Retail News CRM

Author: Mei Ling Tan

  • Korea’s jobless rate stays pat at 3.1% in November

    Korea’s jobless rate stays pat at 3.1% in November

    South Korea’s unemployment rate stayed pat in November compared with the month before as gains in the manufacturing and hospitality sectors were offset by losses in the agrofisheries and retail segments, a government report showed Wednesday.

    According to the report by Statistics Korea, the rate stood at 3.1 percent last month, unchanged from October and the year before. The seasonally adjusted unemployment rate for last month reached 3.4 percent, also flat from the 3.4 percent figure tallied for the previous month. The number of newly created jobs, however, dropped to 285,000 last month, from 348,000 new positions offered in October.

    “Manufacturing continued to fuel growth, along with the hospitality sector, and communication and information technology services, but sharp losses in agrofisheries and to a lesser extent retail affected the job market last month,” said Sim Won-bo, head of the agency’s employment statistics division.

    He said agrofisheries shed 168,000 positions last month from 124,000 jobs lost the month before, while sluggish economic conditions hurt small-time retailer jobs in the country. The official said the loss in agrofisheries was mainly due to rainy weather.

    The manufacturing sector created 190,000 more jobs, with the hospitality sector and communication and information technology services adding a combined 182,000 positions.

    The unemployment rate for people between the ages of 15 and 29 reached 8.1 percent in November, up from the 7.4 percent reading a month earlier, which was the lowest level reported since May 2013.

    The statistical office said the jobless rate for young people usually goes up toward the end of the year as there is a rush to seek employment. The jobless rate among young people has always been higher than the national average.

    The latest report then showed the employment rate for people between 15 and 64, which is used by the Organization for Economic Cooperation and Development to measure employment, stood at 66.3 percent last month, up from 66.2 percent the month before.

    The so-called labor underutilization indicator dipped to 10.3 percent last month from 10.5 percent in October, according to the report.

    The indicator is based on guidelines made by the International Labor Organization and reflects the number of people who are underemployed and those who currently hold part-time jobs but want full-time work. It also counts unemployed people who have given up looking for work not by choice but due to other circumstances.

    The finance ministry said unseasonable weather conditions adversely affected jobs created last month. “The amount of rainfall directly impacted hiring in certain sectors,” it said. “If agrofisheries are not calculated, more than 400,000 jobs were created.” Total precipitation hit 127.8 millimeters, the second highest reading since November 1973.

    The ministry added that while the jobless rate for young people rose, the employment rate edged up 1 percentage point on-year to 41.8 percent, which is a positive development. For the future, it said exports may remain weak but a rise in domestic demand will help create new positions in the coming months.

    Lees ook:

  • PTT firms up local expansion program

    PTT firms up local expansion program

    PTT Philippines, a unit of PTT Public Co. Ltd. of Thailand, plans to invest P3 billion in the next five years to expand the company’s network here.

    The capital expenditure program includes investments in retail stations, oil depots and terminals in Luzon and Visayas.

    “In the next five years, PTT appropriated P3 billion for expansion plan, for laying down on infra,” general manager Danilo Alabado told reporters.

    PTT Philippines currently has 94 stations and plans to put up a total of 300 by 2020.

    “Right now we have the trading areas in Luzon and Cebu. In order for us to achieve our goal to be one of the top five oil companies in the next five years, we will expand into other trading areas, other islands,” Alabado said.

    He said the company needed the support of a stronger infrastructure network  for its expansion program.

    “We need depot, fuel terminal that could come in in Visayas and Mindanao which we have been looking at,” the official said.

    PTT president and chief executive Sukanya Seriyothin cited a strong growth projected growth in Luzon for the company’s planned expansion.

    “Visayas and Mindanao we still have to further expand. We’re still moving forward in Luzon, but aside from that, we move further in Visayas, Mindanao,” Sukanya said.

    Alabado, meanwhile, said the company performed “fairly well” in 2015 with sales volume likely to increase 5 percent to 6 percent.

    “We are confident we are going to meet our target,” Alabado said, adding revenues may reach P1.1 billion this year.

    “We are looking at 5 to 6 percent growth next year until 2017 because we are going to lay down our infra support for expansion for 2018 going into 2020, we are looking at growth of 60 percent compared to what we had in 2015,” he said.

    PTT Thailand is Thailand’s biggest oil player and ranked number 81 under Fortune 500’s List of world’s largest companies.

    The company, controlled by the Thai government, is engaged in downstream and upstream petroleum, natural gas, coal, and other related businesses.

    PTT Public Co. Ltd. of Thailand, the parent of PTT Philippines, earlier said it planned to increase the revenue share of its overseas retail oil business to 20 percent in the next five years.

    PTT Thailand vice president for international marketing Wisarn Chawalitanon noted that the share of the overseas retail oil business to the company’s revenues was still small.

    PTT Thailand, which owns around 1,200 to 1,300 retail stations in Thailand, is banking on its overseas presence in the Philippines and other countries to help propel the company’s growth.

    Wisarn said the Philippines remained PTT Thailand’s priority market.

