Author: Mei Ling Tan

  • Thai 4G: Deputy PM tightens reauction timeline

    Thai 4G: Deputy PM tightens reauction timeline

    Deputy Prime Minister Wissanu Krueangam who has stepped into the mess left after Jas Mobile Broadband walked away without paying for its 900-MHz licence. He has stated that there would be no need to invoke the junta’s absolute power clause in the interim constitution just yet – though he did give the telecom regulator strict marching orders.

    He said the NBTC must successfully auction off the spectrum at a price that is not less than what Jas bid and must do so within one year. It it fails then Jasmine must be held responsible for any shortfall.

    Earlier NBTC Takorn Tantasit had put a timeframe of 4 months for an auction with the starting price of Jas’ winning bid and a second auction one year after that if it fails to go.

    Takorn said the starting price might be lowered to Dtac’s last bid of $1.98 billion (70.18 billion baht)  instead of Jas Mobile’s winning bid of $2.14 billion (75.65 billion baht) or even a round figure of 70 billion baht.

    The auction guarantee would rise to between 10 to 30% of the revised opening bid (previously it was 5% of 12.88 billion baht opening bid)

    Takorn said the draft auction rules would be finished by April 12 which would then be put out for public comment between April 18 to May 23 and should be formalised in the Royal Gazette by 31 May. The auction will be held by June 20 at the latest.

    Takorn said that Dtac had protested TrueMove’s inclusion in the auction given that they already had won half the 900-MHz spectrum. However, Takorn said the NBTC insists that True will be eligible to take part.

  • XL Axiata to sell more telecom towers for $250m

    XL Axiata to sell more telecom towers for $250m

    Indonesia’s XL Axiata has arranged to sell 2,500 more telecom towers for 3.56 trillion rupiah ($250 million) as part of an ongoing asset management reorgnization.

    XL has agreed to sell the towers to local tower operator Professional Telekomunikasi Indonesia (Protelindo) and rent most of them back for 10 years as the anchor tenant.

    Announcing the move, XL said it expects to benefit from significant capex and opex savings, and plans to use proceeds from the sale to help further reduce its debt.

    The operator is also expected to use the divestment to help more aggressively roll out 4G services.

    XL already sold 3,500 towers to PT Solusi Tunas Pratama (SUPR) as part of a deal arranged during 2014, and used the proceeds to reduce its debt burden.

    In related news, credit ratings agency Moody’s has recently published a report predicting that telecom tower companies in Indonesia as well as India are well-placed to continue growing.

    Tower companies in the two markets are the most developed in Asia, Moody’s said. But the company noted that geographical, operational and regulatory differences between the two countries will affect their growth rates and financial performance.

    “We expect continued growth in both markets as mobile operators, building out and strengthening their third- and fourth-generation (3G and 4G) footprints, will seek to lease tower space and sell more of their own towers,” Moody’s assistant vice president and analyst Nidhi Dhruv said.

    “In this context, we expect overall year-on-year revenue growth of about 8%-10% for tower operators in both countries during the next one to two years.”

  • Telekom Malaysia launches POP in Laos

    Telekom Malaysia launches POP in Laos

    Telekom Malaysia has arranged to establish a new point of presence in Laos in collaboration with the Lao National Internet Centre (LANIC).

    Under the agreement, LANIC will host and provide infrastructure for the POP via its international data center in Vientiane.

    Telekom Malaysia will use the POP to provide alternative connectivity options to its customers and afdress growing demand for international internet bandwidth in Laos.

    LANIC is an affiliate of the Laos Ministry of Posts and Telecommunications. The new POP will enable services including IPVPN, IP transit and global Ethernet services.

    “This alliance with LANIC will further strengthen our regional footprint in Southeast Asia, Telekom Malaysia VP for product marketing and operations Mohamed Asri Jaafar said.

    “Through the new POP, TM will be able to offer a vast range of services at a competitive price, going in and out from Laos through diversified routes via submarine and terrestrial cables, connecting to our existing on-net network presence.”

    Telekom Malaysia now has 22 POPs worldwide, spanning Asia, Australia, North America, Europe and the Middle East.

