S. make a trip to the store to complement their mobile research compared to fewer than half (45%) in Japan.

    The real key in all of this is that once consumers start researching on their phones they are in the market to make a purchase relatively soon. Mobile research is the beginning of the intent to purchase cycle.

    Chinese and U.S. consumers are the quickest to convert, while Japanese consumers tend to take a bit more time. When shoppers start their mobile researching, here’s the breakdown of how many make a purchase within the day or sooner:

    • 86% — China
    • 78% — United States
    • 78% — United Kingdom
    • 73% — Germany
    • 49% — Japan

    After they begin their mobile research, more than half (54%) of U.S. consumers end up making the purchase in a physical store. In China and the U.K., more consumers make their final purchase via mobile rather than in person or via desktop.

    This may be a factor in the adoption of mobile payments, at least in stores.

    In the U.S., in-store mobile payments account for only 2% of all retail transactions, according to new research form GfK.  In China, it accounts for 24% of transactions.

    Shoppers in the U.S. may pass on mobile payments and prefer to make most of their purchases in a physical store, but that does not leave mobile out of the process.

    Smartphones are used all the way to the final purchase, for comparing products and checking prices of competitors. The consumer may end up buying at the store, but they likely used their smartphone to determine the product, the store and the timing of the buy.

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  • Malaysia’s property market still resilient despite challenges

    Malaysia’s property market still resilient despite challenges

    The property market remains resilient despite of the challenging economic environment, according to observers.

    Rahim & Co Research director Sulaiman Saheh said although the number of launches and sales performance of developers have been declining, there were projects that were performing well due to the nature of the product, concept, location and marketing strategies.

    “Market fundamental is still resilient and the market has the holding power, in spite of some expectations of rising unit sales,” he said during a presentation at the Rahim & Co property research seminar recently. He said affordability is still a major concern.

    “The market is leaning towards the affordable market segment. Creative products within the affordable segment are going to be well-received,” he said, adding that there is still demand but the buyers were hindered by end-financing woes.

    “We expect a rationalisation of high-end and branded residences as the global economy remains challenging,” said Sulaiman.

    According to Knight Frank in a report on the local real estate market, the outlook for the high-end condominium segment remains lacklustre, impacted by weak sentiment as potential buyers and investors continue to adopt a “wait-and-see” approach. “With the widening gap between supply and demand as well as mismatch in product pricing and affordability in the domestic market, more developers are expanding their target catchment by marketing overseas as the weak ringgit translates into attractive pricing and low-entry level for foreigners.”

    It said the challenging property market environment had led to more strategies with developers adopting “push marketing” to boost sales of selected projects and improve revenue.

    Meanwhile, Knight Frank said the office market in the Klang Valley is expected to remain subdued and face downward pressure.

    “Amid the mismatch between supply and demand, office vacancies are expected to trend upwards due to a strong supply pipeline and lacklustre absorption as more firms cut workforce or freeze hiring to consolidate business operations.

    “Owners of newly-completed office buildings which have yet to achieve significant occupancies may offer more competitive rental package to secure tenants while those of secondary office buildings are expected to be more flexible in negotiations to retain existing tenants.”

    According to Axis REIT Managers Bhd head of investments and Malaysian Institute of Estate Agents immediate past president Siva Shanker, some 5.8 million sq ft of office space is expected to come onstream in the Klang Valley in the second half of 2016.

    He said the market would “start to level out” by 2018 or 2019 and start peaking by 2020 or 2021.

    “With additional office space expected to be completed by end-2016 in addition to the still available space in the Klang Valley, the general market will continue to be a tenant’s market.

    “Landlords or building owners have become more aggressive in marketing to attract tenants,” Siva said at Rahim & Co’s property research seminar recently.

    Knight Frank added that good grade and dual-compliant office space in good location, however, is expected to remain resilient.

    As for the retail market, Knight Frank said the projected sales growth for 2016 had been revised downwards from 4% to 3.5% following the weak performance last year.

    “Consumer spending remains a key challenge in the retail industry with many continuing to hold back on purchases due to growing concerns about rising cost of living and the weaker job prospects.

    “Moving forward, the uncertainties following the recent Brexit referendum are expected to further weigh down market sentiments globally and this will not augur well for the local retail industry. With the scheduled completion of some 3.36 million sq ft of new retail space in the second half of 2016, competition in the retail market will heighten.”