    “The Philippines is the biggest operation that we have in other Asean countries. Our revenue in the Philippines is more than 20 billion baht [P26 billion] compared with the other countries which have around 5 billion baht [P6.5 billion]. That’s why we pay attention to the Philippines,” the official said.

    Lees ook:

  • Supermarkets, restaurants worldwide admit to using slave labour-processed seafood

    Supermarkets, restaurants worldwide admit to using slave labour-processed seafood

    A large-scale investigation spanning multiple continents has revealed that top seafood retailers and restaurants around the world were using products that were tainted with forced slave labour, originating from Thailand’s seafood peeling factories.

    The Gig Peeling Factory on the outskirts of Bangkok houses horrors made of nightmares. Here, the forced labourers work for 16 hours for little or no pay fearing violence from the overseers.

    An Associated Press investigation revealed that Thai Union, the largest seafood supplier, employs the Gig Peeling Factory where a hundred Burmese people, including children, are kept under lock and key and forced to work for hours without end with their hands in cold water, tearing and shedding at the heads and tails of the shrimps.

    Woolworths, Coles and Aldi, Australia’s top retail grocery chains, have all said that they use Thai Union as suppliers for their retail stores.

    “We will investigate this further with our supplier and seek advice from our NGO partners,” quoted Woolworths as saying.

    Australian retailer, IGA Supermarkets’s supplier Metcash confirmed that it uses Thai Union as well.

    “Some of our other locally based seafood suppliers may purchase prawns from Thai Union as they are one of the largest seafood suppliers in the world,” a Metcash spokesman said.

    In the US, the Red Lobster and Olive Garden, both restaurant chains as well as retail chains like Wal-Mart, Kroger, Whole Foods, Dollar General and Petco, have all confirmed using the Thai seafood supplier.

    The seafood produce from Gig Peeling Factory gets mixed with products from other suppliers making it impossible to tell between tainted and ethically produced farm products.

    According to UN and US standards, the whole produce then becomes tainted.

    “They didn’t let us rest,” said 16-year-old Eae Hpaw, 16, a labourer at the factory, whose arms were lacerated with shrimp-related infections and allergies. “We stopped working around seven in the evening. We would take a shower and sleep. Then we would start again around three in the morning.”

    “I was shocked after working there a while, and I realised there was no way out,” said Tin Nyo Win, 22. He and his wife were only paid US $4 per day for peeling 175 pounds of shrimp.

    Europe and Asia, has been similarly importing products from Thai Union, the AP investigation revealed. Germany, Italy, England and Ireland were able to find products from Thailand in grocery stores there.

    “As the world’s largest seafood restaurant, we know the important role we play in setting and ensuring compliance with seafood industry standards, and we’re committed to doing our part to make sure the seafood we buy and serve is sourced in a way that is ethical, responsible and sustainable,” Red Lobster said in a statement.

    In 2015, Thailand had passed laws to come down heavily on the abuses by the seafood industry in the country, and to register migrant workers without papers to ensure their safety.

  • Expats in Asia-Pacific, including Singapore, highest paid in the world

    Expats in Asia-Pacific, including Singapore, highest paid in the world

    Expatriates in the Asia-Pacific are among the highest paid in the world, with Singapore in the top five in the region for disposable income and savings, according to HSBC’s latest Expat Explorer survey.

    The region’s appeal for professionals is set to increase further with the formalisation of the Asean Economic Community (AEC). The eight edition of the Expat Explorer survey was completed by 21,950 expats from 198 countries through an online questionnaire in March, April and May 2015 and released on Monday (Dec 21).

    The study found that the annual average salary for expats across the Asia-Pacific is US$126,000 (S$178,000), the highest compared to the global average of US$104,000.

    South-east Asian countries – including Vietnam, Malaysia and Singapore – along with China and Hong Kong, stand out for offering expats the chance to save more money and enjoy greater disposable income.

    According to the survey, 65 per cent of expats in Singapore report greater levels of disposable income (compared to a global average of 57 per cent), 60 per cent are able to save more (global average is 52 per cent) and 20 per cent say they have been able to buy additional property as a result of moving (global average is 17 per cent).

    The ability to save more, enjoy greater disposable income or acquire real estate assets are all important considerations for expats moving to a new country.

    Said Mr Matthew Colebrook, HSBC Singapore’s head of retail banking and wealth management: “Managing finances is a key draw-card for living abroad, whether that be in helping to ascend the housing ladder or opening up lifestyle choices for later life. However, it does come with complexities and often means expats need to consider financial planning not in one, but two or more countries.”

    Apart from the financial incentives, South-east Asia’s appeal will be heightened as mobile professionals will be able to access a wider job market via the formalisation of the AEC.

    The AEC – which comes into effect on Dec 31 – aims to integrate South-east Asia as an economic region by reducing barriers to cross-border trade and investment, and allowing freer flow of professionals to work in other markets in the region.

    Said Mr Colebrook: “Asia offers some of the most rewarding job opportunities, allowing expats to experience and learn skills while at the same time, boost their standard of living and raise lifestyle aspirations. As the Asean countries move closer to economic cohesion, skilled workers will be needed to raise the region’s competitiveness and help companies and sectors to offset locational skill shortages or mismatches.”