  • Viettel picked for Myanmar telecom JV

    Viettel picked for Myanmar telecom JV

    The Myanmar government has selected Vietnamese military-run operator Viettel as the international partner for the consortium likely to be granted the nation’s fourth telecom license.

    Viettel has been selected from a pool of seven contestants and been granted the rights to negotiate with the local consortium over a potential partnership.

    According to the report, only five of the entrants were deemed eligible to apply, and Viettel was the only one of these five to submit an application before the March 18 deadline.

    If negotiations go well Viettel will become a minority shareholder in a company established by a consortium of 11 local companies from the technology and other sectors, as well as a subsidiary of the Myanmar military run Myanmar Economic Corporation.

    The joint venture is expected to be granted the market’s fourth nationwide telecom license, after Telenor Myanmar, Ooredoo Myanmar and the consortium between Myanmar Posts and Telecom (MPT) and Japan’s KDDI.

    Viettel is expected to pay 49% of the $300 million license fee, equivalent to its stake in the venture.

  • Where’s Marcel? – in the Philippines

    Where’s Marcel? – in the Philippines

    Where’s Marcel has opened its first cafe outside Australia – in Manila, the Philippines.

    The Philippine branch on Pearl Drive in Ortigas is the company’s third store after Sydney and Melbourne.

    Where’s Marcel? coffee founder Marcel Ruggieri said “there’s very good foundations here for specialty coffee,” based on the company’s market research.

    Aside from the cafe, the company sells wholesale processed beans, through a principle of farm to table they call “crop-to-cup.” Through this, the company will assist local farmers in growing beans and buy directly from them.

    “To operate ethically should always be a benchmark for… life. Not just in a hospitality sense, but everything we do,” Ruggieri said. “We’re improving the quality in the cup, we’re improving the training and services to the clientele.”

    He said plans to expand the company’s wholesale operations in the country are set in the coming year.

    “The retail front gives a cafe experience; it’s also an opportunity to showcase our coffee, and train and develop staff… it’s really a great platform to demonstrate.

    “With regards to our wholesale operations, we focus on educating and building our clients’ business. So when we supply coffee, we’re not just supplying the bag of beans,” he said.

    The cafe will complement its coffee with Filipino dishes and desserts prepared by Filipino chefs Sau del Rosario Christine Paredes.

    Founded in 2014, Where’s Marcel? got its name from a blunder.

    “Funny enough, at a farm, they lost me,” Marcel Ruggieri, founder of the cafe, told the press during the cafe’s launch. During a trip to Brazil to source beans with his team, Ruggieri lost his away around, prompting his companions to ask, “Where’s Marcel?”

    “The joke kind of stuck through that trip.”

    Where’s Marcel? - in the Philippines

  • Bison Consolidated debuts with small discount, but picks up momentum

    Bison Consolidated debuts with small discount, but picks up momentum

    Save for the first initial public offering (IPO) this year on the Malaysian market, corporate debuts on Bursa Malaysia has seen dampened openings thus far. Convenience retail chain store operator Bison Consolidated Bhd listed on the Main Market of Bursa Malaysia on Tuesday, opening at MYR1.09 on a volume of 2.2 million shares, a small discount to its IPO price of MYR1.10. This was despite encouraging reception prior, where the 15.5 million new public shares offered had been 6.94 times oversubscribed. The counter closed its first trading day positively, however, at MYR1.17, marking a 6.36 per cent premium to the opening price. 68,480,900 shares traded hands.

    Bison is the third Malaysian IPO in 2016, and the last for this first quarter period. The first two had been building materials supplier Chin Hin Group Bhd earlier this month, and Ranhill Holdings Bhd mid-March. Bison is an investment holding company, and through its subsidiaries, it is involved in the business of press and convenience retailing under its main trade name of “myNEWS.com”.

    It also operates eight outlets of WHSmith, under its equal joint venture with UK retailer WHSmith Travel. Managing director Dang Tai Luk told reporters after the listing ceremony that the group intends to open another 115 stores with the IPO proceeds over the next 36 months. It has already opened 20 stores, with another 50 targeted to be opened within 2016. “Our target for 2016 is achievable; we have already identified 30 locations, and are considering another 30 locations. From those numbers, I would say we are targeting to open 70 stores a year,” he said, adding that a key criteria is the population density in the selected locations. Bison seeks to build its network of stores in high-street locations, departing from its old strategy of setting up in commercial buildings and various types of shopping malls.