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  • China’s diesel demand likely to rise ahead of Lunar New Year

    China’s diesel demand likely to rise ahead of Lunar New Year

    China’s diesel demand is likely to pick up pace ahead of the Lunar New Year as traders stock up barrels ahead of the festivities and as construction activity picks up in some areas, four trade sources said on Thursday.

    Implied diesel demand in October in China, the world’s second-largest oil user, rose to 3.4 million barrels per day, up 6.4 percent from September and 1.3 percent higher than the same time last year, according to Reuters calculations using official data.

    That is the highest level since at least March this year with implied diesel demand rising in only three months so far this year, the data showed.

    Demand for diesel in November to December is expected to be even higher, traders said.

    “China is having many policies to boost the economy now, so demand will pick up a bit, but by how much is a question,” said a source with a state-owned refiner.

    China’s economy looks set to hit its 6.5 percent to 7 percent growth target as increased government spending and increasing housing demand spur a construction boom.

    Diesel is used to power trucks for industry and for construction.

    First-quarter Chinese diesel demand may rise by 75,000 bpd from the year ago period, based on the industrial recovery, consultants JBC Energy said in a note on Thursday.

    Demand is also picking up ahead of the Lunar New Year period as traders start to stockpile the fuel and as winter consumption of the fuel has increased for heating and back-up power generation, a second source with a state-owned refiner said.

    “China has also been increasing the retail prices, so demand from traders is picking up as they start to fill up tanks,” the source added. China will raise retail diesel prices by 95 yuan ($13.66) per tonne from Thursday, its third increase since Nov. 30.

    China’s diesel stocks at the end of November fell to a record low after refineries tempered production while they upgraded facilities to produce higher-quality fuels in order to meet stricter emissions limits that the country is introducing from Jan. 1.

    Regulations introduced in September that imposed stronger penalties and ramped up inspections to prevent trucks being overloaded with goods also boosted demand for diesel, traders said.

    “The trucks have to make more trips, so this consumes more diesel,” a shipping source said.

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  • AirAsia X increasing more Teheran flight

    AirAsia X increasing more Teheran flight

    Airasia X Bhd, the long-haul low-cost arm of budget carrier AirAsia, is adding more flights to Teheran from Kuala Lumpur six months after resuming its flight to the capital of Iran. AirAsia X’s chief commercial head Arik De said the airline had received positive response from travellers and seen a steady increase in the Kuala Lumpur-Teheran route load factor.

    He said the airline had recorded 80 per cent average load factor on the route with strong forward bookings trend, especially towards Nooruz celebration in March. “We will raise frequency starting next month onward with four times weekly direct flights to Teheran from Kuala Lumpur,” said Arik. The improved connectivity’s timing will also benefit from Malaysia’s plan to boost bilateral trade and investment ties with Iran.

    Last month, International Trade and Industry Minister Datuk Seri Mustapa Mohamed said the Cabinet had given its approval to embark on bilateral free-trade agreement talks with Iran to take advantage of the potential growth of two-way businesses since trade sanctions were lifted.

    Bilateral trade so far has been small with about US$700 million (RM3.14 billion) in 2015. Malaysia hopes to boost exports to Iran, especially palm oil. Both the governments agreed during a visit by Iranian President Dr Hassan Rouhani in October to double the trade volume. Mustapa said with a population of 80 million, Iran was one of the largest markets in the Gulf region and already businesses were making a beeline to tap potential since sanctions were lifted in January last year.

    Arik said almost a quarter of AirAsia X’s passengers travelled to Tehran via AirAsia’s FlyThru service from the airline’s long- and short-haul networks. The airline resumed its direct flight to Teheran on June 21 last year after suspending the destination in October 2012 following sanctions against Iran.

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  • Lamborghini to launch its first plug-in hybrid SUV

    Lamborghini to launch its first plug-in hybrid SUV

    Italy based luxury sports car manufacturer Lamborghini is all set to launch its Urus SUV range, informed the company in an interview to a popular media publication. The company also confirmed that Urus will also feature the brand’s first plug-in hybrid, and that it will be the brand’s first and only SUV to get a plug-in hybrid system.

    Lamborghini Urus shares its platform with its cousins Audi Q7 and Bentley Bentayga and will also feature 48V-powered active anti-roll suspension. This is also the company’s first SUV since the LM002 which was on sale from 1986 to 1993.

    Lamborghini R&D chief Maurizio Reggiani has assured that there won’t be any compromise when it comes to the power of the car and all other variants of its SUV will get naturally aspirated engines.

