Retail News CRM

Author: Mei Ling Tan

  • Combo card will be tested in 40 cities

    Combo card will be tested in 40 cities

    The combo card that promotes non-cash social assistance will be tested in 40 cities until the end of 2016, Bank Indonesia (BI) has stated.

    If the trial goes off well, on January 1, 2017, the entire social assistance from the government can be channeled through the Family Welfare Card (KKS) Red and White combo device, Director of Elektronifikasi Program and Financial Inclusion of Bank Indonesia Pungky Purnomo Wibowo said Friday (September 2) night.

    “January 1, 2017, we apply all of the Family Hope Programs and the rice prosperous social assistance (Rastra). Further, the student aid program and the School Operational Assistance (BOS) will be around that time as well,” he said.

    The combo card can be used to avail the Rastra, and family expectations (PKH) aid, Pungky explained in the demonstration project or the pilot project.

    The combo card used in the “e-waroeng” (electronic shop and gotong royong/mutual help) are also agents of Financial Services Digital (LKD).

    The beneficiaries of social grants (bansos) bring the Cards Family Welfare (KKS) issued by the Bank to the new joint four, namely Bank Mandiri, Bank Rakyat Indonesia, Bank Negara, and Bank Tabungan Negara, and exchange it at “e-waroeng”.

    With the KKS, the public can receive Rastra basic foodstuffs such as rice, sugar, flour, and oil at subsidized prices.

    Furthermore, the combo cards can not only be used to get help in the LKD functions, but can also be used for transactions such as cash withdrawals or transfers, as well as saving money, such as bank function nirkantor (branchless banking), Pungky said.

    This combo card can make the distribution of social aid meet the rules of 6T – the right target, the right amount, the right price, right time, right quality, and right administration, Deputy Governor of BI Ronald Waas said on the occasion.

    The government budget for social protection in 2017 reached Rp158 trillion, the BI recorded. With that budget, social protection assistance would be effective and appropriate.

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  • Silver consumers driving convenience push

    Silver consumers driving convenience push

    Look for more, but smaller, neighborhood stores, an increase in local delivery trucks and changing store layouts as retailers accommodate aging populations, says The Silver Series IV: Retail Reconfiguration for Seniors.

    The report is the latest in a series of analyses from Fung Global Retail & Technology on the impact of the growing 65-and-over population  – silver consumers – on global economies, industries and retail.

    With smaller households and appetites, seniors shop more frequently, but make smaller purchases, favoring the convenience store sector, the report says. The trend is already being seen in Europe, where large-format retailers such as Tesco and Carrefour are opening smaller stores. While this has yet to take place in the US, ignoring this population segment is unwise, as silvers are growing in number and driving a disproportionate amount of consumer spending.

    “The era of the silver generation has arrived,” writes Deborah Weinswig, MD of Fung Global Retail & Technology.

    The global population silver consumers – aged 65 and older – will account for over one-third of population growth through 2035, according to the United Nations, and will comprise more than 20 per cent of the population overall in Japan, South Korea, Western Europe, North America and China. These households tend to be wealthier, and in the US, senior households spend well above the national average on household supplies and books, though less on apparel and footwear, which could be due to limited choice.

    Long thought to be the province of the young and tech savvy, eCommerce also is a growth market for seniors, who will enjoy or require the convenience of home delivery.

    Not all stores and product manufacturers are accommodating silvers’ changing needs. Seniors can find large-format stores and regional malls overwhelming, and product packaging may need to be redesigned in order to make it easier for seniors to read and open, Weinswig notes.

    But some retailers around the globe are adapting. Japan’s Lawson convenience store chain has renovated units in areas with a high concentration of silvers, widening aisles, lowering shelves and stocking more products that appeal to older shoppers. The 7-Eleven chain in Japan offers a meal delivery service to seniors, while the Aeon Mall offers medical facilities, leisure activities, a concierge and other services for its senior shoppers. Supermarket chains in Germany and Austria have widened aisles, provided customised shopping carts and added nonskid flooring, while in the US, drugstores CVS and Walgreens are adapting store layouts to minimise high- and low-shelving, and have carpeted floors in some stores and even added magnifying lenses to shelves so shoppers can read labels with small print more easily.

    “It is no coincidence that Japan, which is well ahead of most countries in terms of the aging of its population, has a major convenience store sector,” Weinswig writes. “We are now seeing other markets follow Japan in a convenience boom: in France and the UK, for instance, major retailers are pushing into the format as the segment outpaces the wider grocery market.”

    The full report can be found here.

