GM Korea Co., the local unit of U.S. automaker General Motors Co., said Tuesday its sales dropped over 12 percent from a year earlier last month as both its domestic sales and exports suffered heavy losses.
In September, the company sold 45,113 vehicles globally, down 12.4 percent from the same month last year, the company said in a press release.
Domestic sales tumbled 14.1 percent on-year to 14,078 cars, while exports retreated 11.16 percent to 31,035 vehicles.
In the first nine months of the year, the company’s global sales slipped 4.4 percent to 434,573 cars despite a 12.3 percent on-year spike in domestic sales as its outbound shipments plunged 10 percent on-year to 306,583 units over the cited period.
McDonald’s Corp. Chief Executive Steve Easterbrook, aiming to slim down the Golden Arches and boost profit, has turned to the market where he can do something big, fast: China.
The Oak Brook, Ill., chain is looking to cut a deal to turn its 2,200-store empire in China—65% of which it owns and operates—into a cash machine through all-out franchising. The move, for which a partner could be determined before the end of the year, is expected to fetch between $1.5 billion and $2 billion up front from investors, people familiar with the matter said.
McDonald’s would also rake in an estimated 5% to 7% of sales for the 20-year life of the deal. It would keep a minority stake in these far-flung stores, while slashing its operational costs and preserving capital.
The timing of the initiative also reflects the maturing of the fast-food business in China, where McDonald’s and Yum Brands Inc.—owner of Kentucky Fried Chicken and Pizza Hut—have operated for a quarter-century.
As big consumer chains move from the familiar streets of Beijing, Shanghai, Guangzhou and other metropolises to smaller cities, they need Chinese partners with knowledge of the country’s real estate and market demographics to know where to put new stores and how to supply them.
“In the lower-tier cities, we want to accelerate, and a local partner would have more local wisdom and more local resources,” Phyllis Cheung, chief executive of McDonald’s China, said in an interview. “The whole idea of franchising is that you have more flexibility and speed to market—and are more able to answer to consumer needs.”
There appears to be a healthy appetite for the deal. A clutch of at least six bidders has shown interest in a McDonald’s China franchising deal, including U.S. private-equity giantsCarlyle Group LP, TPG and Bain Capital LLC, according to people familiar with the situation.
The three private-equity firms have teamed up with local Chinese partners, such as CiticLtd. and Wumart Stores Inc., who know local market conditions. McDonald’s is also looking to cut a similar deal with outside investors for its South Korea stores.
In China and Hong Kong, McDonald’s is asking its potential partner to take over its more than 1,400 company-owned restaurants and build 1,300 new stores. It still has room to grow in China, the only major market where the number of Kentucky Fried Chicken stores—5,000 and counting—outstrips the number of McDonald’s stores.
The winner will operate in a country where the novelty of burgers, fries and shakes has long since faded. It will need to find new ways to satisfy Chinese consumers demanding healthier, more upscale and personalized alternatives.
Bessie Wang, 33 years old, began eating at McDonald’s in grade school soon after the fast-food chain entered China 26 years ago, becoming a fan of the company’s fried-chicken sandwiches.
On a recent weekday, Ms. Wang was dining on a spicy chicken sandwich at the McDonald’s on Beijing’s Wangfujing shopping street. But her visits have declined.
“Taste isn’t the issue; it’s health reasons,” said Ms. Wang, an office administrator. “I don’t need to go as often anymore because other restaurants offer fried-chicken dishes.”
Sales from established McDonald’s stores in China have bounced back from a supplier issue that led to shortages of hamburgers and chicken at some restaurants in 2014. Same-store McDonald’s sales in the country shrank for four consecutive quarters before they began recovering in the middle of last year, according to figures provided on the company’s earnings calls.
And competition is rising. Dicos, a Taiwanese-owned chain, for example, offers chicken sandwiches at more than 2,000 restaurants in China, matching the scale of McDonald’s. Another growing Chinese fast-food chain, known as Real Kung Fu, sports a Bruce Lee logo, offering bowls of Chinese noodles with beef and pork.
The growing competition, Ms. Cheung said, is one reason McDonald’s is looking for a Chinese partner with a “deep understanding” of China’s market, rather than one that can simply bankroll new stores.
Yum announced a similar move last year to spin off its KFC and Pizza Hut operations in China and maintain a foothold in the country through royalty payments.
For companies such as McDonald’s and Yum, moving toward a franchise-only model in China makes sense now because the market has matured to the point where there are more people with experience running fast-food chains and fast-casual restaurants, according to Ben Cavender, director at China Market Research Group.
“There’s a stronger talent pool, and they have the capability to operate a franchise and operate it well,” he said. “Brands are also clamoring to try to grow into new markets, and they might not be able to do it quickly by themselves, and they need help.”