    Singaporeans are one of the most globally mobile workforces in the region, with some 212,500 citizens living overseas as of June 2015, according to the Department of Statistics.

    Based on the sample of respondents surveyed in the latest edition of the Expat Explorer, expats in the Asia-Pacific originate from Australia, Canada, China, India, Indonesia, Malaysia, New Zealand, Philippines, United Kingdom and the United States. They work in industries such as education, marketing, banking, health, engineering, telecommunications, manufacturing and hospitality.

  • HKIA celebrates Xmas with shopping rewards

    HKIA celebrates Xmas with shopping rewards

    Hong Kong International Airport (HKIA)is marking the Christmas run-up with series of festive special offers and promotions, including cash coupon redemptions up to HK$5,200 ($671) alongside more than 2,000 surprise gifts for travellers.

    The new promotion begins this Thursday (17 December) with travellers spending more than HK$2,000 ($258) by electronic payments qualifying for redemption coupons. HKIA adds that passengers using their UnionPay cards stand to reap even more rewards.

    HKIA Xmas od=ffers Dec 2015

    A ‘glamorous gift-themed exhibition’ will also be featured on Level 6 of the Departures East Hall allowing travellers to experience the spirit of Christmas, while prompting them with gifting ideas.

    Various music performances will also take place here and there will also be miniature installations on display showing how different countries around the world celebrate Christmas.

    Xmas at Hong Kong Dec 2015
    Travellers spending over HK$1,000 ($129) in a single transaction at HKIA can also enjoy free local delivery service. Free delivery service to Mainland China, Macau and Taiwan is also offered to travellers who spend over HK$2,500 ($322) on clothing, bags and accessories in a single transaction.

    At the same time, HKIA is partnering with its retailers to provide travellers with shopping and dining offers. More details are available at: https://www.hongkongairport.com/eng/shopping/special-offers.html

    Lees ook:

    Lees ook:

    Lees ook:

  • Myanmar central bank to grant new foreign bank licences

    Myanmar central bank to grant new foreign bank licences

    The Central Bank of Myanmar plans to initiate a second round of foreign bank licencing in early 2016, the monetary authority said.

    The aim is to licence banks from “additional neighbouring and important trading partner economies”, quoted the central bank as saying.

    “The main objective of the second round of licensing is to further promote existing economic cooperation.”

    Foreign banks headquartered in countries that successfully obtained a licence in the first round – namely Australia, China, Japan, Malaysia, Singapore and Thailand – will not be allowed to participate in the second round, the notice said.

    Foreign banks with representative offices in Myanmar or which are in the process of obtaining one will be permitted to participate.

    The licence will be for onshore wholesale banking through a branch, and a call for expressions of interest will be made in early 2016, the Central Bank said.

    In the last, hotly-contested bidding round, nine foreign banks won licences on October 1 last year, and winners were given a year to prepare operations to meet the approval of the Central Bank.

    All of the banks – Bangkok Bank, Australia’s ANZ, Japan’s the Bank of Tokyo-Mitsubishi UFJ, Mizuho Bank and Sumitomo Mitsui Banking Corporation, the Industrial and Commercial Bank of China (ICBC), Malaysia’s Maybank, and Singapore’s Oversea-Chinese Banking Corporation (OCBC) and United Overseas Bank (UOB) have now opened branches.

    The licences came with a number of restrictions – banks are only permitted to lend to foreign businesses and local banks. They may team up with local lenders to offer additional services, but are prohibited from involvement in retail operations.

    This marked the first time that foreign banks have operated in the country for more than 50 years – Myanmar had not allowed onshore banking by foreign institutions since 1963, when 14 foreign banks were nationalised.

  • Hong Kong Regulates Mobile and Contactless Payment Systems

    Hong Kong Regulates Mobile and Contactless Payment Systems

    Hong Kong recently introduced a new regime to regulate stored value facilities (SVFs) and retail payment systems (RPSs) offered by non-financial institutions. The primary new legislation is the Payment Systems and Stored Value Facilities Ordinance (“Ordinance”), which amends and replaces the previous Clearing and Settlements System Ordinance. The Hong Kong Monetary Authority (HKMA) is now responsible for supervising the activities of non-financial institutions operating in this area.

    Issuers of multiple purpose SVFs must now obtain a specific approval and license from HKMA for such SVFs, regardless of whether these are operated through a device or not. However, an SVF which is used only for purchases from a single retailer remain exempt from this requirement. In addition, while there is no automatic approval and license requirement for RPSs, HKMA is entitled to decide on which RPSs will be subject to its regulation.

    The new regime seems to track the increasing use and proliferation of such new payment systems, as well as the increased risk of data loss and theft and fears that unnecessary personal data may be embedded and accessible within the chips in contactless cards.

    Companies operating in this area should check whether the new requirements apply to them and commence applications for licenses if necessary. While there is a grace period until November 2016 before penalties can be imposed, it is unclear how long the administrative processes will take in practice and there is a risk of significant fines or suspension of business for failure to meet the deadline.

