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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.

  • Lotte seeks calm waters after family turbulence

    Lotte seeks calm waters after family turbulence

    The fate of Lotte Group hung in the balance several months ago, as the fraternal battle over control of the retail giant reached its peak.

    However, a year into the family battle, Chairman Shin Dong-bin managed to settle the dispute and strengthened his grip over the country’s fifth-largest conglomerate, which has operations in Korea and Japan.

    Most shareholders of Lotte Holdings in Japan voted in support of the younger son, who heads both the Japanese and Korean operations, despite efforts by his older brother, Shin Dong-joo, to oust the chairman as CEO of the Japan-based unit.

    In the second shareholders meeting on March 6, Shin Dong-joo even suggested that he would give 2.7 billion won ($2.3 million) worth of shares to members of the association of Lotte Holdings workers – the second-largest shareholder after Kojyunsya, with a 27.8 percent stake – should he win the vote. But the agenda failed to win a majority of shareholders’ votes, and the meeting finished only in about 30 minutes.

    “We figured that the meeting’s result shows firm support for the chairman, and the succession battle has actually ended,” a Lotte Group spokesperson said.

    Shin Dong-joo may have used up most of his maneuvers to nullify the leadership of Shin Dong-bin, though the result of a lawsuit to determine the legitimacy of Shin Dong-bin’s reign at Lotte Holdings has yet to come.

    As the highly publicized feud appears to be coming to an end, Chairman Shin Dong-bin is seeking to revamp the group through three key initiatives: corporate restructuring, global expansion through mergers and acquisitions, and empowering female executives.

    Cleaning up the corporate structure

    Of all things, the chairman placed the improvement of Lotte’s corporate structure high on the agenda since the fraternal battle exposed an opaque governance structure and the founding family’s strong hold over the group.

    Founded in 1948 in Japan, Lotte has gone from a small chewing-gum maker to a major business unit with interests encompassing retail, chemical and car rental services. Today, Lotte Group has a total of 86 affiliates with annual sales hitting 81 trillion won. Still, only eight affiliates, or 9.9 percent, are listed on the Kospi market, making credible information on the unlisted units hard to come by. This type of backward system is linked with founder Shin Kyuk-ho’s business principle that keeps most of the businesses unlisted.

    The feud and ensuing investigation revealed that a handful of unlisted units based in Japan – with obscure functions and business areas – are at the top of the corporate governance structure.

    Chairman Shin Dong-bin is trying to fix the system through the listing of key Lotte affiliates.

    The first target is Hotel Lotte, the de facto holding company of Korean Lotte affiliates. Lotte Group said last year that it will take the hospitality operator public in the first half of this year. The hotel unit passed a preliminary screening for its planned initial public offering (IPO) in January, according to the Korea Exchange.

    After the group’s core affiliate goes public, more affiliates, including some of the Japan-based Lotte units, as well as Lotte Data Communication Company, Korea Seven and Lotteria, are expected to go public, according to the Korea Exchange.

    Alongside the IPO efforts, the business tycoon has sought to ease the group’s complex cross-shareholding system by purchasing shares of key Lotte units at the center of the cross-holding web.

    Last year, the chairman acquired a 1.3 percent share in Lotte Confectionery, which was held by Lotte Construction & Engineering.

    The move cut Lotte’s cross-shareholding links by 34 percent from 416 to 276, and the number has since been further reduced to 67, according to Lotte Group and a report from the Fair Trade Commission.

    To speed up structural governance reforms promised by the chairman, the group launched a task force last year that will be entirely focused on a structural overhaul. Lee Bong-chul, head of the group’s support department, leads the team.

    Another area of focus by the chairman is business expansion through different mergers and acquisitions. When he took the helm at Lotte Group, Shin Dong-bin clinched a number of big deals to acquire different units, including electronics store chain Hi-Mart, car rental service operator KT Rental and a liquor unit of Doosan Group.Global expansion

    Most recently, he has set his sights on the global market beyond the Asian continent.

    Last May, Hotel Lotte bought the New York Palace Hotel in Manhattan for $805 million from real estate management firm Northwood Investors.

    But the purchase of the landmark hotel was only part of Hotel Lotte’s broader efforts to extend its properties.

    Song Yong-dok, CEO of Hotel Lotte, said last year that the hospitality chain will acquire 33 more hotels outside of Korea by 2020, a move to become an international hotel chain.

    The CEO specifically cited hotels in Los Angeles, Chicago, London, Paris and Frankfurt as potential bases for new hotels in the coming years.

    The CEO’s interest reflects the hotel operator’s intention to further move into European and U.S. markets, since the unit’s global operations currently center on Asian countries such as Vietnam and Uzbekistan and other regions such as Russia and Guam.