China’s burgeoning online clothing market experienced a sharp slowdown in the second quarter. Yearly growth rates tumbled from over 70% just six months ago to a two-year low of less than 45%. If the sharp slowdown continues in the second half this year, it will have a substantial impact on the revenues and profits of China’s top online retailers Alibaba, JD.com and Vipshop.
According to the latest quarterly report by Analysys, China’s B2C apparel trade fetched a record of 208.9 billion yuan in the second quarter this year, an increase of 44.7% over a year ago. It was also higher than the 186.77 billion yuan registered in the first quarter.
Sales figures for each company’s second quarter are higher than that of first quarter because of two factors. First, most people buy winter clothes in the fourth quarter, in part preparing for the Chinese New Year. Secondly, the second quarter is the time to buy spring and summer clothing. To further stimulate this seasonal demands, different e-retailers have organized in recent years three promotions, namely on April 19, May 20 and June 18. These three days have become national “festivals” and are successful in driving the overall growth of online apparel market.
Online Clothing Sales Growth Rates Drop Nearly 30 Percentage Points
However, Chinese online clothing sales now experience a sharp deceleration. The yearly transaction growth rate tumbled from an all-time-high of 72.2% at the fourth quarter last year, to only 44.7 % in the second quarter this year. It was also the lowest growth rate registered in the last two years.
Under its mega promotion campaign “In Style ● Hong Kong,”the Hong Kong Trade Development Council (HKTDC) brings “Hong Kong Galleria,” featuring the best of the city’s fashion, design and gourmet products, to Bangkok’s Siam Paragon, from now until 9 October.
HKTDC Executive Director Margaret Fong, said Hong Kong is not only Asia’s leading business hub, it is also Asia’s lifestyle trendsetter. “Hong Kong has a unique East-meets-West multicultural and multilingual environment,” said Ms Fong. “It is always at the frontier of fashion and lifestyle with a wide range of international and local design brands and innovative and creative lifestyle products. The ‘In Style ● Hong Kong’ promotion highlights Hong Kong’s vibrant and unique lifestyle, as well as creativity to Thailand’s consumers and business sector.”
The “Hong Kong Galleria” at Siam Paragon is divided into three zones, bringing an all-round Hong Kong experience to Bangkok consumers.
Brand ● In Style
The HKTDC Design Gallery is collaborating with the popular online shopping site Lazada Thailand on an O2O retail service, featuring such lifestyle brands as The Candle Co, Eco Concepts, GLUSH/, Snugalicious and Tea Lab. On-the-spot ordering with immediate home delivery is available to shoppers. Meanwhile, hktdc.com Small Orders presents a selection of stylish Hong Kong products from Everlong, Sky’s Creative, HK Keytron, Jet T Technology and PO: Selected. Online shoppers can take advantage of special offers.
Fashion ● In Style
Through an e-wardrobe installed at the “Hong Kong Galleria,” visitors can try on the latest collections by popular Hong Kong fashion designers, Doris Kath Chan, Bonita Cheung, Koyo William Cheung, Polly Ho, Henry Lau and Mountain Yam. The six Hong Kong designers, who have featured at international fashion events such as Tokyo Fashion Week, Copenhagen Fashion Week, New York Fashion Week and CENTRESTAGE in Hong Kong, collaborated on a “Thai Silk Crossover” series for “In Style ● Hong Kong”with the unique pieces to be showcased at the “Hong Kong Galleria”.
Gourmet ● In Style
Hong Kong is well known as a food lover’s paradise and Cantonese sauces always brighten dishes. The internationally recognised Chinese brand Lee Kum Kee is presenting food tasting sessions featuring its wide range of sauces and condiments. Premium Hong Kong specialty tea brands, Contact Design, Gianna, MingCha and OrTeaTM are also offering complimentary tea-tasting. A collection of Hong Kong-style restaurants in Bangkok, featured by OpenRice Thailand as well as the signature menus developed by designated “Chef ● In Style”, Denice Wai, are available at B.Duck Cafe, Four Seasons Chinese Restaurant and Gokfayuen.
The Hong Kong Tourism Board will also stage a promotion at the Siam Paragon from 6 to 9 October to showcase Hong Kong as a top travel destination.
Shop for Hong Kong products
The HKTDC Design Gallery is collaborating with Betrend and The Selected to offer a range of Hong Kong brands at discounted prices from now until December. Brands to be featured include The Candles Co, Digit Band, Eco Concepts, Team Green, Herkomst, HYOne, Paris Garden、Prima Series, Tea Lab and Team Green.
Meanwhile, a “Hong Kong Lifestyle Products” promotion is underway in Bangkok, with well-known Hong Kong fashion brands Bossini, Episode, Esprit, Giordano, G2000 and Jessica, as well as popular retail watch brand City Chain and optical boutiques eGG and Optical 88 offering discounts and other consumer incentives.