    He added “A supersports car is completely different; you need the responsiveness of the engine, to feel the spark of every cylinder. We will keep normally aspirated engines for our other models. They are still the best choice.”

    The company also sees a strong distinction between its front-wheel-drive models and the increasing number of Rear-Wheel-drive variants in its portfolio. Lamborghini will continue to offer both the driveline systems as Reggaini explains that “a modern electronic chassis control system like that of the Huracan LP580-2 is no substitute for the ability of four-wheel drive to transfer power to the road.”

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  • Vinh Foods products to be sold in Spain supermarket

    Vinh Foods products to be sold in Spain supermarket

    Vinh Foods products, a brand of catfish processor Vĩnh Hoàn Corporation, have been put on the shelves of Mercadona, the largest supermarket chain in Spain, from December.

    Vĩnh Hoàn Corporation is expected to earn revenue equal to 10 million euros (US$10.5 million) from supplying tra fish to Mercadona in 2017 and 16-19 million euros in 2018-19.

    The company started negotiations with Mercadona in 2015 and the first batch was shipped this September.

    Mercadona owns a chain of 1,598 supermarkets, accounting for nearly 60 per cent of the tra fish retail market in Spain, until October.

    Vĩnh Hoàn Corporation is the largest tra fish exporter in Việt Nam. Statistics showed that in the first 10 months of this year, the company earned revenue of more than $202 million, a rise of 8 per cent over the same period last year.

    Việt Nam earned $1.67 billion from exporting tra fish this year, increasing by 7 per cent over 2015.

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  • Korea braces for next industrial trends in 2017

    Korea braces for next industrial trends in 2017

    Korean businesses’ quest to step closer to future industries is expected to accelerate in the New Year, regardless of the political scandal, the ongoing investigations into dubious business-political ties and the looming presidential election.

    The year 2016 was an opportunity for general consumers to familiarize themselves with the innovative concepts of technologies. And the year 2017 is likely to see some of these technologies become reality.

    The convergence of the automotive industry with technology will speed up along with a transition to green cars, amid the growing competition in the battery market and the rising price of oil.

    Devices including smartphones and home appliances operated by artificial intelligence will come to the fore, with virtual reality and augmented reality technologies becoming mainstream in the tech world.

    The shifting technologies are also expected to affect the retail market with consumers looking for products that offer experience and value beyond a simple price benefit.

    Go player Lee Se-dol at a press conference at the Four Seasons in Seoul on March 12, 2016

    AI to be next big thing in the tech industry

    Artificial Intelligence, which astonished the world in a match with the top Go player Lee Se-dol, is expected to become the next big thing in the smart device and appliances industry in 2017.

    The nation’s largest tech company Samsung Electronics, which acquired the AI startup Viv Labs in October, seeks to recover from the note 7 debacle with its new AI-based smartphone Galaxy S8, which is set to be unveiled early this year. Viv Labs is the US tech firm set up by Apple’s Siri developers.

    Samsung Electronics’ Vice President Rhee In-jong said in October, “Galaxy S8 will be Samsung’s first platform, which adopts AI-based voice recognition technology,” adding that the technology has reached close to the level of the understanding humans.

    Korean tech firms — both smartphone makers and mobile carriers — are spurring AI development as the technology will ultimately be used to connect and control all home appliances and electronics.

    Samsung is set to unveil more advanced AI-based home appliances, which can be connected via Wi-Fi technology and controlled through smartphones, at the upcoming Consumer Electronics Show in January.

    LG Electronics is also slated to unveil AI-based home appliances, which adopt deep learning technology at the upcoming show. The deep learning technology enables products to provide customized services and functions by learning users’ habits and surroundings.

    The nation’s largest telecom carrier SK Telecom is also upgrading its AI-based speaker NUGU after first launching it in August. This device figures out users’ taste to recommend music, control home appliances and provides customized information such as weather and schedules based on their preferences.

    Market consulting firm IDC predicted that the global AI market would grow 55 percent on average annually from $8 billion in 2016 to $47 billion in 2020.

    Journalists and participants wear the Samsung Gear VR headset at the company‘s flagship Galaxy S7 launch event in Barcelona in February 2016.

    AR, VR to gain bigger presence

    Virtual reality and augmented reality technologies are geared to gain a bigger presence in the tech world in 2017, building upon the landmark developments made in 2016.

    VR is a technology that completely immerses users in computer-generated virtual worlds via a head-mounted display, while AR technology overlays, or augments, digital images onto a person’s view of the world.