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  • Pizza Hut parent eyes French Connection sale

    Pizza Hut parent eyes French Connection sale

    The parent of the Pizza Hut business in the UK appears to be an unlikely bidder in the French Connection sale.

    Private equity company Rutland Partners is reported by the Sunday Times to have been in talks to buy the troubled UK fashion brand since early this year.

    French Connection, a decade ago infamous for its branding FCUK, has struggled for the last several years as its designers failed to capture consumers imagination with its offer. The brand seems caught in a rapidly shrinking middle market between fast fashion brands and the European-led luxury sector, its pricing aligned with neither end of the spectrum.

    The company is thought to have been unofficially on the market for more than a year, although Rutland is thought to be offering as little as £40 million

    A source told the Sunday Times it could not justify paying more than 40p a share for the business, which extended its losses five-fold last year on sales down 9 per cent to £164.2 million.

    Besides Pizza Hut, Rutland also owns electronics chain Maplin and the Bernard Mathews turkey brand.

    French Connection dates back to 1992 when it was founded as a womenswear brand by Stephen Marks, a year after the cult film of the same name was released. Menswear was added in 1976 and Marks grew the business to the point where its float in 1984 made him Great Britain’s 15th richest man. By the late 1980s it was in trouble and he bought back control of the business in 1991, launching the controversial FCUK brand and advertising campaign. That drove it back into a new era of success before consumers grew tired of the joke and it reverted to French Connection in 2005. By 2014 the retailer had 131 stores in the UK and Europe and it wholesales stock and supplies franchises internationally.

    Ten years ago the company’s shares traded at £2.40 each, and Gatemore Capital Management, which holds 8 per cent, values the stock at £1.50.

    Robert Stockdill

  • Asian online shoppers habits uncovered

    Asian online shoppers habits uncovered

    Asian online shoppers research, locate, engage with and purchase products and services in entirely different ways in different markets, according to a new report.

    For example, almost all consumers in Indonesia knowingly provide brands with wrong details, including name (93 per cent), phone number (94 per cent), and email address (95 per cent) when researching or shopping online

    And the biggest driver of online-to-offline (O2O) conversions is with email in Singapore; SMS in Indonesia; chat apps in China; social media in Malaysia and Thailand and video ads in Hong Kong.

    And 27 per cent of consumers in China and 10 per cent of consumers in Singapore unknowingly input wrong payment details, breaking the region’s eCommerce’s momentum.

    Those are among many takes from The Digital Consumer View 2016 (Asia) report, released by global information services specialist Experian today, containing research from International Data Corporation (IDC), aimed at helping businesses better understand digital consumers in Asia.

    The report reveals how consumer behaviour varies across the key Asian markets of Singapore, Malaysia, Indonesia, Thailand, Hong Kong, and China, based on surveys with over 1200 digital consumers.

    Differences exist across channels (SMS, app notifications, email, social media, chat apps), devices (smartphone, feature phone, Wi-Fi/cellular tablet, wearable) and content (ads in email, ads in mobile apps, ads in social media, video ads on websites, and search ads). The findings highlight the complexity of reaching digital consumers in Asia across many channels, but also highlight how crucial that is, says Jeff Price, MD of Southeast Asia at Experian.

    “While the region is fast-growing, consumer behaviour in each market has unique disparities. Businesses today cannot succeed without intelligent insights based on consumer data,” he advises.

    “Asia is in the midst of a great digital revolution, with an explosion of smart devices, social media interactions and eCommerce transactions. While this evolution has greatly enabled and empowered both sides, it has also challenged businesses to be more effective and targeted in the way they communicate and market to this modern, digital-savvy consumer.

    “For companies to keep up with digital consumer behaviours – how they act on information – it’s absolutely vital to adopt and leverage what their consumers are providing them with every day – invaluable data. Businesses slow to act on this data will see their competitive advantage erode.”