To enjoy these offers, simply pick up a Citywide Promotion coupon booklet available at more than 100 participating outlets across Bangkok, featuring over 30 Hong Kong and local brands from 1 September to 31 October, or visit “Hong Kong Galleria” in Siam Paragon from 3 to 9 October. More exciting Hong Kong products and gourmet can also be found at online retailer Lazada Thailand and gourmet website OpenRice Thailand.
Symposium promoting Hong Kong services
Apart from the consumer promotions, a symposium targeting the Thai business sector will be held on 6 October at Plaza Athenee Bangkok. Officiating the opening session will be Vincent HS Lo, Chairman of the HKTDC; Rimsky Yuen, Secretary for Justice, Hong Kong Special Administrative Region Government; and Apiradi Tantraporn, Minister of Commerce of Thailand. More than 30 business leaders and experts from Hong Kong and Thailand will offer insights on how Hong Kong can facilitate the business expansion of Thai companies
Mobile users in APAC purchase more frequently from their devices, but are less satisfied than their counterparts elsewhere, according to a new survey.
The in-depth survey of mobile users from around the world was conducted by the Interactive Advertising Bureau (IAB).
APAC consumers take the lead
The IAB surveyed 3,800 respondents in 19 countries, including regional countries such as Singapore, China, Japan and Australia, and found that APAC consumers take the lead in frequent mobile purchases.
Specifically, a third of mobile users make a weekly purchase on mobile in APAC, which is higher than the worldwide average of a quarter of mobile users. China in particular boasts of a 47% weekly purchase rate on mobile.
On the flip side, respondents in APAC are 50% more likely to have a previous negative purchase experience, with only three in four consumers satisfied with their mobile purchase in the region compared to four in five globally.
As a result, APAC consumers are also 11% less likely to make a repeat mobile purchase in the next 6 months, says the IAB report.
The findings underscore the need for marketers in the region to be more transparent in their marketing efforts, and to address the negative purchase experiences cited as a key barrier to repeat purchase.
“Many markets in APAC are mobile-first, and consumers are now mature online buyers with more discerning tastes than the global average,” says Miranda Dimopoulos, CEO IAB Singapore.
“Advertisers who make an effort to understand their needs and craft the right messages have a tremendous opportunity to cut through the noise and seize market share.”
“While mobile purchasers are high in APAC, poor buying experiences have dampened initial enthusiasm,” says Regina Goh, IAB mobile committee chair and managing director at ad-tech provider Blis. “Sellers in the region need to consider the consumer’s journey from the first click to post-purchase to ensure customers are delighted and come back for more.”
Nokia has signed an agreement with Australia’s Optus to collaborate on 5G development, and revealed it is working with KT to deploy the world’s first 5G commercial trial network in 2017.
Optus announced that the two companies plan to jointly conduct a 5G trial using Optus’ 3500-MHz spectrum. Optus andNokia will develop an early 5G prototype in the spectrum by 2017.
The companies have already conducted initial closed tests at Optus’ Sydney headquarters over a new 5G radio test bed on Nokia’s Airscale product, highlighting the capability of 5G to deliver virtual reality video content at the required speeds.
“There is a global race to explore and develop 5G technology, and in Australia, Optus is well positioned to lead in this space with our ownership of 3.5GHz, and close partnerships with our vendors including Nokia,” commented Tay Soo Meng, CTO of Optus’ parent company Singtel.
In a blog post, Nokia project manager for 5G development research Jani Moilanen separately detailed the steps Nokia and KT are taking to deploy a 5G commercial trial network in the 28-GHz band next year.
Nokia Bell Labs and the Nokia Korea Advanced Technology Center have developed initial network plans using 3D maps, accurate ray-tracing simulations and other technologies to address the potential for blockages of the 28-GHz band, including human bodies blocking line of sight between device and base station.
The company is also working to address other key network planning challenges, including sufficient non-line-of-sight coverage in outdoor areas.
With the Philippines’ consumption-driven economic boom showing no signs of abating, modern retail enterprises are sprouting outside the capital. Some are new companies eager to make a mark alongside the country’s established conglomerates.
DoubleDragon Properties is one of the up-and-comers. Back in April 2014, when its valuation was less than $100m, the company listed on the Philippine Stock Exchange. In its first day of trading, the stock shot up by 50 per cent, hitting the bourse’s daily limit. Since then, it has continued to be a strong performer.
The share price on Friday was nearly 30 times the price at flotation. This year, DoubleDragon’s stock has surged 140 per cent, making it the best-performing real estate company in the PSE’s property index. The price has climbed in conjunction with the rise of Rodrigo Duterte, the country’s first president from the southern island of Mindanao who came into power in June. He has promised to boost economic activity in rural areas.