    Lees ook:

    Lees ook:

    Lees ook:

  • Mercedes-Benz to invest RM200m in retail network

    Mercedes-Benz to invest RM200m in retail network

    Mercedes-Benz Malaysia will be looking to invest a further RM200 million until end-2016 to enhance its retail network to deepen the group’s presence nationwide, as Malaysia currently represents the biggest market for Mercedes-Benz passenger cars in Southeast Asia, according to the company.

    The German automaker has invested over RM250 million here since 2012, and has been reaping the benefits of its investment as market development for its brand has grown significantly. Its annual passenger car sales grew from 5,809 units in 2012 to 6,932 units in 2014 — a record annual number for the company.

    As at early October this year, its passenger vehicle sales hit about 8,200 units, exceeding the total volume for 2014, and setting 2015 up as another record-breaking year in terms of sales.

    Its year-to-early-October sales were 70% higher over the same period last year, president and chief executive officer Dr Claus Weidner told The Edge Financial Daily in an interview recently.

    However, he was cautiously optimistic about going into 2016, given the rising cost of living and continued weakening of the ringgit against the US dollar.

    “To repeat that sort of growth … we can’t do it every year. Nevertheless, we are confident we can keep up with the expected high level of sales in 2016, and will look into the macroeconomic situation and plan accordingly,” Weidner said.

    He declined to disclose if the group will raise prices of its cars next year, saying that it is too early to tell if the group should.

    “We have several financial instruments in place, together with our group from Daimler. But at the current stage, I cannot say which way we will take,” Weidner explained.

    He added that the group’s investment in local production since 2012 will help counterbalance the carmaker’s exposure to foreign exchange to a certain extent.

    Together with its authorised dealer, Hap Seng Star Sdn Bhd, Mercedes-Benz Malaysia recently launched the seventh Autohaus, or Mercedes-Benz showroom, in Kota Kinabalu, Sabah.

    Known as Hap Seng Star Kota Kinabalu Autohaus, the showroom saw Hap Seng putting in an investment of RM2 million. The sum is part of the RM30 million that the dealer has put aside for its long-term expansion in East Malaysia, which includes an Autohaus in Miri, Sarawak, that opened in May, and a new one in Kuching, Sarawak, slated for launch by end-2016.

    Weidner: We are confident we can keep up with the expected high level of sales in 2016, and will look into the macroeconomic situation and plan accordingly.

    Hap Seng’s latest venture in East Malaysia will help grow Mercedes-Benz Malaysia’s customer base in the premium automotive segment. Mercedes-Benz Malaysia believes that a focused partner in the auto industry is what will help drive growth.

    “In this situation, we have good progress in terms of putting in good landmarks and strategic points for the main market in East Malaysia. We want to provide the same standard of service as we do in Peninsular [Malaysia] to our customers here.

    “Hence, having partners who are very focused on the automotive business and show their professionalism is crucial for us to expand because it is a really detailed set-up and we have to establish quite a lot of processes,” Weidner explained.

    He added that Mercedes-Benz Malaysia had been investing in its processes and talent, in addition to the hardware aspects of the business.

    “Our customers are very demanding, and this is one of the challenges that we face, and we train our front-liners to be able to cater to these customers and continuously improve our processes. Training and upgrading — these are where we invest in heavily,” Weidner said.

    Mercedes-Benz Malaysia and Hap Seng began their collaboration some 46 years ago in Sabah, where they started their commercial vehicle operations in East Malaysia.

    Lees ook:

    Lees ook:

    Lees ook:

  • First Visa token service launched in Asia-Pacific

    First Visa token service launched in Asia-Pacific

    Visa launched on Monday the first Visa Token Service in Asia-Pacific with the United Overseas Bank (UOB) as the first bank implement the service. 

    The service is a new security technology that replaces sensitive payment account information found on payment cards, such as the 16-digit account number, expiration date and security code, with a unique digital identifier or “tokens” that can be used to process payments without exposing actual account details.

    Visa cards that are tokenized are also domain controlled, meaning the tokenised card is linked to a consumer’s phone or wallet application and is validated in real-time by VisaNet, Visa’s global payment processing platform.

    Tokenisation was first introduced as a new global standard in October 2013 by Visa and other payment schemes to enhance security and simplify consumers’ purchasing experience.

    “We live in a connected world and with the rise of digitization, it is important the payments industry is focused on delivering a safe, secure, simple, and consistent consumer purchasing experience,” said T.S. Anil, Head of Product for Asia Pacific for Visa.

    “The Visa Token Service can help prevent fraud by offering financial institutions, merchants, and third party payment providers, such as digital wallet providers, a secure way to enable mobile and online payments without sharing sensitive account information,” he added.

    United Overseas Bank has implemented the Visa Token Service as part of its digital wallet UOB Mighty. The service allows its Visa credit or debit cardholders to make contactless payments with an NFC-enabled Android smartphone simply by launching the UOB Mighty app, selecting the “Pay” function, entering a PIN and tapping to pay at all NFC-enabled terminals in Singapore and overseas.

