Retail News CRM

Author: Mei Ling Tan

  • National Park’s rental income surges with new tenants

    National Park’s rental income surges with new tenants

    The National Parks Board (NParks) collected a lot more rent in its last financial year, ending March 2015, with rental income surging by 48 per cent, or about $2.6 million.

    It had a new museum tenant in Fort Canning Park, as well as two fairly new retail shops in the Singapore Botanic Gardens, to thank for boosting its coffers.

    NParks said the opening of Singapore Pinacotheque de Paris, the first global offshoot of France’s largest private museum, as well as two shops by gift retail chain Risis, helped to increase rental income.

    According to NParks’ latest annual report, its rental income rose from about $5.5 million in financial year (FY) 2013 to about $8.2 million in FY2014. Rental income made up about 34 per cent of its total income for FY2014.

    The increase in rental income reflects how parks today have evolved to include many amenities and attractions, said Mr Chris Koh, director of estate agency Chris International.

    He said: “In the past, parks used to be just places of greenery, but now you have museums, retail and food and beverage shops.

    “While NParks needs revenue for these places, members of the public will also stand to benefit by having such amenities.”

    There are more than 60 tenants in public parks around the island, with most being dining outlets, according to NParks’ website.

    Overall, NParks’ income increased by 29 per cent to about $24 million in FY2014, mainly because of more income from rents and admission charges, said a spokesman.

    The rise in admission charges was due to ticket sales for the Singapore Garden Festival in August 2014, which had about 300,000 visitors, she added.

    Both the museum and Risis declined to say how much rent they are paying.

    Risis now has three outlets in the Singapore Botanic Gardens which opened in 2013 and 2014, ranging in size from 49 to 215 sq m. The rent for shops at the gardens could be about 20 per cent lower than those in shopping malls, said R’ST Research director Ong Kah Seng. A 49 sq m shop space in a mall could cost $7,000 to $10,000 a month. He added: “Retailers these days have more avenues to get niche retail spaces which are unlike those in conventional shopping malls.

    “The shoppers are those who like to visit interesting places and they may like the greenery that NParks can provide.”

    Mr Sanchit Bhatnagar, director of sales, marketing and communications at Art Heritage Singapore, which manages the Singapore Pinacotheque de Paris museum, said it chose Fort Canning Park for its central location and greenery, among other reasons.

    Since its opening in May last year, the museum, which is in the Fort Canning Arts Centre, has attracted 30,000 visitors to both paid and free galleries.

    “Visitors have shared that the museum is suitably placed at a venue with strong local history. We are working with the relevant stakeholders to further enhance accessibility for the public,” he added.

    Ms Wee Swee Poh, chief executive officer of BP de Silva, the parent company of Risis, which manages the three outlets at the Singapore Botanic Gardens, said it had space constraints when it had just one outlet there.

    She said: “Having three stores within the gardens allows us to better cater to visitors. ”

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  • Metro Retail starts expansion

    Metro Retail starts expansion

    Newly listed Visayan retailing giant Metro Retail Stores Group Inc. (MRSGI) is riding on the buoyant consumer spending in the country by expanding its delivery fleet and distribution infrastructure.

    “We aim to be a leader in retail supply chain management and meet our customers’ demand for world-class services,” MRSGI chair and chief executive officer Frank Gaisano said in a recent statement.

    Gaisano recently led the turnover of 37 new delivery trucks from Isuzu Philippines Corp. and 30 new delivery trucks from Hino Philippines to MRSGI’s logistics facility in Silangan, Laguna.

    In line with MRSGI’s objective to improve logistic capabilities, the company teamed up with Isuzu Philippines for the acquisition of 13 units of Isuzu FVM 10-wheeler trucks with aluminum wing van, 12 units of NKR71 with refrigerated van body and 12 units of NKR71 with aluminum body.

    The company also teamed up with Hino Philippines for the acquisition of 16 units of SH1E tractor head and 14 units of WU342L 6-wheeler truck with aluminum van body.

    The new fleet will be deployed to MRSGI’s 46-store network that serves over 250,000 customers daily, the company said.