DoubleDragon’s priority is the construction of 100 shopping centers, each measuring 5,000 to 10,000 sq meters, by 2020. As of June, the company had secured 53 sites for these CityMalls, as it calls them, but built only eight.
Yet, even if some of the projects are behind schedule, its market capitalisation of 131.5bn pesos ($2.72bn) has eclipsed that of Robinsons Land — a unit of conglomerateJG Summit Holdings that has built 44 large shopping complexes and dozens of residential and office developments nationwide.
DoubleDragon is led by Edgar “Injap” Sia, a 39-year-old businessman from Visayas in the central Philippines. The self-made entrepreneur is best known locally as the founder of Mang Inasal, a fast-food company that specialises in grilled chicken.
When Mr Sia started his entrepreneurial journey about a decade ago, success was anything but a foregone conclusion. Born to a Chinese-Filipino-Japanese parents that own a grocery store in Roxas City in Visayas central Philippine region, Mr Sia dropped out of college to go into businesses. In 2003, he opened a grilled chicken eatery in the parking lot of a mall in Iloilo City, also in Visayas. Its chicken specialty, paired with unlimited rice, became a phenomenon, shaking up a fast-food market dominated by western-style fried chicken.
In 2005, Mr Sia established Mang Inasal as a franchise operation, creating the nation’s quickest-growing fast-food chain at the time.
An encounter with Tony Tan Caktiong, the founder of Jollibee Foods, the Philippines’ largest fast-food group, proved to be a key turning point. The two men share Chinese ethnicity and were both born in the Year of the Dragon in the Chinese lunar calendar, albeit 24 years apart. The “two dragons” opened a dialogue about the future of Mang Inasal.
Mr Sia’s business was becoming a threat to Jollibee. Mr Tan Caktiong offered to take control. In 2010, Mr Sia agreed to sell Jollibee a 70 per cent stake. This past April, he sold it the remaining 30 per cent. The transactions valued Mang Inasal at 5bn pesos.
From Mr Sia’s perspective, selling to Jollibee made sense on two levels. First, it would put Mang Inasal under the control of an experienced fast-food company that would nurture — rather than kill — his brand. Second, he needed the money to pursue his second dream: building a property and retail empire.
“I really like the [real estate] business, but it needs substantial resources,” Mr Sia said.
In late 2011, after Mr Sia relinquished management of Mang Inasal to Jollibee Foods, Mr Tan Caktiong approached him again. He, too, had been eyeing real estate. Sometime in 2012, the pair mapped out a plan to transform Injap Land, an Iloilo-based developer, into DoubleDragon, a nationwide player.
“We want to become one of the largest property companies in the Philippines,” Mr Sia said.
While clearly ambitious, Mr Sia is also pragmatic. Before the IPO, he accepted an offer from SM Investments — the Philippines’ largest conglomerate, owned by the Sy family — to acquire a 34 per cent stake in City Mall Commercial Centers, the entity that runs CityMalls under DoubleDragon.
This gave Mr Sia two powerful backers: Jollibee, a giant on the Asian fast-food scene; and SM Investments, which owns top Philippine lender BDO Unibank, mall developer SM Prime Holdings and retailer SM Retail.
All sides stand to benefit. Jollibee and SM Group see DoubleDragon and CityMalls as vehicles to tap provincial markets. As the principal shareholders of each company, Jollibee and SM will be priority tenants in the CityMalls.
The malls are “barely in Luzon and mostly in Visayas [and] Mindanao, which are exactly the under-penetrated regions where we think we would like to grow,” SM Group consultant Tim Daniels was quoted as saying in a local media report in 2014.
Mr Sia is avoiding Manila and broader Luzon, where more established players have secured land strategically. Instead, DoubleDragon plans to open 70 per cent of its branches in Visayas and Mindanao. To this end, he is taking advantage of know-how gleaned from the expansion of Mang Inasal. The fast-food chain now has about 450 locations, many in the same outlying areas where Mr Sia intends to build CityMalls.
He sees Mang Inasal as a barometer of local readiness for a modern shopping experience. Like the chicken restaurants, CityMalls will be situated in places with large concentrations of people — near transport terminals and markets, for example.
In October, a CityMall is set to open in the Mindanao city of Cotabato. The city is located west of Davao — the home town of Mr Duterte. Cotabato used to be a hotspot for terrorism and Muslim insurgents. “There are no SM or Robinsons malls there,” Mr Sia said, “but there has been Mang Inasal for eight years.”
Mr Sia is confident he has chosen the right target markets. “We strongly believe in the great potential of Visayas and Mindanao,” he said. “I personally had a very good first-hand business experience … in [the] Visayas and Mindanao areas during the expansion of Mang Inasal.” He added that the chain had “over 150 stores in Visayas and Mindanao in operation for several years.”