    “Consumers are increasingly attached to their smartphones which have become an indispensable lifestyle device. With the Visa Token Service, UOB is able to offer Singapore customers the option of making contactless payments, with tokenised security, through their smartphones at the point of sale – whether it is in a supermarket, coffee shop or at a petrol station,” said Mr Dennis Khoo , Head of Personal Financial Services, Singapore, UOB.

    Lees ook:

    Lees ook:

    Lees ook:

  • A New Air Jordan Store Has Just Opened Up In Hong Kong

    A New Air Jordan Store Has Just Opened Up In Hong Kong

    Jordan Brand has already shown us that they have huge plans of going international with their upcoming retail store in Toronto. So does that mean they’ll stop there? Nope.

    The Jumpman is making its presence felt all around the world with their latest power move coming in Hong Kong. In the pictures above you can see the new Jordan Brand retail store that features a section with every silhouette from the Air Jordan 1 through the 29 draped in gold as well as something they’re calling the Jordan Flight Club which gives you access to The Draw, Jordan Breakfast Club, and Footwear Trial.

    From the outside of the store you can also see a massive recreation of the iconic “Wings” poster with Michael’s outstretched arms done in gold for that touch of luxury. Take a look at images of the retail space above and give us your thoughts.

    The Air Jordan 8 Wellington flagship store is located at Wellington Place, 2-8 Wellington St. in Hong Kong.

    Lees ook:

    Lees ook:

    Lees ook:

  • Japanese e-retail leader Rakuten doubles its online sales in China

    Japanese e-retail leader Rakuten doubles its online sales in China

    Rakuten’s Q3 growth from China jumps 101%. The Tokyo-based company plans to open a store soon on Chinese marketplace JD.com. The falling value of the Japanese yen and China’s relaxed cross-border e-commerce policies have helped Rakuten Inc., Japan’s dominant online marketplace operator, double its web sales in China in the third quarter.

    Founded in 2007, Rakuten says it now sells about 150 million products from over 41,000 merchants on its Japanese online marketplace, Rakuten.jp.

    Rakuten operates localized sites in 13 countries, including Japan, the United States, the United Kingdom, Spain, Brazil, Germany, France, Austria, Singapore, Thailand, Malaysia, Indonesia and Taiwan. CEO Hiroshi Mikitani has pursued a global strategy that has included several e-retail acquisitions, such as of Buy.com in the U.S. and PriceMinister in France.

    Rakuten also operates the Rakuten Global Market, an online marketplace offering 1.2 million Japanese products from 10,000 merchants to consumers outside of Japan. China represents the fastest-growing country in terms of purchases on the Rakuten Global Market, the Rakuten spokesman says. “Our Q3 total cross-border trading showed 50% growth year on year,” he says. “Our Q3 growth from China showed a significant increase of 101%.”

    Japanese products have become much cheaper to Chinese consumers as the Japanese yen has depreciate about 30% over the last few year.

    In addition, China has relaxed its policies on online imports, making it easier for Chinese consumers to buy from foreign e-commerce sites. For example, the duty charged on small online purchases from abroad is lower than the tax charged on domestic purchases in China, and China has created free-trade zones in nine cities where parcels from overseas move through customs faster than before.

    Rakuten says Chinese consumers are particularly interested in unique and high-quality Japanese-made goods. “We will also continue to explore new avenues to empower Rakuten merchants in expanding their businesses in China.” the spokesman says.

    This week, Rakuten announced it will open an online store to sell Japanese products on the e-commerce site of Chinese e-retailer and marketplace operator JD.com, No. 1 in the Internet Retailer 2015 China 500.

    This is not the first time Rakuten has entered China. In 2010, Rakuten and Chinese search engine company Baidu created a joint venture to operate Rakuten.cn, aiming to sell products in China to Chinese consumers. After only 18 months, the site was closed by Rakuten in 2012, reflecting the fierce e-commerce competition in China.

    In April 2015, Rakuten also announced it had invested in a Chinese cash-back shopping site, Fanli.com, but did not disclose the investment amount.

    Rakuten is No. 20 in the Internet Retailer Asia 500. JD.com is No.1 in the Internet Retailer 2015 China 500. Rakuten is the leading online retail site in Japan, accounting for about 20% of web sales in 2014, according to Euromonitor International.

    Lees ook:

    Lees ook:

  • Rental gap narrowing between suburban and Orchard malls

    Rental gap narrowing between suburban and Orchard malls

    The rental gap between prime spaces in suburban malls and Orchard malls has been narrowing – and this trend is slated to continue into 2016.

    Property consultants noted that the relative resilience of suburban malls stems from their larger local catchment and lower susceptibility to tourist spending, which has been dealt a blow from lacklustre tourist arrivals and competition from other global cities for their spending.

    While the retail rental index of the Urban Redevelopment Authority (URA) for the Central Region showed a 2.9 per cent drop in retail rents over the first three quarters of this year, the Central Area marked a bigger 3 per cent drop compared to a 2.4 per cent decline in the Fringe Area.

    URA’s retail rental indices do not track malls located in the far-flung areas of Jurong, Tampines and Yishun, though rental data by unit size, floor level and district is available on its website.

