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The Changi Airport Group (CAG) reports that passenger traffic on Chinese and Korean routes proved to be ‘particularly strong’, with plus-7% in both instances.
CAG also described traffic numbers more generally as ‘relatively steady’, while pointing out that that this comparison with the same period least year obviously factored in Singapore’s Golden Jubilee celebration and its many activities. This included a four-day extended weekend with a registered traffic increase in August 2015 of +6.6%.
Meanwhile, CAG reports that August was still the second busiest month for Changi Airport so far this year in second place behind July’s passenger total of 5.18m..
MORE REPRESENTATIVE INDICATOR?
Perhaps the more representative traffic figure for the airport, considering the single month August 2015 ‘distortion’ was the first eight month period this year, however. As such, Changi registered 6.5% more passenger movements, with growth underpinned by Southeast Asia (+8.9%) and Northeast Asia (+10.5%) traffic.
CAG added: “As at 1 September 2016, more than 100 airlines operate at Changi Airport, connecting Singapore to some 330 cities in about 80 countries and territories worldwide. With more than 6,800 weekly scheduled flights, an aircraft takes off or lands at Changi roughly once every 90 seconds.”
On the retail side, CAG is also still running its Shop and be a Millionaire promotion, offering passengers who spend S$50 ($37) at the airport – or with iShopChang.com a chance to win the S$1,000,000 ($734,000) grand prize. This continues to be the single most successful promotional event ever run by the Changi Airport Group.
South Korea’s department store sales rose for a third straight month in August thanks to widespread discounting ahead of a major public holiday this month, government data showed on Thursday.
Combined sales at department stores run by Hyundai Department Store, Lotte Shopping and Shinsegae Co rose 4.1 percent on-year, data from the Ministry of Trade, Industry and Energy said.
This followed a 7.0 percent jump in July.
Sales of all individual categories at department stores rose in August, with the exception of men’s clothing.
The same data showed August sales at discount stores fell 1.3 percent from a year ago after rising for two months previously. In August, sales rose 2.1 percent.
The decline was attributed to a 14.8 percent slump in sports-related goods as the unusually hot summer weather this year discouraged customers from seeking them out, the monthly report said.
Online open market sales growth at websites owned by eBay Korea Co Ltd and others slowed slightly to 22.4 percent in August from 31.2 percent in July.
Retail sales overall in August mainly saw demand for household electronics like air conditioners and gifts ahead of the Chuseok holiday season, the data said.
South Korea kicked off a nationwide shopping event on Thursday with a variety of promotions, cultural and entertainment events to draw more shoppers at home and abroad and revive the sluggish domestic consumption.
The massive shopping campaign called “Korea Sale Festa” runs until Oct. 9, involving major retailers, manufacturers and traditional markets, while cultural and entertainment programs for foreign travelers will be held throughout October.
The shopping festival is jointly hosted by the Ministry of Trade, Industry and Energy and the Ministry of Culture, Sports and Tourism to tie up the retail industry with tourism and cultural sectors to unleash pent-up demands in time with the major Chinese holiday season.
A total of 249 retailers, manufacturers and online malls provide discounts and promotions at 59,000 stores across the nation, offering much wider options compared with last year’s fall shopping season when “Korea Black Friday” and “Korea Grand Sale” were held between September and October.
This shopping season isn’t just limited to malls and online retailers. Consumers looking for a new vehicle, phone or television will find some attractive bargains at car dealerships and electronics stores as major companies join the shopping season. Among the big names are Samsung Electronics, LG Electronics, Hyundai Motor, AmorePacific and LG Household & Healthcare.
A sales manager at Samsung’s electronics store in Seoul explains discount deals on a refrigerator on Sept. 28, 2016, in this photo provided by the company.
Three car makers — Hyundai Motor, SsangYong Motor and Renault Samsung Motors — offer up to a 10 percent discount on cars during the period, while Samsung Electronics and LG Electronics give half priced deals on best-selling home appliance items. Consumers can get up to a 670,000 won discount (US$612) on Samsung’s Galaxy S6 Edge Plus smartphone.
Department stores give deep discounts on luxury goods, fashion items and cosmetics, knocking down price tags by up to 80 percent.