In 2015, Metro Manila’s annual economic growth rate of 6.6 per cent topped Luzon’s 5.4 per cent, Visayas’ 5.8 per cent and Mindanao’s 5.3 per cent. However, the Duterte government’s agenda for achieving “inclusive growth” is expected to brighten the prospects for rural regions. The president aims to preside over annual growth in the 7-8 per cent range for the next six years, with provinces making a greater contribution than in the past.
Since the Metro Manila market is maturing, established retail players are also eyeing opportunities in the provinces. Their strategies vary. SM Retail is building its own shops while tapping CityMalls to expand its network. Robinsons Retail Holdings and Puregold Price Club, the second and third-largest players, are in a race to acquire provincial retailers with a couple of branches.
Meanwhile, around 70 per cent of the retail sector remains informal, with myriad mom-and-pop shops. There are also independent provincial shopping centre operators running scattered locations in first-tier cities. Of the 145 cities in the Philippines as of June 30, a third were so-called “first class” municipalities, meaning they have annual revenues exceeding 400m pesos.
When it comes to creating a strategic network of shopping malls in the first-tier cities, Mr Sia hopes to be a step ahead. He envisions CityMalls as one-stop shops for daily errands. He said he did not intend to compete with bigger malls, where customers often spend the whole day on weekends, for dining, shopping and entertainment.
“The transition from the traditional unbranded fast food to modern fast food [was] already done in the Philippine provinces a decade ago,” Mr Sia said. “The transition from traditional retail to modern retail in the provincial areas has just started, and is expected to be completed in the next few years.” Mr Sia hopes to spearhead this new phase of retail industry through the expansion of CityMalls in the provinces
He continued: “That is the market where we are currently positioning CityMall, and once the transition cycle is done, CityMalls are poised to be the biggest beneficiary.”
Still, while the stock market is cheering Mr Sia’s strategy of focusing on Visayas and Mindanao, DoubleDragon does face its share of challenges.
Some analysts argue the company is overvalued, partly because most of its investors are retail investors, who tend to play up stocks. It was only in July last year that DoubleDragon managed to attract long-term institutional investors, and it may need to do more to improve its credibility with bigger funds.
“The price is not warranted at this time,” said Richard Laneda, an analyst at COL Financial in Manila.
The company’s first-half net income rose 16 per cent to 144m pesos, as revenue jumped 15 per cent to 706m pesos. It is targeting net income of 4.8bn pesos by 2020.
DoubleDragon’s price-earnings multiple is 100, higher than those of SM Prime andAyala Land, which are both trading at around 30, noted Luis Limlingan, managing director of Reginal Capital Development.
Mr Sia said analysts should look beyond that metric. “Clearly, our investors are not looking at the ‘now,’ they are looking at the next five, 10 or maybe 15-year horizon.”
Anton Alfonso, an analyst at RCBC Securities, warned that Visayas’ and Mindanao’s under-developed infrastructure could hamper DoubleDragon’s mall network build-up. Convenience store chains looking to expand there have faced similar challenges.
Despite some delays in branch openings, Mr Sia said the company was confident it would meet its targets. “We should be able to announce the next phase of our business in the next few years,” he said, adding that DoubleDragon is open to overseas opportunities as well.
To be sure, DoubleDragon has the Philippines’ consumption-driven growth going for it. Consumption generates two-thirds of the country’s gross domestic product, and projections indicate the economy should keep expanding by an average of over 6 per cent for the next six years on the back of steady remittances from overseas Filipino workers and a growing business process outsourcing industry.
Mr Sia is hardly the only new-generation entrepreneur looking to ride this wave. Steve Benitez, from the central Philippine island of Cebu, hopes to turn his Bo’s Coffee chain into the world’s next Starbucks. It currently has 60 domestic branches. Ben Chan, another self-made entrepreneur, is building an apparel company, Bench, and is taking it into other Southeast Asian countries and China.
Then there are the heirs who are taking the reins of their family businesses. In 2015, Puregold Price Club appointed the son of founder Lucio Co, Ferdinand Vincent, as chief executive. Puregold’s parent company, Cosco Capital, plans to compete with Mr Sia in the community mall segment.
Mr Sia believes the completion of the 100 CityMalls is just the beginning of his new empire — and a rock-solid foundation. “Once we complete that, our presence will be powerful, and the confidence in our company will be higher.”
In Southeast Asia huge family businesses, conglomerates and state-owned companies still dominate the region’s economies. While it remains to be seen whether Mr Sia will accomplish his ambitions, the new-generation entrepreneurs will be key in taking the region to its next stage of growth.
The tax amnesty scheme in Indonesia has had a much smaller impact on funds flowing out of Singapore’s private banking industry than feared, an RHB report suggested on Tuesday.