    The year 2016 saw the release of next-generation VR headsets such as the HTC Vive, the Oculus Rift and Sony’s Playstation VR, which prompted the emergence of thousands of VR video games and mobile apps.

    The explosive popularity of AR-based mobile game Pokemon Go also highlighted AR’s potential to appeal to the masses on the mobile platform.

    The two cutting-edge technologies are geared to further advance and draw closer to the public in 2017 as the price of VR headsets further drop to boost the VR gaming sector, and as AR technologies are embraced by more industries.

    “After several years of hype, the operative reality behind virtual, augmented and mixed digital worlds is set to manifest more fully in 2017,” IHS Markit said in a recent outlook report.

    The firm expects AR and VR technologies will “advance significantly as Facebook, Google and Microsoft consolidate their existing technologies into more exhaustive strategies.”

    According to tech market intelligence company IDC, worldwide revenues generated by the AR and VR market will jump from just $5.2 billion in 2016 to more than $162 billion in 2020, as the two technologies expand their applications across diverse industries and services.

    IDC predicts that revenues generated by VR systems will surpass that of AR-related revenues until 2017, due to rising consumer uptake of VR-based video games and paid contents.

    After 2017, AR revenues will grow bigger as AR technology finds mass applications across areas such as healthcare delivery, product design and management tasks, it said.

    Just about every major tech company in the world has already entered the race to secure its place in the approaching era of VR and AR technologies. In the lead is Facebook-owned Oculus, Google and Microsoft, with Apple and Samsung Electronics working to catch up.

    Kia’s EV autonomous vehicle Soul

    Auto industry to face unprecedented race

    It was a tough year for the auto industry in Korea with an emissions scandal, strikes, low demand and negative growth.

    With the auto market expected to continue negative growth next year, carmakers will face unprecedented competition in the industry where automotive and technology are converging rapidly.

    South Korea’s largest automaker Hyundai Motor conducted a survey on the most anticipated technology next year. Almost 76,000 of 320,000 voters picked the autonomous driving technology. Although self-driving cars won‘t populate the road next year, most of the major carmakers and tech companies are putting all-out efforts to commercialize the self-driving technology.

    The debut of US electric automaker Tesla Motors and Chinese electric car maker BYD Auto will likely boost the EV market in South Korea, giving customers more choice in this growing segment. Tesla is set to open its flagship store in Korea and BYD officially launched its Korean office in Jeju Island in October.

    Backed by growing popularity, sport utility vehicles will remain as the silver lining for the sluggish auto market, which is expected to decline 1.2 percent on-year.

    Domestic carmakers, especially Hyundai Motor Co and Kia Motors Corp, will face fierce competition in 2017 in the Korean market as imported cars expand its market share. Currently, imported carmakers take up 13 percent of the total market.

    Outside Korea, South Korean automakers will struggle to thrive in mature markets, like the US and EU where analysts expect a zero growth next year, and in China where they saw disappointing sales figures in 2016. China’s auto market is expected to grow 4 or 5 percent in 2017 while other developing markets, like Russia and East Europe, will recover from the 2016 slump.

    China looms over Korean battery makers

    For Korea’s major battery makers — Samsung SDI and LG Chem — concerns over their performance in the Chinese market are likely to persist next year amid the neighboring country’s stricter rules on providing battery certification.

    The two companies have been dealt with a blow after the Chinese government suspended subsidies for electric vehicles using batteries produced by the two firms earlier this year. The two were excluded from the subsidy list as they failed to acquire the battery certification amid tightened regulations in China’s alleged protectionism moves.

    Unless China changes its policies, the Korean battery makers are unlikely to see improvement in their business there, the companies said.

    “While (the company) had anticipated the EV battery certification process will resume in the third quarter, (the Chinese government) did not carry it out. It is difficult to project an accurate timing,” a Samsung SDI official said in the third quarter’s conference call.

    LG Chem shared a similar view.

    “The biggest variable for the company’s sales growth for next year is China. If the status quo continues next year, the automotive battery business growth rate will be around 30 percent. If (the certification issue) is solved, the growth rate will possibly jump up to 60 percent.”

    Amid the higher threshold to the Chinese market, Korean battery makers are seeking to sustain their top position in the global ESS market next year.
    LG Chem topped the global ESS market share with 21 percent this year, standing at No.1 for two years straight, followed by Samsung SDI with 19 percent.

    “Amid the three-party competition of LG Chem, Samsung SDI and BYD Auto in the market, Tesla has risen as the new competitor. As the supply amount of the two Korean companies is projected to surpass 2 gigawatt hours next year, the two are likely to make up half of the market in total,” SNE Research forecasted.