Among the top price for a giveaway event is a 700 million won apartment offered by Lotte Department Store, the retail unit of Lotte Group.
Online malls and social commerce sites, including Coupang and Ticket Monster, are also offering cyber deals during the period, with the government supporting part of their delivery fees to boost sales.
About 400 traditional markets nationwide will hold various events and unique festivals in October to catch the eyes of visitors and spur the local economy.
The event held ahead of the year-end holiday season is raising expectations among local retailers as it overlaps with a Chinese national holiday that runs from Oct. 1-7. It’s when deep-pocketed Chinese travelers hop on planes to go on a holiday shopping spree.
According to industry officials, about 250,000 Chinese tourists are expected to visit South Korea during the weeklong autumn holiday.
With so much money up for grabs, local retailers have prepared a bunch of promotional events and giveaways targeting Chinese patrons.
Myeongdong, the busiest shopping street in downtown Seoul, has transformed to embrace Chinese travelers, supplementing Chinese-speaking shop assistants and putting up Mandarin signs for the latest beauty products.
Duty free stores, which heavily rely on Chinese travelers, also offer promotional and entertainment events, teaming up with credit card companies.
Shinsegae Duty Free holds “K-beauty and fashion week” during the Chinese holiday at its Myeongdong branch to attract those who are interested in beauty know-how and encourage purchase of Korean beauty products.
Market watchers say the influx of Chinese tourists will give much-needed momentum to revitalize the tepid domestic consumption, which will in turn drive up shares related to consumption and leisure.
“While last year’s sales event was mostly about offering discount deals, Korea Sale Festa is more systematic with wider discounts and cultural events for foreign travelers,” Nam Ok-jin, a researcher at Samsung Securities, said. “Special offers given during (China’s) National Day is expected to maximize the effect.”
Hong Kong International Airport (HKIA) celebrates the upcoming National Day holiday with a series of shopping and dining promotions to provide travellers a superb spending experience.
From 30 September to 16 October 2016, HKIA will launch a limited time offer, giving out cash coupons valued up to HK$5,000 to encourage traveller spending at HKIA.
Google’s Jakarta office was raided by Indonesian authorities after they warned the company for refusing a tax audit.
Officers visited Google’s office in central Jakarta “many times” in the past two weeks to collect data and repeatedly sought meetings with senior company officials, Muhammad Haniv, the head of special taxpayers at the Finance Ministry, said in a phone interview Thursday. Google has “paid all applicable taxes in Indonesia,” Taj Meadows, a spokesman, said by e-mail, adding the company is cooperating with the government.
“Everyone must comply, whoever they may be,” Haniv said. “If you refuse to be audited, then we will keep chasing you.” The government had earlier written to the company warning it for refusing a tax audit, which can result in criminal punishment, he said.
President Joko Widodo’s government is following in the footsteps of European authorities in pushing Google to pay more taxes as it steps up efforts to earn more revenue from internet companies. He’s under pressure to do so as this year’s state revenue is set to suffer an estimated 218 trillion rupiah ($17 billion) shortfall, while earnings from a tax amnesty program are set to miss his target.
Indonesia May Block Websites of Tech Companies Avoiding Tax
Indonesia has been asking internet companies to set up permanent local entities for tax purposes since as early as April. It’s also promising lower rates compared to the 30 percent corporate income tax and 25 percent value-added tax that would otherwise apply to Google’s sales of advertisement to local companies, according to Haniv.
Several Indonesians will be among the master craftsmen from selected ASEAN countries to participate in Manilas premier design and lifestyle event in Pasay City, the Philippines, from October 20 to 22, 2016.
The ASEAN Master Craft Design Festival, titled Manila FAME, which is being held at the World Trade Center and the Philippine Trade Training Center, will feature an exhibition called ASEAN Crafts to the World that will unveil the first collection of crafts developed through the project “Improving the Current Status of ASEAN Mastercraft Designers”, Alma Argayoso, the Philippine Embassys Trade Representative to Indonesia, said here recently.
Another highlight of the festival is an exhibition that will feature the works of the first group of ASEAN Master Craftsmen Lim Masulin from Indonesia, Roselyn Long Lah from Malaysia, Al Valenciano from the Philippines, Tuong Phi Duc from Vietnam and Rush Pleansuk from Thailand.