The funds flowing out of Singapore likely made up only 1-2 per cent of assets under management (AUM) of the private banking industry. Some 79 trillion rupiah (S$8.3 billion) was repatriated in the first nine-month phase of Jakarta’s tax amnesty programme.
The scheme allows Indonesians to declare assets that were previously undeclared to tax authorities. In return, they paid a sharply reduced tax rate on those assets – just 2 per cent – in the first phase, which ended on Sept 30.
The 79 trillion rupiah was 12 per cent of the assets of wealthy Indonesian clients that were declared to be kept in Singapore, according to data from the Indonesian government. Singapore has been a big draw for rich Indonesians. All in, the assets held here and declared to the Indonesian authorities made up 70 per cent of all overseas funds that had been declared.
RHB calculated that the total assets of the three Singapore banks’ private banking segment stood at about S$321 billion. This means the amount repatriated to Indonesia from Singapore accounts for only 2.6 per cent of the three banks’ total AUM. These already exclude the asset base of the top private banks in Singapore, such as UBS, Citi, and Credit Suisse. So, all in, the impact on Singapore’s private banking industry should be about 1-2 per cent of all assets held here, RHB noted.
“There is likely to be more repatriation of funds from Singapore to Indonesia going forward, but the experience of Phase 1 suggests that the amount repatriated is unlikely to be a large percentage of Singapore banks’ assets under management,” it said.
This comes as the tax rate for those who repatriate their assets in Phase 2 rises to 3 per cent, one percentage point more than in Phase 1. The tax rate will be increased yet again in the third phase, Jakarta has said.
Indonesian taxpayers had declared more than 3,600 trillion rupiahs in assets both domestically and overseas. An Indonesian tax authority quoted by The Straits Times said the country had set a 4,000 trillion rupiah target for the first phase.
The tax amnesty scheme comes amid heightened scrutiny of tax evasion. Banks here had to file a suspicious transaction report on clients taking part in the programme, with the Singapore authorities later having to state publicly that participation in a tax amnesty scheme alone would not attract criminal investigation in Singapore. The Monetary Authority of Singapore (MAS) said that the use of suspicious transaction reports is a practice across other jurisdictions when handling tax amnesty cases.
Deputy Director of the BI Financial Management Department Asral Mashuri in Jakarta, Tuesday 4, 2016, said that Bank Indonesia (BI) is planning on implementing a coin deposit machine to ease people in saving the form of money.
“The machine would look like an ATM, but this one is for coins, and the machine can sort out the money; which is one thousand and one hundred. It would be easy for people to use,” he said.
According to Asral, nowadays, many people keep the coins and left it uncirculated. The uncirculated coins have forced BI to reprint it, although coins have a longer lifespan than paper money.
A coin deposit machine is hoped to help banking institutions in retracting the coins. “This also accelerates the money circulation, and later on, banking institutions can retrieve money from people’s savings,” Asral said.
He added that it will be implemented as soon as possible. The study is still ongoing; it will be realized but not in the coming months. “The machine will be available for the public to use soon as possible,” Asral said.
Indonesia is predicted to be the country in Southeast Asia with the second-highest price for Apple’s new iPhone 7, according to a recent price study by iPrice Indonesia, local arm of online shopping startup the iPrice Group.
The iPhone is manufactured in China, which neighbors Southeast Asia, but according to the iPrice Indonesia study, the iPhone 7 will be significantly more expensive in the region compared to the United States, due to shipment export costs, import duties and taxes, and other fees imposed by governments.
According to iPrice, the iPhone in Indonesia will be one of the most expensive worldwide.
“For countries where the iPhone 7 has not yet been officially launched, such as Thailand, Vietnam, Indonesia, Malaysia and the Philippines, the tech savvy have resorted to going abroad in the hope of being the first to own it,” iPrice said in a statement e-mailed to the Jakarta Globe by Andrew Prasatya, the company’s content marketing executive.
“Unauthorized retailers are purchasing the iPhone 7 from Singapore and Hong Kong [where the iPhone 7 has already been launched] and selling them in their home countries at higher prices, which can go up to 14 percent in Vietnam and 49 percent in Thailand,” iPrice said in the statement.
Apple has not yet announced the official release date for the iPhone 7 in Indonesia.
How Expensive Can It Go?
The study estimates that an iPhone 7 with 128 gigabytes of internal storage will cost about $1,268 when it arrives in Indonesia, making it nearly $500 more expensive than in the United States, from where it originates.
As for neighboring countries, buyers in Thailand are expected to pay the most, where a new iPhone may cost up to $1,340.
The cheapest is in Singapore at $897, where the iPhone 7 has been available since last month.
The study said middle-income Indonesians, with an average salary of $1.80 (or Rp 23,900) per hour, have to work at least 87 days to afford an iPhone 7, assuming that the whole salary is spent on the phone.
