Author: Mei Ling Tan

  • Furla to showcase FW16 collection in Singapore

    Furla to showcase FW16 collection in Singapore

    Italian luxury leathergoods supplier Furla will showcase its FW16 collection at the upcoming Tax Free World Association Singapore show in May.

    According to the company, the new Furla bags embody the rebellious spirit, typical of the music scene, from rock to pop and influenced by a metropolitan tribal beat in its more modern interpretation.

    The bags are decorated with laser cuts, which add 3D effects and create kaleidoscopic patterns, embellished with golden studs. The new Furla Loop bag, for example, has fringes emphasising movement and femininity.

    Shoulder straps, the season’s protagonists, recall guitar-like straps and are enriched with details and weave effects. The leathers are smooth, supple and soft and adapt to the body. Perfectly on-trend, charms convey a personal touch to each bag, making it special for every occasion.

    The colour palette is sharp and well-defined, veering from black to blues to army green with touches of deep red and metal sparkles.

    The Furla Valentina and Furla Club bags are characterised by a new and colourful camouflage pattern that becomes a manifesto of the fervent cultural mixes of big cities, especially when matched to the new tribe tattoo themed straps and tags.

    The Furla Metropolis bag has evolved into a “creative laboratory” where new dimensions, craftsmanship and materials are developed and enriched.

    Also being shown is the new travel-retail exclusive Furla bag, a limited-edition set of three crossbody bags in Saffiano leather, each with a smaller detachable pouch inside. Available in three colour combinations: Lampone & Magnolia, Onyx & Gold, and Cobalto & Silver, each bag has an adjustable and detachable strap.

    Furla global travel retail director Gerry Munday said: “Asia is extremely important to the Furla brand and accounts for 35% of our global business in travel-retail. We are seeing significant growth in all areas, with a 36% sales increase in 2015 thanks to our presence now in 48 countries with a total of 195 airport doors versus 174 in 2014. We also have some exciting projects being finalised which will be announced in due course.

    “I’m confident this growth will continue as we continue to bring out collections that break the mould in terms of innovation, design and styling. The FW16 collection has already received incredible feedback and, with the addition of our latest travel-retail exclusive, we are looking forward to a very successful and productive week in Singapore this year.”

  • Economy Hong Kong’s retail sales drop hardest in 17 years

    Economy Hong Kong’s retail sales drop hardest in 17 years

    Hong Kong’s retail sales plunged in February, as the economic slowdown in China prompted fewer visits from the mainland.

    On an annual basis, the total value of retail sales in February dropped by 20.6 per cent to HK$37bn, from January’s 6.6 per cent drop. The drop in February was the worst since January of 1999.

    After stripping out price changes, the total volume of retail sales decreased by 19.5 per cent, the worst since September of 1998.

    Combining January and February figures, the value of sales of luxury goods like jewellery, watches and clocks, which mainland Chinese tourists often visit Hong Kong to buy, decreased by 24.2 per cent. This was followed by 11.4 per cent decrease in clothes, a 12.3 per cent decline in commodities in department stores, and 7.7 per cent decrease in medicines and cosmetics.

    In a statement, Hong Kong’s Census and Statistics Department said:

    Apart from the severe drag from the protracted slowdown in inbound tourism, the asset market consolidation might also have weighed on local consumption sentiment.

    The near-term outlook for retail sales will still be constrained by the weak inbound tourism performance and uncertain economic prospects. The Government will continue to monitor closely the retail sales performance and its repercussions on the wider economy and job market.

    With Chinese consumers unwilling to spend on luxury goods, Swiss watchmakers, known for their luxury watches, are having a hard time, with UBS cutting earnings forecast.

  • Suning Plans $7.7B Fund To Expand And Invest Overseas

    Suning Plans $7.7B Fund To Expand And Invest Overseas

    Suning Commerce Group, one of China’s largest electronics retailers, plans to create a separate investment arm seeking to raise as much as RMB50 billion (US$7.7 billion) within five years.

    The Nanjing-based Suning is also establishing two separate investment funds each targeting RMB2 billion by the end of this year.

    One fund will focus on investing in media and content production industries. The other vehicle will target the sports consumption and retailing sectors.