    Its IPO prospectus noted that the group has 255 outlets, as at February 10, which carry a range of print media, convenience retail products and offer consumer services like electronic payment services and money remittance services. According to Smith Zander International Sdn Bhd, Bison owns an estimated market share of 8.6 per cent in outlet numbers, and 6.6 per cent in terms of revenue for the year 2015. The company is also looking to establish another distribution centre either in the north or south of Peninsular Malaysia, looking at either Penang or Johor states.

    It currently has one 125,000-sq ft warehouse facility in central Peninsular, and Dang noted that the new warehouse will not be bigger than the existing one. “We have always managed our own distribution, and we want to improve and make it more efficient,” he said.

    The management has no plans to expand beyond Malaysia at the moment, as it believes there are more opportunities to tap onto in the domestic market. Bison raised MYR88.68 million ($22.19 million) from the IPO, of which MYR35.55 million or 40.1 per cent will be utilised for the purpose of outlet expansion and enhancing the group’s existing outlets; and MYR14.45 million or 16.3 per cent will be used to improve its nationwide logistics and IT capabilities to support its growing network and product base, the establishment of an additional distribution centre, food preparation and packaging facility and acquiring additional transport equipment. Another MYR32.23 million or 36.3 per cent will be utilised to finance inventory stocking for new and existing outlets as well as other working capital requirements. The proceeds will be utilised for these purposes over the next 36 months. The remaining portion will fund listing expenses.

    CIMB Investment Bank was the principal adviser, managing underwriter and sole bookrunner for the IPO.

  • Philippine property giants turn to retail

    Philippine property giants turn to retail

    Philippine property giants are entering record capital expenditure programs in 2016, on the back of strong economy, according to the global property advisor Savills.

    Three of the eight biggest property developers – Ayala Land, SM Prime Holdings and Robinsons Land – are also the biggest mall developers in the country.

    “When the real estate boom started, residential sales were the sweet spot. It seems that the residential market is becoming more saturated that’s why developers are shifting to the commercial side,” said Antton Nordberg, research and consultancy manager at KMC MAG Group.

    The 2016 capex budget will mostly fund the development of large-scale mixed-use communities, mostly commercial components such as office and retail, Nordberg said.

    Nordberg said real estate firms – mostly listed in the Philippine Stock Exchange – could spend an all-time high of P369 billion (US$7.9 billion) this year, surpassing the record investment of P360 billion last year by 2.5 per cent.

  • Thailand’s most illustrious real estate event returns for the 11th year

    Thailand’s most illustrious real estate event returns for the 11th year

    The Thailand Property Awards presented by Hansgrohe returns for a successful 11th edition to reward the finest developers and current developments in the country’s resilient real estate sector. The annual event, which is attended by some 600 C-level executives, industry leaders and innovators annually, was officially launched to the media on 29 March 2016 at the Renaissance Bangkok Ratchaphrasong Hotel.

    Building on the monumental success of last year’s 10th anniversary event, which saw SC Asset Corporation PLC claim the biggest award for Best Developer, the kingdom’s biggest and most respected industry awards programme will champion the leading industry players in Bangkok and Phuket, which continue to evolve alongside the secondary markets of Hua Hin, Chiang Mai, Khao Yai, Samui and the Eastern Seaboard.

    “The tourism sector is playing an increasingly important role in driving the country’s economic growth,” Suphin Mechuchep, managing director of JLL Thailand and newly elected chairperson of the central panel of judges, said.

    “A decent chunk of tourist spending goes to retailers in various retail formats from street-side retail strips to modern shopping centres,” she added. “Retail markets in key tourist destinations such as Bangkok, Pattaya, Phuket, Krabi, Koh Samui, and Chiang Mai will benefit most from this trend.”

    This economic boost, as well the recently reported strong year-end finish to 2015 following the implementation of the government-led boosting measures and incentives, will be discussed by the industry’s leading experts, developers and innovators at the high-level forum that takes place before the awards gala – the Property Report Congress Thailand. The whole day conference on Thursday, 22 September from 09:00 to 15:00, and will be held at the Plaza Athenee Bangkok, a Royal Meridien hotel, the official venue of the Thailand Property Awards.