They may likely think twice before purchasing a 128 GB iPhone since the price is equivalent to the latest automatic scooter by Japanese manufacturer Honda. The price would also be equivalent to three-months’ rent of an apartment located in the heart of Jakarta, or 32 bags of rice at 50-kilograms per bag.
Highly Anticipated
Still, the iPhone 7 is eagerly awaited in Indonesia. And despite negative reaction around the replacement of audio jack with Apple AirPods, the latest model is in demand because of innovations such as increased storage, a new home button and water-resistance, according to reports from various local media and online tech-focused news portals.
IPrice said regardless of its fairly high price, the iPhone generally remains popular in Indonesia.
It referred to industry data showing that about 61.2 million units of the previous generation iPhone 6 and 6s were sold in the country during the first quarter of 2015.
“In addition to the innovation of the iPhone 7, the iPhone is a status symbol in Indonesia where the owners are perceived as being rich, successful and living in luxury,” iPrice’s statement said.
The government is optimistic the country would be self sufficient in salt supply in 2017, an official said here on Wednesday.
Agung Kuswandono, the Deputy II in Coordination of Natural Resources and Service at the office of the Coordinating Minister for Maritime Affairs said self sufficiency in salt supply is expected to be reached in 2017.
Agung said the Marine and Fisheries Ministry has taken various steps to improve the quality of the farmers salt to meet the standards for household consumption and industries.
He said the country needs around 4.02 million tons of salt including 2.05 million tons of industrial salt and 1.97 million tons of consumption salt.
The domestic production is around 3.8 million tons a year including 3.1 million tons of farmers salt and 700,000 tons produced by the state -owned salt company PT Garam.
Based on data from the Indonesian Association of Salt Consuming Industries (AIPGI), in 2015 , the country needs 400,000 tons of salt to preserve fishes a year.
The process of fish salting generally does not use iodine although iodine is important for human health, Agung said.
Indonesia imports salt especially from Australia to cover the deficit in domestic supply
Hong Kong may no longer be the darling of European luxury brands after the combined effect of a slower local economy and fewer mainland shoppers as a result of Beijing’s anti-corruption crack down, but the city is still magnet for less expensive luxury brands and mid-priced retailers.
Retail sales have seen an 18 month-long nosedive, with August figures (the latest available) down 10.5 per cent year on year to HK$33.9 billion.
The decline, largely due to a drop in the number of mainland Chinese tourists, has forced landlords to reduce retail rents to avoid vacancies.
“This has created a lot of opportunities for retail players to emerge and innovate,” Joanne Lee, associate director of research and advisory of Colliers International said.
Some less expensive luxury brands and mid-priced retailers still have confidence in the Hong Kong retail market, taking the opportunity to move in on prime locations as high end luxury brands close up shop, according to property consultants.
French brand Sandro is an example. It finds Hong Kong is still a highly lucrative market compared with the rest of the world – even in bad economic times.
In August the Paris-based fashion chain opened its largest Asia flagship store in the heart of Causeway Bay, considered one of the world’s most prime shopping districts. It also plans to double the size of its store in Tsim Sha Tsui’s Harbour City, one of the most prestigious malls for mainland visitors.
Branding its products as “accessible luxuries”, Sandro’s chief executive Jean-Philippe Hecquet said the segment became “very powerful” when people started to look inside their wallets.
The luxury retail industry veteran, who previously worked for world’s biggest luxury group LVMH for over a decade, said that upper-middle class consumers still want to enjoy their life even with less money. “They still want to buy luxury products for sure.”
Sandro, along with sister brand Maje and Claudie Pierlot, recorded a 51 per cent year on year growth in Asia Pacific in the first six months of the year.
Encouraged by the strong performance, Sandro opened three new stores in prime shopping districts in Hong Kong, and plans to add two or three more by the end of next year. It currently operates eight outlets in Hong Kong.
The Harbour City store, which opened a year ago, quickly become the most lucrative store among its 410 retail outlets worldwide in terms of sales per square metre.
In contrast, total tenant sales at Harbour City fell 14.7 per cent to HK$13.3 billion in the first half, according to financial filings by its parent company Wharf Holding.
“The economy is about cycles. Everything happen for a reason. You just need to hang in there,” Hecquet said.
Unlike traditional luxury brands such as Gucci, Louis Vuitton and Burberry, which had previously aggressively expanded in the city to cater for the huge influx of mainland shoppers, Sandro has only recently ramped up its pace in terms of adding stores. Its first store in Hong Kong was not opened until 2012.
Hecquet admits Sandro may have missed the “golden age” when rich mainland shoppers queued up outside Chanel, Gucci and Louis Vuitton outlets, snapping up expensive leather bags emblazoned with big logos.
“For [traditional luxury brands], the traffic is going down, but for us, we still see very decent traffic,” he said.