    Key findings

    Experian - DCV - Region - Key findings

    • Search and discovery: Social media is the top channel in Singapore (31 per cent), Malaysia (49 per cent), Indonesia (67 per cent) and Thailand (58 per cent). It’s equally important as chat apps in China (47 per cent); in Hong Kong, video ads (63 per cent) trumps all.
    • Triggering product interest: Social media, once again, is the key driver in Singapore (28 per cent), Malaysia (44 per cent), Thailand (49 per cent) and Hong Kong (25 per cent). However, in Indonesia it’s SMS (62 per cent), and in China it is chat apps (48 per cent).
    • Triggering purchase intent: Email is the biggest driver of online to offline conversion in Singapore (27 per cent); SMS tops in Indonesia (57 per cent); chat apps in China (45 per cent); social media in Malaysia (44 per cent) and Thailand (51 per cent); and video ads tie with social media in Hong Kong (23 per cent).
    • Finding good deals: For unplanned purchases stemming from promotions, email leads in Singapore (34 per cent); social media in Malaysia (50 per cent), Indonesia (68 per cent) and Thailand (58 per cent); SMS in Hong Kong (36 per cent), and social media in China (51 per cent).
    • Brand engagement: Email is key for marketers to build engagement in Singapore (58 per cent) and Thailand (60 per cent); chat apps in Malaysia (62 per cent) and China (70 per cent); banner ads in Indonesia (56 per cent), and SMS in Hong Kong (61 per cent). While email is important, marketers need to be wary: more than 70 per cent of consumers reported receiving too many emails, up from 52 per cent in 2015.

    Experian - DCV - Region - The rise of omni-channel engagement 1

    Shiv Putcha, associate director, consumer mobility and telco strategy with IDC Asia Pacific, says businesses and brands cannot afford to ignore Asia’s multi-trillion-dollar digital commerce market. China alone is now the world’s largest retail market.

    “The challenge lies in the fact that the region has extraordinary differences – language, economy, purchasing power – and consumer behaviours, especially with the digital generation. That uniqueness will not diminish over the next few years and may even increase, making it challenging for marketers not using data-driven insights to research, plan and execute effectively. The Digital Consumer View 2016 (Asia) will hopefully serve as a valuable guide to deciphering some of these key trends, mapping the path forward for brands and their connected consumers.”

    Experian - DCV - Region - Top 3 types of ads that influence consumer's buying behavior

    Key Learnings for marketers in Asia

    • Over-reliance on a single marketing channel will not work. Depending on the country and its current state of digital sophistication, marketers need to think carefully about the right mix of channels to employ.
    • Quality over quantity. Consumer preferences for receiving promotional material varies from market to market, and by specific use cases. On a broader level, more is not necessarily better. A relevant and targeted message will ensure better conversion. Too much, and consumers are inclined to unsubscribe, delete, or mark content as spam.
    • The quality and integrity of data is crucial for marketers to find success. A significant number of consumers across the region either knowingly or unknowingly provide inaccurate information, which in turn causes errors and inaccuracies in marketer’s data sets. Around 27 per cent of consumers in China but only 10 per cent in Singapore unknowingly input wrong payment details; 40 per cent of consumers in China, and over 20 per cent of consumers in the rest of the region provide a wrong address at online checkout.

    Asia comprises 49.6 percent of the world’s Internet users, according to Internet World Stats (2016), digital commerce in the Asia-Pacific (excluding Japan) region will rise to US$17 trillion by 2019, up from US$7 trillion in 2015 according to International Data Corporation (IDC). The combination of rising incomes, increased consumption, acceleration of internet use, and the proliferation of mobile broadband access continues to unlock tremendous opportunities for marketers across the continent.

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  • Tourists taint Abercrombie & Fitch sales

    Tourists taint Abercrombie & Fitch sales

    After a short lived rally at the back end of its previous fiscal year, US apparel group Abercrombie & Fitch is now firmly back in negative territory with a weak set of sales figures at both the total and comparable level.

    It is particularly disappointing that sales growth has deteriorated since the prior quarter with much worse comparable numbers coming through for the US market.

    Once again, Abercrombie led the way with a decline of 7 per cent in same store terms; Hollister fared a little better but also slipped into negative territory with a comparable sales slide of 2  per cent. In the US both brands suffered from weaker traffic to malls and from lower tourist spend at flagship stores in key locations. This was offset, in part, by a more robust performance from the online channel which continues to show signs of life.

    Thanks to tighter inventory control, discounting was not particularly pronounced across the period which allowed A&F to produce a stronger margin outcome than might otherwise have been the case. Even so, higher product costs, relatively higher store and distribution expenses – which include the impact of lower margin eCommerce orders – and an asset impairment charge all helped push the company to an operating loss of US$10.8 million over the period. This is a marked deterioration on last year’s profit of $1.9 million.

    As disappointing as these numbers are, they are not entirely unexpected. The second quarter was expected to be fairly weak before a slight recovery of fortunes during the fall and winter seasons when stronger ranges should help drive more consumer interest. Since the previous update, however, the dollar has strengthened and this will take some of the edge of both sales growth and the profit line across the remainder of this year.