Lim Masulin, the featured artist from Indonesia is an entrepreneur, inventor and avid connector of the creative industry. He is best known as managing partner of Poiema Creative Group with brands like BYO Living, Chamero Couture and others.
Indonesias craftsmanship will be highlighted in this years Manila FAME as it will feature not only Lim Masulin but also Indonesian architect Cosmas Gozali, who will curate the ASEAN Master Craftsmen exhibition.
Fourteen Indonesian companies are also set to participate in the expo with the support of the Ministry of Small and Medium Enterprises (SMESCO), Argayoso added.
The project is organized by the ASEAN Handicraft Promotion and Development Association (AHPADA) and funded by the ASEAN – Republic of Korea Future Oriented Cooperation Program.
“The project aims to strengthen and enhance the use of design in reinforcing cultural identity in design development, merchandising, packaging, and marketing of ASEAN products by supporting and sustaining the Master Craftsmen in the region,” according to Argayoso.
The group will showcase home furnishings, gifts and housewares, garden accessories, and fashion merchandise.
Meanwhile, the Master Craftsmen from the second set of ASEAN countries – Brunei, Cambodia, Laos PDR, Myanmar, and Singapore will observe the exhibition and prepare for the projects next phase which will then feature their collection of crafts.
Renowned retailer of traditional Indonesian products, Sarinah will celebrate National Batik Day on Sunday, 2nd October 2016 which will commence from 6:30 A.M. – 10 A.M. at its Thamrin department store location. As a leading state-owned enterprise with immense pride in its local heritage, Sarinah has also partnered with the Indonesian Batik Foundation as well as the Indonesian Scout Movement. Furthermore, Sarinah is also working alongside the Ministry of Law and Human Rights and will thus makes available a bazaar showcasing a range of locally-made products.
During the “Batikmu, Batikku, Batik Kita Beda, Tapi Kita Indonesia” (Your Batik, My Batik, Our Batik is Different, But We are Indonesia) event, Sarinah’s Board of Directors will be joined by 1,000 members from the Indonesian Scout Movement for a wall signing ceremony which reiterates both parties’ dedication to preserving batik as an ancient Indonesian artform. In keeping with its role as a modern retailer, Sarinah will additionally host a fashion show featuring budding Batik fashion designers from Indonesia. This opportunity will enable guests and visitors to gain better understanding of the wide array of batik clothing styles and its position in the country’s increasingly trend-savvy society. To further provide an all encompassing shopping experience, Sarinah is set to further provide live entertainment for visitors.
Sarinah’s participation in celebrating National Batik Day is an effort that demonstrates the company’s unsurpassed commitment to maintain traditional crafts and heritage as part of its business operations. As such, Sarinah exemplifies its standing as highly-regarded retail of modern and traditional products as well as its role as the Home of Indonesian Heritage.
In support of local handcraft ateliers under the Design for Exports Program, the Center for International Trade Expositions and Missions (CITEM) has recently enjoined 15 local manufacturers in a product development program.
The program focuses on new generation weaves, basketwork, and related wares.
These product collections will be presented during the Manila FAME: The Design and Lifestyle Event on October from 20 to 22 at the World Trade Center, Pasay City, the Philippines embassy said in a statement, here Saturday.
“The appeal of Philippines crafts lies in our raw materials and the unparalleled skill of our artisans. Through the DTI-CITEM efforts, we can further enhance this advantage and capitalize on it to help maintain – or even raise our position in the global handicrafts export industry,” CITEM Executive Director Rosvi C. Gaetos said.
In recent years, when the global demand for basketwork has been steadily increasing, and eco-friendly designs are also gaining popularity among international buyers as these are considered sustainable, the Philippines remains the 4th largest exporter of basketwork and other related wares in the world.
CITEM will provide the 15 companies full design and product development assistance to maximize their business opportunities in the global houseware industry through material and product development, market intelligence, and buyer matching. CITEM envisions the local manufacturers will enter niche markets as the current target market in weaves and related crafts is already dense.