    On the panel: Srikorn Techarattanaptasert, consultant of title sponsor Hansgrohe; central panel of judges chairman Suphin Mechuchep, JLL Thailand; Terry Blackburn, founder of the Asia Property Awards and managing director of PropertyGuru International; returning judge Professor Dr Manop Bongsadadt, 2016 president of judges panel; and Alexander Kunz, Asia regional director of sponsor Kuppersbusch by Teka
    On the panel: Srikorn Techarattanaptasert, consultant of title sponsor Hansgrohe; central panel of judges chairman Suphin Mechuchep, JLL Thailand; Terry Blackburn, founder of the Asia Property Awards and managing director of PropertyGuru International; returning judge Professor Dr Manop Bongsadadt, 2016 president of judges panel; and Alexander Kunz, Asia regional director of sponsor Kuppersbusch by Teka

    An internationally recognised celebration of the country’s real estate achievements, the Thailand Property Awards 2016 have already begun accepting nominations from developers and the general public starting in late February. The nomination period will close on 8 July, with the official shortlist revealed to the world in the third week of August.

    Entry is free. All successful entries will be supervised by BDO, one of the world’s largest accounting and auditing firms, and the trusted awards supervisor of the Asia Property Awards, which, in its 11th year, is widely recognised for its fairness and transparency.

    This year’s awards programme will be boosted by the support of title sponsor Hansgrohe, a leading global manufacturer of innovative and designer bathroom products, official media partner Property Report, as well as the large network of awards organiser PropertyGuru, Asia’s largest online property portal group.

    “We’re excited to be working with PropertyGuru Group as the Asia Property Awards programme continues to expand in ASEAN in its second decade,” said Terry Blackburn, founder and managing director of the Asia Property Awards. “In trying times like these, Thailand can always depend on exceptional projects that boost investor confidence and elevate market standards. We’re delighted to reward their hard work at the Thailand Property Awards.”

    Suphin will be joined on the esteemed judging panel, which is presided by Dr Manop Bongsadadt, renowned professor of architecture at Bangkok’s Chulalongkorn University, by some of the best-known names in the industry. Aside from the central panel of judges, each region will have its own panel comprising local experts to ensure credibility of the Awards.

    A total of 31 trophies will be presented in 2016, with award categories covering the condominium, housing/villa, hotel, office, and retail segments. A special recognition for Thailand’s Real Estate Personality of Year, whose influence and achievements resonate across the kingdom, will be named by the editors of Property Report prior to the gala night.

  • Uniqlo to open flagship store in Singapore

    Uniqlo to open flagship store in Singapore

    Japanese clothing brand Uniqlo is set to open its first global flagship store in Singapore and the Southeast Asia region at Orchard Road by the second half of this year.

    The store, spanning across three levels at Orchard Central (a total area of 2,700 sqm), will generate more than 300 jobs here. It will be Uniqlo’s biggest outlet in Singapore and the region.

    “We are very honoured, and excited, to open our first UNIQLO Global Flagship Store in Singapore. Having been a member of the local retail scene since 2009, we remain committed toward contributing to the local community and being an integral part of Singapore’s growth and future,” said Taku Morikawa, CEO of Uniqlo Southeast Asia.

    Uniqlo fans can expect the flagship store to provide an extensive range of Uniqlo’s latest lines for women, men, kids and babies. The store will also serve as a platform to showcase the brand’s LifeWear collection.

    There are currently 13 global flagship stores around the world, including cities such as New York, London, Paris and Shanghai.

  • Dubai-based group behind Robinsons and Zara to refresh retail offerings

    Dubai-based group behind Robinsons and Zara to refresh retail offerings

    Dubai-based conglomerate Al-Futtaim Group is embarking on a slate of moves to refresh the offerings at its stable of retail brands here, such as household names Robinsons department store and the Marks & Spencer chain.

    The multi-faceted efforts to draw more shoppers are part of a drive by its Asia group chief executive, Mr Christophe Cann, who was appointed to the role in January to grow the company’s business in the region.

    “The strategy is to build a profitable long-term business, to bring new brands to the market and to keep the strength of the group which is quite diversified,” said Mr Cann, at the Robinsons store at The Heeren.

    The group’s diversified retail portfolio also includes sports brands such as Royal Sporting House, Reebok, and fashion labels such as Zara, Pull and Bear, and Massimo Dutti.

    For a start, it will inject $12 million to renovate Robinsons at Raffles City in phases over one year, starting in July. Upgrading plans are also afoot for Marks & Spencer stores at shopping malls – Parkway Parade, Paragon and Raffles City.

    Shoppers will also be able to take a pit stop at a new 1,000 sq ft cafe at the Marks & Spencer outlet at Wheelock Place in Orchard Road, set to open in the third quarter.

    “Having new concepts and new brands are ways to keep customers’ money in Singapore… We need to give more reasons for customers to visit us, to stay longer in the store,” said Singapore-based Mr Cann.

    The group is also adding more food and beverage offerings at Robinsons at The Heeren, with a new restaurant by chef and TV personality Angela May due to open on level two of the store next month.

    Mr Cann also flagged an upcoming outdoor F&B area at The Heeren – where T.G.I. Friday’s outlet used to be – to be connected to level two of Robinsons via a bridge. The F&B area will be up and running in the third quarter.

    Apart from culinary offerings, Al-Futtaim will be trying out new retail concepts, with the opening of a “sneakers bar” at Orchard Central later this year. The new store, spanning about 1,000 sq ft, will carry limited-edition footwear.

    Mr Cann added that the Royal Sporting House outlet at VivoCity will also be given a makeover and will open next month.

    “Sports is not just about products these days, it is about lifestyle. The new shop will look more fashionable and appeal to a younger crowd. We will also downsize on the number of brands, carrying only the best performing ones,” he said.

    This big revamp of its stores across various brands is expected to boost profitability.

    For example, Mr Cann said Robinsons, which has three outlets here – at The Heeren, Raffles City and Jem mall – booked a loss of “a few million dollars” last year, but is likely to break even this year; while its Marks & Spencer chain here is already profitable.

    Singapore is Al-Futtaim’s second- largest market in the region after Malaysia, followed by Thailand and Indonesia.

    Mr Cann said the company expects to invest around $80 million a year across the four markets to enhance its offerings.

  • Rough patch for Smoothie King as it closes outlets here

    Rough patch for Smoothie King as it closes outlets here

    American food chain Smoothie King has closed all seven of its stores in Singapore over the past month – although it says it is still keen to operate here within a franchise agreement.

    The news has shocked observers as the food and beverage segment is said to be one bright spot in an otherwise gloomy retail scene.

    While Smoothie King did not comment on the performance of its stores here, a company spokesman said its owner and chief executive Wan Kim recently sold his interest in the South Korean operations.

    Smoothie King Singapore is wholly owned by Smoothie King Korea, according to a company search.

    “As a result of this transaction, Smoothie King Company has chosen to not own and operate outside the United States. This decision has led to the strategic closing of all operations in Singapore,” the spokesman told The Straits Times on Monday.

    The company appears to have quietly exited the market. No mentions were made on its website and Facebook page, which were both unavailable yesterday.

    Smoothie King has been on a rapid expansion path over the past few years. It opened its first store here in December 2012, and said it planned to launch at least 30 shops in three years.

    Apart from the US, it is also open in the Cayman Islands and South Korea. The only Smoothie King- owned outlets are in the US. The rest are franchise agreements, the company spokesman said.

    It has agreements to open stores in the Middle East and will be announcing further international developments in the coming days.

    “Smoothie King vigorously continues to seek operating partners in Asean… It will be exploring opportunities to operate in Singapore within a franchise agreement,” she said.

    The company may have had limited appeal here. Staff at a store opposite its former Nex outlet said that while it would be packed with students from Friday to Sunday, it would typically not even be half full at lunchtime on weekdays.

    It was a similar story at its former Marina Bay Link Mall outlet, with staff at nearby outlets noting it would not be a full house during lunch hours.

    Mr Steven Goh, who runs retail consultancy SG Retail Network, said the chain’s growth and pricing strategy were not suited to the Singapore market.

    “It’s a premium to pay $6, $7 for a smoothie and they are, unlike coffees, not something most people will drink every day.

    “Smoothie King was in a very niche category but also expanded fast, with outlets in prime locations and high rental costs. Not all the stores may have been performing… But for chain store operations to be sustainable, at least 90 per cent of the stores should be profitable.”

  • Li & Fung proves nimble

    Li & Fung proves nimble

    Hong Kong-listed global supply chain management company Li & Fung has proved nimble weathering one of the most challenging retail environments for many years.

    Yet despite an overall increase in trading volume, its revenue for the year ended December 31 fell 2.4 per cent to US$18.8 billion for the year.

    Mainly servicing US and EU brands, department stores, hypermarkets, specialty stores, catalogue-led companies and eCommerce sites, the family-led company reorganised during the year with the aim of delivering innovation and product differentiation while focusing on client solutions.

    Growth was strong in its e-logistics division, thanks to the eCommerce boom, and with an unprecedented drop in ocean freight rates, its logistics network grew in both turnover and unit volume.

    Adding to the difficulties of the year were political uncertainties in Europe and Asia. Meanwhile, increased competition from fast-fashion, off-price and eCommerce players continue to challenge retail customers, resulting in margin pressure across the board.

    Turnover eased by 2 per cent year-on-year to $18.8 billion, largely because of soft macroeconomic conditions and the challenging retail environment.

    Turnover in Asia decreased by 2.5 per cent to $2 billion, with distribution being hit by the slowdown in China, geopolitical issues in Southeast Asia and Asian currencies depreciating against the US dollar.

    However, Li & Fung’s logistics network continued to grow in Asia, largely thanks to support by new contracts and expansion, particularly into Southeast Asia.

    Across its trading network, the company served a diversified group of customers including brands, department stores, specialty stores, clubs, hypermarkets and pure-play eCommerce ventures. The network covers more than 40 economies, and the top three sourcing countries continue to be China (more than half of products), Vietnam and Bangladesh.

    The company’s entrance into Indonesia, Japan and Korea also began to generate positive contribution, and it launched a regional distribution centre in Singapore.

    “Globally, our industry is going through an unprecedented structural change, led by the changing conditions at retail,” says group CEO Spencer Fung, the great-grandson of the company’s founder.

    “Retail is becoming more competitive as more eCommerce players enter the marketplace, and global competition overall is being augmented by cloud computing, mobile connectivity and cross-border logistics.”

    He says consumer preferences and buying patterns are also changing, led by millennials and the newer Generation Z.

    “The way these consumers discover, socialise and finally make a purchase decision has had immense consequences to brand loyalty, to sustainability and to the sharing economy… the speed of change is only increasing as we look ahead.”

    Li & Fung is partnering with companies that offer technology and innovation to create products “with more excitement”, and has simplified its structure and business to improve speed and flexibility.

    “With fewer acquisitions in 2015 compared to previous years, we have been very focussed on growing organically and increasing our market share with our existing customer base,” says Fung.

    “All indications point toward a challenging 2016, but I am confident we will weather these changes as we build for the future.”

  • J Crew ends ‘torrid year’

    J Crew ends ‘torrid year’

    In closing what can only be described as a torrid year for the company, J Crew has posted a weak, but improved, set of fourth quarter figures.

    Total sales rose by 1 per cent, boosted by strong sales gains of 26 per cent at Madewell. While this compares favorably to the 5.5 per cent decline of last quarter, this is but a small bright spot surrounded by a sea of relatively gloomy numbers.

    Total comparable sales fell by 4 per cent off the back of a 3 per cent decline in the prior year. Here the gains made at Madewell were more than wiped out by the continued decline of the core J Crew brand where comparable sales fell by 5 per cent and total sales by 3 per cent.

    The company remains firmly in the red with a US$7.03 million loss recorded during the quarter – although, to be fair, this is a marked improvement on the $30.6 million loss recorded last year. Notably, however, losses for the full fiscal year now stand at a staggering $1.2 billion – something that leaves the company, and its balance sheet, in a very weak position.

    While there are many reasons to be negative, the results at least bring some respite in as much as they suggest that J Crew is at last starting to stem the tide of decline – especially so given that the shallower falls occurred during a quarter when overall demand was notably weak. Even so, the group still faces a herculean task in turning around its fortunes.

    Thanks to changes made by management across the year, many of J Crew’s full line stores are now looking much more disciplined in terms of merchandising and display. However, products are still priced above what many consumers are willing to pay – especially for relatively simple garments that have nice detailing but little else in terms of fashion credentials.

    The issue of price is underlined by the fact that while J Crew’s mainstream stores suffer, J Crew Factory stores are fairly popular with more shoppers willing to buy its products at a reduced price. This isn’t the position that the company would like to be in, but it is one that reflects the fact that there is much more work to do in terms of refining the brand image and the product offer so that it can attract the premium J Crew wants to charge.

    That people are unwilling to pay full price means that discounting at mainstream stores and via the mainstream website is also frequent. While this is a necessary evil to clear down inventory, J Crew is building a reputation as a retailer from which customers should never buy at full price – something that is hampering its ability to rebuild its brand and price integrity.

    In our view, what J Crew needs is a fresh take – and this is something it is hoping will be delivered by the spring collection, the first designed by its creative director Somsack Sikhmounmuong. Even if this is a hit it will be just the first of many steps that J Crew needs to take to rebuild itself into a successful lifestyle brand.

    The market is more competitive and crowded than ever and J Crew needs to do much more to stand out.

  • Philippines’ first microsatellite lifts off

    Philippines’ first microsatellite lifts off

    The Philippines’ first microsatellite, Diwata-1, was launched into space last week from the National Aeronautics and Space Administration in Camp Canaveral, Florida.

    Department of Science and Technology (DOST) Secretary Mario G. Montejo said that Diwata-1’s launch into space would enable the government to generate real-time data that will help the country improve its disaster response mechanisms.

    “The satellite will also aid the rest of the country in terms of agriculture and tourism, with the satellite giving data that will help farmers decide what crops to plant and where, while also capturing the country’s natural wonders,” Montejo said.

    A 50-kg imaging satellite,Diwata-1 was assembled by nine young Filipino engineers stationed in Tohoku and Hokkaido University over the last 14 months. IT has four specialized cameras for imaging weather patterns, agricultural productivity, and land and water resources.

    Diwata-1 is expected to be in orbit for approximately 20 months, taking images twice daily. And while it is still in orbit, its sister Diwata-2 will be launched late 2017 or early 2018.

    Diwatas 1 and 2, and the ground station called the Philippine Earth Data Resources Observation (PEDRO) are part of a three-year, 40.82-million peso ($18.1 million) microsat program.

    In 2014, the Philippine government through the DOST embarked on a research program to develop the necessary local expertise in space technology and allied emerging fields in science and engineering.

    The flagship project of this program is the PhilMicrosat Program handled by several departments at the University of the Philippines and DOST’s Advanced Science and Technology Institute. The program also has two partner universities in Japan where the Diwata engineers are taking their higher studies.

    Along with the microsatellite development is the installation of the satellite ground receiving station in Subic, Zambales that is tasked to receive DIiwata-1 imagery, including other images from selected commercial satellites.

    Another space-related facility under construction is the UP Diliman Microsatellite Research and Instructional facility which will be the hub of training for future space technology research and development activities.

  • Mix of innovation, soft power drives ‘K-beauty boom’ in China

    Mix of innovation, soft power drives ‘K-beauty boom’ in China

    Eating exotic and wild species is nothing new in China, just like a saying well known in Guangzhou: “Chinese will eat everything with four legs except tables and eat everything that swims except a submarine.”

    Their openness to new ingredients and recipes strikes a similar note, as South Korean cosmetics companies embrace such quirky ingredients as snail slime, horse oil and pig skin collagen as long as they are considered good for the skin.

    With ingredients ranging from an extract from cocoons, goat milk and volcano clay, Korean beauty items come in all imaginable forms. They range from hair mousse styling foam and fruit flavored yogurt to mask sheet packs for the feet and breasts.

    The relentless experimentation may be one of the most decisive factors behind Korean cosmetics’ success in China, which helped spread the “K-beauty boom” beyond Asia to reach Western customers over the past few years.

    South Korea’s cosmetics exports to China doubled on-year to US$1.08 billion in 2015, which accounts for nearly 40 percent of its total global sales, according to the Korea International Trade Association. South Korea is the second-largest cosmetics exporter to China following France.

    Chen Ming, a 30-year-old makeup artist from Guangzhou, says she has tried several basic skin care products and massage packs by Korean brands, which emphasize naturally flawless skin. For the “nude makeup look,” she is willing to try highly functional cosmetics with bizarre ingredients.

    “Let’s say horse oil is known as good for moisturizing and healing for skin, but you don’t want to use it until it is turned into some kind of dermatological formula to apply onto the skin,” the resident of China’s third-largest city on the southern coast said. “Unlike major Western cosmetics, many Korean cosmetics put key ingredients before labels to give a sense of what it is made of. I think it’s an effective way to sell a product.”

    While major cosmetics companies, including No. 1 AmorePacific Co. and its smaller rival LG Household & Healthcare Ltd., have a wide range of luxury and lower-end lines, independent brands put more focus on targeting safety-conscious Chinese consumers who also care about price tags. Most lower-end brands have lineups ranging from $10 to $50 per item, with advanced formulas below $100.

    “In China, cheap products are considered not reliable because they could contain harmful chemicals, while expensive products are just too expensive for ordinary consumers,” Lou Wei, a 46-year-old music teacher in Guangzhou, said. “Korean products are known as cost-effective compared to Western brands. Plus, the skin types are similar between Koreans and Chinese.”

    The unwavering popularity of Korean dramas and entertainment shows has also elevated their brand power to the next level.

    According to a survey by the Korea International Trade Association last year, 70 percent of 1,400 middle-class consumers in major Chinese cities said they have seen Korean dramas and shows. Eight of them evaluated that such experiences positively affected their perception towards Korean products.

    Most recently, “Descendants of the Sun,” a mega hit KBS drama currently on air both in Korea and China, showed how companies can benefit from consumers who want to mimic styles of celebrities.

    Laneige, AmorePacific’s mass brand, saw skyrocketing sales of items used by actress Song Hye-gyo, who starred as a doctor in the drama, which was viewed a combined 1 billion times on iQiyi, its official streaming site in China.

    At 11st Street, a Korean online retailer that runs a Chinese language site, sales of Laneige’s blemish balm pact jumped 10-fold from March 14 to March 20, while a new lipstick sold out three days after its release.

    “As Korean dramas were usually aired in China at least several months later, sales of related products were reflected with time lag,” said Yoo Sang-woo, a sales director at 11st Street’s Chinese shopping page. “As ‘Descendants of the Sun’ is simultaneously aired in Korea and China, the customer reaction is almost instant.”

    While major players have built production lines in China to get ahead in the fast-growing market, smaller brands have raised considerable sales at duty-free shops and through Chinese vendors who buy in bulk in Korea and resell with a margin both online and offline.

    Experts say the biggest hurdle for those who have yet to establish a direct sales network in the mainland is how to tackle the rising number Chinese knock-offs, stressing the need to expand official distribution channels.

    “In the case of best-selling items, consumers are reluctant to buy them at local shops or through private vendors over concerns of fake products. Some of them buy cosmetics in Hong Kong shops or ask a favor of friends visiting Korea,” said a Guangzhou-based trade official. “Chinese prefer products made in Korea because they have safety concerns over food and anything related to the body.”

    In light of such growing calls, the Korea Trade-Investment Promotion Agency (KOTRA) has pledged to provide support to emerging cosmetics companies via overseas marketing efforts jointly with international retail giants.

    On Wednesday, KOTRA held a “K-beauty Summit” with officials from 40 small and medium-sized cosmetics companies and U.S. retail behemoth Amazon. It also agreed with Taobao, the online market place by Chinese e-commerce giant Alibaba, to hold a beauty trade fair in the first half of this year to expand their sales network.

    Experts say online marketing efforts have become ever more important for further expansion to reach out to the growing number of smartphone users in smaller Chinese cities.

    “Despite recent economic slowdown, the Chinese consumer goods market still offers a great deal of opportunities to Korean cosmetics and clothing companies,” Park Hyun-jin, a researcher at the Seoul-based Dongbu Securities, said.

    “The e-commerce market will continue to grow thanks to the popularity of mobile shopping. As the number of smartphone users has sharply risen in smaller cities and urban areas, brand marketing via mobile and online will help boost sales in China.”