    To ensure timely delivery of goods and improve overall cost efficiency, MRSGI plans to equip all its in-house delivery trucks with tracking devices that will enable real-time monitoring from the company’s control center. “Employing the latest technology is a key innovation that will drive our business forward,” said Gaisano, highlighting the company’s commitment to continuously upgrade its infrastructure.

    Alongside its investments in technology and equipment, MRSGI also plans to hire 130 personnel to join its team of engineers, mechanics, customer service representatives, traffic controllers, and cost and transport specialists who support the company’s growing logistics and supply chain network.

    MRSGI has also committed to train its drivers on safety, driving efficiency, and customer service delivery in line with its thrust to provide friendly and responsive service to its customers. “We have a comprehensive approach to improving service delivery,” said Gaisano, who explained that “good customer service does not stop with store associates, but is reflected in every aspect of the company’s operations, including supply chain management and back-end services.”

    Armed with fresh capital for expansion, MRSGI—which listed back in November—planned to open 50 to 70 new stores to double its nationwide retailing footprint in the next five years.  The group currently has around 400,000 square meters of gross floor area across its 46 stores, making it the largest retailer in Visayas and the fourth largest nationwide.

  • China’s Top Boutique Openings in 2015

    China’s Top Boutique Openings in 2015

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    Last year is yet another in a line of several that proved tough for the luxury retail industry in China. The anti-graft campaign has continued in full force, causing some shoppers to steer clear of flashy, high-cost purchases, while online shopping has driven many malls around the country to close. Still, 2015 was a big year for several international high-end labels, independent boutiques, and department stores that entered China for the first time or were revamped to give consumers an updated look. Here are six brands that made headlines in the style sector this year.

    Fei Space

    _DSC0251

    Formerly located in 798 Art District, Fei Space is a culmination of local designers and stylish brands from around the world. Shoppers may also recognize the boutique for its pop-up store in Beijing’s U-Town mall that featured past-season collections from Topshop and Topman. Now that the official Topshop has opened in Galeries Lafayette (see below), the new Fei Space now is primarily focused on Chinese independent designers and some casualwear, such as Beijing-based American workwear brand Taciturnli and Shenzhen designer VMajor. It’s located in the Grand Summit mall, an evolving shopping center in the capital’s embassy district that includes a multitude of high-end Chinese boutiques and local health food chains aimed at the discerning shopper.

    Triple Major Beijing

    triple_major

    The year was off to a good start as far as openings go—Triple Major wowed media with its expansive new store in Beijing’s developing Dashilar district, which was designed in part to reflect the building’s former use: a Chinese pharmacy. Owner Ritchie Chan moved the concept store featuring both international and local brands from its home in Beijing’s central hutongs to an area that’s quickly transforming into a hub for young creatives with no shortage of locally-owned third-wave coffee shops, art galleries, and small, artisan boutiques.

    Topshop at Galeries Lafayette

    The new Topshop location at Galeries Lafayette in Beijing. (China Daily)

    The new Topshop location at Galeries Lafayette in Beijing. (China Daily)

    Topshop has been open in Hong Kong for a few years, but only this year has the brand decided to put roots in the mainland, namely in the French department store Galeries Lafayette, a mall that has been struggling to attract shoppers in Beijing’s Xidan area. This version is tiny compared to its flagship and blends in on a floor mainly reserved for Asian independent labels.

    Tommy Hilfiger

    Tommy Hilfiger (L) with socialite Olivia Palermo (R) at the brand's new store opening in Beijing. (Tommy Hilfiger/Facebook)

    Tommy Hilfiger (L) with socialite Olivia Palermo (R) at the brand’s new store opening in Beijing. (Tommy Hilfiger/Facebook)

    Tommy Hilfiger kicked off opening its largest store in Beijing’s In88 shopping center with a football-themed runway show in the spring, hoping to gain Chinese fans by pushing an all-American aesthetic.

    JNBY Concept Store

    A look from JNBY's latest collection. (Courtesy Photo)

    A look from JNBY’s latest collection. (Courtesy Photo)

    The JNBY Concept Store is nothing new outside of China, but Beijing gained its first in the new Grand Summit mall this year along with an art exhibit in cooperation with Beijing’s UCCA to kick things off. Fans of the international, Hangzhou-born brand that’s known for supporting independent Chinese designers with high-end clothing for adults and children also get a selection of contemporary jewelry and handbags and artisan chocolate.