“We just cannot continue making only products. We need to create products full of soul, and that are unique, meaningful, and useful,” ED Gaetos was quoted as saying in the statement.
The 15 handcraft ateliers currently undergoing product development using locally-sourced natural materials are from craft communities of Bicol, Pampanga, Cavite, Negros, Davao, Cebu, and Metro Manila. Companies that are making use of Philippine fibers (Abaca, Banana, Buntal, Cotton, Pineapple, Raffia), leaves (i.e. Pandan and Water Hyacinth), reeds, vines, bamboo, rattan, and wicker are Calfurn, Catalina Embroideries, Inc., Larone Crafts, Inc., Hacienda Crafts Company, Inc., Maria Vinecraft, Inc., Obra Cebuana, Inc., Shelmed Cottage Treasures, That One Piece Enterprise, and Tagum Agricultural Development Corporation (TADECO).
The companies that make use of wood and metal are Basket and Weaves Handicrafts Mftg., Chanalli and Native Crafts and Arts Industries Inc., and Masa Ecological Development, Inc. (MASAECO) makes use of paper, pi�a fiber, and mulberry bark, while Asia Ceramics Corporation and Kilus Foundation are making products made of ceramics and synthetic materials.
As part of the program, CITEM organized a presentation on the market and product directions consistent with global design and trends in basketry to a group of Manila FAME exhibitors, designers, and students. Attendees were introduced to the lifestyle and color forecast for 2017 and beyond, that largely embarks on elements of, light, natural, earthly colors and turquoise accents.
The food industry has done more than relieving hunger as it has also made huge impact in the overall economic growth of Singapore, contributing a bulk to the city-state’s GDP.
According to the Food Industry Asia report by the Oxford Economics, F&B industry contributes an estimated $14.4 billion to GDP and employs nearly 300,000 people.
The study revealed that overall impact of the food industry is dominated by food distribution.
“The wholesale and retail of food, along with activities linked to Singapore’s 6,700 food service locations (which include restaurants, coffee shops and street hawker stands) account for two-thirds of the food industry’s GDP contribution, and four-fifths of the employment it supports,” the study said.
Meanwhile, the food manufacturing industry has also made a huge impact on Singapore’s GDP, with its direct support for 38,800 jobs.
In 2014, the food manufacturing industry earned S$9.8 billion from sales in Singapore.
More so, food manufacturers’ supply chain spending within Singapore supported $1.6 billion of domestic procurement, $610 million of GDP, 6,100 jobs, $31 million in tax revenues, and S$37 million in Central Provident Fund contributions in the same year.
“Based on the report’s findings, the food manufacturing industry is equivalent in size to Singapore’s aerospace industry, and larger than industries such as speciality chemicals, petrochemicals, medical technology and land transport engineering,” the study noted.
Siam Discovery The Exploratorium, the biggest arena of lifestyle experiments which allows any visitor to experiment, create and cultivate, is now mounting the biggest trends update campaign of the year: “Best of The Season, You Can Grab and Go”. It gathers the latest trends that are becoming popular in the world, the ones for every kind of lifestyles, during the 4 months from now on (September to December 2016), while also allowing everyone to experience. The grand opening of the campaign launch has recently taken place on 4th Floor, Siam Discover The Exploratorium.
The launch event was crowded with a number of distinguished guests who have taste in various lifestyles including design, fashion, travel, adventure to name but a few. The gathering guest list included Ornchuma Durongdej, Hathairat Fingerhooth, Tada Varich, Pichamon and Pimpisa Chamanant, Monlissa Leenuttapong, ML Samornlada Chompol, Thitipong Lororasert etc. All of them were welcome by Siam Discovery’s executives, Chanisa Kaewreun and Kriangkrai Rulkhachantrkul. All the guests got updated on news of hot lifestyles: art and design from Phantipa Thanchookiet of Likay Bindery, travel from Kanitkul Natrbutr, and fashion trends from Nichakul Kitiyanubhongse of Harper’s Bazaar Magazine. A special fashion show was provided, presenting a wide range of lifestyle products.