    Data from consultancy firm Savills shows that prime-facing spaces in Orchard malls have fallen by a bigger 4 per cent over the first three quarters of this year, compared to 2.9 per cent in suburban malls.

    “On the whole, we still haven’t seen any concrete plan to arrest the pilferage of sales from online retailers who are waging a guerrilla war against sitting targets,” said Savills research head Alan Cheong.

    He expects rents in suburban malls to dip by up to 2 per cent and those in Orchard malls to fall by a bigger 3-5 per cent next year.

    Based on Knight Frank’s computations, the rental premium of prime retail spaces of Orchard Road malls over suburban malls has been steadily shrinking over the last three years. The average prime rent of Orchard Road malls was 1.09 times of that in suburban malls in the last nine months this year, down from 1.12 times and 1.13 times in 2014 and 2013 respectively.

    “This demonstrates the higher resilience of suburban mall prime space rents compared to Orchard Road’s,” said Knight Frank head of consultancy and research Alice Tan. “Nonetheless, the limited availability and limited upcoming supply of new retail spaces in Orchard Road should limit rental declines for Singapore’s prime shopping belt going forward, keeping rental premium between Orchard Road and suburban prime retail spaces at similar levels for 2016.”

    Some Orchard Road malls have found it hard to gain traction. Wheelock Properties’ Scotts Square has seen many of its tenants come and go since its opening in 2012. Shaw Centre has similarly failed to ramp up its occupancy and pull in customers since its revamp last November.

    Far East Organization’s Orchard Central, now 85 per cent occupied, will be undergoing a revamp until Q3 2016, during which 17 per cent of its tenants will have to close or relocate by Dec 31.

    Cushman & Wakefield research director Christine Li noted that popular retail brands previously present only in Orchard Road have made their way into suburban malls, hence diluting retail sales in Orchard malls.

    Looking at prime-facing retail units on ground floor of not more than 3,000 square feet, Ms Li is projecting a 3-3.5 per cent drop in rents in Orchard Road, a 4 per cent fall in the city-fringe, and stable rents for suburban malls next year.

    A spokesman for Frasers Centrepoint Asset Management, the manager of Frasers Centrepoint Trust (FCT) which owns a number of suburban malls, stressed that suburban malls have very localised catchment, roughly 3-5km radius in the primary catchment and slightly further afield if the mall is easily accessible by MRT or bus.

    “We think the outlook for suburban malls should remain stable in general, as consumption in this sector are mostly necessity spending,” he said.

    FCT finished the financial year ended Sept 30 with an average rental reversion of 6.3 per cent. Its manager is further tweaking tenant mix at Changi City Point and Bedok Point, where occupancies were 91.1 per cent and 84.2 per cent respectively as at Sept 30. Its Northpoint shopping centre in Yishun is being expanded as part of the integrated Northpoint City project.

    “In most instances, the challenge is not so much in finding a tenant as there is always interest in space in suburban enclosed malls. It is more a question of finding the correct tenant that is also willing to pay the target rent,” FCT manager’s spokesman said. “Occupancy-wise, we should be able to maintain our current level or improve slightly over our last financial year.”

    But not all suburban malls are faring well too. Consultants note that there is greater competition in Jurong East where there are five malls in the same catchment – namely JCube, JEM, WestGate, Big Box and IMM Building.

    “While household and office population there is on the rise, the majority of homes and offices are still under construction and the newly completed malls have injected more supply at a faster rate than demand,” said Chesterton Singapore managing director Donald Han.

    Woes of JCube arose with the proliferation of malls in the Jurong East regional centre in recent years. Since Jem and Westgate opened across the road in 2013, JCube’s occupancy rate has been on a slide since end-2013 from 100 per cent to 83.7 per cent as of Sept 30 this year. Though it has undergone several rounds of mall repositioning, one industry player felt that the mall has not yet found its “identity”.

    “Both JCube and IMM are undergoing a series of asset enhancement initiatives. We think the malls here may underperform other areas where there are less mall competitors such as Junction 8, Causeway Point or Bedok Mall,” Mr Han said.

    CapitaLand’s Tampines Mall and Junction 8 marked full occupancy as at Sept 30 and some asset enhancement works are ongoing for Tampines Mall.

    When asked about its malls in Jurong Gateway, CapitaLand Mall Asia head of retail management for Singapore Teresa Teow explained that the three malls are positioned differently to complement each other, with Westgate serving as a premier lifestyle and family mall, IMM Building as Singapore’s largest outlet mall, and JCube being a leisure and entertainment hub in the west that houses Singapore’s only Olympic-size ice rink.

    JCube recently added a trendy retail zone, J.Avenue, that houses 100 shops offering chic, affordable merchandise. “We continually reinvent our malls to ensure that they stay relevant and attractive to shoppers,” Ms Teow added.

    Large landlords such as CapitaLand and Frasers Centrepoint are also embracing technology, making their rewards programme available via mobile apps.

    CapitaLand’s Capitastar goes further to glean the shopper preferences of some 800,000 Capitastar members in Singapore from the aggregated data, which enables CapitaLand to work with retailers to push out targeted retail offerings through the Capitastar mobile app.

