Author: Mei Ling Tan

  • Affluent Asians spending on status

    Affluent Asians spending on status

    Goods and experiences which provide “a sense of status, exclusivity and uniqueness” are key considerations when shopping for luxury items for Asia Pacific’s elite, according to the Visa Affluent Study 2015.

    In other words, affluent Asians are prepared to spend on status.

    According to the study, a significant percentage of Asia Pacific affluents describe themselves as “status seekers”, with more than one third of the affluent in China (38 per cent), Hong Kong (36 per cent) and Korea and Japan (31 per cent each) are motivated to purchase luxury goods to display their social standing. Affluent in India (29 per cent) and in Singapore (27 per cent) also report taking pleasure in the attention that luxury goods attract.

    “What drives Asia Pacific’s affluent in making luxury purchase decisions varies across the region, but the common factor is the search for unique products and services that give a sense of status and exclusivity,” said Ruben Salazar, VP, products with Visa Asia Pacific.

    “While quality remains important for most consumers, Asia Pacific’s affluent are continuously looking to go beyond quality guarantee to find that special product or experience that stands out from the crowd and that gives a sense of self-satisfaction.”

    Only the affluent from Indonesia and Australia described themselves as being more driven by other considerations, with almost a quarter of Indonesian affluent (23 per cent) surveyed also valuing quality alongside social status (24 per cent) and exclusivity (28 per cent).

    Some 500 respondents from each of Australia, China, Hong Kong, India, Indonesia, Japan, Singapore and South Korea were interviewed online and in face-to-face surveys for the study. Respondents have an average household income of US$73,000 per annum and are aged between 18 and 55 years old.

  • Matahari has strong half

    Matahari has strong half

    Indonesia’s PT Matahari Putra Prima (MPPA) says its first half year sales rose 6.6 per cent on the back of new stores.

    Like for like sales rose 2.1 per cent in a period of softening economic conditions and when several stores were closed for renovation.

    Matahari has continued with a strong focus on upgrading its store formats, rolling out its new G7 format with brighter, more upmarket store designs and increased range. It also opened the first of its new Foodmart Primo format stores during the half year.

    In the next six months Matahari will open the first of another new concept – a SmartClub wholesale store.

    Operating profit surged 29.4 per cent in the half (excluding extraordinary items) as the retailer continued to improve its infrastructure, boosting internal efficiencies and developing a solid platform for future growth.

  • CapitaLand posts healthy quarter

    CapitaLand posts healthy quarter

    CapitaLand Limited has today announced a second half after tax group profit of S$464 million – 5.8 per cent up on the same period last year.

    The property giant, which derives 80 per cent of its revenue from Singapore and China, has a portfolio including shopping malls, serviced apartments, office blocks and hotels trading under a variety of banners.

    In a statement, CapitaLand said its operating profit was 87.6 per cent higher than the same quarter last year on account of gains from the change in the use of development properties for sale in China, namely The Paragon (Tower 5 & 6) and Raffles City Changning (Tower 3). These projects are at prime locations in Shanghai and the group has changed its business plans for these projects from strata-sale to leasing as investment properties.

    The result was impacted by an impairment for a development project in China.

    Revenue increased by 17.8 per cent on the back of higher contribution from development projects in China, partially offset by lower revenue from development projects in Singapore and Vietnam.

    The group says it recorded higher rental revenue from its shopping mall and serviced residence businesses during the quarter.

    Lim Ming Yan, president & group CEO, said CapitaLand’s well-balanced portfolio of investment properties and residential projects will continue to generate recurring income and trading profits for the group.

    “While CapitaLand remains focused on Singapore and China as core markets, it is exploring opportunities to expand in growth markets such as Vietnam, Indonesia and Malaysia. CapitaLand has built a significant scale across diversified asset classes and strong expertise in integrated developments, shopping malls, serviced residences and capital management. Coupled with its technology efforts, CapitaLand continues to strengthen its position for growth,” he said.

  • Waterway Point Mall Singapore 90% leased

    Waterway Point Mall Singapore 90% leased

    The new Waterway Point Mall in Singapore is already 90 per cent leased, a whole six months ahead of its scheduled opening date.

    Developer Frasers Centrepoint Malls says the new centre in Punggol won’t be open for business for about six months, but the vast majority of space is now leased.

    Waterway Point is part of Watertown, an integrated waterfront residential and retail development by Frasers Centrepoint, Far East Organization and Sekisui House.

    A 24 hour FairPrice Finest supermarket, a 1500 seat Shaw Theatres multiplex cinema and a large Times Bookstore have been named as anchor tenants.

    The new 370,824 sqft mall will feature four levels of indoor retail space, alfresco dining and leisure space.

    The Times Bookstore will be the chain’s largest in Singapore with a 7335 sqft footprint.

    “Once underserved, Punggol today is a picture of rapid development,” said Christopher Tang, CEO for commercial and Greater China with Frasers Centrepoint.

    “The positive take-up underscores a healthy demand for retail space in this developing area.”

  • Burberry Beauty Box enters China

    Burberry Beauty Box enters China

    British luxury apparel brand Burberry has opened two more Beauty Box stores in greater China.

    It follows the opening of Beauty Box’s first Asian store in Korea last December in Seoul’s Coex Mall.

    Burberry Beauty Box concepts are now trading in Hong Kong and Shanghai.

    In Hong Kong, the store has opened in Times Square at Causeway Bay. The store closely follows the Burberry Beauty Box flagship in London’s Covent Garden.

    The new Beauty Box concept focuses on make-up, including Burberry Eyes, Lips, Face and Nails lines, fragrances for men and women, including My Burberry, and assorted luxury accessories.

    It includes a digital Lip & Nail Bar, a 95 degree screen broadcasting Burberry catwalk shows, and the My Burberry Digital Experience that lets customers digitally interact with the brand.

    Customers can order in-store monogrammed labels for 90ml bottles of My Burberry Eau de Parfum and My Burberry Eau de Toilette to create an exclusive, customised gift.

  • Tag Heuer Hong Kong to close store

    Tag Heuer Hong Kong to close store

    Tag Heuer is to close one of its Hong Kong stores as it battles high rents and falling sales.

    Tag Heuer Hong Kong’s Causeway Bay store on Russell St will close soon, according to Jean-Claude Biver, the head of Tag Heuer’s parent LVMH’s watch unit.

    While local watch and jewellery retail chains have been adjusting their store networks in the wake of plummeting sales to Chinese tourists over the last 12 months, this is the first significant closure announced by a global luxury player. Rival luxury retail group Kering has hinted it may close some stores, but has not announced firm plans as yet.

    However, the Tag Heuer plan itself is vague.

    “I am not sure if the shop will be closed this year or next but for sure I want to close it because of high rental costs and a drop in traffic,” Jean-Claude Biver told Reuters.

    Local jewellery retailers like Luk Fook and Chow Tai Fook have been renegotiating rents as they come up for renewal, and reporting reductions  of between 10 per cent and 20 per cent.

  • Chow Tai Fook wins 40 per cent rent cut

    Chow Tai Fook wins 40 per cent rent cut

    Jeweller Chow Tai Fook has reportedly re-signed a retail shop rental lease at a 40 per cent reduction.

    It’s a rent reduction which will energise the retail sector, but not doubt send shivers through Hong Kong’s property community.

    Several listed luxury retailers have in recent months been openly discussing expectations of reduced rents when re-negotiating with landlords over lease renewals. Their expectations are grounded in falling sales of luxury goods resulting from Mainland China;s gift-giving crackdown and a reduction in the number of cashed up, big spending Chinese tourists hitting the territory.

    But the sort of reductions being discussed have ranged between 10 and 20 per cent.

    According to Ming Pao, Chow Tai Fook has renewed the lease on its Mong Kok Bank centre branch – shops 6 and 7, on the ground floor.

    The previous rent agreed was $1.3 million in 2012. The new rent rate is 40 per cent lower. Other terms, such as the lease term, have not been disclosed.

  • New malls boost SM Prime revenue

    New malls boost SM Prime revenue

    SM Prime Holdings has posted a 90 per cent increase in first half year sales to PHP18.7 billion (US$408 million).

    However the increase was largely due to one time gains on the sale of securities; recurring income grew by a more modest, but still healthy, 15 per cent.

    The company says new malls helped boost its turnover.

    Rental revenues from retail and commercial spaces, accounted for 54.2 per cent of consolidated revenue, up 10 per cent. The growth in rental revenues was mainly driven by rising contribution from the new malls and the expansion of shopping spaces in existing malls in 2013 and 2014. These include SM Aura Premier, SM City BF Parañaque, Mega Fashion Hall in SM Megamall, SM City Cauayan, SM Center Angono and the expansion of SM City Bacolod with a total gross floor area of 652,000 sqm.

    In the first half of the 2015, SM Prime opened SM Megacenter Cabanatuan and SM City San Mateo last April and May, respectively, taking the total Philippine operating malls to 52 with a GFA of almost 6.6 million sqm. For the rest of the year, SM Prime is set to open one mall in Metro Manila, SM Center Sangandaan in Caloocan, and two malls outside Metro Manila namely SM City Cabanatuan in Nueva Ecija, and SM Seaside City Cebu.

    The company is also expanding two existing malls, SM City Lipa in Batangas and SM City Iloilo. Combined, these new and expanded malls will have a total GFA of almost 716,000 sqm. By the end of 2015, SM Prime will have 55 malls in the Philippines and six malls in China with an estimated combined GFA of 8.3 million sqm.

    Cinema and event ticket sales, accounted for 6.6 per cent of consolidated revenues, recovered in the second quarter registering a seven per cent year-on-year increase to PHP1.4 billion as compared to a decline year-on-year of eight per cent to almost PHP1 billion the previous quarter. This brought cinema and event ticket sales to an almost flat point when compared with the same period last year.

    The recovery of ticket sales in the second quarter was due to Hollywood blockbusters like Avengers – Age of Ultron, Fast and Furious 7 and Jurassic World.

    “The strong financial performance posted by SM Prime in the first half of the year is reflective of the benefits derived from a diversified property portfolio as both rental and developmental incomes contributed to the overall performance of the company,” said SM Prime president Hans T. Sy.

    “The sustained growth could be attributed to the consolidation of SM Prime, which resulted to a strong balance sheet that allowed us to pursue all projects as planned. We are confident that we can sustain this growth in the long-term.”

  • BreadTalk Singapore apologises for soy slipup

    BreadTalk Singapore apologises for soy slipup

    Breadtalk Singapore has apologised to customers and withdrawn its soy milk for sale after a backlash on social media.

    The company has been labelling and promoting its bottled soy milk as “freshly prepared” – the claim was disproved by a photograph uploaded onto social media by a customer who was shocked to see a store employee hand filling plastic bottles from bulk containers of Yeo’s brand soya bean milk.

    The photo was posted on Sunday and has since gone viral forcing BreadTalk Singapore into damage control.

    The company has confirmed it buys the milk in one litre packs from Yeo’s before repackaging it in plain plastic bottles in-store. It claims an employee used plastic bottles labelled “freshly prepared” intended for fresh juice, not the soy milk.

    “We have heard our customers’ feedback about our bottled soya bean milk,” a BreadTalk spokeswoman said. “We would like to apologise for any misaligned presentation or wrong impressions created, and clarify that it is never our intention to mislead.”

    The chain says it will discontinue rebottling the milk and instead sell if from drink dispensers “to prevent misunderstanding”.

  • Domestic airfreight industry hits turbulence

    Domestic airfreight industry hits turbulence

    The country’s airfreight services industry will likely flat line this year amid the domestic economic slowdown, which has affected exports and imports, an industry group has said.

    The International Air Transport Association (IATA) released data recently saying that the global airfreight market remains slow with respect to air cargo demand in June.

    “The mid-year report for air cargo is not encouraging. With growth of just 1.2 percent compared to June of last year, markets are basically stagnating. But overall it has been a disappointing first half of 2015, especially considering the strong finish to 2014,” IATA’s director general and CEO Tony Tyler said in a statement.

    “The remainder of the year holds mixed signals. The general expectation is for an acceleration of economic growth, but business confidence and export orders look weak. Air cargo and the global economy will all benefit if governments can successfully focus on stabilizing growth and stimulating trade by removing barriers,” he said.

    According to the report, Asia-Pacific carriers saw a drop in freight ton kilometers (FTKs), which measures actual freight traffic, of 0.3 percent in June from a year earlier. The region has experienced a notable slowdown in imports and exports over recent months, and the latest data shows trade in emerging Asian markets down 8 percent.

    In line with global and regional airfreight performance, during the first half of this year, national-flag carrier Garuda Indonesia’s cargo volume decreased to 176,000 tons from 193,500 tons in the same period last year, as stated in the company’s financial report.

    Garuda’s president director Arif Wibowo said that 60 percent of the cargo revenues were derived from the domestic market, while the remaining 40 percent came from the international market, mainly in China, South Korea and Japan.

    Garuda Indonesia Cargo currently operates around 70 cargo service centers across the archipelago, including in Medan, Jambi, Jakarta, Bandung, Yogyakarta, Surakarta, Semarang, Surabaya and Denpasar.

    The carrier’s acting vice president for communications Ikhsan Rosan said that it aimed at pushing for more cooperation with other air cargo operators and increasing international services to improve the performance in the second quarter.

    Meanwhile cargo airline Cardig Air CEO Boyke Soebroto said that he was pessimistic that the company would be able to reach the target cargo volume of up to 10,000 tons this year.

    “The government recently announced that economic growth in the first semester reached only 4.7 percent and they will push it to 5 percent in the second semester, I believe that the demand for air cargo will remain stagnate until the end of the year and it is highly unlikely to reach our target,” he said.

    The carrier transported a total of 6,000 tons of cargo with a value of around Rp 20 billion (US$1.5 million) last year, according to Boyke.

    Data from the Central Statistics Agency (BPS) shows that the country’s exports declined 11.86 percent to US$78.29 billion during the first six months of this year. From January to June, overall imports declined 17.81 percent to $73.94 billion.

    AirAsia Indonesia’s revenue and business head Rifai Taberi separately said that the carrier, which is the Indonesian affiliate of Malaysia’s AirAsia, also saw decreasing demand for air cargo with a 17 percent decrease in volume in the first semester of 2015 as compared to the same period in 2014.

    Without mentioning the volume, Rifai said that the steep decrease was seen in the domestic routes, particularly in Java.

    “Apart from the current economic slowdown, the improvement in land and railway transportation has highly affected the air cargo demand in Java as we see up to a 25 percent decrease in volume for the Jakarta-Surabaya route in the first semester,” Rifai

    Rifai said that the air cargo service could not outcompete the land and railway transportation in terms of costs, since air cargo require more cost components such as x-ray procedures and warehouses.

  • AirAsia India Announces Flurry of Offers, Reintroduces Fares at Rs 990

    AirAsia India Announces Flurry of Offers, Reintroduces Fares at Rs 990

    AirAsia India on Monday introduced a flurry of offers both for domestic as well as international routes, to mark the group’s milestone of flying 300 million travellers.

    AirAsia had announced last week that it would come up with something ‘big’ to mark the occasion.

    On domestic routes, AirAsia has reintroduced its Rs 990- fare (all-inclusive) offer. This offer is valid for travel period of 15 February-31 August 2016 and to avail it tickets should be booked between August 10 and August 16.

    Under the AirAsia scheme, while tickets from Bengaluru to Kochi are priced at Rs 990, Bengaluru to Goa tickets would cost Rs 1190, and New Delhi to Guwahati tickets are available at Rs 2990.

    On overseas routes, AirAsia has put on block 3 million seats and is offering all-inclusive fare as low as Rs 3,999 for traveling to Kuala Lumpur from cities like Kochi, Visakhapatnam and Hyderabad.

    AirAsia has also introduced discounts for travel on overseas routes like Bangkok, Melborune, Sydney, Perth etc.

    Jet Airways also introduced a discount offer on Monday. Jet Airways announced a promotional scheme offering a flat 30 per cent discount on base fares of domestic flights and travel from India to international destinations.

    Fare wars between airlines have turned intense in Indian skies and carriers have been coming up with offers every other week to woo flyers.

    The promotional schemes offered by different airlines have helped spur strong passenger growth. The number of passengers carried by domestic airlines during January-June this year rose to 388 lakh, as against 324 lakh during the corresponding period of previous year – an increase of nearly 20 per cent.

  • Garuda Indonesia Surabaya-Jakarta flight takes off despite false bomb threat

    Garuda Indonesia Surabaya-Jakarta flight takes off despite false bomb threat

    Garuda Indonesia flight GA 311 from Surabaya to Jakarta received a bomb threat this morning. Authorities said the plane flew in spite of the terrorist threat because it did not reach the pilot before he took off.The PT Angkasa Pura I and Garuda ticketing offices in Surabaya received the bomb threat via text message at 10 am. It read:“This is a warning that the Garuda flight from Surabaya-Jakarta will blow up in the air tonight, that is all the information from us, please check every passenger’s luggage and cargo for the passengers’ safety.”

    The message was signed off by someone who claims to be Erwin.

    When the two offices received the bomb threat, 147 passengers were already on board the plane, which was preparing for take off at Surabaya’s Juanda International Airport. The flight went ahead because takeoff preparations have already begun and the bomb threat did not reach the pilot before take off.

    Luckily, the flight went off without a hitch and the plane made a safe landing at Soekarno-Hatta Airport at 11:35 am. No bomb was found on the plane.

    “After thorough checks on Surabaya-Jakarta flight GA 311 PK GFN, which landed at 11:35 am, [it was concluded that] there were no dangerous items on board,” said Garuda Indonesia Spokesman Ikhsan Rosan.

    Ikhsan said authorities have already apprehended a suspect.

    “The mobile phone number was traced, the suspect was confronted but they denied ever sending the terrorizing message,” he said.

    Ikhsan added that Garuda Indonesia is tightening security measures in the light of this incident.

     

  • Sogo ‘resilient’ in tough market

    Sogo ‘resilient’ in tough market

    Department store operator Lifestyle International says its Sogo department stores in Causeway Bay and Tsim Sha Tsui helped it achieve a 15.1 per cent boost in first half year profit.

    In the six months to June 30, group turnover increased 6.6 per cent to HK$3.07 billion and profit attributable to owners of the company to $1.17 billion “The Sogo Causeway Bay store proved resilient,” the company said in its half year report.

    “It put in a steady and solid performance during the review period and delivered a healthy set of business results. The store generated HK$4.493 billion in total sales revenue, representing a slight decrease of 1.4 per cent from the same period last year, largely in line with the market as a whole. As with previous years, the store remained the biggest contributor to the group’s revenue, accounting for 64.4 per cent.”

    That trading result was achieved despite a renovation program and during a period of “relatively weak market sentiment”, which caused a decline in traffic footfall.

    “Notwithstanding the drop in traffic footfall, the store saw an increase in the stay-and-buy ratio that went up by 2.3 percentage points from the same period last year, which reflected customer loyalty for the store.”

    Across the harbour, the Sogo Tsim Sha Tsui store, which moved to a new location in November, has quickly attracted a significant amount of old and new customers, thus enabling it to grow steadily and deliver a better-than-expected performance, the company said.

    “The stay-and-buy ratio, average ticket size and the traffic footfall all performed well above the expectation of the management. During the period, continuous efforts had been made to adjust and refine the brand portfolio and merchandise of the boutique-style store, in reference to customers’ reception and the group’s market research. To enrich the product selection, SOGO TST opened in May the Freshmart in the previously unfilled area of the store, which houses a wine cellar and offers a vast array of food and confectionery items.”

    In Mainland China, Lifestyle’s operations delivered “encouraging results” in spite of the prevailing weak sentiment in the retail market.

    “The performance of operations in bigger cities was relatively more positive, as the decline in consumer confidence showed signs of bottoming out. The larger middle-class population with stronger spending power also enhanced the resilience of operations in big cities. Nonetheless, intensifying market competition remained a challenge. On balance, the generally healthy results of the mainland operations attest the Group’s core competency and its ability to drive operational efficiencies in good or bad times.”

    Shanghai Jiuguang performed strongly throughout the review period, with sales revenue up 9.7 per cent from the same period last year. The group said it had made an extensive effort to adjust the store’s brand and merchandise portfolio over the past years, which was now starting to pay off, and the store is now believed to own the strongest portfolio of cosmetic brands in its locality.

    “While Shanghai Jiuguang’s total traffic footfall fell 10 per cent during the period, the average ticket size was up 5.7 per cent and the stay-and-buy ratio improved by 6.2 percentage points, which again points to strong customer loyalty. In May, the store kicked off its renovation program, which is to be carried out in phases and is scheduled for completion in 2016.

    “Suzhou Jiuguang, which has established itself as a sought-after shopping destination in Suzhou, stayed firmly on a growth trajectory. It turned profitable in 2013 and has remained so since then. For the first half of the year, it reported a 5.1 per cent growth in sales revenue. The traffic footfall and ticket size was up 10.5 per cent and 1.7 per cent respectively, while the stay-and-buy ratio was largely stable at 38 per cent,” Lifestyle reported.

    “Of late, competition in the local department store sector has grown increasingly fierce. Being one of the first department stores to have secured a solid market position in the city, Suzhou Jiuguang enjoys first-mover advantage and has developed a loyal clientele that is still growing. Nevertheless, the group will continue to monitor closely the market situation in order to devise sound and sensible marketing and business strategies to respond promptly to new development in the market.”

    However, Dalian Jiuguang in Northeast China performed “largely in line with the local market situation”, recording a 13.2 per cent negative growth in sales revenue.

    “The results were within expectation of the management, in light of the fragile business environment and weak consumer sentiment of the city over the past few years. However, the group has been realigning the product range and tenant mix to widen the appeal of the store.”

    Shenyang Jiuguang, which opened in October 2013 as the Group’s fourth Jiuguang establishment in mainland China, continued to face a sluggish retail environment, with weak consumer sentiment and restrained economic activity.

    “With persistent efforts to enhance its product mix and to promote a wide range of local and imported products catering to a broad customer base, Shenyang Jiuguang managed to keep its business on a stable footing. For the first half of the year, sales revenue was stable when compared with the corresponding period in 2014. The traffic footfall showed signs of improvement, indicating the group’s marketing strategy is in the right direction. The management is aware that under the current economic climate, it would take notably more time for a young department store like Shenyang Jiuguang to turn profitable.”

    And Beiren Group, an established Shijiazhuang-based retailer in which the Group has strategic investment, continued to deliver “stable performance despite slack demand” in the highly competitive local market. For the first six months of the year, the investment contributed about HK$179.7 million in profit (including profit attributable to non-controlling interest) to Lifestyle International, compared with HK$142.7 million in the same period last year. The significant improvement in share of results was mainly due to the fact that its results in the previous year were negatively impacted by an audit adjustment.

    Beiren Group operates approximately 1.2 million sqm of retail space encompassing 17 department stores, 37 supermarkets and various outlets specialising in electrical appliances, consumer electronics and gold and jewellery. Most of the operations are located in Shijiazhuang.

    Nearly two years since its opening in July 2013, the group’s standalone “Freshmart” store in

    Changning, Shanghai, continued to deliver consistently and satisfactory results. Sales revenue for the first six months of the year saw a year-on-year growth of 11.6 per cent.

  • Kitsune touches down in Hong Kong

    Kitsune touches down in Hong Kong

    French fashion label Maison Kitsune has opened its first permanent store in Hong Kong.

    Kitsuné is a French electronic music record label and fashion label created in 2002 by Gildas Loaëc, Masaya Kuroki and the London-based company Åbäke. Kitsune is the Japanese word for “fox” and the brand uses references to foxes in its marketing material.

    “Following the success of our Maison Kitsuné Gallery, the brand’s first ever pop-up shop in Hong Kong inaugurated last March 2015, we’re now settling down in the city for good with the opening of our very own Hong Kong pied-à-terre,” the company announced on its blog.

    Located in Causeway Bay, the 80 sqm store reveals a ‘post-modern chic space fusing the brand’s Parisian heritage with some subtle touches of traditional Asian decors’.

    Co-founders and creative directors Gildas Loaëc and Masaya Kuroki have created a unique retail experience that aligns fashion, music and design, featuring industrial-style floor, black and white tiles, oak shelf with white painted wood bracket, white walls and Asian antique furniture bargain-hunted in Hong Kong.

  • Banks, insurers to face new rules when selling at malls, public places

    Banks, insurers to face new rules when selling at malls, public places

    As financial institutions (FI) jostle to get a bigger share of the consumer dollar by sending their salespeople to hawk everything from credit cards to insurance and investment products at shopping malls, MRT stations and other public places, the Monetary Authority of Singapore (MAS) has stepped in to minimise the risks to consumers from such aggressive marketing tactics.

    In a consultation paper released today (July 23), the financial regulator proposes `Market Conduct Guidelines’ setting out safeguards that FIs — including banks, non-bank credit card and charge card licensees, insurance companies, capital markets and financial advisers — are required to implement while marketing their products and services at retail outlets and public places.

    “These proposals seek to strike a balance between allowing FIs flexibility with their marketing and distribution activities, while safeguarding consumers’ interests when they purchase financial products at retailers and public places,” said Mr Lee Boon Ngiap, assistant managing director of capital markets at the MAS.

    He emphasised that the regulator does recognise the importance of such marketing initiatives as a part of the FIs’ business models. The proliferation of such practises could lead to problems including harassment of consumers, confusion over the roles of the FI and the retailer, enticing consumers to purchase unsuitable products, buying financial products in an unconducive environment and mishandling of monies collected, the MAS said.

    Under the proposals, FIs will have to notify the MAS of their marketing and distribution activities at retailers and public places on a quarterly basis so that the regulator is able to monitor the situation more closely and tailor its supervisory approach accordingly.

    The MAS also proposed that the board and senior management of FIs be accountable for ensuring proper controls over their marketing campaigns at such places. FIs are also expected to call back customers roped in at public places before or within the free-look or cooling-off period to ensure they have understood the insurance and investment schemes they purchased. FIs must regularly conduct mystery shopping and site visits to ensure that their representatives adhere to the required standards and guidelines.

    The proposals complement existing rules and practises, and ensure consistency and alignment of standards across the financial industry, the MAS said, referring to existing guidelines that most FIs already have in place.

    Mr Antony Eldridge, financial services leader at business consultancy PwC Singapore said: “Given innovations in marketing and distribution techniques used by FIs, these proposals should not be unexpected. In fact, the proposals should also help to protect FIs in Singapore from getting caught in the kind of hugely costly scandals that have hit a number of overseas institutions.”

    Mr Rajan Raju, head of retail clients at Standard Chartered Bank Singa­pore, said: “The initiative is about responsible selling, treating customers fairly, and ensuring a robust process for the marketing of financial products and services. Treating customers fairly remains a key priority for us at Standard Chartered.”

    The Life Insurance Association of Singapore said its members are aligned with the MAS in safeguarding consumers’ interests. The implementation of numerous initiatives such as compareFIRST, balanced scorecard and Direct Purchase Insurance products are some examples of the industry’s efforts to ensure that consumers are well-informed and given flexibility in managing their portfolios to meet their protection, savings and investment needs, LIA added.

    The public consultation will close on Aug 24.