    As much as A&F is still in a period of correction, the company continues to move in the right direction. The decision to shutter 60 stores in the US over the course of this fiscal year reflects the changing dynamics of shopper behavior and will reduce A&F’s exposure to weaker malls and retail centres. The company’s emphasis on eCommerce will ensure that some of these sales are recouped.

    The company’s efforts around eCommerce are not just confined to the US. In Europe A&F’s new partnership with Zalando is encouraging, allowing it to bolster volumes and sales across Europe in a cost effective way. This gives the company and its brand extensive reach without the associated costs of opening and operating a vast number of stores.

    All that said, A&F still has much work before its brands are restored to full health. Its new ranges are better and much more appealing to core customers as well as a slightly older demographic. However, the brands still need a stronger sense of identity and focus in what remains a very crowded and competitive marketplace.

  • HSBC appoints new wealth chief in Singapore

    HSBC appoints new wealth chief in Singapore

    Anurag Mathur will become HSBC’s new head of retail banking and wealth management in Singapore as of mid-September.

    He will replace Matthew Colebrook, who is taking charge of the bank’s equivalent business in the Middle East.

    HSBC

    Mathur has most recently worked as head of international markets for HSBC’s retail banking and wealth management arm in Asia.

    This has seen him oversee Bangladesh, Brunei, Macau, Mauritius, New Zealand, Philippines, Sri Lanka and Vietnam.

    Mathur has most recently worked as head of international markets for HSBC’s retail banking and wealth management arm in Asia.

    This has seen him oversee Bangladesh, Brunei, Macau, Mauritius, New Zealand, Philippines, Sri Lanka and Vietnam.

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  • Hong Kong Housing Prices to Fall a Further 10%, Nomura Says

    Hong Kong Housing Prices to Fall a Further 10%, Nomura Says

    Hong Kong home prices will fall a further 10 percent as a pipeline of new developments is met by stalling income growth and looming interest rate hikes, Nomura Holdings Inc. said in a report.

    “We are bearish on the physical property market, on a weakening economy, deteriorating affordability, declining retail sales and stagnant real household income growth,” analysts led by Jeffrey Gao wrote in a note Tuesday. Prices will decline over the medium term, the analysts said, without being more specific.

    Gao said in an interview earlier this month that a rebound in property prices during the second quarter was just a pause in a multi-year correction. Hong Kong home prices are 9.4 percent below their September peak, having fallen as much as 12.8 percent at the end of March, according to data from Centaline Property Agency Ltd.

    Mortgage rates in Hong Kong, which are linked to the Federal Reserve rate via the pegged currency, may rise after Fed Chair Janet Yellen said last week the case to raise interest U.S. rates is getting stronger.

    Nomura also sounded a bearish note on Hong Kong’s retail property market, predicting a 5 percent drop in rental returns in fiscal 2017, as tourist arrivals decline and sales fall. Office rents may also fall as much as 5 percent as leasing demand slows, the report said.

    Despite the negative outlook, Nomura remains “positive on HK property names overall,” citing their healthy debt levels, solid balance sheets and potential for share buybacks. The analysts’ top picks are Sun Hung Kai Properties Ltd. and Kerry Properties Ltd., which are both trading at a discount to their net asset value.

    Sun Hung Kai Properties shares have risen 17 percent this year and Kerry Properties have gained 6.9 percent, outperforming an 11 percent increase by the Hang Seng Property Index.

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  • ALODD by Aldo Lipari Steps Out in Singapore

    ALODD by Aldo Lipari Steps Out in Singapore

    ALODD by Aldo Lipari is a new Singapore-based label to step out into the retail scene in Singapore.

    The footwear brand is founded by Aldo Lipari, who brings his wealth of experience as the former  CEO of Bally Southeast Asia / Oceania, drawing on his know-how on the market and what consumers want, in setting up his own venture.

    A resident of Singapore for the past six years, Lipari first relocated to the city-state to run Bally’s operations in the region, serving as the Swiss luxury brand’s CEO of Southeast Asia and Oceania from 2009 to 2014

    I’m very much at home in the Asia Pacific / Southeast Asia region and have a strong understanding of what the customer here wants, what the climate and lifestyle require. But I’m also Italian, with an immense appreciation for quality and craftsmanship,” explains Aldo.

    The flagship store for ALODD by Aldo Lipari opens in the newly-opened annex of The Centrepoint on Orchard Road, and sits opposite the popular Ministry of Food and soon-to-be opened, Din Tai Fung.

    Our beautifully designed shoes are handmade in Italy to the absolute highest standards,”

    “By eliminating many of the unnecessary overheads that major brands are subject to, we’re able to deliver a product that presents far greater value than what you’d find on the shelves at most ‘luxury’ boutiques.”