Ms. Chanisa Kaewreun, Executive of Siam Piwat Company Limited, said, “Best of The Season, You Can Grab and Go campaign has been initiated by Siam Discovery, which acts as a shopping market that sells every kind of design items, or a design supermarket. In fact, it is acknowledged among shoppers that Siam Discovery will be a very first choice when thinking about where to shop for any items with style and packed with creativity.
“That’s why Siam Discovery is gathering top curators who have expertise in a variety of lifestyles and asks them to analyze trends and global movements in terms of design. Then, they will choose what items to become the latest trends in the world. Moreover, we are holding a number of workshops that feature different subjects: Art Design and Decoration coming with “Design Experiment Market” theme from 3 to 16 October 2016, Travel and Play with “The Wanderlust Experiment Market” theme from 17 to 31 October 2016, Fashion and Accessory representing “The Fashion Forward Experiment Market” theme from 1 to 8 November 2016. And closing with Sport and Adventure which represents “Active Experiment Market” theme from 9 to 20 November 2016. Siam Discovery will present a range of products according to these themes, available upon timelines. As well as workshops that are based on each of the themes for the four months, from now to the year-end 2016.”
Nichakul Kitiyanubhongse said, “The hottest trend in fashion of the moment is a modern vintage style, which has lasted for ages. At the same time, a vintage style is growing in popularity. When wearing vintage attire, it’s no need to wear heavy make-up or dramatic hairstyle. It really appears an amazing trend.”
Phantipa Thanchookiet said, “We can see two hot key trends in design and decoration in 2016 and 2017. One is design work friendly to the environment. This year, the eco trend becomes popular again. People are interested in things for their daily use, the ones with creativity and more eco-friendliness. Especially for furniture and home decorations. Let’s say which are becoming popular will have an eco-concept. The other is handicraft, which more plays a prominent role in creation in terms of design. Or even daily use products such as notebooks that can be decorated to tell the identity of an owner.”
Kanitkul Natrbutr said, “I enjoy traveling and love to have adventures in new places to explore new experiences. And for each of my trips, I always blend in, my personality, with it. This is shown through my traveling stuff, from backpack and shoulder bag to water bottle and shoes or even outfits. After I had visited throughout the country and explored some neighboring countries, I feel like riding a bicycle wherever I go. That’s the beginning of my traveling together with my bicycle. This way makes me expand my horizons and have a close relationship with the nature. It gives me a unique travel experience, different from other kinds of travel. With a bicycle, I can find any places that I cannot by car. Or to enjoy being in the sunshine and the breeze, the surrounding nature that I can see with my eyes and feel with my heart.”
Come play with us. Enjoy “Best of The Season, You Can Grab and Go” campaign which offers a variety of themes suitable for every lifestyle. Available from now to year-end 2016 at Siam Discovery The Exploratorium.
Indonesia won two prestigious awards at the largest tourism market and exhibition, entitled “the Gateway Show”, in Johannesburg South Africa, which ran from September 23-25, 2016.
Deputy Assistant of European, Middle East, America and Africa Market Development at the Ministry of Tourism, Nia Niscaya, said, here on Friday, that the two awards included the Best International Destination, building a booth modelled after a Phinisi traditional ship.
The other award received by Indonesia was The Highest Award; the Spirit of Gateway 2016.
“This award is expected to open the eyes of the international public, especially in Africa, about Indonesias tourism potentials,” Nia said.
Also, Gateway Show organizers praised the Indonesian promotions team for its work at the exhibition, in which they presented a variety of attractions and delicious culinary treats.
At the Gateway Show, the Wonderful Indonesia booth showcased Indonesia’s unique foods and coffee, offering samples to visitors.
The sellers who participated in the Wonderful Indonesia Team were Nusa Dua Beach Hotel Bali, Holiday Inn Bandung, Maya Resort Bali, Bhara Tours Bandung, Singapore Airlines and a local travel agency, Afronesia Tours dan the Facets.
The Gateway Show is an international tourism market and fair, participated in by industries, media, and visited by South Africans.
After purchasing two Strategic Sealift Vessel (SSV) warships from PT PAL Indonesia, the Philippine government is considering putting in another order for a medical support vessel from Indonesia’s state-owned shipbuilder.
During the 2016 Asian Defense & Security (ADAS) exhibition in Manila, Philippine Secretary of National Defense Delfin Lorenzana held a discussion with Brig. Gen. Jan Pieter Ate from the Indonesian ADAS delegation on Indonesian defense products.
“The Secretary of National Defense and the Philippines Navy chief of staff are impressed with the medical support vessel that will be fit for humanitarian assistance and disaster relief (HADR) operations,” Jan Pieter, the Defense Ministry’s director of the defense industry and technology.
According to Jan Pieter, the Philippine secretary of defense had shown a deep interest in the 123-meter vessel and spent a lot of time looking at the vessel’s mock-up.
It was reported that the Philippines had also put in an order for the CN235-200 and N212i aircraft from state-owned airplane maker PT Dirgantara Indonesia in 2015.
The three-day ADAS 2016 exhibition ends on Friday.
According to its official website, ADAS 2016 attracts exhibitors from around the world and works closely with the Armed Forces of the Philippines (AFP), the Office of Civil Defense (OCD) and the Philippine Coast Guard (PCG).
TheDirectorGeneral of Customs and Excise for the Finance Ministry, Heru Pambudi said the number of cigarette factories in Indonesia continues to fall significantly over the past years. There were 4,669 cigarette factories in 2007, which had fell to 754 by 2016
According to Heru, the better tobacco control measures taken by the Directorate General of Customs and Excise has resulted in the decline of cigarette factories. “Both through administrative and physical control [measures],” he said in a written statement Wednesday, September 28, 2016.
Heru said the Directorate General of Customs and Excise has been taking rigorous approach to issuing permit to manufacture tobacco products. In addition, the Directorate General had shut down the non-compliance factories. “Non-compliant factories will be closed,” he said, adding that the measure will be continued.
The measure, according to Heru, aims to improve compliance of cigarette factories, as well as to supress illicit tobacco trade, which is one of the directorate’s remit which include monitoring tobacco distribution.
Indonesian Cigarette Manufacturers Association (GAPPRI) chairman Ismanu said strict tobacco control policies by the Directorate General of Customs and Excise have been adequate, “GAPPRI fully supports the measures taken by the government in developing tobacco industry,” he said.
August shopping data from tax refund specialist, Global Blue, indicates a downward trend in tax-free in-store sales of -13% (year-on-year) – the worst decline since the start of the year and a big fall compared with July’s 0% change.
There are stark differences in August tax-free sales, largely because of the beneficial ‘MERS effect’ in Korea.
While transactions rose significantly in August by +25%, the decline of average spend at -30% clearly shows that individual travellers are spending less and this is probably due to a combination of factors ranging from China’s customs clampdown, a different passenger profile, and currency influences.
Global Blue says: “The rise of less affluent middle class Chinese travellers continues to bring down the average spend of tax-free shopping globally, with a sizeable impact in Asia. Across the region more ‘value seekers’ from second-tier and third-tier cities are growing their transactions, but with less affluent spending patterns.”
Duty free and travel retailers can take comfort from the rising number of travellers in Asia, which correlates with higher numbers of transactions in South Korea, Japan and Singapore. But, says Global Blue, the overall sales performance in the region is significantly limited by the headwinds of a stronger yen in Japan and Chinese spending in the region increasingly being driven by value-seeking shoppers who spend less.
COMMON THEME IS LOWER SPEND POTENTIAL
The travel boost is not compensating for the spending fall in key duty free and travel retail locations such as Singapore and Japan – while Hong Kong (downtown) does not even have the benefit of rising traveller numbers.
All Global Blue’s Asia tax-free shopping destinations rely on increased arrivals and traffic, yet the common theme is lower spend potential. With -33% sales in August, Japan has been affected by the strong currency, which has negatively impacted the number of transactions.
Transactions are strongly up but average spending is even more strongly down.
Global Blue estimates that 23% of Japan’s negative sales performance this month is driven by the softer yen and the other 10% is due to increased numbers of less affluent Chinese shoppers arriving in Japan (+20 to +30% more in the first half of the year at Narita airport) from second-tier and third-tier cities.
South Korea’s sales performance of +44% this month (versus an impressive triple-digit growth of +215% for July) is on the back of highly beneficial comparisons to last year when the MERS virus took a big toll on traffic.
ASIA YEAR-TO-DATE DOWN -21%
Transaction numbers are significantly up across all globe shopper nationalities in Asia, except for Hong Kong (-10%), reflecting the increase in air arrivals across Japan and South Korea. Taiwanese globe shoppers (+43%) showed the highest transactions growth in the region in August, followed by Chinese (+28%), with Thais and Indonesians up too. However, the decline in average spend per transaction is a long-term trend.
Global Blue estimates that the new Chinese value seekers are having a negative impact of between -6% and -10% across Asia as their demand for regional travel increases, driven by the Chinese government’s strategy of strengthening the economy by localising discretionary spending.
Year to date tax-free sales performance across the region is flat and average sales are down -21%. A less favourable economic situation in mainland China is also not helping travel spending: for example Japan’s current picture YTD is a +26% increase in transactions and a decline of -25% in average sales.
Việt Nam’s growing retail market has attracted the attention of foreign retailers. A series of famous retailers from Japan, Thailand, South Korea and France have flocked to the country, hoping to penetrate the market, a recent JLL Việt Nam report said.
As penetration of foreign retailers into the country has increased, fierce competition in the retail space has become more intense. This will put the retail market to the test and only retailers with the right positioning to meet market demand will gain market share.
In 2014, the Berli Jucker acquisition of Metro Cash & Carry Việt Nam for an enterprise value of 655 million euro (US$700 million) – the largest-ever Merger & Acquisition deal in Việt Nam at that point – signalled entry of the Thailand retailer into the country.
Later, another Thailand giant, Central Group, acquired Nguyễn Kim Trading – Việt Nam’s top electronics retailer, and BigC Việt Nam- the second largest supermarket chain in terms of store number in the nation.
In October 2015, Emart – the leading South Korean retailer – officially marked its entrance with a US$60 million shopping centre in north HCM City. Also from South Korea, Lotte Mart is quite successful with 11 supermarkets, a number expected to increase to 60 stores by 2020.
Most Japanese investors consider the success of Aeon in Việt Nam a praiseworthy case in overseas investment. Aeon has four malls and expects to reach 20 malls before 2020. Also from Japan, Takashimaya arrived in July 2016 as anchor tenant of downtown HCM City’s Saigon Centre retail mall.
Adding to three Simply Mart stores in HCM City, AuchanSuper, a major retail brand from France, is planning to open another 17 supermarkets by end-2017 in the city and 20 stores by 2020 in northern Việt Nam.
Thanks to increasing disposable incomes, big fashion brands such as Gap, Mango and Topshop have become the top choice of many young Vietnamese. In September 2015, Zara opened its first flagship store in HCM City. H&M will reportedly enter Việt Nam early next year.
With 90 million people, Việt Nam has attracted retailers with its relatively young population – 70 per cent are aged between 15 and 64 years – who promise to be a key driver of robust market growth. Việt Nam’s urban population is expected to grow 2.6 per cent annually from 2015 to 2020, the highest rate among regional peers.
“Increasing disposable incomes, rapid urbanisation and rising living standards make Việt Nam one of the most dynamic emerging economies in South East Asia,” says Bùi Trang, Commercial Leasing Director at JLL Việt Nam.
According to the Boston Consulting Group, Việt Nam has the fastest growing middle and affluent class (MAC) in the region, which will double in size between 2012 and 2020, from 12 million to 33 million. MAC consumers, whose income is VNĐ15 million (US$700) or more a month, will be a key group of potential customers for retailers.
Việt Nam e-commerce is set for strong growth thanks to its growing consumer and online population. According to the Nielsen’s report, nine out of ten consumers in Việt Nam (91 per cent) own smartphones, compared to 82 per cent in 2014, and the rapid up-take of connected devices, especially smartphones and tablets are instrumental in media consumption shifting.
“Significantly increasing the amount of the credit card holders has also had an impact on the change in consuming behaviour. It is observed that people now are more willing to spend as they can afford more with credit and it tends to make shoppers less canny,” she said.
Additionally, increasing international arrivals and continuously improving infrastructure are also factors that make Việt Nam an alluring market for retailers.