But he noted that the emerging young upper-middle class in Asia would be the future powerhouse for luxury goods, and the right time to expand is now. The current retail downturn in Hong Kong has also freed up more prime retail locations and rents were going down. “We have been waiting for a long time to be able to open a flagship,” he said.
Hecquet said the average age of its customers in Hong Kong was from 25 to 30 years old, and mainland visitors contributed to a significant portion of sales.
Property consultants said the impact of mainland tourists will continue to diminish as retailers focus their efforts on locals and millennial shoppers.
“[Retailers will be] very much focusing on the local spending power, instead of relying on tourists,” said Daniel Shih, director of research and advisory at Colliers International.
Henrik Fisker, whose previous automotive venture collapsed in 2013 owing U.S. taxpayers $139 million, said on Tuesday he plans to launch a new electric car company next year to compete with Tesla.
Fisker declined to say who is funding his new California-based venture, called Fisker Inc, and a new battery subsidiary, Fisker Nanotech.
The Danish automotive designer’s previous venture, Fisker Automotive, once was a rival to Tesla Motors Inc (TSLA.O) in the nascent market for electric luxury cars. Founded in 2007, Fisker Automotive built fewer than 2,000 cars through 2012 while burning through $1.4 billion in private investments and taxpayer-funded loans from the U.S. Department of Energy. Fisker left the company in March 2013, before it filed for bankruptcy protection.
In 2014, Fisker was purchased out of bankruptcy by Chinese auto parts maker Wanxiang Group Corp (000559.SZ), and renamed Karma Automotive. Wanxiang also acquired bankrupt U.S. battery maker A123. It relaunched the Fisker Karma gasoline-electric hybrid sports car in August as the Karma Revero.
In an interview, Fisker said his new company plans a battery-powered model aimed at the Tesla Model S, which is priced at about $65,000. He did not specify when production would begin.
A second smaller Fisker electric car will follow, Fisker said, and will target the upcoming Tesla Model 3, which is expected to start at about $35,000.
Fisker said his new electric cars will be powered by a long-range battery that uses graphene to extend its range and life and reduce charging time. The company is targeting a 400-mile driving range between charges, Fisker said.
Fisker said his new venture is not connected with Wanxiang.
Japanese electronics components supplier Murata Manufacturing Co Ltd wants its enlarged battery business to help double automotive-related revenue when the years of rapid expansion in the smartphone market have passed, its chief executive said.
Murata is adding to its small battery operations after agreeing in July to buy most of Sony Corp’s battery division by the end of March 2017 for an undisclosed amount. In the business year through March 2016, that division generated sales of about 160 billion yen ($1.56 billion).
“We want to enter the automotive battery business through the acquisition,” Tsuneo Murata said in an interview on Tuesday.
Components makers have seen profits soar in recent years due to the rise of smartphones. Murata, which earns about 60 percent of revenue from smartphone parts, expects operating profit to have grown six times over the four years through March, helped by business from customers such as smartphone leaders Apple Inc and Samsung Electronics Co Ltd.
The company is currently benefiting from a trend toward higher-performance smartphones that use more of its components, such as capacitors and frequency filters. But to guard against any future slump, it aims to boost other sources of income.
“I believe batteries will be a powerful weapon,” said Murata, one of the sons of the founder of the Kyoto-based firm.
The CEO said he wants batteries to help the automotive proportion of revenue to reach 20 to 30 percent in about 10 years, from 13 percent in the year ended March.
In the Sony deal, Murata has bought the division responsible for selling the world’s first lithium-ion battery in 1991, but which Sony said in a July earnings briefing was losing money partly because it could not supply a major smartphone maker.
Murata intends to apply Sony’s battery technology to automobiles, the CEO said.
“South Korean battery makers may look dominant in the market right now,” Murata said. “But there are many purposes in the automotive industry alone and I think various battery makers will grow by focusing.”
DHL eCommerce Singapore has launched a hybrid shipping product to help e-tailers in Singapore tap into the cross-border e-commerce market in Australia.
According to DHL, the new product, called Parcel International Direct Australia, delivers shipments of up to 20kg to major Australian cities in four to six business days.
“Consumers worldwide are increasingly expecting greater choice and convenience in their delivery options, and demanding greater visibility and reliability during the process,” said Malcolm Monteiro, CEO of Asia Pacific at DHL eCommerce. “In a recent DHL study, we found that over 59% of customers consider shipping costs, delivery time and choice of the delivery partner before making an online purchase. As a result, e-tailing businesses and online sellers require more cost-effective and varied means to ship their products to remain competitive. Parcel International Direct Australia is a versatile shipping product that will help merchants expand their footprint in the online cross-border market.”
Deliveries can be made to conventional addresses, P.O. boxes or parcel lockers. No additional charges will be imposed for delivery to remote addresses, according to DHL.