    Consultants note that malls which are connected to an MRT tend to do well. Size matters too, Mr Han added, with larger malls of more than 200,000 sq ft in net lettable area able to enjoy economies of scale and provide a variety of tenant-mix offering to consumers.

    Ms Tan noted that while landlords are now more receptive to negotiate rentals with established retailers, the current structure of base rents vis-a-vis variable rents has not changed much, with limited room for adjustment.

    Lees ook:

  • More retail-friendly bond issues in 2016

    More retail-friendly bond issues in 2016

    Singapore’s fixed-income market next year is tipped to be active, with more retail-friendly issuances. What’s more, perpetuals will continue to be popular even as financial conditions are likely to remain volatile. Retail bond demand is expected to stay healthy and there should be more deals done than in 2015 – thanks to higher yields, said Clifford Lee, DBS Bank head of fixed income.

    Four retail bonds with yields of 3.85 to 5.25 per cent were sold in 2015 by Perennial Real Estate Holdings, Oxley Holdings, Frasers Centrepoint and Aspial Corp. Investors could buy these bonds for as low as S$2,000 per lot, much cheaper than the minimum S$250,000 for most bonds sold here.

    Mr Lee said retail investors are not dumb, unlike your “mom and pop” investors. “The smaller caps have smaller subscription, indicating they do have discretion.”

    While the retail offerings were oversubscribed, he said the oversubscription was not massive – an indication that retail investors know what they are doing.

    The four retail bonds raised S$1.25 billion, against just one issue from CapitaMall Trust in 2014 worth S$350 million.

    “Of the four issuers this year, three may even be ‘high yield’ – although none are rated – which may spur further issuance from other mid-sized firms which could offer higher yields on their retail bond issues,” said Terence Lin, iFast’s regional research manager in the fixed-income division.

    Investors, especially financial institutions and real estate investment trusts (Reits), are expected to still like perpetuals – bonds with no fixed maturity – in 2016, as they did in 2015.

    Seven perpetuals were sold this year which raised S$3 billion, almost double the S$1.8 billion for 2014.

    Mr Lin indicated that issues such as the new Julius Baer, Ascendas Reit perps and FCL perps have so far been among the most heavily traded bonds in the SGD corporate bond market in 2015. “We think their popularity stems from the higher yields offered versus traditional fixed maturity bonds (given the additional maturity uncertainty), while most of the perpetual bonds are still expected to be called on their first call dates (which are usually less than 5 years away), making them good alternatives to traditional short duration bonds,” he said.

    Also, he added, many of the perpetuals are issued by higher-quality names, offering investors a level of comfort.

    While more bank perpetuals are expected to be launched, as banks look to build additional capital, as well as to refinance maturing/callable debt, many non-bank corporate perpetuals are also maturing.

    Firms such as Hyflux, Cheung Kong, Olam International, GuocoLand, Global Logistic Properties, Hotel Properties, Mapletree, Mapletree Logistics Trust and Genting Singapore are some of the existing issuers of perpetual SGD debt which are callable in 2016/2017, making them potential refinancing candidates/perpetual bond issuers come 2016.

    Tan Kee Phong, OCBC Bank’s head of capital markets, estimated that US$33 billion in loans and S$13 billion in SGD bonds are set to mature from syndicated loans in 2016 in Singapore. Yet nothing can be taken for granted, according to Elaine Ngim, Coutts’ he ad of fixed income in Asia. “Two key factors that may determine if 2016 is a bull’s or bear’s year are how fast Fed will hike rates and how slow will China economic growth be,” she said.

    “China’s growth story will be the larger factor for Singapore, as its economy is trade dependant on their growth. As a result, investors may become increasingly selective on quality of issuers and their industry,” said Ms Ngim.

    DBS’s Mr Lee also said China would have the biggest impact on the Asian bond markets, because it accounts for the lion’s share of the Asian G3 (USD, yen or euro) bond arena.

    China-linked issuance in 2015 was 54 per cent or US$91 billion of the US$169 billion Asian G3 bond market. But offshore funding costs have ballooned and a lot of Chinese companies are now opting to issue onshore, Mr Lee indicated.

    “If China continues to issue onshore next year, then it (Asian credit market) could get a kick in the stomach,” he said.

    The SGD bond market was pretty solid in 2015, especially compared with equities. This year has seen 161 deals worth S$22.7 billion done, slightly less than the S$23.5 billion raised in 2014. The highest was S$31 billion in 2012.

    “2015 was comparatively a better year for bonds in Singapore when compared to the STI index, with main drivers being corporate bonds, specifically statutory board issuers in the 5-7-year maturity bucket,” said Ms Ngim.

    Up to Dec 11, the Singapore Fixed Income Indices for 2015 outperformed the STI by 17.64 per cent (1.87 per cent vs. -15.77 per cent).

    Despite the year starting out somewhat jittery, there was no lack of higher risk issuers, Ms Ngim said.

    “Looking back at these issues, 2015 is categorised by several buckets, namely the real estate developers and Reits who are listed on the SGX, shipping and the offshore support vessels, and closing off the year with a few global financial issuers,” she said.