    Macy’s (Tmall)

    Macys

    Macy’s entered China this year on more official terms when it opened its shop on Alibaba Group’s Tmall, becoming the first U.S. department store to do so. It steered away from opening a brick-and-mortar shop, unlike its competitors who have done so and struggled, like the UK brand Marks & Spencer. M&S closed a chunk of its stores in Shanghai and instead opened a brand new space in Beijing’s business district shopping center, The Place.

    Michael Kors

    Model Ming Xi makes an appearance at the Michael Kors opening in Beijing. (Michael Kors/Facebook)

    Model Ming Xi makes an appearance at the Michael Kors opening in Beijing. (Michael Kors/Facebook)

    Huamao Shopping Center in Beijing acquired a 9,000-square-foot Michael Kors flagship store last month, which was celebrated with a photo exhibition done in collaboration with Vogue China. The new shop is now the largest in Asia, followed by the Shanghai flagship that opened last year alongside a high-profile campaign to attract jet-set Chinese consumers.

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  • Bridgestone pulls out of bidding war for Pep Boys

    Bridgestone pulls out of bidding war for Pep Boys

    Japanese tire maker Bridgestone Corp said it would not counter Carl Icahn’s raised offer to buy Pep Boys – Manny Moe & Jack, ending a bidding war for the U.S. auto parts retailer.

    Icahn sweetened his offer for Pep Boys for the second time to $18.50 per share on Monday, after Bridgestone raised its bid by $1.50 to $17 per share on Dec. 24.

    Pep Boys said on Monday Icahn’s latest offer was superior to the deal it accepted from Bridgestone, and moved to terminate its agreement with the Japanese company.

    Icahn, whose latest bid values Pep Boys at about $1 billion, had reported a 12.12 percent stake in Pep Boys earlier in December and said the company’s retail automotive parts business would be a perfect fit for Auto Plus, a competitor he owns.

    The auto parts retailer has been on the block since June, when it said it was considering selling itself as part of a strategic review.

    Bridgestone had said on Oct 26 that it would buy Pep Boys to boost its retail network by more than a third in the United States.

  • Score Alarm Plans to Expand from Germany to Asia

    Score Alarm Plans to Expand from Germany to Asia

    Score Alarm, a start-up from Zagreb, has become the official technology platform used by mobile applications for Oddset, the most popular sports betting service in Germany. It is a service which is offered by almost all lotteries in Germany and is represented at more than 15,000 retail outlets, reports Poslovni.hr on December 26, 2015.

    Ivan Klarić, the founder and director of Score Alarm, said that he was pleased with the latest success of his company. “Now we can truly say that we do business with German lotteries, given that they are the ones which distribute the Oddset service whose mobile applications are running on our platform”, Klarić said. He added that currently they have eight large corporate clients, including Bet Live, the biggest provider of gaming services in Bosnia and Herzegovina, then the Romanian Casa Pariurilor and Hungarian state lottery Szerencsejatek. With these clients, Score Alarm has become a platform used by more than 250,000 end users. By the end of 2016, they expect the number of end users to exceed one million.

    Klarić explained that he could not go into details about his customers, but did say that the applications which are being used in Germany have been downloaded several thousand times and are achieving high growth. “The German market is one of the most valuable in the industry, and Oddset – Die Sportwette is one of the first and most recognizable sports betting games in that market. Together with new clients and technological solutions which we are going to present soon, that will enable us to reach a million end users of our platforms in 2016″, Klarić said.

    Score Alarm began its expansion in spring of 2012. A mobile application which displays results of sporting events appeared on Google Play and AppStore at a cost of two dollars. Six months later, Score Alarm already had more than 13,000 paying customers and the Croatian Lottery expressed its interest. For 250,000 kuna, it bought exclusive rights to the Croatian market for a year. Cooperation was continued in the following years, and Score Alarm in the meantime transformed from an application for end users into a platform, a specialized IT system for large national lotteries and other companies offering sports betting services.

    Klarić said that he expected that most of the growth in the sports betting industry in the next few years will switch to mobile platforms. This represents an opportunity for Score Alarm to become the market leader in this new and rapidly growing industry. He added that they are now preparing for the ICE conference in London next year, which is the largest annual gathering of gaming industry. “Once we achieve good results in the European market, we want to spread to Asia, where there are opportunities in the Far East, and to Africa, where there is also interest for our platform”, Klarić concluded.

  • Amazon is Secretly Testing Air Cargo Operations

    Amazon is Secretly Testing Air Cargo Operations

    Amazon.com, Inc. has been conducting secret trial flights that have carried thousands of packages to and from its fulfillment centers in the United Kingdom. Evening Standard reports that the tech-giant has chartered a Boeing 737 aircraft, which has been flying on routes between Poland, Germany, and England since mid-November.

    The online-retail giant has reportedly chartered the aircraft from DB Schenker, a German logistics company. Five weekly flights have been determined so far, on which the planes travel first from Katowice, Poland to Kassel, Germany. Katowice and Kassel are both significant stops, as the airports in these towns are within close proximity of the e-commerce giant’s huge warehouses in the two countries, respectively.

    The flight then continues from Germany to England, where the plane finally lands at one of the airports in Luton, Doncaster or East Midlands. The packages are dispatched from these airports to Amazon’s various fulfillment centers, including its biggest one at Dunfermline and another in Hemel Hempstead. The company is also rumored to extend the trials by chartering more planes and include its centers in Italy and Spain in this network.

    The move highlights Amazon’s urgency to limit reliance on traditional courier firms. The company has already built its own van delivery fleet in the UK this year, after one of its couriers, CityLink, went bankrupt. On a global-scale, the company has locked horns with its chief carrier UPS. Amazon provides business worth around $1 billion to UPS, but its dissatisfaction has risen due to the increasing shipment charges. Shipping cost has increased 10.4% in a year, compared to revenues growth of 11.7% in the same period.

    This means generating higher revenues did not have the expected positive impact on earnings, if supply chain costs had been further streamlined. Amazon was further unhappy with UPS services, when during last two Christmas periods the courier services was unable to deliver consumer packages on schedule, due to delivery overload. Consequentially, the e-commerce giant has sought to build its own distribution network to restrict costs, and have more control over its distribution network.

    Even within the US, recent reports suggest Amazon is looking to lease 20 Boeing 767 freight aircrafts. While these are positive cost control strategies for the online-retail firm, its air cargo expansion spells trouble for traditional freight carriers such as UPS, FedEx, and DHL. These couriers will likely lose a great chunk of business when Amazon starts carrying its own inter and intra-continental freight.

    An Amazon spokesman was quite tight-lipped when the Evening Standard asked for a comment over the European flights, and did not reveal information beyond the fact that the retail-firm employs various distribution and fulfillment modes, including air transport. No other official statement was made by the company.

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  • Kulon Progo Airport construction to kick off in May

    Kulon Progo Airport construction to kick off in May

    The construction of an international airport in Kulon Progo district, Yogyakarta province, will kick off in May 2016, Vice President M. Jusuf Kalla has hinted.

    “God willing, it will be built starting May. Hopefully, land clearance and design will be completed in May so it can be completed in 2019 or 2020,” he said after holding a closed-door meeting at Congot Radar in Kulon Progo, Saturday.

    All serious problems related to the planned construction of the airport have been resolved so that the project can be started soon, he said.

    “There are no longer any land problems. The Yogyakarta governor has ordered (his staff) to resolve them. Furthermore, state airport operator Angkasa Pura I is also ready,” he said.

    The funds needed to construct the airport will come from Angkasa Pura Is budget and the company will cooperate with foreign parties to build and manage the airport, he said.

    The project will also include the construction of roads and railway tracks. In the initial phase of the project, an estimated three thousand workers will be employed, he said.

    After holding a closed-door meeting for nearly one and a half hours, the Vice President and his entourage observed the planned location for the construction of the airport from the third floor of the Congot radar.

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  • Kuta tourist area needs reform and management

    Kuta tourist area needs reform and management

    The tourist region of Kuta, in the Indonesian island resort of Bali, in 2016 needs reform and management in various supporting sectors such as traffic management and environmental hygiene, according to tourism practitioner Nyoman Sarjana.

    “The Kuta tourist area will face a great challenge in the future because from year to year the traffic there continues to get crowded. Therefore, the government and stakeholders in the tourism sector should all move to improve tourism in Bali, particularly in Kuta,” Nyoman remarked here Friday.

    If the iconic tourism of Bali is not properly managed, it is feared that the tourists will be bored of coming to Kuta and find another destination instead, he noted.

    a”It is because other areas in Indonesia are also managing their tourist attractions to attract more tourists,” Nyoman said, and added that foreign tourists who come to Bali feel comfortable and safe, and therefore this factor should be the priority while developing tourism.

    “Indeed, Bali is famous for art and culture since the ancient times. However, if it is not accompanied by comfort and security, domestic and foreign tourists will look for the other tourist attractions outside Bali,” he went on.

    In addition, the government and stakeholders should pay attention to hygiene, because the presence of garbage is in the spotlight in the world of tourism, he noted.

    “We have to find the solution to overcome the garbage problem in Bali, and all parties must be concerned about the environment,” he said.

    Furthermore, all parties should make every effort to keep the island resort of Bali clean and green, he added.

  • Garuda Indonesia Expects 10% Passenger Growth

    Garuda Indonesia Expects 10% Passenger Growth

    President Director of national carrier PT Garuda Indonesia Arif Wibowo predicted that passenger growth of the airline would reach 8-10 percent in 2016.

    “The growth is supported by the booming tourism industry in Indonesia,” Arif said in Jakarta on Sunday (3/1).

    For the record, in 2015, PT. Garuda Indonesia reported a positive passenger growth, that is 25 million passengers or a 3 million increase from that in 2014.

    In the meantime, its subsidiary, Citilink, also posted a quite significant growth, that is 11 million passengers or a 2 million increase from that in the previous year.

    Therefore, to anticipate the increase in the number of passengers, Arif said that the airline would purchase 23 new aircrafts, which purchased with leasing mechanism.

    Furthermore, Arif also hoped that in May 2016, Garuda Indonesia could use Terminal 3 of the Soekarno-Hatta International airport that is now under renovation.

    “We hope that with the new terminal, our services could improve,” he concluded.

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  • Strong growth recorded by Bank NTT in assets

    Strong growth recorded by Bank NTT in assets

    Regional lender, PT Bank NTT, in East Nusa Tenggara, recorded a strong growth of 44.03 percent year-on-year in assets to Rp11.9 trillion in 2015.

    “The bank has recorded a steady growth until the close of 2015,” Daniel Tagu Dedo, the president director of the lender, which is owned by the regional administration, said.

    Daniel said the bank also recorded good growth of 20.29 percent in drawing third party funds to Rp7.54 trillion by the end of 2015 from Rp6.27 trillion a year earlier, and a 20.29 percent growth in in credit expansion.

    The banks outstanding credit was recorded at Rp6.61 trillion by the end of 2015, up from Rp5.5 trillion a year earlier.

    Its profit grew 34.01 percent to Rp380 billion from Rp244 billion and its core capital totaled Rp1.23 trillion including paid up capital at Rp973 billion.

    The capital put the bank in the category of Buku II, allowing it to offer internet banking service or selling other products such as insurance product.

    The bank has received citations in recognition of its good performance in 2015 from various organization and agencies including banking agency.

    “The bank would not boast about the citations, but the recognition would serve to spur the management to work the harder,” he said.

    In 2015, BNK NTT won Infobank Award with the notation of excellent for 15 consecutive years for category of banks with assets of around Rp10 trillion, and Annual Report Award (ARA) 2014 for category of listed state companies, as the third best.

    The awards were received in Jakarta in September 2015.

    The award ceremony was organized by the Financial Service Authority (OJK), the Indonesian Stock Exchange,Bank Indonesia, The ministry for state enterprises, the National Committee for Governance Policy, the Association of Indonesian Accountants and the Taxation Directorate General.

    In the same year, the bank also received the award of Anugerah Perbankan Indonesia (APBI) IV 2015 in a ceremony held by the Economic Review Magazine and Institute of National Banking (Perbanas) for the category of bank with core capital of Rp1 trillion up to Rp5 trillion.

    The award was presented on November 5, 2015.

    Another award, Lintas Artha Award, was received by the bank later that month.

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  • Lampung exports of instant coffee growing

    Lampung exports of instant coffee growing

    Lampung has recorded growing exports of instant coffee reaching 63.2 tons in November, 2015.

    “Exports of instant coffee has continued from month to month,” head of the provincial trade office Ferynia said here on Saturday without saying exports in the previous months.

    Lampung is a big producer of robusta coffee.

    Instant coffee from Lampung has been exported to various countries such as Vietnam, which is the worlds largest producer of robusta coffee, and Singapore.

    Exports, however, are small in comparison with domestic consumption.

    The export prospects are still encouraging, Ferynia said, adding, Lampung is aggressive in launching export promotion in a number of other countries by holding exhibitions.

    He said Lampung has managed to maintain strong foothold for its instant coffee in export markets.

    “Demand is still high and the price is good for Lampung product of instant coffee in international markets,” he said.

    The production center for instant coffee in Lampung is Bandarlampung, which has a production capacity of around 8,000 tons of the commodity per year.

    “Sales of instant coffee in the country average 50 to 100 tons per months,” Ferynia said.

    Lampung has 163,837 hectares of coffee plantations with production averaging 140,000 tons of coffee beans per year.

    Indonesia is the fourth largest coffee producer in the world and the second largest in robusta coffee production.

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  • How Much For A Hong Kong Wedding?

    How Much For A Hong Kong Wedding?

    Couples planning to walk down the aisle in Hong Kong better have some deep pockets. Even as consumer prices generally have dropped on the Chinese island, the average cost for a wedding is up to 314,000 Hong Kong dollars (about $40,000).

    Retail sales in Hong Kong have been falling for the last eight months, in part because of fewer Chinese tourists arriving, but weddings costs have curiously spiked. Receptions alone now cost on average the equivalent of $21,000, and rings and jewelry around $6,500. The average honeymoon now sets couples back $4,900, and the rest of the budget covers the photo shoot and all additional expenses, according to a study on the ESDlife ecommerce website for brides.

    The flipside is that this expensive reality is mitigated by cultural tradition. Wedding guests tend to arrive at the celebration feast with red envelopes stuffed with cash that generally cover the cost of their meals. In Hong Kong, the envelope is known as a “favor.”

    Everybody knows exactly how much to put in their “favor.” If invited to a reception at a top-class hotel, a guest would give between, say, $130 to $150. But if the invitation is to a standard restaurant, the “favor” would only be about half as much.

    Chinese pragmatism also dictates that there is no such thing as a wedding registry, and cash is a sign of sincerity. It is for this reason that any invitation to a wedding is colloquially known as a “red bomb.”

    Unlike in the West, where people generally marry in spring or summer, the favored time for Chinese weddings is the New Year. The rush to the altar is from November to February, so any unmarried girl in March knows she’s going to have to wait one more year. At least.

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  • International luxury brands abandoning China as economy slows

    International luxury brands abandoning China as economy slows

    After enjoying a decade of aggressive expansion in China, international luxury brands have begun to curtail their operations as the world’s second-largest economy is beset by a slowdown, a massive government crackdown on graft and a Chinese preference to buy expensive goods abroad.

    French retailer Louis Vuitton closed its store in the sprawling port city of Guangzhou. That was followed by two more shutdowns by the firm in Harbin and Urumqi in Xinjiang.

    The company, however, said the closures were part of a marketing strategy adjustment by headquarters.

    During the past two years, Britain’s Burberry has closed four stores in China, Coach shut two, Hermes one, Armani five, and Prada went from 49 to 33.

    Following 10 years of aggressive expansion, the luxury brands have been shrinking their physical presence in China to adapt to a cooling market plagued by a slowing economy, an ongoing anti-corruption campaign and Chinese buyers’ increasing overseas purchases, Hong Kong-based South China Morning Post reported today.

    Fortune Character Institute (FCI), a Shanghai-based market research unit, forecasts mainland luxury sales to grow 3 per cent to USD 25.8 billion this year, much slower than the 11 per cent in the recovering global market.

    The institute in a study found that although Chinese shoppers consumed 46 per cent of luxury goods around the world, their purchases in their home market accounted for only 10 per cent of global sales, falling from 11 per cent in 2012 and 13 per cent in 2013.

    The sluggish growth is reflected in the expansion plans of luxury brands. They are opening fewer new stores and closing more, the report said.

    “Store openings are no longer a major way for international luxury brands to expand in the China market. Over the next two years we expect these brands to close even more stores than before,” said Zhou Ting, director of FCI.

    “But if you think luxury brands are taking a totally defensive strategy in China, you would be wrong. The closures are only a small part of a thorough strategy adjustment they are undertaking in China,” he was quoted in the report.

    The first batch of luxury brands entered China in the 1990s. Most of them set up stores in five-star hotels and high-end department stores in big cities, targeting foreign businessmen, overseas Chinese and government officials.

    The “golden era” came around 2009 and 2010 when affluent Chinese began spending on high-end goods and jewellery, making China the fastest-growing luxury market in the world.

    Encouraged by this, luxury retailers rushed to China.

    Global consultancy Bain & Co estimated that the 15 top brands it surveyed had opened more than 80 new shops during the first eight months of 2010.

    A watershed for China’s luxury market came in 2013 when President Xi Jinping launched a massive anti-corruption and austerity campaign. It had a big impact on the luxury market as government officials were banned from receiving gifts.

    Such expenditure had been a major driver of domestic luxury consumption, the report said.

  • $316m ShillaI’Park Duty Free targets $578m

    $316m ShillaI’Park Duty Free targets $578m

    Just over half the floor area (16,500sq m) of the new $316m 30,400sq m ShillaI’Park Duty Free store complex opened in downtown Seoul this month, initially covering floors three to six at the I’Park Mall in the Yongsan District.

    The December 24 ‘soft launch’ by the HDC Shilla Duty Free joint venture, delivered 60% of the planned retail space, with the remainder due to open at the 16 March ’grand’ unveiling – including the seventh floor and an additional 13,900sq m balance of floor space.

    The HDC Shilla Duty Free Shop is a joint venture between Hotel Shilla and Hyundai Development, which was formed to win the downtown duty free license, and it now features more than 400 brands – including luxury offerings – along with ‘K-Discovery Duty Free’ and ‘the largest K-wave store’.

    The two partners are sharing the $316m cost of developing the project. [Significantly, this is also the first new downtown duty license to be issued by the Korea Customs Service in Seoul since the year 2000].

    By the grand opening next March it expects to be offering in excess of 600 brands as South Korea’s ‘largest urban duty free location’ [and also as the long-time major challenger to Lotte Duty Free’s sales dominance in South Korea’s downtown duty free sector].

    It is also expected to generate revenue of KRW670.8bn/$578m in 2016, and produce an operating profit of KRW57.7bn/$49.7m, according to bullish predictions by KDB Daewoo Securities Research.

    THE WORLD’S SECOND-LARGEST DOWNTOWN DFS

    According to detailed information already provided to TRBusiness by Hotel Shilla, the total duty free floor space is only slightly smaller than the world’s largest downtown duty free complex at Hainan Duty Free in Haitang Bay.

    However, this new complex is designed to be multi-recreational in purpose. Plans for the HDC Shilla complex also include a 1,700-room hotel, several restaurants and concert halls.

    The joint venture has already opened luxury branded shops for Salvatore Ferragamo, Valextra, Vivienne Westwood and Bally, along with luxury stores offering multiple luxury brands in their respective product categories of fashion and accessories, watches, cosmetics and other products.

    There is also a special emphasis on cosmetics brands, which are popular as a major draw with Mainland Chinese tourists.

    One of the huge benefits offered by the new complex – and a key component in its selection for the downtown duty free license in the first place – is its plentiful parking spaces for tour buses – an extremely rare luxury commodity in Seoul today. The store location is also a hub for provincial tours by KTX trains.

    In a statement, the company said: “In the first phase, there are around 100 bus parking lots in the building and outside of the building. From the bus parking lot, tourists can directly reach the entrance of the duty free store by exclusive escalators, ‘Crystal Gate’. Next year (2016), the bus parking lot will accommodate up to 400 buses based on the demand of tourists.”

    HDC Shilla’s Co-President, Changhoon Yang and Gilhan Lee said: “We will do our best to make Shilla I’Park duty free the world’s best duty free store and to make Seoul a global shopping destination. We will take the lead to promote the nation’s tourism industry.”

    The company adds that its ambition is that Shilla-I’Park will become the centre of the Korean-Wave tourism that promotes Korean-made cosmetics and fashion goods, provincial tourism and co-prosperity along with regional economies in Korea.

    This promise to boost sales and the profile of domestic goods and services should come as a politically popular message for the present Korean Government – especially President Park Geun-hye – who is reported (by the Yonhap News Agency) to have been openly critical of recent duty free customs law revisions. Particularly so, with regard to the downward revision of downtown duty free license terms from 10 to five years.

    Meanwhile, the Shilla-I’Park partnership claims that the new store is also equipped ‘with the largest cosmetics section’ covering a floor area of 6,300sq m featuring all of the Korean-made cosmetics brands and global brands popular amongst Chinese tourists.

    HDC Shilla Duty Freec

    The new store entrance. (Photo credit: Shilla Duty Free).

    AIMING FOR 90% OF SALES GOAL – BEFORE FULL MARCH OPENING

    It also points out that it houses the biggest ‘K-cosmetics’ and ‘K-Bag’ store areas specialising in Korean-made cosmetics, fashion goods and accessories, comprising more than 270 cosmetics, fashion and accessory brands.

    In addition, the third and fourth floors feature luxury fashion and global cosmetics branded stores, with a special ‘Luxury cosmetics zone’ on floor three dedicated to imported cosmetics and high-end timepieces.

    HDC-Shilla said: “We have most of [the] cosmetics and luxury watch brands loved by Chinese visitors and have raised the portion of K-cosmetics that recently showed a large increase in sales, so we are expecting to achieve about 90% of our sales goal – even before the grand opening.”

    Meanwhile, the ‘K-Discovery Travel Package’ will be introduced in collaboration with each local government, Korail, travel agencies and the duty free store to boost provincial tours of Korea.

    The retailer adds: “In addition, I’Park mall will be upgraded to provide diverse tour contents and new shopping facilities to support [the] Shilla I’Park duty free store. In collaboration with character contents, the mall will be the tourist destination, by providing various attractions consistently.”

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  • $1.3bn Midfield terminal inaugurated at HKIA

    $1.3bn Midfield terminal inaugurated at HKIA

    Hong Kong International Airport (HKG) officially opened its HK$10bn/$1.3bn Midfield Concourse (MFC) and auxiliary facilities on Monday as scheduled – with the retail offer to be “gradually introduced” next year.

    The 105,000sq m, five-storey MFC is located between the airport’s two existing runways to the west of terminal one and is connected to it with an automated people mover. It has 20 parking stands and a capacity of 10m pax.

    On Monday, Jack So, Chairman of HKG’s operator, Airport Authority Hong Kong (AA), and Zhang Kui, President of Hong Kong Airlines, accompanied by CK Ng, Executive Director, Airport Operations of the AA and Ben Wong, Chief Operating Officer of Hong Kong Airlines officiated at the opening ceremony, and also welcomed the first batch of passengers.

    On the retail offer, AA says: “The concourse will gradually introduce restaurants, coffee shops and retail outlets to provide passengers with a one-stop shopping and dining experience.”

    On the significance of the concourse, So says: “The MFC is an important development as it will help the airport meet increasing passenger traffic demand. In the past 12 months, Hong Kong International Airport handled 68.2m passengers, marking a year-on-year increase of +8.3%.

    “With its capacity to serve an additional 10m passengers every year, the MFC will be able to increase the number of flights using airbridges to board and disembark, enhancing the overall passenger experience.”

    AA plans to gradually increase the usage of the MFC in the next few months. It is expected to serve about 20% of daily passenger flights from HKG when operating at full capacity by next March.

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