    LG Chem has made aggressive ESS moves with supplying ESS for California’s largest power company SCE and other European companies.

    Experience-focused electronics retailer Electromart at Starfield Hanam

    ‘YOLO’ trend to rule retail in 2017

    In 2016, the retail sector saw consumers shifting their focus to stores and products that offer value and experience, rather than simply low prices.

    Despite the stagnant economy, brands saw consumers reaching for premium and healthy products, packing newly opened malls offering experience-based stores.

    In “Trend Korea 2017,” Seoul National University consumer studies professor Kim Nan-do dubbed this the “YOLO,” or “you only live once,” trend.

    “Consumers who used to think of restraint as a virtue are now enjoying and challenging themselves each moment, and spending money on simple, clear value,” he said.

    The most notable examples of YOLO spending can be found in travel, with consumers facing record-low interest rates choosing to spend money on meaningful experiences rather than saving it away. All retail sectors, meanwhile, have seen consumers choosing to open their wallets and enjoy the “here and now.”

    For example, consumers are buying more decorative products for the home to create better surroundings for themselves. According to the online open market Auction, sales of products like sculptures and music boxes from January to November rose by over 200 percent on-year. Hobby-related products such as classical guitars and model buildings and model airplanes also nearly doubled on-year.

    The Samsung Fashion Research Institute saw “selfness,” or the importance of brands‘ personalities matching those of consumers, to be a major factor moving the fashion industry in 2017.

    Starfield Hanam, a shopping mall featuring stores that allow consumers to experience products as well as buy them, saw nearly 2 million shoppers each month since it opened in September. Starfield Hanam’s popularity during a year when department stores struggled to maintain sales indicated that consumers are visiting and spending money at places that have an element of entertainment, rather than simply shopping options.

    “In an ‘experience economy,’ it will become more important for brands to find new marketing strategies that can satisfy the now-focused experience consumption of the YOLO consumers,” Kim wrote.

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  • Twelve Cupcakes sold to Indian tea company

    Twelve Cupcakes sold to Indian tea company

    Less than a month after celebrity couple Jaime Teo and Daniel Ong made their divorce public, it is now confirmed that Twelve Cupcakes, the cupcake chain they founded in 2011, has been sold to Kolkata-based Dhunseri Group, one of India’s largest tea producers, for S$2.5 million.

    Mr Mrigank Dhanuka, a member of the family that owns the Dhunseri Group, told: “We have acquired a 100 per cent stake in Twelve Cupcakes. The company, with a presence across 17 malls, helps us establish a strong footprint in the food & beverage (F&B) space in the Singapore market. We are looking at turning the business around, which is at just about cash break-even point at this juncture.”

    The sale was completed last December, following the divorce four months earlier of the former beauty queen and the radio deejay.

    The couple made the news of their divorce public on Dec 31 on their respective Instagram accounts.

    They have a six-year-old daughter, Renee, and they both said their focus is on giving her “as normal a childhood as possible”.

    “We have no comment on the story for now,” Mr Ong said in his response to queries about the sale of Twelve Cupcakes, which has expanded to more than 40 outlets across six countries in the region. Ms Teo did not respond by press time.

    The deal marks Dhunseri Group’s first foray into the F&B space in Singapore and the region. Mr Dhanuka has relocated to Singapore to head the operations locally, with plans to widen his firm’s presence in the F&B scene here. “We will be expanding our F&B portfolio under Twelve Cupcakes with new product launches in Singapore. We are also looking at expanding in the region post this acquisition. We continue to look for value deals here in the confectionery space,” he said.

    Dhunseri Group, which has been in the tea business for more than five decades, expanded its holdings to 10 estates in 2012-13 in Assam, from eight estates in 2003-04. The group also has a sizeable presence in the petrochemicals sector in India.

    The Twelve Cupcakes deal comes at a time when the retail industry in Singapore is struggling amid poor consumer sentiment, high costs, labour constraints and, above all, increased competition from e-commerce. The F&B segment has, however, remained largely resilient to the broader retail decline, and malls have increased the F&B share of their tenant mix sharply to attract footfall.

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  • Reliance on China makes tourism vulnerable

    Reliance on China makes tourism vulnerable

    A senior director at Lotte Duty Free said the Korean retail giant has lost customers recently. “I don’t think the situation will get any better this year,” the director said. The duty-free company saw its customers decrease by at least 10 percent in December compared to the same period last year.

    This year will be tough for Korea’s tourism industry as a whole as more youke, or Chinese tourists, are turning their backs to what was until recently one of their favorite destinations.

    The main cause is geopolitical. After Korea decided to deploy an American Terminal High Altitude Area Defense system (Thaad) missile defense system, Beijing ordered retaliation against a range of Korean businesses, particularly its entertainment exports. The Chinese government denies issuing vindictive orders to reduce tourists to Korea by 20 percent, but the numbers tell a different story.

    Mismanagement of Chinese group tours, such as forcing them to buy merchandise, is another factor.

    In November, the number of Chinese tourists coming to Korea was 520,000, a mere 1.8 percent increase year on year, according to the Korea Tourism Organization. The growth rate in August was 70.2 percent – partly due to a base effect related to the low number in August 2015 during an outbreak of Middle East respiratory syndrome. This dropped to 22.8 percent in September and 4.7 percent in October.

    For the first time in three years, the rate of Chinese tourists to all tourists in Korea fell below 40 percent to 39.5.

    One internal problem in Korea’s industry is group tours that overly emphasize shopping. The tour groups get commissions from the merchants.

    Ms. Wong, a 32-year-old office worker, was hauled to six shopping places in a single day as part of a five-day group tour to Korea in November. The guide informed the group that the stores were certified by the government, adding that all the salesperson were public officials.

    “I really doubted whether any of the stores I visited today were approved by the government,” she said. “I’ve never heard of the brands before and yet the products were all so expensive.”

    Government approval of stores does exist – a system jointly operated by the Korea Tourism Organization and the Ministry of Culture, Sports and Tourism. Three of the six stores Wang went to were not among the 1,004 certified stores. The other three were well-known duty-free stores.

    “There is no case whatsoever in which a public official works as a sales person at a commercial store,” confirmed a KTO spokesman.

    To tackle the problems with group tours, the Korean and Chinese governments have started to launch regulation on the business.

    According to local industry insiders, China’s tourism companies, who organize and send tourists to Korea, have increasingly made demands such as requesting lower fees from the Korean side or charging incentives per person in exchange for sending groups.

    “I heard of one case in which a Chinese travel agency asked for 300 yuan ($43) per person,” said a source working for a domestic travel company.

    Because the local tourism industry depends so heavily on Chinese tourists, local companies find it hard to resist such requests.

    To make up for those concessions, local tour companies try increasing their revenue by taking groups to duty free shops, where they get commissions.

    After the government issued new duty-free licenses in Seoul, competition among the stores got fiercer.

    “About 10 to 20 percent of sales are given to travel companies as commissions when their customers spend money at our branches, but after the competition heated up, I heard some even started paying up to 30 percent,” said one source.

    That’s causing a kind of race to the bottom in terms of profitability. “The competition has gotten so cut-throat,” said another duty free source, “that even with rising sales, profits are constantly going down.”

    Tourism specialists say Korea’s tourism industry has to reduce its dependence on China and shopping.

    They emphasize the importance of enhancing the cultural experiences for visitors.

    Lee Sho wen, 52, and Lee Li Mei, 47, sisters from Taiwan, spent two of their six days in Korea at a cooking class they found on the internet. The OME Cooking Class has provided Korean cooking classes in English and Chinese for foreigners since March 2015.

    Ha Wong Ming, a 27-year-old from Hong Kong, came to Korea for four days to learn K-pop dancing. He practiced the choreography of Big Bang’s “Bang Bang Bang” for two hours at Coreart, which organizes classes in K-pop dance and samulnori, a traditional percussion performance. “The objective is to offer a chance to experience Korean culture,” said CEO Jee Yoon-seong.

    “Shopping tourism has a limit,” said Lee Ki-Jong, a professor of hospitality and tourism management at Kyung Hee University. “Korea is relatively short of natural scenery so we have to focus more on cultural tourism.”

    In terms of diversifying target markets, a rising alternative to Chinese is Southeast Asians, many of whom are already familiar with Korean culture from hallyu, or the so-called Korean wave of cultural exports like K-pop and television serials.

    The number of Indonesian tourists to Korea November jumped 49.2 percent from 2015, according to the Korea Tourism Organization. Visitors from Vietnam rose 38.7 percent and from Taiwan 35.3 percent during the same period.

    Widening the spectrum of visitors can open new opportunities. For example, Taiwanese tourists have a keen interest in visiting Korea’s strawberry fields and picking fruit.

    Indonesians, many of whom have never seen snow, enjoy ski trips to Korea.

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  • Soon, fly to Singapore, Bangkok, directly from Chandigarh

    Soon, fly to Singapore, Bangkok, directly from Chandigarh

    The Chandigarh international airport in Mohali will be spreading its wings by connecting two new international destinations and four new domestic stations with direct flights from here.While two more international direct flights to two most sought-after global tourist destinations – Singapore and Bangkok— will start taking off from Chandigarh in March, the direct flights to and fro from Goa, Pune, Chennai and Hyderabad will also start taking off in February and March.

    With this, Chandigarh will have four international flights (two international direct flights to Sharjah (thrice a week) and Dubai daily are already flying since September this year), while the number of domestic flights daily will go up to 25.Today, Chandigarh was connected directly to Leh with Air India (AI), launching a flight between Leh and Chandigarh. The first flight (AI-457) departed from Leh at 08:05 hours and arrived here at 09:00 hours. In the return journey, the flight (AI-458) took off from Chandigarh at 09:40 hours and landed in Leh at 10:20 hours.

    The flight, operated by an A-319 Airbus, will fly on Tuesday, Thursday and Saturday every week.Sharing the airport expansion plans for 2017 with The Tribune here today, the airport CEO, Suneel Dutt said besides adding more international and domestic flights, as per the demand and viability, a duty-free shop and more retail shops would also open at the international terminal in the coming days. Also, the international cargo and another aerobridge, which will be the third here, would begin operations in 2017. The domestic cargo and two aerobridges are already functioning here.

    The airport CEO said there are also plans to beautify the international airport terminal further with the expansion of its green belt in the New Year.The newly-constructed integrated terminal building of Chandigarh international airport had already bagged the prestigious Vishwakarma Award for best construction project.

    The new terminal had been awarded for being the best project for well-developed landscapes and interior with art, paintings and mural works. Inaugurated on September 11, 2015, the new international airport had taken off in September, 2016, with the operation of two international flights to Sharjah and Dubai.The terminal building can handle 1,600 passengers during peak hours, with an annual capacity of 4.5 million.

    Fully air-conditioned and equipped with modern facilities, the new building has the facility of three aerobridges, four baggage carousels, 14 elevators, six escalators and 48 check-in counters. The parking area has the capacity for 500 cars and a separate provision for VIP car park and bus parking. Aircraft parking main apron and the cargo apron has a capacity of 10 C-type aircraft and one E-type aircraft at a time. The interior of the airport is decorated with art and mural works depicting the heritage and culture of Punjab, Haryana and Chandigarh.

  • Petrol, diesel prices go up in January

    Petrol, diesel prices go up in January

    As expected, retail fuel prices will see an increase across the board as of midnight. For January, RON95 petrol will be priced at RM2.10 per litre, marking an increase of 20 sen compared to December retail price. RON97 petrol will be priced at RM2.40 per litre, up by 15 sen.

    The same applies to diesel and Euro 5 diesel, which are priced at RM2.05 per litre and RM2.15 per litre respectively – an increase of 20 sen for both. These new fuel prices were confirmed by Petrol Dealers Association of Malaysia president Datuk Khairul Annuar Abdul Aziz. “Prices are in line with global petrol prices. However, the diesel prices which exceeded the RM2 mark will be a concern for the business community,” he told.

    The country’s petrol and diesel prices have been placed on a managed float system from Dec 1, 2014 following the removal of fuel subsidies. Yesterday, Finance Ministry Strategic Communications director Datuk Lokman Noor Adam reportedly said that the retail prices of RON95 and diesel would go up in Jan due to an increase in the price of crude oil in the world market.

    He said the retail price of RON95 and diesel were set according to the average prices of fuel in the world market for a month, as well as being influenced by the ringgit’s movement against US dollar.

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  • Viettel gives users free SIM before 4G launch

    Viettel gives users free SIM before 4G launch

    Viettel Telecom will provide free 4G SIM cards to its users ahead of the launch of its 4G network in the first quarter of 2017.

    From January 1 to March 1, customers can visit Viettel’s shops, supermarkets and postal offices nationwide to swap their current SIMs for 4G SIMs.

    Viettel said its infrastructure is in place for the launch of 4G services, which will allow its users to watch HD videos, do video streaming and download and upload quickly. The 4G service will be compatible with all types of mobile phones in the market.

    In Hà Nội and HCM City and other key cities, customers will be able to enjoy the 4G service as soon as Viettel completes installing its base transceiver stations.

    “We invested in equipment and started installing infrastructure to widen the 4G coverage area as soon as we got the licence. Viettel expects a mobile internet boom in Việt Nam and 4G to become hugely popular,” said Hoàng Sơn, Viettel Telecom’s General Director.

    Viettel is the only network provider in Việt Nam that has successfully launched 4G across different markets in the world, such as in Burundi, Laos, Haiti and Peru.

  • South Korea c-store launches own parcel service

    South Korea c-store launches own parcel service

    South Korean convenience store chain CU has launched BGF Post, a c-store-specific parcel delivery service unit. A Korean Economic Daily article reported that BGF Post has been set up to distinguish CU’s parcel service from other convenience store chains’.

    CU previously operated CVS Net, a joint parcel service with GS25 convenience stores. As it independently operates the new subsidiary, GS25 plans to run CVS Net on its own, says the report.

    The company will also explore new business opportunities through BGF Post amid increasing number of convenience store parcel delivery users.

    CU is a subsidiary of BGF Retail and has more than 8,000 convenience stores in the country.

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  • Hong Kong less of a paradise for shoppers from China

    Hong Kong less of a paradise for shoppers from China

    It used to be widely known as the Pearl of the East, a shopping paradise beckoning residents of China.

    But these days, Hong Kong has lost much of its lustre and is finding it harder to attract big spenders from China.

    Tourists from China spent an average of HK$7,105 (S$1,300) in Hong Kong in the first half of last year, down 15.8 per cent from the same period in 2015. This is also way below the corresponding figure for 2014 of more than HK$9,000.

    With three in four tourists to Hong Kong hailing from China, the decline in spending has hit Hong Kong’s retail sector badly.

    Last year, no fewer than four major luxury brands have shut at least one of their stores in Hong Kong. The latest is Prada, which closed its flagship boutique at Peninsula Hotel’s shopping arcade yesterday.

    $1,300

    Average amount tourists from China spent in Hong Kong in the first half of last year, down 15.8 per cent from the same period in 2015.

    35.4m

    Tourist arrivals to Hong Kong from China in the first 10 months of last year, down 8.2 per cent from the same period in 2015.

    The Italian fashion brand joined Ralph Lauren, Paul Smith and Tonino Lamborghini in having store closures in Hong Kong last year.

    Analysts expect more to follow. Some have already served notice of their plans to shut their stores.

    Abercrombie and Fitch will pull out of Hong Kong before the lease of its 25,600 sq ft store in Pedder Street expires in 2019. The United States fashion label suffered a 14 per cent year-on-year drop in sales from August to October last year. The company intends to open five stores in China by the end of this month.

    Another US fashion chain, Forever 21, has confirmed that it will shut its 51,188 sq ft store in Causeway Bay shopping district by August.

    Mr Pascal Martin, partner of OC&C Strategy Consultants, said: “Until recently, Hong Kong was a key part of a brand’s strategy to build brand equity with Chinese tourists in view of entering China.

    “This is still true to some extent, but now, brands rely more on building brand equity directly with Chinese visitors in their flagships in Europe and the US, as well as online, rather than in Hong Kong.”

    He added: “Most affluent Chinese tourists have now diversified their travel destinations beyond Hong Kong, to places such as Japan, Korea, Europe and the United States, where they also shop.”

    Hong Kong saw 35.4 million tourist arrivals from China for the first 10 months of last year, down 8.2 per cent from the same period in 2015.

    But things got better during the recent Christmas holiday period from Dec 23 to 26, as Chinese visitor numbers jumped 18 per cent year on year, and overall visitor numbers rose 13.8 per cent, South China Morning Post reported.

    But many tend not to spend much on shopping in Hong Kong.

    Cafe owner Lin Chang, 29, was among the Chinese tourists who visited Hong Kong over the Christmas period. Despite the attractive deals on offer, she did not buy a single item. “I plan to buy a designer handbag, but I want the novelty of getting it in Paris,” said Ms Lin, who spent only two days in Hong Kong before heading off to Paris for a week.

    The retail slump in Hong Kong may not spell bad news for all – the closure of some stores has allowed new players to take over shop space at lower rents, noted Mr Martin.

    Hong Kong still remains an attractive tourist destination, said executive director of the Travel Industry Council of Hong Kong Joseph Tung.

    Mr Tung said: “The latest statistics showed that the number of overseas visitors to Hong Kong has increased in recent months. It means that Hong Kong is still an attractive destination to tourists from other countries, not only mainland visitors.”

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