    ALODD’s footwear is exquisitely crafted by Italian artisans, utilising time honoured, traditional shoemaking techniques.

    The ALODD range is priced from $397 to $496, and staples for the working man include classic loafers, lace-ups and slip-ons, to a Derby, Oxford and Double Monkstrap.

    For the weekend, driver moccasins, suede loafer and the woven loafer make excellent choices.

    Lastly the label’s unique Comfort Line which is a hybrid of sneaker meets Italian footwear, features the California construction.

    Although its name suggests American origins, the ‘California’ technique of shoe construction actually originated in Italy.

    As is the case with all of ALODD’s footwear, Comfort Line shoemaking is carried out entirely in Italy, by skilled Italian craftsmen.

    ALODD by Aldo Lipari The Centrepoint
    #02-50 The Centrepoint, 176 Orchard Road
    Singapore  238843

    ALODD by Aldo Lipari Takashimaya
    391 Orchard Road, Takashimaya Shopping Center Level 3
    Singapore 2238873

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  • Menswear milestone: Hugo Boss opens 200th airport store

    Menswear milestone: Hugo Boss opens 200th airport store

    Luxury menswear specialist Hugo Boss opened its 200th airport store earlier this year at Sydney Airport, as the brand maintains its strong focus on growth in travel retail.

    The store, which opened in April, measures 187sq m and is located at Sydney Airport Terminal 1. It offers Boss menswear including ready-to-wear, shoes, accessories as well as sportswear lines such as Boss Green.

    The opening takes the brand’s total number of airport stores in Asia Pacific to 47.

    Hugo Boss entered travel retail in the 1990s and has four lines: Boss, Boss Green, Boss Orange and Hugo. The company has a dedicated global travel retail team, with offices in Zürich, New York and Hong Kong.

    The company said growth in the channel over the years has been stable apart from 2001/2002 and 2008/2009 when the travel retail and fashion industries were shaken by global events such as 9/11 and the financial crisis.

    Hugo Boss Travel Retail Director Jesper Gustafsson said Hugo Boss had proven a success in travel retail because it offers all three product pillars in men’s fashion: formalwear, sportswear, shoes and accessories. “The share among the three pillars is equal today, with shoes and accessories the fastest growing product segment for the past two to three years.”

    Gustafsson continued: “Last year’s exceptional growth of fashion and accessories in the travel retail industry was mainly driven by womenswear and by the accessories category in particular. For Hugo Boss, this has been a blessing in disguise. On the one hand, it has given us tough times as some airport authorities have been chasing the accessories segment for women blindly, sometimes deciding to dedicate 100% of the available stores in their airports to this product category.

    Hugo2_32 - Copy

    Hugo Boss Travel Retail Director Jesper Gustafsson says there is limited competition in men’s fashion in travel retail

    “On the other hand, it has given us little competition in our area of expertise, namely fashion for the male customer at the airports. Our strategy has always been to be the number one menswear brand in travel retail, a vision we have kept and fulfilled for several years now.”

    The importance of travel retail to Hugo Boss’ business is highlighted in the brand’s investments in new stores and renovations, he said. “On average we finalise between 40 to 50 store projects per year, with a strong distribution network as a result,” noted Gustafsson.

    “We develop both through franchise partners and directly operated stores, which enables us to act fast and balance our distribution in a way that we can learn from direct contact with the traveller. It is imperative to learn how the needs of the travelling customer develop and how we can adapt as a brand to become better, and more responsive in the way we develop our business.”

    Opening Photo

    According to Gustafsson, fashion is not considered a priority by many male travellers. “Fashion, especially for men, often comes after the core categories, food & beverage and sometimes also behind technology. This means that a clear, powerful message is needed in your offer as well as good customer service to enable the purchase to happen within the restricted time limit for the customer.

    “Another important factor is omnichannel. If we can start the buying process before our customer leaves his home, we have a head-start and our airport conversion rates will be affected positively.

    “Like many other fashion companies out there, Hugo Boss is investing heavily in this area and in due time several functions such as click & collect for example will be available at our airport stores.”

    So, where does Gustafsson see Hugo Boss’ travel retail business in five years’ time? “Having 200 airport stores is certainly a milestone, but the road ahead is filled with more opportunities, which does not necessarily have to be more stores. It can also mean new ways of connecting to the customer through an omnichannel approach, or, for example, to offer a deeper customer service with tailoring at the airport and free home delivery of an altered suit.”

    Gustafsson continued: “Airports will develop more and more towards downtown shopping centres, where customer experience takes precedence rather than the spur-of-the-moment or last-minute approach used today by airport authorities when they develop their retail areas.

    “I also think that we will see the fashion & accessories category continue to outpace the traditional airport categories in growth, leading to a welcome shift in focus from how the main duty free stores should develop separately from the rest of the stores and cafes/restaurants, to how the entire airport shopping area should develop to give the customer a better experience.”

    “A brand like Hugo Boss can make gains as there’s still a mismatch between demand and supply for men’s and women’s fashion at airports today if you compare it to downtown,” concluded Gustafsson.

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  • Malaysia’s retail industry may grow by 6% this year

    Malaysia’s retail industry may grow by 6% this year

    Malaysia’s retail industry is expected to grow by 5.9% in the third quarter of this year, boosted by the timing of the Hari Raya holidays, according to Retail Group Malaysia (RGM) in the latest Malaysia Retail Industry Report.

    RGM said the projected growth would also be spurred by the Minimum Wages Order 2016 that was implemented on July 1.

    “For civil servants in Malaysia, the minimum wage increased to RM1,200 per month. This has raised the average purchasing power of the Malaysian working population to some extent,” RGM said.

    It added that the Pokemon Go app launched in Malaysia this month had also attracted more visitors to shopping centres and retail outlets throughout the country.

    “Nevertheless, it is not expected to contribute significantly to retail sales. Food and beverage outlets and grocery stores located near to Pokestops will benefit the most from this craze.”

    Mall operator Sunway Malls, in a recent statement, said Pokemon Go had resulted in a surge in traffic and sales numbers at its shopping centres locally.

    “To date, we have seen traffic increase by an average of 10% for Sunway Pyramid (pic), 8% for Sunway Giza, 6% for Sunway Putra Mall, and 4% for Sunway Carnival Mall,” said Sunway Malls chief operating officer Kevin Tan.

    “It is widely known that malls in general have high traffic during the festive period and school holidays, but the introduction of Pokémon Go has certainly spiked up the footfall for the non-peak season.”

    Meanwhile, RGM said retailers in the fashion and fashion accessories sector expected their business to slow down again, with a positive growth of only 0.2% during the third quarter of this year.

    “Retailers in the pharmacy and personal care sub-sector are expecting to maintain their recovery with a growth of 11.4% during the third quarter of 2016.”

    MIDF Research, in a report earlier this month, said it was optimistic that the launch of the new Perodua Bezza and Proton’s new batch of models, combined with the launching of new smart devices, will boost retail sales in the second half of 2016.

    Moving forward, RGM said the Malaysian retail industry’s fourth-quarter growth rate estimate remained at 5.5%, taking into consideration the growth of 1.3% achieved during the same period a year ago.

    “The projected retail sales growth rate of Malaysia’s retail industry in 2016 by RGM stays at 3.5% or RM99.5bil in values.”

    The Malaysian retail industry reported a lower-than-expected growth rate of 7.5% in the second quarter of this year compared with the same period last year.

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  • A bonfire of the Swiss watches

    A bonfire of the Swiss watches

    Ever since the Chinese government cracked down on “gift giving” as part of its anti-corruption campaign, Swiss watch exports have taking a beating.

    Here’s the trend, courtesy of a UBS European luxury note out Wednesday:

    As the analysts note, that slump follows a more than 100 per cent rise in the value of Swiss watch exports over 2010 and 2011.

    Ground zero for the demand destruction, meanwhile, is Hong Kong. And it’s there that UBS got some insight on the scale of the downturn from three major retailers:

    We recently met three Hong Kong/ China watch retailers: Hengdeli, Oriental and Emperor Watch & Jewellery. All three companies commented that current trading remains tough, and there is not expected to be any significant recovery this year. Destocking continues as retailers reduce replenishment rates on weaker brands and adjust inventory price mix. More store closures are also ahead with the only silver lining that there appears to be a little more room for rent reductions in Hong Kong of ~10%-40%.

    Recent company commentary has continued to be weak: Swatch reported H1 results on 21st July. Organic sales declined -12.5%, with multi-brand retailers cautious to re-order or cancelling orders. CEO Hayek commented that own retail was better than wholesale and retail in Hong Kong has potentially bottomed out with sales between +10% and -10% depending on the stores. Local Hong Kong retailers, however, do not see the same trends. These results again confirm the difficult market conditions, and follow Richemont reporting April sales -15%.

    Unsurprisingly, for a market where the perception of scarcity underpins all value, the likes of Richemont have even taken to buying back inventory. According to UBS, the new Cartier CEO has specifically looked to clean out high end inventory from the Hong Kong market. This, we’d argue, is quite something. (Or at the very least a new asset purchase idea for QE?) From UBS:

    We estimate that Cartier watches declined -25% in H2 to March 2016 (~€240m) decelerating from closer to a -10% decline in H1. How much of this was “negative sales” due to the buy in is unclear. A rebasing of stock levels in the channel remains key for a medium term reacceleration. Stock levels have been high in the channel in the industry notably in Greater China.

    Hong Kong retail sales figures for watches, jewellery and clocks, meanwhile, registered a 26 per cent year-on-year decline in July following a 20 per cent decline in June:

    A comparable trend can also be seen in the diminishing number of visitor arrivals to Hong Kong from the Chinese mainland:

    The situation seems to be desperate enough for some Chinese luxury retailers to be breaking lease agreements and closing up shops, says UBS. On the up side, however, mainland sales seem more robust of late than Hong Kong, with Cartier watches seeing growth in the last quarter. Nevertheless, since luxury spending in mainland China is a small portion of the total of Chinese sales (about 25-30 per cent), the improved sales picture there is not necessarily offsetting the slowdown in other areas.

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  • Xiaomi Mi Robot Vacuum for home cleaning launched in China

    Xiaomi Mi Robot Vacuum for home cleaning launched in China

    Xiaomi has announced Mi Robot Vacuum, its latest Mi Ecosystem product. The device has been developed by Mi Ecosystem company Rockrobo. Mi Robot Vacuum is an intelligent robot with Laser Distance Sensor (LDS). The LDS feature allows Mi Robot Vacuum to scan its surroundings 360 degrees, 1,800 times per second. There’s also Simultaneous Localization and Mapping (SLAM) algorithm, which enables the device to map out how the house is laid out and calculate the best cleaning path. Xiaomi’s Mi Robot Vacuum is equipped with 12 sensors.

    Xiaomi Mi Robot Vacuum integrates with the Mi Home app and allows users to control Mi Robot Vacuum remotely. The main brush in Mi Robot Vacuum automatically adjusts height to create tight seal with floor for dirt pick-up on uneven surfaces. It maintains 1cm distance from walls for the side brush to effectively clean near walls. There’s a 5,200 mAh battery, which the company claims will provide 2.5 hours of cleaning. Mi Robot Vacuum will be available in China starting September 6. It will retail for 1699 yuan ( Rs 17,000 approx) on Mi.com and at Mi Home stores in China.

    Xiaomi introduced its Mi Ecosystem sub-brand in March with the launch of Mi induction heating pressure rice cooker. The Mi Ecosystem covers a range of products manufactured by Xiaomi’s ecosystem partners. These include smartphones, smart TVs and smart routers. Xiaomi has invested in 55 companies for designing and manufacturing products for this ecosystem. Mi induction heating pressure rice cooker is WiFi-enabled and can be controlled via the Mi Home app. It sells for 999 Yuan (approx Rs 10,000).

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  • Dunnhumby strives to deliver innovative state of the art “media planning”

    Dunnhumby strives to deliver innovative state of the art “media planning”

    Dunnhumby, a leading customer science company, today announces a 29.8% year-on-year growth in gross revenue, as it continues to be an innovator in retail business by significantly expanding its retail media services over the past few years.

    Analyzing data on consumer spending behavior, Connect Media from dunnhumby is able to understand the customer decision-making process, and therefore better tailor marketing and advertising, both online and offline, to enhance customers’ decisions in buying products, while at the same time earn brand loyalty.

    “We’re able to offer a seamless customer journey, through-the-line, from home, when customer on the moves, on mobile, to the point of sales,” said Teeradet Dumrongbhalasitr, Head of TESCO Commercial South East Asia, dunnhumby Thailand. “dunnhumby begins with understanding the customer’s mind, then we pick the right knowledge to match media that suits the campaign’s objectives. We then choose the right touch point on the customer’s journey to communicate with them.”

    Over the past couple of years, Connect Media from dunnhumby has supported many of Thailand’s leading brands to successfully deliver their message to customers and build their brands at Tesco Lotus. 

    “dunnhumby strives to create new execution, new platform, new measurement to deliver innovative state of the art media. This makes Connect Media clearly different from other media in the market,” said Mr. Teeradet.

    It isn’t just the new innovations like its ibeacon on-location technology, or its unique approaches, like personalized opportunities, that is responsible for Connect Media’s success in “Return on Customers” for companies, though, but also its combination of innovative media solutions for ultimate impact and penetration in the market.

    “Of course, digital channels and platform synergy are becoming increasingly important in empowering customers’ shopping experiences and targeting individual customers, but we should also not neglect ‘point of sales media’, and advertising on the sales floor in its ability to influence customers at their moment of truth” added Mr. Teeradet. “Although customers may very well have a clear idea of what they want before they enter the store, the influence of promotions and media at point of sales can always change their purchase intention.”

    Connect Media from Thailand shows no sign of slowing in terms of growth and expansion, and in the coming months seeks to better “humanise” online interactions, and continue to evolve the shopping experience through creative offline platforms.

    “We will be focusing on as of yet untapped markets in the coming months, while strengthening key categories,” said Mr. Teeradet.

     In line with Connect Media’s history of leading the retail industry in innovation, Connect Media will also be focusing on business opportunities in other sectors, and looking at ways to solidify their position in the marketplace by potential data partnerships.

  • CapitaLand Mall Asia inks its first third-party management contract in China

    CapitaLand Mall Asia inks its first third-party management contract in China

    CapitaLand Mall Asia Ltd, CapitaLand’s wholly owned shopping mall business, has signed its first third-party management contract to manage the retail component of a mall in China.

    The contract with Changsha Pilot Investment Holdings Group Co is for Fortune Finance Center, an integrated development in Changsha, the provincial capital of Hunan in central China, CapitaLand announced on Wednesday (Aug 31).

    It said the deal marks the beginning of an enhanced asset-light strategy to enlarge its mall network through third-party management contracts to complement its core strategy of developing, owning and managing malls.

    The scope of the contract covers asset planning, pre-opening and retail management for a total gross floor area, excluding car park, of 95,000 square metres (about 1 millio square feet) that spans seven levels – five levels above ground and two basement levels.

    Currently under construction, the mall is targeted to commence operations in end 2018. It is owned by Changsha Pilot Investment Holdings, a Chinese state-owned developer which currently has seven projects in Changsha.

    Said Mr Jason Leow, CEO of CapitaLand Mall Asia: “We continue to be on the lookout for suitable acquisition opportunities to grow our mall portfolio even as we seek to enlarge our network through third-party management contracts. By managing quality third-party malls for which we have a right of first refusal to acquire, we are also paving the way for future acquisitions.

    “Through this multi-pronged approach, we will be able to maximise opportunities to expand our mall and retailer network, increase recurring income and further strengthen our leadership in the shopping mall sector in the region.”

    With this contract, CapitaLand doubles its presence in Changsha, where it currently owns and manages CapitaMall Yuhuating, a 62,000 sqm mall, approximately 10 km) from Fortune Finance Center.

    It is also expanding its presence in China, where it has a network of 65 malls. Across Asia, CapitaLand now manages a total of 104 malls in Singapore, China, Malaysia, Japan and India.

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  • Australia sues Volkswagen over alleged emissions fraud

    Australia sues Volkswagen over alleged emissions fraud

    The Australian consumer watchdog on Thursday said it had sued the Australian arm of world No. 2 carmaker Volkswagen AG (VOWG_p.DE) for intentionally selling more than 57,000 vehicles with software which lied about levels of toxic emissions.

    “These allegations involve extraordinary conduct of a serious and deliberate nature by a global corporation,” Australian Competition and Consumer Commission Chairman Rod Sims said in a statement.

    The Federal Court action adds to what is already proving to be costly legal fallout for the German company as it faces class action lawsuits in Australia and around the world over emissions fraud, as well as penalties from antitrust authorities.

    Already in Australia, law firm Maurice Blackburn is seeking more than A$100 million ($75 million) from the company, including the full replacement cost of some 90,0000 vehicles, while the auto giant has agreed to pay its 650 U.S. dealers $1.2 billion in compensation.

    In Australia, the ACCC said it wanted the company to make public declarations of misconduct, pay unspecified financial penalties and issue corrective advertising in relation to its actions over five years.

    “Volkswagen engaged in multiple breaches of the Australian consumer law by concealing software in their vehicles to cheat emissions testing and misleading consumers about the vehicles’ compliance,” Sims said.

    “Consumers rightly expect that their vehicle’s emissions would operate as advertised during their day-to-day use and we allege that this was not the case.”

    Volkswagen Group Australia said in a statement that it doubted the ACCC’s action would benefit consumers since it planned to give them software which corrected the emissions data as soon as it was approved by the government – likely by year-end.

    The Volkswagen unit, which is defending the private class action, said it was reviewing the ACCC’s claims.