    Still, some have found 2015 a challenging year for the SGD bond market.

    “We believe credit quality of issuers, on average, declined, with particularly significant weakness seen in commodity linked companies and in the offshore marine sector, which is a sizeable part of the SGD bond market,” said Neel Gopalakrishnan, Credit Suisse, director, emerging markets bond analyst, private banking Asia Pacific.

    “Secondary market liquidity was another issue with no meaningful bids available especially for higher yielding bonds, making it almost impossible for bondholders to exit their positions if they were uncomfortable with the underlying issuer,” he said.

    Lees ook:

  • Jewellers scale down to adapt as Hong Kong loses its tourist lustre

    Jewellers scale down to adapt as Hong Kong loses its tourist lustre

    After a decade of aggressive store expansion, Hong Kong’s jewellery retailers have been hardest hit by the recent downturn in tourism, with half their revenue coming from mainland shoppers.

    Jewellers have now been forced to a adopt variety of strategies to tackle the tougher market, ranging from trying to lure local customers, cutting store sizes and expanding business overseas.

    TSL, one of Hong Kong’s largest jewellery chains, is scaling back its presence in tourist districts while setting up more small shops in local malls.

    Estella Ng Yi-kum, deputy chairman and chief strategy officer at TSL, said the rent for one store in a prime area could pay for at least two stores of the same size in a residential area.

    “Moving into residential areas enables us to provide better customer service,” said Ng, adding that growth in local stores is “much more stable”.

    After the closure of its flagship Causeway Bay store earlier this year, TSL has opened three smaller stores in Temple Mall North in Wong Tai Sin, Plaza Hollywood at Diamond Hill and Olympian City in Kowloon.

    Luk Fook, the city’s second largest jeweller, is maintaining its presence in prime retail areas, in the hope that the mainland tourists will return, while cutting the size of some stores or relocating them to secondary locations.

    Earlier this year, Luk Fook closed a store on Nathan Road, which had cost HK$2 million a month to rent. Meanwhile it opened a smaller store on the same street with the rent as low as HK$400,000.

    “The turnovers were almost the same,” said Luk Fook chairman and chief executive William Wong Wai-sheung, adding the smaller store was enough to cater for the shrinking number of mainland tourists.

    Following the logic that mainlanders have to spend their money somewhere, Chow Tai Fook, the city’s largest jeweller, has moved into both the mainland and South Korea, another emerging tourist mecca.

    It recently opened a new store in Qianhai free-trade zone in Shenzhen, offering competitive prices just slightly higher than Hong Kong. The jeweller’s mainland business contributed 56 per cent of its total revenue in the six months to September 30 this year, according to company figures.

    International jewellery brands seem to be adopting the opposite strategy, switching their existing stores to prime locations, according to a retail leasing expert.

    Joe Lin, executive director of retail services at leasing firm CBRE, said many international brands had rented stores with either better quality in terms of customer traffic and visibility, or lower rents in Causeway Bay.

    “This is a great timing” said Lin, adding that more prime store locations had become available amid the retail downturn.

    This article appeared in the South China Morning Post print edition as Jewellers forced to adapt as city loses its tourist lustre

  • DJI Opens Flagship Retail Store in Shenzhen

    DJI Opens Flagship Retail Store in Shenzhen

    DJI, the world leader in unmanned aerial vehicle technology opened its first flagship store today at OCT Harbour in Shenzhen. The 800-square-meter store will feature a full range of DJI’s consumer products and aims to let consumers see, touch and learn firsthand about the company’s innovative and creative platforms.

    “The DJI flagship experience is an important touchpoint to connect people with our cutting-edge technology and get a sneak peek into the future,” said Frank Wang, DJI Founder and CEO. “Whether you are curious to learn how to fly or a professional looking for the latest aerial imaging technology to create your next big idea, the flagship store will provide you with the opportunity to really experience the DJI brand up close and in person. More importantly, it will allow us to engage our customers in a deeper and more meaningful way.”

    On display and for sale will be DJI’s Phantom 3 series, the Inspire 1 and Spreading Wings series, Matrice 100, Guidance, the Ronin handheld three-axis camera gimbal line, as well as the company’s latest integrated stabilized 4K handheld camera, the Osmo.

    The flagship’s interior architecture is based on the concept of yuan, the Chinese word for “circular.” It is symbolic of DJI’s drone propellers, which form a circular shape when in motion. This concept can be seen in various places around the store, including the “SkyPixel Around the World” interactive installation, which is featured on a cylinder-shaped map in the shop’s center. The flagship store also features a theater, flight area, lounge area and repair counter.

    The OCT Harbour store features a stunning waterfront view and is surrounded by a vibrant culture of tourism, ecology and commerce.

    Highlights of the flagship store include:

    The DJI flagship store is located at the Shenzhen Tourist Information Center, OCT Harbour, East No.8, Baishi Road, Nanshan District, Shenzhen, China. Openings hours are Sun-Thu 10:00 – 22:00 and Fri-Sat 10:00 – 22:30.

    Lees ook: