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Category: General

Retail News Asia is committed to providing both local and global retailers with the latest General Retail news throughout the Asian market. This on a daily base.

  • Tourists invisible to Hong Kong retailers

    Tourists invisible to Hong Kong retailers

    While more tourists have been crossing the border for the ongoing Golden Week, there has not been much gold in it for Hong Kong retailers.

    Visitor numbers jumped more than 14.1 per cent on Saturday, the start of the holiday, according to the Hong Kong Immigration Department (IMMD).

    This has mainly been attributed to visitors from the neighbouring Guangdong province, with cheaper hotel rooms and convenient travel making Hong Kong an accessible choice, says the South China Morning Post.

    Statistics show that more than 200,000 visitors arrived on the first day of the national holiday, a jump from last year’s 177,000. But despite the rise, the visitors have been spending less – hardly good news for Hong Kong retailers, who have already been feeling the pinch. With Hong Kong no longer riding the wave as the first port of call for Chinese tourists, retailers were warned last month that they need to discount or die.

    For the new influx of visitors, their travel and buying patterns differ from previous mainland tourists as they are familiar with Hong Kong and tend to visit relatives, go sightseeing and buy from stores in residential areas. Family visitors and Shenzhen residents spiked more than 40 per cent on the first day of the holiday, while those crossing the border on the “L visa” dropped 5 per cent.

    Hong Kong retailers are already branding this the worst-ever Golden Week, with many reporting lower numbers of mainland tourists, fewer tour buses and less spending.

    However, Travel Industry Council executive director Joseph Tung Yao-chung says the divergence between tourist numbers and luxury sales is a “good sign”.

    “The city’s tourism sector is normalising,” he says, with high-quality individual tourists compensating for the loss in mainland tour groups, which have long been criticised for forcing visitors to buy high-priced products at designated shops.

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  • AirAsia Indonesia to end Bali-Kota Kinabalu services

    AirAsia Indonesia to end Bali-Kota Kinabalu services

    AirAsia Indonesia will end its thrice weekly Bali-Kota Kinabalu services, effective June 23.

    In a statement, AirAsia Bhd chief executive officer, Aireen Omar, said this was due to the stagnant market growth and insufficient revenues to offset the costs.

    “The operational costs have also increased quite substantially for AirAsia’s operations at Terminal 1 Kota Kinabalu International Airport,” she said.

    Following the termination of the services, the low-cost carrier said it would offer three options for the affected customers.

    The passengers could reschedule their journey with the latest flight on June 21, 2016, depending the availability of seats, it said.

    “They could also opt for creditshells which can be used as payment towards any AirAsia tickets or products and they are valid for six months or 180 days from the date of issuance,” it said.

    AirAsia said it would also offer a full refund of the amount equivalent to customer’s booking.

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  • New Zealand Eyes More Investment in Indonesia

    New Zealand Eyes More Investment in Indonesia

    Franky Sibarani, Chairman of the Indonesia Investment Coordinating Board (BKPM) met with Indonesian Ambassador to New Zealand Joze Tavares in Auckland last Wednesday, May 4, 2016. The meeting was held to coordinate New Zealand’s plan to increase its investment in Indonesia.

    “To attract more investment, the BKPM will [cooperate] with the Indonesian honorary consul in Auckland, which is also the President of the ASEAN Business Consul,” Franky said after the meeting.

    Franky added that the BKPM will continue to coordinate with Indonesian representative in New Zealand to follow up potential investments.

    Jose Tavarez welcomed the Indonesian government initiative to market possible investments in New Zealand.

    “New Zealand has large potential related to the development of renewable energy, specifically geothermal [energy],” Tavares said.

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  • Bali’s exports to Europe decline

    Bali’s exports to Europe decline

    Balis exports of various handicraft and small industrial products to European countries declined in the first three moths this year because the economic growth in Europe has not yet recovered well.

    “Importers from Europe still demanded for various handicraft, garments and furniture products but the volume was not as big as that last year,” exporter Made Parwata said here on Saturday.

    He said that importers from Spain still maintained stable demand and delivery was still smooth.

    Other European importers were those from Italy, France and Germany. These countries are included as the big ten importers of Balis products.

    However, the Central Bureau of Statistics (BPS) data showed that imports of these products by France, Spain, Italy and Germany declined from US$19 million in the January-March 2015 to US$17 million in the same period this year.

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  • Indonesia to take part in Beijing Tourism Expo

    Indonesia to take part in Beijing Tourism Expo

    The Indonesian government will participate in the Beijing International Tourism Expo (BITE) to be held on May 20-22 to realize its target of attracting two million Chinese tourists this year.

    The Indonesian Tourism Ministry would be one of the main sponsors of the expo, Deputy Tourism Minister in charge of International Tourism Marketing Development I Gede Pitana stated here, Friday.

    The ministry was optimistic that Indonesia would be able to attract Chinese tourists during the long holiday from October 1 to 7 this year, he noted.

    China has become Indonesias main tourist contributor, according to Tourism Minister Arief Yahya.

    Last year, some 987 participants from 81 countries took part in BITE, which was visited by some 120 thousand people.

    BITE has been organized annually for the past 13 years, and Indonesia has taken part in the expo twice.

    Other countries expected to participate in BITE this year are the United States, the Maldives, Seychelles, Thailand, Sri Lanka, Japan, Taiwan, South Korea, Malaysia, India, and some European countries, among others.

    Indonesia has set a target of attracting 20 million foreign tourists by 2019, from 9.7 million last year.

    This year, Indonesia hopes to lure some 12 million foreign tourists.

  • Apkasi to prepare online app system to ease investors

    Apkasi to prepare online app system to ease investors

    The All Indonesia District Administrations Association (Apkasi) will set up an online application system to make it easier for those seeking to invest in the countrys regions, its chairman Mardani H Maming said here on Saturday.

    “The online application system will help investors wishing to know about potential of any region,” he said, adding the system is planned to be launched in 2017.

    Mardani, who is also the district head of Tanah Bumbu, South Kalimantan province, stated that he hoped the new system would make importers able to buy commodities directly from producers.

    Also, the same system could be used as a mechanism for distributing subsidy to regions in need, he explained.

    Citing an example, he said a region that did not produce rice could obtain the produce from other regions to ensure it remained well stocked.

    Apkasi organized Investment and Trade International Summit 2016 at JIExpo Kemayoran in Central Jakarta from May 5-7 in an effort to attract investment.

    Mardani informed that a number of investment and trade related transactions were made during the event, including in plantation, animal husbandry, infrastructure and tourism sectors.

    “Memorandums of understanding have also been signed with foreign parties, including those from Japan and China,” he said.

    In the speech marking the events conclusion on Saturday, President Joko Widodo urged the regional governments in the country to develop their respective regions potential.

    He called on them to focus on a certain area for efficiency and to also ease control.

    He cited the example of a region that only provided golfing facilities and grew as a result.

    “It is not impossible for regions here to develop only sugar or fish. If they do so, these will become known as sugar or fish regions,” he said.

    He also asked the regional governments to speed up the licensing process.

    “If BKPM (capital investment coordinating board) could finish the process of giving eight licenses within an hour, the regional governments must also be able to do the same,” he stated.

    The government is continuing to make efforts to improve ease of doing business in the country, he said.

    “Several years ago, we were ranked 120th in ease of doing business index. Last year, we were at 109th out of 189 countries, far below the list topper Singapore, or Malaysia at 18th and Thailand at 49th,” he elaborated.

    He said he has ordered the Coordinating Minister for Economic Affairs to ensure that the country achieves the 40th rank this year, he said.

    “Breakthroughs must be made to achieve it. This is our common task. It is not impossible to achieve it, but we need to work hard. We must not be at ranks lower than 100 or so forever,” he urged.

    The president again reminded that Indonesia has now entered a competitive era, and said, “If we are unable to change ourselves, we will be run over. We must win the competition if we wish to become a victorious nation.”

  • Hong Kong consumers favour saving over fun

    Hong Kong consumers favour saving over fun

    Hong Kong consumers lead the world for their saving and investment mindset, while savers outnumber fun-lovers overall in Asia Pacific.

    Market research company GFK has found that 54 per cent of online consumers in Hong Kong “disagree completely” or “disagree somewhat” with the notion of enjoying life today and worrying about savings and investments later.

    At the other end of the scale, China has the highest proportion of consumers of the APAC countries surveyed (38 per cent) who favour having fun now, followed by Australians at 32 per cent.

    GFK polled more than 27,000 internet users across 22 countries, including Australia, China, Hong Kong, Korea and Japan, to find how strongly they agree or disagree with the statement “I want to enjoy life today and will worry about savings and investments later”.

    Internationally, people in favour of saving slightly outnumber the “have fun now” respondents – but the numbers are very close. Hong Kong stands out as the only state where more than half of the online population puts up its hand for saving.

    Though 33 per cent of women internationally are happy to worry about financial security later, 40 per cent disagree. Men, however, are more evenly split with 36 per cent agreeing and 35 per cent disagreeing.

    Respondents in their 20s are the highest percentage of fun-lovers of any age group, with 41 per cent happy to worry about saving later. Teenagers (15 to 19 years old) and those in their 30s come next, almost equal at 37 and 36 per cent respectively. Of respondents in their 50s and older, 26 per cent also agree with living for today.

    Meanwhile, the numbers with a “save now” attitude increase fairly steadily with each age group, starting at 34 per cent for both teenagers and those in their 20s, and peaks at 43 per cent of those in their 50s, and 42 per cent of those older.

    “These findings give financial service brands a useful, top-level picture of the differences in attitude toward the concept of savings and investments across countries, age groups and genders,” says GFK APAC chief commercial officer Frans Janssen.

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  • Indonesia AirAsia to Go Public

    Indonesia AirAsia to Go Public

    Budget airliner PT Indonesia AirAsia—the subsidiary of Malaysian AirAsia Berhad—is preparing to hold an initial public offering on the Indonesia Stock Exchange in late 2017 or early 2018. Before going public, the airline will seek to improve its finances.

    “We are improving our financial performance. We cannot say yet what the improvements are,” president director Sunu Widyatmoko told yesterday.

    He did say that the IPO proceeds will be used to increase AirAsia’s number of fleet and flights.

    Based on the financial statements of AirAsia Berhad, which owns 49 percent stake in Indonesia AirAsia, the subsidiary posted negative performances last year with revenues dropping 37 percent to Rp5.02 trillion.

    The main reason for the income decline was a decrease in passengers’ volume by 22 percent.

    In December 2015, Indonesia AirAsia recorded a loss of Rp885.2 billion and a net loss of Rp2.33 trillion. It was an even bigger loss compared to 2014, when the company noted a loss of Rp635.8 billion and a net loss of Rp883.5 billion.

    The airliner also recorded a foreign exchange loss of Rp1.27 trillion last year, which prompted its Malaysian parent company to inject an additional capital of Rp2.05 trillion in quarter three, in the form of perpetual capital securities.

    Sunu said that another cause for last year’s major loss was the Flight QZ8501 disaster. The plane crashed while en route from Surabaya to Singapore, claiming the lives of 155 passengers and seven crew members.

    AirAsia Berhad CEO Tony Fernandes said the two main reasons why Indonesia AirAsia needs to become a listed company is to improve transparency and corporate management, and to allow Indonesian investors to own the airliner’s shares.

    Fernandes also said in Jakarta earlier this week that Indonesia AirAsia had gone through rough times last year, but the company now aims to leave that past behind and focus on business expansion.

    In mid-2015, Indonesia AirAsia is one of 13 airlines ordered by the Transportation Ministry to raise capital due to its negative equity. At that time, Indonesia AirAsia’s equity was minus Rp1.32 trillion, with liabilities amounting to Rp6.15 trillion and an assets value total of Rp4.83 trillion.

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  • Garuda Indonesia Urged to Strengthen Domestic Market

    Garuda Indonesia Urged to Strengthen Domestic Market

    Indonesian Tourism Minister Arief Yahya has told national carrier PT Garuda Indonesia to continue strengthening domestic market due to its huge potentials.

    “Our domestic market is very strong. Last year, there were 255 million visits by domestic tourists. This year, the target is 260 million visits. If that amount is multiplied by Rp. 1 million, it means Rp260 trillion circulated,” Arief said in Jakarta on Friday (29/4).

    Arief added that once the domestic market is strengthened, it would be easy to develop international market.

    In comparison with domestic market of neighboring countries, Aried added, Indonesia is much bigger. He cited Singapore, which does not have domestic market or domestic market in Malaysia that is not too big.

    The Minister added that that the Government is gearing up to meet the target of 20 million tourists visiting Indonesia in 2019.

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  • SIA to support Indonesia’s tourism campaign under new partnership

    SIA to support Indonesia’s tourism campaign under new partnership

    National carrier Singapore Airlines and Indonesia’s Ministry of Tourism on Thursday (Apr 28) announced a partnership to boost foreign tourist arrivals into Indonesia.

    Both parties signed a memorandum of understanding at the National Coordination Tourism Meeting in Jakarta on Thursday, and they will work to finalise details of the partnership in a memorandum of cooperation at a “later date”, the joint press release said.

    Under the three-year partnership, SIA will support the ministry’s tourism campaign “Wonderful Indonesia”, which aims to attract 20 million foreign tourist arrivals annually by 2019.

    Joint activities will include advertising and other campaigns to promote travel to Indonesia via Singapore from key source markets, which include China and India for the first year of collaboration, the press release said.

    SIA, together with its subsidiary SilkAir, serve 13 cities in Indonesia with more than 150 weekly flights, the airline said.

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  • Gieves & Hawkes exploring RFID route

    Gieves & Hawkes exploring RFID route

    The new Gieves & Hawkes store in The Mailbox, Birmingham is using RFID technology to help the retailer gain a clearer view of stock inventory and to aid the business’s loss prevention strategy.

    Further installations of the technology are being discussed with solutions provider Catalyst, but for now the menswear retailer is solely monitoring results in the West Midlands store, which opened last summer.

    Sam Thompson, regional IT manager for Gieves & Hawkes parent company Trinity Group, said: “The technology has been easy to deploy and the store appreciates the benefits it offers.

    “The data generated is useful in managing store stock levels.”

    Catalyst, which is owned by global supply chain organisation Li & Fung, operates a cloud-based data platform and is providing Hawes & Curtis with handheld readers for scanning products and overhead readers, which are invisible to the customer but offer the company’s staff item level intelligence. The tech range is showcased in the company’s London, New York and Hong Kong showrooms, allowing retailers to walk in and see the solutions in action in a mock-up store scenario.

    We visited the Catalyst London showroom in 2014 and witnessed how the readers can be combined with other technology such as smart changing room systems or digital screens, to boost the customer’s in-store experience.

    Catalyst works alongside Smartrac for the Gieves & Hawes project, with the latter’s UCode 7 Web RFID tags printed, encoded and applied to all garments delivered to the store. The tags are deactivated using Catalyst’s ePay readers at the till point, with the information fed straight into the retailer’s point of sale system, giving the business a real-time view of stock inventory.

    The RFID solution also provides an alternative to electronic article surveillance in the fight against theft.

     

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  • Hong Kong Gifts & Premium Fair Attract 64000+ Visitors

    Hong Kong Gifts & Premium Fair Attract 64000+ Visitors

    Organised by the Hong Kong Trade Development Council (HKTDC), the 31st Hong Kong Gifts & Premium Fair concluded today at the Hong Kong Convention and Exhibition Centre (HKCEC). The concurrent 11th Hong Kong International Printing & Packaging Fair (27-30 April) also came to a close at AsiaWorld-Expo. The twin fairs together attracted more than 64,000 buyers from 134 countries and regions. Around 50,000 buyers visited the Gifts Fair, while over 14,000 buyers attended the Printing & Packaging Fair. Markets such as the Chinese mainland, Malaysia, the Philippines, Italy and Indonesia saw growth.

    “In the face of a fluctuating global market, suppliers should promote their brands and products even more proactively, while distributors and retailers should seek out new competitive products,” said Benjamin Chau, HKTDC Deputy Executive Director. “Showcasing top-quality items and providing a diverse range of choices, the two fairs are the ideal platform for both promoting and sourcing products.”

    The HKTDC organised a total of 171 buying missions from 75 countries and regions for the two fairs, comprising more than 13,200 buyers. At the fairground, business matching services were also provided to foster business opportunities and partnership-building. Moreover, in view of the keen demand for small order sourcing, the hktdc.com Small Orders display at the Gifts Fair featured over 360 showcases offering more than 2,500 products available for orders of between five and 1,000 units. A total of 23,000 business connections were generated during the four-day fair.

    Mr Chau also noted that, during the Gifts Fair the HKTDC signed a memorandum of understanding (MoU) with Thailand, a key ASEAN country, to strengthen business promotion and cooperation between Hong Kong and Thailand. This includes offering a top-quality promotion platform for Thai products through the HKTDC’s fairs and online promotion services, covering sectors such as garments, fashion accessories, textiles, food and agricultural products.

    Cautiously optimistic on sales prospects; decorative gifts & figurines to lead market growth

    The HKTDC commissioned an independent onsite survey during the Gifts Fair, interviewing some 920 buyers and exhibitors about their views on market prospects and product trends. The survey found that the industry is cautiously optimistic about the gifts market this year. Close to half of the respondents expect overall sales to remain the same in the coming year with 20 per cent expecting sales to improve. Thirty-seven per cent of respondents expect production costs and sourcing costs to increase. More than 60 per cent of respondents, however, do not expect to raise FOB selling prices or retail prices, suggesting that they will not transfer increasing costs to customers. As for the market with the highest growth potential, most respondents pointed to the Chinese mainland, followed by Hong Kong and Korea.

    The survey also analysed product trends in the gifts and premium market. Most respondents said they expect decorative gifts and figurines to have the strongest growth potential this year, followed by tech gifts and advertising gifts and premium. As for products, the industry generally believes that consumers are increasingly focused on product practicality and quality, followed by their pricing and cosmetic design.

    Ideal platform for exploring business opportunities & promotion

    Tian Guofeng, Director, Exhibition Department, China International Center for Economic & Technical Exchanges, Ministry of Commerce, said this was the first time that the Ministry had organised a delegation to the Gifts Fair, comprising 10 companies from Yunnan Province. “As the Hong Kong fair is not only the world’s largest gifts and premium fair but also the most influential show of its kind, it will help Yunnan manufacturers develop overseas markets,” said Mr Tian. “Exhibitors from Yunnan Province are showcasing a wide variety of high-end products such as metal ware, silverware, wooden gifts, pottery, stone carvings and gunny handbags. Responses from buyers have been very encouraging.”

    Shosuke Fukushima, Director of Japan Pavilion, Business Guide-Sha, Inc., said that Japanese exhibitors achieved very good results at last year’s fair, so they returned this year with 17 companies joining the Japan Pavilion, the largest-ever such delegation. “Japanese exhibitors are here showcasing all kinds of trendy products such as cosmetics, garments, stationery, toys and video games. The Hong Kong fair is an international trade fair where Japanese exhibitors can talk to many buyers and learn more about the market needs. More importantly, Hong Kong is a key gateway for Japanese companies to look for distributors and retailers from all over the world. We’ll continue to organise the Japan Pavilion next year.”

    Hong Kong exhibitor Phoebe Wong, Director of Eco Concepts, said it was their fifth time to participate in the fair. The company produces various green products with PLA (polylactic acid). “Through business matching services provided by the HKTDC, we have met with more buyers from Europe, probably because our products can meet their strict requirements in terms of environmental protection. On the first day of the fair, we have already got an order worth US$9,000 from a Thai buyer,” said Ms Wong.

    Another Hong Kong exhibitor, Gianna Company Ltd., strives to inject new design elements into products. The company’s Managing Director Lawrence Tong said the market trend towards innovative designs is prevalent. “We received onsite orders worth over HK$2 million in total from long-time clients. We have also established contacts with many potential buyers from various countries at the fair,” said Mr Tong.

    Meanwhile, at the Printing & Packaging Fair, Hong Kong exhibitor Tommy Yu, Senior Manager of VersaTech Energy Innovation Limited, and Environmental Consultant of The Hong Kong Printers Association, noted cleaner production is the way forward amid growing environmental concerns. The Hong Kong Printers Association made good use of the Hong Kong International Printing & Packaging Fair to promote new technology for cleaner production. “Many large-sized printers have taken the task seriously and we want to encourage more SMEs to join the wave through the exhibition. In the first few hours of exhibition, about 50 visitors including printing-related companies from Hong Kong, the Chinese mainland, the Philippines and Taiwan approached us. They showed keen interest in how new technology in cleaner production can work for printers.”

    New products and onsite orders

    Sia Yew Ming, Senior Corporate and Trade Marketing Manager, Mediacorp TV Singapore Pte Ltd, was a first-time visitor to the Gifts Fair. She came looking to develop products that are related to their TV programmes with a view to selling them to consumers through convenience stores and book shops in Singapore. She said that, with so many suppliers at the fair, there was a great variety of products at competitive prices. She said she placed an order of 500 units of USBs and 500 units of power banks on the second day of the fair. “I have found a lot of new ideas and new products here. I have found 10 potential suppliers and will follow up after the show,” she said.

    Barama is an importer and wholesaler of stationery, paper products, school bags and toys in Argentina. This year was their seventh visit to the Hong Kong Gifts & Premium Fair. Alex Leibovich, Manager of Barama, said they were looking for school products and new suppliers. “So far, we have identified three new suppliers of paper products and punchers at the fair, and we have already placed onsite orders for US$20,000 worth of paper products and US$13,000 worth of punchers.”

    B. Food Product International from Thailand sells food products domestically as well as to different markets worldwide including Asia and Europe under two major brands S-Pure and BETAGRO. Sakhorn Jullarat, the company’s Product and Process Development Director, said, “We put strong emphasis on the quality and safety of the food we produce every day. This is our first visit to the Hong Kong International Printing & Packaging Fair. We’ve already found five potential suppliers for packaging items that will be used for our frozen and chilled food products. We can find a lot of interesting packaging products and ideas here. We would like to visit the fair again next year.”

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  • Local retail sector seen growing 4% this year

    Local retail sector seen growing 4% this year

    Retail Group Malaysia (RGM) is projecting a 4% growth rate for the local retail sector this year, as it believes that consumers will still continue to spend in spite of the global economic uncertainty.

    RGM managing director Tan Hai Hsin said while consumers are cautious, they will continue to spend on goods and services that are important and relevant to them.

    “People are still spending on their children’s education even though it is not cheap. The MATTA Fair is also still doing well as people are still traveling,” he said in a talk in conjunction with the StarProperty.my Fair 2016 i-City edition yesterday.

    Tan said the outlook for the local retail sector this year is expected to be challenging.

    “There is no major stimulus. It’s also not an election year, this year. Right now, we’re relying on the global economy and if it’s down, it will affect us.”

    According to RGM’s Malaysia Retail Industry Report last month, the local retail industry recorded a measly year-on-year sales growth of 1.3% in the fourth quarter of last year.

    RGM said the year-end school holiday and festive season did not lift the buying spirit of Malaysian consumers, adding that the higher cost of overseas travelling due to weaker ringgit did not encourage more domestic spending.

    “The weak ringgit performance during the last quarter of 2015 had resulted in higher import costs. Higher import costs led to increased retail prices. Increased retail prices had further deteriorated the purchasing power of Malaysian consumers.

    “Despite heavy price discounts and aggressive promotions, retailers could not raise the consumers’ spending.

    “During this latest quarter, they suffered further decline in profit margin growth,” he added.

    For the full-year 2015, RGM said the Malaysian retail industry grew by a mere 1.4% as compared to the same period a year ago. The total retail sales turnover for 2015 was RM96.2bil.

    “Last year was the worst annual retail growth rate since 2010. In 2009, the retail industry growth rate was 0.8%,” RGM said.

    According to National Property Information Centre’s (Napic) 2015 Property Market Report, the retail sub-sector recorded a slight improvement in occupancy to 82.4% in 2015 from 81.8% in 2014, with a take-up rate amounting to more than 780,000 sq meters.

    The StarProperty.my Fair 2016 i-City edition, which is being held at i-City from April 22 to 24, will feature projects including i-Soho, i-Suite, Liber­ty Tower and Parisien Tower in i-City, and 8Kia Peng at Kuala Lumpur city centre.

    Besides talks and fun activities, 1,000 visitors will receive complimentary theme park tickets given daily.

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  • How smaller retailers can win market share and drive growth

    How smaller retailers can win market share and drive growth

    I’m always interested in the small business owners I meet across the world, many running generations-old businesses that offer one-of-a-kind treasures. These shop owners, with their time-honored craftsmanship, quickly win over even the most casual window shopper, effortlessly converting passersby into loyal customers.

    Creating this sort of memorable customer experience is one of the keys to success for small retailers in the fashion and luxury goods sector.

    However, as the worlds of fashion, luxury and media descend upon New York for Fashion Week, these experiences and transactions seem increasingly quaint and inconsequential; one could be forgiven for thinking that high fashion remains the exclusive preserve of global retailers and big-name luxury brands.

    While that may once have been true, it’s no longer the case. Remarkably, more and more fashion retailers are starting to embrace being ‘small’ as a strategy for success and growth. Increasingly user-friendly technology tools are helping smaller retailers to speak and deliver to their niche customer sets across all channels with the same voice as they would in a shop in Hong Kong.  So what is driving their success?

    Tech-savvy

    According to research from eMarketer, e-commerce growth is projected to double the retail industry average at least until 2017. Half of all shoppers discover new products when searching with smartphones, and 82 percent of smartphone owners look online for product information when shopping. Smartphones already account for over 40 percent of ecommerce transactions in Japan and South Korea, so it is no wonder that small retailers are realizing that they need to be as tech-savvy and flexible as their customers. That means engaging and delighting shoppers on mobiles, social media and online channels.

    Highly personal

    Technological advancements and the democratizing power of the Internet have allowed retailers to scale up without sacrificing intimacy and personal service. As customers no longer think about retailers’ brands in a silo, neither does the small retailer. They analyze insights from website visitor traffic, social media interactions, and newsletter click-through rates to better understand their customers. Any retailer with a Facebook page can now easily discover that their average customer is, for example, female, aged between 16 and 24, listens to Adele, and by using this data to precisely tailor their sales and marketing strategy, they can more effectively engage and delight their customers.

    Cultivate and engage a community

    It is much more profitable to sell to loyal customers than to constantly look for new ones. A Bain study showed that just a five percent growth in customer retention could boost profitability by 75 percent.

    Small retailers are starting to use this insight to build loyal online communities, which do the selling for them. No wonder a brief Google search on the words ‘e-commerce’ and ‘social media’ turns out 101 million results, with articles such as ’12 Social Media Tactics to Drive Traffic to your E-commerce Site’ being the most visited. Another way is through loyalty programs, which 30 percent of independent retailers are planning to implement in 2016. This is on top of the quarter of independent retailers who already have a loyalty program in place.

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  • Hong Kong leads Asia retail expansion

    Hong Kong leads Asia retail expansion

    Asia Pacific remains retail industry’s growth engine – with Hong Kong at the top of the Asia retail cross-border expansion rankings.

    Despite the sharp decline in Hong Kong retail sales during the last 18 months or so, Hong Kong is the second most favoured destination for global retailers entering new markets – top in Asia and second only to London internationally.

    JLL’s Destination Retail report, which looks at the top cities worldwide for retailing, reveals 50 major global cities which have risen to the top of the list for mainstream, premium and luxury retailers’ expansions. While the list is dominated by cities in Asia Pacific, those in the Middle East are coming on strong, propelled by an ever-increasing array of international retailers. In a battle between historic, established markets versus modern newcomers, JLL indexed the global cross-border retailer activity and attractiveness of 50 meccas and found:

    • London stands at the forefront of international retailing as a global retail powerhouse, and the Number 1 retail market.
    • One-third of the top 15 global retail cities are located in the Middle East (Dubai 4th, Kuwait City 9th, Abu Dhabi 11th and Jeddah and Riyadh tied for 12th.).
    • Asia Pacific outranks all regions with 18 cities making the cut driven by sheer market size.
    • Cities in the United States make up just over one-quarter of the top 50 cities, with only one city (New York 5th) in the top 15.

    “Structural change is sweeping the retail industry as technology and eCommerce platforms become more sophisticated; however, demand for the right physical space, in the right location, is stronger than ever,” said James Brown, director of global retail research for JLL.

    “Borders are becoming less of an issue for retailers pursuing opportunities overseas and we’re seeing the global retail landscape shifting fast to accommodate the change.”

    JLL’s report examines the presence of 240 international retail brands and 140 international cities, including the drivers of their growth, opportunity and barriers, and also ranks and assesses the vitality and attractiveness of cities.

    The top 10 ranked cities on the list are:

    Size matters

    The sheer size of Asia Pacific’s leading cities – in terms of population and economic might – is one of the most compelling drivers for retailers’ expansion into the region.

    “Many Asian markets benefit from a burgeoning middle class and growing levels of affluence, which are attractive in particular to a wide-range of retailers,” the report concludes.

    “The cities also benefit from large amounts of new, fit-for-purpose modern retail space.”

    Hong Kong remains Asia’s leading shopping destination, with top brands from luxury to fast fashion competing for prime locations. Across the region, cities are catching up to modern retail markets in Europe and the US.

    China is the second largest economy in the world, and its key cities, Shanghai and Beijing, have undergone a transformation in the last two decades driven by a swelling middle class and high concentration of high-net-worth individuals. Both are now firmly on international retailers’ maps as key locales for tremendous brand exposure and test markets. Key cities outside of Greater China that are also gaining attention from international retailers include Tokyo, Singapore, Seoul, Osaka and Bangkok.

    Europe’s retail powerhouse

    London has the highest presence of international retailers compared to its global peers, and edges out Hong Kong in terms of international luxury brand presence. London continues to be a magnet for new brands thanks to its unique blend of market size, maturity and high degree of transparency. The UK capital has a long history of success, driven by a diverse base of locals and tourists, and many retailers regard London as the entry point to Europe, including recent entrants J.Crew, Arc’teryx, Club Monaco, Kit and Ace, and John Varvatos.

    Middle East hotbed

    The Middle East’s top cities, including Dubai, Kuwait City, Abu Dhabi, Jeddah and Riyadh are emerging as business and travel hubs, and are increasingly catching the eye of global retail brands. The cities’ strong in-place tourism plays an important role in increasing the flow of foreign money, a key driver for retail spend. The markets each have large quantities of affordable retail space, supported by franchise structures, which present viable options for international retailers and reduce their operational risk at entry. Additionally, the domestic retail market in the Middle East is not as mature as other regions, allowing international brands to enter without too much competition from domestic brands. JLL’s report found that pent up shopping demand across the region has spurred some of the highest sales volumes for retailers.

    Stars, stripes and strong sales

    While the Americas region only captures one-quarter of the top 50 cities for attractiveness, 15 out of the 16 cities identified are located in one country, the US. The ‘Land of Opportunity’ has more retail space than any other country with 12.8 billion sqft, and presents retailers with several options for entry, either in malls, shopping centers, power centers or general retail space. While the US remains one of the most advanced retail markets globally, with significant amounts of retail spend, the market overall is daunting to international retailers. The portal cities of New York, San Francisco, Miami, Chicago and Los Angeles remain robust with global brands, but the 137 remaining key markets are largely untapped by international retailers.

    Looking forward

    “Expansion into new markets is catching on quicker than ever, but not without risk. International retailers that are focused on measured and balanced growth will find that the world’s mega-retail cities are a productive opportunity,” said David Zoba, chairman of JLL’s Global Retail Leasing Board.

    The acceleration of international brand expansion across the world’s best and most attractive cities in the next decade will continue, driven by fast-growing middle classes, new powerhouse economies and rising tourism.

    “Retailers who succeed in acquiring the right space and at the right time are expected to benefit from successful and profitable growth.”