    The newly planned funds may potentially seek to accelerate the group’s outbound investments, as well as expand its existing investment activities, according to state-owned China Daily.

    Previously, Suning operates its investment activities across three funds.

    Suning Rundong Fund, with RMB5 billion, targets a diverse range of sectors, including technology, media, telecommunications, and the cultural and entertainment industry.

    Suning Goldstone Fund, founded in 2014 with RMB4 billion, focuses on retail infrastructure such as physical stores and logistics.

    Suning Qingchuang Fund, with RMB300 million, backs startups with a focus on those specializing in emerging industries.

    The retail giant invested RMB1.93 billion in smartphone maker Nubia Technology Ltd., a subsidiary of ZTE Group, to take a 33.33% stake in the company in December 2015.

    In August 2015, Alibaba Group Holding Limited formed an extensive strategic alliance with Suning to create a far-reaching O2O (online-to-offline) e-commerce platform.

    In October 2014, Suning planned to transfer 11 retail stores for RMB4.01 billion (US$650 million) to Goldstone Investment Ltd., the direct investment arm of CITIC Securities to focus on core and profitable assets.

     

  • Singapore telcos hit the road with transit NFC pay service

    Singapore telcos hit the road with transit NFC pay service

    Singapore’s three telcos have unveiled plans to offer NFC-enabled service for the country’s public transport network, enabling mobile users to pay for their fares using their smartphones.

    All three operators issued statements today, alongside a separate release from industry regulator Land Transport Authority (LTA), which announced the completion of a joint pilot conducted between the telcos and local public transport operators, as well as payment service provider EZ-Link. The latter’s contactless payment card currently is used by public transport commuters and as a payment option at more than 30,000 locations, including convenience stores, fast food outlets, retail stores, and taxis.

    Available today, M1’s service would be the first to allow its subscribers to swop their SIM cards for NFC-enabled chips that they could then use on buses and trains island-wide. They could do so at any of the telco’s retail outlets, but would need to have compatible devices for the NFC payment to work, including Samsung Galaxy Note Edge 4G+ and Sony Xperia Z. The Apple iPhone was not on the current list of approved devices.

    The NFC SIM cards are embedded with EZ-Link purse, which supports specifications under Singapore’s own standard Contactless e-Purse Application (CePAS). Upon activating the new SIM cards, mobile users would be able to top up or check the balance of their credit stored in the purse, as well as use their device to pay for other services that support ez-link payments.

    Singtel said sale of its transit NFC SIM cards would start in late-April, when subscriber would be able to purchase the chips from its retail stores. A S$5 registration fee for these SIM cards would be waived for a limited time, the operator said.

    M1 said its transit SIM card would cost S$37.45, with a service activation fee of S$9.10 that also would be waived until April 30.

    StarHub said its NFC transit chips would go on sale at its retail outlets from April 2 and would be priced at S$37.45 for a new SIM, or S$26.75 for a SIM replacement. It added that the “NFC ez-link purse fee” of S$5 would be waived “until further notice”.

    The telco’s head of business strategy Yeong Mun-Ling said: “This development is a step in the right direction towards stimulating digital commerce growth in Singapore. Our world is becoming increasingly digital and we are looking forward to meeting the needs of our mobile customers, who want to do more with their smartphones.”

    M1 CMO P. Subramaniam also noted: “Transit is the ‘killer phone app’ Singapore consumers have been looking forward to and we are pleased to be the first to offer customers the convenience of making payment with the one device that is always with them, their phone.”

  • TANGS names Kevin Dyson as new CEO

    TANGS names Kevin Dyson as new CEO

    TANGS has announce that Mr Kevin M. Dyson will be appointed Chief Executive Officer (CEO) with effect from 1 April 2016. He will also be appointed as a member of the Board of Directors of C.K. Tang Limited.

    According to a release from TANGS, effective 1 April 2016, Mr Foo Tiang Sooi will relinquish his duties as CEO, and will remain as a member of the Company’s Board of Directors. He will continue to be in the Company as Senior Director.

    As CEO, Kevin will be responsible for all aspects of the business and provide leadership in achieving TANGS’ vision as a world-class retailer.

    Here’s more from TANGS:

    Prior to joining TANGS, Kevin spent 25 years with Barneys New York, a leading luxury retailer in the USA, with extensive experience in store management, merchandising, and the expansion of stores across the USA.

    Mr Foo Tiang Sooi’s new role as Senior Director will be focused on the financial aspects of the business, providing support to the Chairman as well as the new CEO. He has been a member of the Board since 1994, before assuming the role of Chief Operating Officer (COO) in 1999, and being appointed as CEO in 2006.

  • Coupang Faces off against Retail Giant Shinsegae

    Coupang Faces off against Retail Giant Shinsegae

    “We should catch up to Coupang, accepting the risk of financial loss,” said Chung Yong-Jin, vice chairman of Shinsegae Group. “Coupang is taking away our customers in their 20s and 30s. Why are we just sitting on our hands and leisurely watching the exodus?”

    The JoongAng-Ilbo has recently reported that vice chairman Chung Yong-Jin of Shinsegae Group had harshly criticized Shinsegae executives for making a lukewarm response to Coupang eating into its customer base.

    Chung was quoted as saying: “Even if we have to incur a deficit, the entire distribution channel should come up with strategic online product offerings and sell them at rock bottom prices to lure in 20-30 something consumers who use smartphones to make purchases. To that end, we should give priority to taking E-mart’s online mall to new heights.”

    He made such a comment because E-mart, the discount store unit of Shinsegae, has lost business to social commerce operators, especially Coupang, over the past year.

    After all, Shinsegae Group waged a price war against e-commerce leader Coupang last month: it announced that it would sell baby formula, feminine hygiene products and instant coffee at the lowest possible prices. E-mart, the country’s largest discount store chain logging 13 trillion won in sales and 500 billion won in operating profit, started to fight back, accepting the risk of incurring a deficit.

    Coupang, established in 2010, has emerged as a threat to Shinsegae Group, the country’s largest retail juggernaut. Coupang’s sales grew sharply from 348.5 billion won in 2014 to 1.5 trillion won in 2015, greatly unnerving Shinsegae Group. If the growth of Coupang continued at such high speeds, Shinsegae Group fears, it could be overtaken by Coupang in 2-3 years.

    Computer-based and mobile traffic to E-mart’s online mall is languishing in the one million visitor range. Sales from its online mall account for about 5 percent (or 700 billion won) of its total sales (13 trillion won). In contrast, the number of visitors to Coupang reached over 7 million, dwarfing traffic to E-mart’s online mall.

    Coupang’s mobile app came out on top in traffic for 41 consecutive months from July 2012 to November 2015.

    Though E-mart with deep pockets is trying to take sales away from Coupang by offering products at sharply discounted prices, the majority view is that Coupang still gets the upper hand on E-mart when it comes to mobile shopping. A Coupang official said: “We are unscathed by E-mart going on the offensive. Actually, things are looking up as the mobile shopping market is on the upswing. It has become obvious that so many consumers have faith in Coupang.”

    According to Coupang, consumers, who have enjoyed convenient mobile shopping experiences since the launch of Coupang, will not easily drift away from Coupang.

    There is no doubt that Coupang is enjoying a “first-mover” advantage as sales from its mobile shopping platform surpassed 80 percent of its total sales. According to Statistics Korea, mobile shopping sales hit 2.66 trillion won in January 2016, exceeding computer-based e-commerce sales (2.54 trillion won) for the first time.

    Coupang is expanding its business realm on the back of its signature “Rocket Delivery” program, its delivery staff dubbed “Coupang men,” and its ‘direct commerce’ business model, in which Coupang takes care of all the stages of e-commerce from selling to delivery.

    Coupang plans to invest 1.5 trillion to increase the number of Coupang men to 15,000 and the number of logistics centers from 14 to 21 by 2017.

  • German retail giant Metro to split businesses into two listed entities

    German retail giant Metro to split businesses into two listed entities

    German retail giant Metro said last week it will spin off its businesses into two separately listed units, sending its shares sharply higher.

    “The management board of Metro is preparing the creation of two independent and sector-focused companies through a demerger of the group,” Metro said in a statement.

    Metro shares were the strongest performer on the mid-cap MDAX index of the Frankfurt stock exchange on Wednesday, shooting up 7.73 per cent to €26.47 in a generally firmer market.

    A wholesale and food specialist group would be created comprising the group’s Metro, Makro and Real brands, as well as a consumer electronics products and services group centred around its Media and Saturn retail chains.

    Since there is little operational overlap between the two businesses and limited synergy effects, management felt “very strongly that a split into two independent and focused businesses would be in the best interest of all stakeholders, as it would facilitate a significant opportunity for faster and more profitable growth,” said supervisory board chief Juergen Steinemann.

    “Both entities would become individually stock-listed, with their own distinct profile, management and supervisory boards,” Metro said.

    The aim would be to give each of the companies and their respective management full control over their corporate strategies.

    “This will further increase customer focus, accelerate growth of the businesses, simplify structures and improve time-to-market and operational excellence,” it argued.

    Moreover, both entities would be able to independently pursue acquisition and partnership strategies, enabling them to define their own expansion strategies.

    Metro said its management and supervisory boards “will make a decision on the contemplated demerger of Metro group after a period of intensive consultation and review.”

    Should the boards and shareholders be in favour, “implementation of the demerger is aimed for mid-2017,” Metro said.

    “Over the past years, we have successfully revitalized our core businesses while significantly strengthening our group balance sheet,” said chief executive Olaf Koch.

    “Both our wholesale and food specialist business as well as our consumer electronics business have continued to commercially improve, are on a steady successful path and are best-equipped for an independent future,” Koch said.

    “Our shareholders would effectively own two well positioned market leaders, both of whom are increasingly focusing on their respective business areas and are generating more value for customers, employees and business partners.”

  • To survive, we need to change: German luxury brand Braun Buffel

    To survive, we need to change: German luxury brand Braun Buffel

    Amid a retail environment clouded by slowing global growth and the rise of technological trends that threaten to displace traditional retailers, the boss of German luxury brand Braun Buffel said change will hold the key to survival.

    “Mankind tends to stay with what they know and sometimes people are not open to changes. But to survive in the long run, we need those changes,” owner and managing director Christiane Brunk.

    The more than century-old label, founded by Johann Braun in 1887, is best known for its handcrafted leather goods and accessories, but has in recent years ventured into new segments such as sunglasses and watches – a step which Mrs Brunk described as “enhancing the brand’s experience”.

    Such nimble thinking is also evident in the introduction of more colours and shapes to its product line. According to Mrs Brunk, Mr Braun’s great granddaughter and the fourth generation to helm the family business, these changes made the historical European brand “a little bit more fashion forward”.

    The leather used in products sold worldwide also differs, so as to cater to the varying preferences and climate in various parts of the world. For example, the leather used in products sold in Asia has to undergo special treatment to suit consumer preferences and the climate in this part of the world, according to Braun Buffel’s master craftsman and production manager Manfred Goll.

    “In Europe, the consumer prefers softer materials, but leathers which are stiffer and have other surfaces do better in this region,” Mr Goll said through a translator. “Leather in Asia also needs to be treated to avoid any reaction to the humid climate.”

    Meanwhile, the company is also embracing the rising trend of e-commerce, with plans to roll out an online retail platform in Asia soon.

    While analysts have identified Internet retail as a key threat for brick-and-mortar retailers, Mrs Brunk thinks otherwise: “As a traditional company, we might not belong to the group of early adopters … but this is something that we can’t exclude from our distribution channels.”

    Christiane Brunk, Managing Director of Braun Büffel.

    FLAGSHIP BOUTIQUE OPENS IN SINGAPORE

    Change is also evident with the official opening of a flagship boutique at Singapore’s Marina Bay Sands on Tuesday.

    The 1,500-square-foot store, which features Braun Buffel’s trademark leather extensively in the form of an Italian fine-grain leather wall and bespoke leather armchairs in the lounge area, is the first in the world to roll out the brand new design concept.

    According to Mrs Brunk, it will serve as a test bed for future store designs and understanding consumer preferences in the region, especially the Indonesian market which the brand is keenly eyeing.

    “Singapore is always a good and important base for us in the Asia-Pacific region because there’s good global connectivity and a multicultural population which gives you great customer insights,” said Mrs Brunk, who took the reins at the 129-year-old label in 2005.

    “In Singapore, we always get very good and precise feedback so it was clear to choose here as the first location in Asia-Pacific again,” she added, referring to how the German leather goods label picked the Lion City as its first Asian market back in 1982.

    Braun Buffel’s latest Fall-Winter 2016 collection on display at Marina Bay Sands. (Photo: Tang See Kit)

    “GO SLOW AND STEADY”

    But while change is the only constant in keeping up with competition, the well-established leather goods manufacturer prefers to stick to its own pace.

    For one, the brand new boutique in Singapore – Braun Buffel’s fifth store in the Lion City –was a year in the making.

    “When we do things, we try to do it as perfectly as possible. That’s our principle so we took our time to go over details such as choosing the leather for the wall,” Mrs Brunk said.

    This “slow and steady wins the race” approach also applies to Braun Buffel’s expansion plans.

    “We don’t dance (at) too many parties,” Mrs Brunk said. “There are fields such as product quality and development where we take the lead, but in terms of store expansion, sometimes you have to wait. These are huge investments and as ‘careful merchants’, we need to make sure our investments are successful.”

    Apart from Indonesia where a booming middle class means untapped opportunities for the German luxury brand, China is the other emerging market where Braun Buffel has set its sights on.

    When asked whether she is worried about the spending power of Chinese consumers amid an ongoing anti-graft campaign, slowing economic growth and a turbulent equity market, Mrs Brunk said: “During the past 130 years, we have overcome several crisis including wars, and in an economy there will always be ups and downs. I think we are doing a quite good job in China now and even though the market is slowing, we still see room for expansion.”

    She added: “We now have nearly 200 point-of-sale in China. We are very keen on certain locations in big cities like Beijing and Shanghai. But it’s not our strategy to expand very fast so we are not under pressure (from the slowing economy).”

  • Asia gives Jimmy Choo an unlikely boost

    Asia gives Jimmy Choo an unlikely boost

    While a majority of luxury fashion retailers are blaming Asia for declining sales and failing to meet profit projections, Jimmy Choo has confounded the market by praising the continent.

    Jimmy Choo has reported sustained growth in far eastern markets to deliver 6.1 per cent revenue growth for 2015, to £317.9 million.

    “Whereas other players such as Burberry have faltered with declining Chinese demand, Jimmy Choo has been able to deliver impressive revenue growth across Asia,” notes Andrew Hall, an analyst atVerdict Retail.

    “The brand’s relative immaturity in these markets has helped to shield it from the decreasing demand and a stuttering economic slowdown in the region. Investment in new store openings and plans for new flagship stores across Asia sets Jimmy Choo apart from its rivals and will continue to reap rewards for the brand.”

    Jimmy Choo’s Asian sales rose a staggering 21.2 per cent, more than enough to offset a 2 per cent decline in sales in Europe, Middle East and Africa.

    The company reported a pre-tax profit of £22.1million, a significant turnaround on the 2014 loss of £8.2 million. It opened 13 new stores.

    In an earnings statement, Jimmy Choo said its Asian business in Asia and Japan is growing well.

    “We see significant opportunities to maintain this outperformance in the years ahead. Despite challenging market conditions, we expect continuous operating efficiencies and the dynamism and flexibility of our teams to enable us to drive margin expansion and continue the reduction in leverage and financing costs.”

    Said chairman Peter Harf: “Jimmy Choo continues to outpace the sector despite the challenging competitive environment. The company successfully reversed the first half decline in wholesale revenues and remains on track with growth forecasts in Asia and Japan where brand awareness continues to grow strongly.”

    However, Hall warns that Jimmy Choo is far from immune to the geopolitical situation: the decline of Russian luxury consumers in Europe, attacks in Paris deterring European consumers, and the weakening of the euro have contributed to disappointing performance in EMEA.

    “While the brand has achieved an operating margin of 9.4 per cent, compared to 8 per cent last year, the shoe specialist must be wary of creeping costs as it not only pursues store expansion but invests in omnichannel capabilities and continues to develop a strong social media presence,” said Hall.

    “Creative Director Sandra Choi has led a strong year of product design, building upon Jimmy Choo’s British identity to produce seasonal ranges which continue to resonate with consumers across the globe. While attempts to embrace the male market remains a difficult nut to crack, the development of stores aimed at both genders and the strength of new fragrances has seen the brand make headway into capturing a male demographic.”

    Hall said Verdict expects Jimmy Choo to continue to outperform the luxury sector in Asia giving it another year of solid total revenue growth.

    “However the Chinese market remains volatile and Jimmy Choo should be wary of putting all of its eggs in one far-eastern basket as its grip on European markets loosens.”

  • Trinity Group confident despite loss

    Trinity Group confident despite loss

    With revenue totalling HK$1.9 billion (US$245 million), Hong Kong-listed retailer Trinity Group lost HK$88.5 million last year.

    Trinity Group, which sells premium menswear brands in greater China and Europe, says it continued to be dragged down by the dampened consumer spending environment in China, but has implemented business reforms as well as restructuring aimed at improving its position long term.

    As well as the slower growth in China, its main market, the group also lost money with one-off restructuring costs and the impact of the RMB’s depreciation.

    Trinity Group, a Fung Retailing company, owns the Cerruti 1881, Kent & Curwen and Gieves & Hawkes brands and manages D’Urban under long-term licence in Greater China.

    CEO Richard Cohen says while the group took measures to mitigate against the expected lower consumer spend, the impact on same-store sales in the last quarter was far more significant than the retail sector predicted. However, the group’s overall performance was in line with that experienced by the wider high-end and premium retail sectors.

    “Our results, along with others in the industry, are disappointing but not wholly unexpected. Looking forward, we believe there are significant international wholesale, franchising and retail opportunities for the group in the long term.”

    Efficiency measures by the group last year included improvements to sourcing and inventory management. This involved a consolidation restructure, including moves to further reduce staff costs, which resulted in one-off full-year costs of HK$60 million.

    Fifty non-performing stores were closed, reducing the group’s outlets from 399 at the end of 2014 to 349.

    Cohen says the group was able to maintain gross-profit margins above 70 per cent despite the difficult retail environment.

    While maintaining its focus on the Chinese consumer, Cohen says the Trinity Group has revised its global strategy.

    “The growing middle class in China is increasingly travelling abroad, so our strategy is to continue to engage with these core customers when they travel, while also reaching out to new clientele.”

    Related to this strategy, the group signed an exclusive five-year agreement in September that will see international sports icon David Beckham play a multifaceted role in driving Trinity’s Kent & Curwen business globally.

  • Lippo Group expands into online wholesaling

    Lippo Group expands into online wholesaling

    After launching its Matahari Mall online shop in October, Indonesia’s Lippo Group is expanding its eCommerce activity into wholesale services.

    It is set to launch Mbiz.co.id next month, targetting businesses and government institutions. It digitises the procurement process, which Lippo Digital Group CEO Adrian Suherman says translates into efficiency.

    To offer its customers more choice, Mbiz is hoping to attract a wide range of vendors to join its platform as suppliers. The aim is to offer an easy alternative to cumbersome conventional procurement, where a business has to find vendors and compare them one by one, negotiate prices and record transactions manually. Mbiz wants to expedite procurement by making vendor information easily available, comparable and transparent, as well as offering flexible payments.

    Meanwhile, the eCommerce site has been selling products from 12 main categories, including electronics, furniture, office supplies and packaging. Its vendors include Asus, HP, Philips, Samsung, Sony and other blue-chip companies.

    Mbiz intends to start selling heavy machinery and agricultural goods as well as maintenance, repair and overhaul items for businesses and government institutions.

    “If we talk about fashion in B2C business, it is going to be the clothing itself, but in B2B or B2G business, the items are yarn, loom, sewing machines, embroidery machines and fabrics,” says Mbiz co-founder Ryn Hermawan.

    As many businesses have their own particular procurement systems, Mbiz uses a direct-selling strategy, giving individual presentations to companies and organising events to introduce its services. A follow-up team is available to train businesses and help them evaluate their performance.

    Mbiz can also offer clients product recommendations and input on when they need to buy goods based on their historical data.

    For the largely untapped government institution market, Mbiz will play the role of vendor by providing its e-catalogue to the Government Procurement Regulatory Body (LKPP). Co-founder Andrew Mawikere says the potential for the procurement of government goods and services in Indonesia last year was Rp31 trillion (US$2.36 billion) without e-tendering.

    Mbiz has fewer than 100 employees and is funded by Lippo, but says it is open to foreign investment in the future. The unit is run by Brilliant E-Commerce, part of the Lippo group. Matahari Mall is run by Global Ecommerce Indonesia, in which Investama Digital Ventura holds a majority stake.

  • eCommerce won’t dent Asian retail real estate demand

    eCommerce won’t dent Asian retail real estate demand

    Growing online sales will not undermine demand for Asian retail real estate, according to the last CBRE study of major international brands.

    For the seventh edition of How Active Are Retailers Globally?, the real-estate company looked at more than 150 major international brands based in Americas, Asia Pacific and EMEA (Europe, the Middle East and Africa) countries.

    China is the top target market in the Asia Pacific (APAC) and fourth-ranked globally, with 27 per cent of retailers looking to expand there. Hong Kong follows in sixth position (24 per cent), Japan in seventh (22 per cent) and Singapore in ninth (21 per cent). The top three globally were Germany (35 per cent), France (33 per cent) and the UK (29 per cent).

    China and Hong Kong maintained their placings, while Japan, Singapore and Australia (11th) all rose higher in the ranking, up from 13th, 18th and 15th positions respectively.

    “Hong Kong will remain a desirable market for retailers, particularly as it continues to serve as a popular shopping destination for mainland Chinese tourists,” says CBRE Hong Kong executive director for retail services Joe Lin.

    “The main difference is a shift from luxury to mid-range brands. This is forcing luxury retailers to consolidate their footprint, leading to a drop in rental cost in prime locations and therefore opportunities for non-luxury retail brands.”

    Most APAC markets saw increased interest for this year, with the exception of China and South Korea. Malaysia (10 per cent), Indonesia (9 per cent), Thailand, Vietnam and The Philippines (all 8 per cent) received more than double the interest they saw last year, when all markets secured between 1 and 3 per cent.

    Asked about the risk factors for the coming year, brands indicated that real-estate cost escalation (56 per cent) and unclear economic prospects (42 per cent) continue to be at the forefront of their minds.

    “We’re seeing more of a challenging economic environment, and concerns such as high operating costs and a lack of quality space means retailers are somewhat more wary this year,” says CBRE head of Asia Pacific research Dr Henry Chin. “However, even as markets such as China and Hong Kong are experiencing a slowdown, we see increasing numbers of opportunistic retailers looking to enter markets like Hong Kong, supported by strong underlying consumer demand.

    “Japan and Australia remain attractive, while Southeast Asia showed strong growth because of opportunities for retailers around an expanding middle class and stronger economic growth.” CBRE senior director and head of retailer representation for Asia Joel Stephen says there are still opportunities for retailers to grow their business in Asia, underscored by the region having four of the 10 most popular destinations. “The goal now for all brick-and-mortar retailers is to build an engaging offer that encourages people to stay longer and spend more.”

    The survey shows that 83 per cent of brands suggest their physical store expansion plans for this year will not be affected by the growth of eCommerce. From a retailer perspective, only 22 per cent of the brands see stiff competition from online retailing as a threat to their business.

    At the same time, retailers are cautiously optimistic on physical expansion. Of those canvassed, 17 per cent have large-scale ambitions, many of them looking to open more than 40 stores this year (up from 9 per cent last year), while 67 per cent plan to open up to 20 stores.

    “A physical store presence in key locations is still critical to the strength of a brand’s image,” says Stephen. “Customers still feel a need to go into stores, to physically touch a product and enjoy the feel-good factor associated with a particular brand experience. The store is integral to the shopping journey and can be used in different ways, such as to click and collect, research of the product or brand, or to test the product. It isn’t solely about the transactional side.”

    A new trend is brands looking to expand into travel hubs, such as airports and train stations, giving them access to high footfall in busy locations. But for APAC retailers, shopping malls are still the preferred destination by far, at close to 90 per cent.

    While globally the key concern for brands in negotiations for premises is lease length, APAC retailers are most concerned with turnover rent clauses (GP). They are also particularly concerned about changing consumer behaviour (40 per cent), which is higher than the global average (31 per cent).

  • Grab to deliver for MatahariMall

    Grab to deliver for MatahariMall

    Taxi and ride app service Grab has formed a strategic partnership with one of the Indonesia’s largest conglomerates to provide logistic services for online shopping.

    It has signed up with Lippo Group’s MatahariMall, launched last year at a cost of $500 million
    – the largest eCommerce investment in Indonesia. A competitor to Sequoia-backed Tokopedia, MatahariMall is aiming for $1 billion in sales within its first few years.

    Formerly under the Singapore brand GrabTaxi, the company rebranded in January to reflect its extra services, including deliveries, beyond its original licensed taxi service.

    “Technology can be a key driver of economic growth, and we are both invested in opening the digital economy to all Indonesians,” says Grab co-founder/CEO Anthony Tan of its deal with Lippo.

    Backed by investors like Didi Kuaidi (China’s largest ride app), GGV Capital and SoftBank, Grab is reportedly valued at more than $1 billion. Its rivals include Uber and Indonesia-based Go-Jek, both of which are also entering the delivery/logistics space.

  • Disappointing year for Matahari Putra Prima

    Disappointing year for Matahari Putra Prima

    While the net income of Indonesian grocery retailer Matahari Putra Prima (MPPA) was below expectations, it recorded slightly improved revenue and sales for the year ended December 31.

    Its revenue was Rp13.9 trillion ($US2 billion), with sales up 2.5 per cent from Rp13.6 trillion in 2014. Its net income came in at Rp183 billion, giving it an operating profit of Rp268.8 billion, or 1.9 per cent of sales.

    CEO Noel Trinder says that despite the economic difficulties, the group continued its strategic direction of expanding business through new or enhanced formats.

    As well as continuing its Hypermarket G7 rollout, Matahari PP also revamped its Foodmart and Bostonformats, and launched the SmartHub and FMX concept debuts formats on the wholesale side.

    MPPA opened 33 outlets during the year, and now has 293 multi-format stores. Four G7 stores opened, and eight stores were remodelled to the concept.

    One of Indonesia’s largest retailers, Matahari PP has more than 30,000 employees in 112 hypermarkets, 23 supermarkets (Foodmart and Primo/Fresh), 49 minimarket/convenience stores (FMX), 108 health and beauty stores (Boston) and its wholesale outlet (SmartClub).

    In total, it has 293 stores in 68 cities throughout Indonesia.

  • StarHub TV features short-form content, telemovies

    StarHub TV features short-form content, telemovies

    Singaporean audiences can soon look forward to more exciting “Made in Singapore” content from as early as the third quarter of this year.

    StarHub’s new wave of Public Service Broadcast (PSB) lineup includes of travelogues shot in “the most exotic” corners of the world, kids infotainment shows and sports programs that shine the spotlight on the everyday superhuman athletes.

    For the first time, viewers who enjoy consuming content on the go, will also be able to view short-form content―each ranging from five to 15 minutes in duration.

    Local movie fans will also be treated to an array of locally produced telemovies centered on the kaleidoscopic facets of Singaporeans’ lives.

    PSB content is produced under the Media Development Authority of Singapore’s (MDA) Public Service Broadcast Contestable Funds Scheme (PCFS). The PCFS aims to extend the reach of PSB content to multiple broadcast platforms, as well as to bring more opportunities to local production houses to deliver creative, high-quality PSB content.

    Viewers will be able to catch StarHub’s exciting lineup of PSB content on its self-packaged channels, E City (StarHub TV Channel 111/825) and SuperSports Arena (StarHub TV Channel 112/205), as well as via its online streaming service, StarHub Go.

    In total, StarHub will be commissioning about 110 hours of original productions. These productions will incorporate PSB values, such as celebration of the Singapore’s culture and heritage, and promotion of the Singaporean identity, through innovative storytelling.