    Five months after the hotel purchase, Lotte announced the largest acquisition deal to date in the conglomerate’s history.

    Lotte Group agreed to buy a sizable stake in Samsung’s petrochemical units for around 3 trillion won, extending its business beyond retail and hotels.

    Under the deal, Lotte Chemical will absorb the businesses of the new units.

    “Lotte Chemical, which specializes in basic petrochemical materials and synthetic fibers, has been on the lookout to include future-oriented chemical businesses and products to create synergies with existing products,” the group said.

    When the deal is completed in the first half of this year, the Lotte affiliate is expected to boost its competitiveness in plastic materials such as polycarbonate, acrylonitrile butadiene styrene and polystyrene, where Samsung’s chemical units are strong.

    Lotte expected the deal to raise Lotte Chemical’s total annual sales to 20 trillion won from 14.9 trillion won in 2014.

    The group also looks to bolster its presence, with the surging population in high-growth markets in Southeast Asia, including Vietnam and Indonesia.

    Earlier this month, Lotte Group submitted a bid to buy retail chain Big C in Vietnam from French retailer Groupe Casino.

    Big C is the second-largest supermarket chain in Vietnam, and also operates in Thailand and Laos with 600 stores. The extensive retail network of the discount chain will help Lotte cement its position in the Southeast Asian market.

    Groupe Casino’s sale of its Vietnam units attracted multiple bids in Asia, including offers from Thai tycoon Charoen Sirivadhanabhakdi and Japan’s Aeon as well as Lotte.

    The value of the deal is estimated to be over $ 1 billion.

    Also joining the bid are Central Group, Thailand’s biggest retailer, and Vietnamese companies Co.opmart and Masan Group, according to reports in the Wall Street Journal.

    Another region that draws Lotte’s interests is Russia, with its enormous potential in untapped natural resources and land.

    The group recently established farming and logistics networks along the Black Sea and Maritime Province.

    The move is expected to create synergies with the existing Lotte Confectionery plant in Kazakhstan.

    “The chairman pays attention to the region because the current economic slowdown in Russia could translate into benefits for those interested in investment in the region,” said a source at Lotte Group who declined to be named.

    Empowering female leaders

    Chairman Shin Dong-bin has reiterated that increasing the number of female workers and executives is one of his priorities.

    The group openly said that its affiliates should hire more women to enhance gender diversity.

    Now, the proportion of new female workers accounts for 35 percent, and the company plans to increase the ratio to 40 percent.

    The chairman also acknowledged that generally perceived characteristics of women, such as sensitivity, fit Lotte’s major business areas centered on shopping and retail segments.

    “We have many customers who are women,” Chairman Shin Dong-bin said during a meeting with female executives at Lotte affiliates last year. “And I am sure that women know best what women really want, so hiring more women workers and putting them in executive posts is one of the most important tasks for Lotte.”

    Empowering women workers has emerged as a major social issue, as few women are found at the senior level of big companies.

    In Korea, women represent a miniscule 1.9 percent of board directors, according to a GMI Ratings survey.

    The ratio puts South Korea at the bottom of the ranking out of 45 countries surveyed.

    The chairman has set the target of filling 30 percent of its executive posts with women.

    “Following the direction of Chairman Shin Dong-bin, we have been focused on hiring women since 2006,” a representative of Lotte Group said. “Now, 11 percent of senior workers, whose rank is above senior manager, consist of women. But we will expand the proportion to 30 percent by 2020.”

    Lotte’s efforts are reflected in major personnel changes that saw more women promoted to the executive level.

    At the end of last year, Lotte announced the promotion of two women to executive positions.

    At the time, the company appointed its first female executive to have risen through the ranks from an entry-level employee and also the first non-Korean female executive.

    “We don’t want to just say that we want more women,” the representative said. “Our efforts will be shown in numbers by hiring and promoting more women.”

    Chairman Shin Dong-bin, left, describes the 123-story Lotte World Tower to Hugh Trenchard, a member of the British Parliament, last July ;The Lotte World Tower, built by Lotte Group, is the tallest building in Korea. [LOTTE GROUP,JOINT PRESS CORPS]President Park Geun-hye, center, and Lotte Chairman Shin Dong-bin, left, tour the Busan Center for Creative Economy and Innovation run by the group in March;CEO Song Yong-dok of Hotel Lotte, second from right, poses outside the New York Palace Hotel in Manhattan after Lotte acquired the American hotel last May.

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  • Eight steps for riding out the economic storm

    Eight steps for riding out the economic storm

    In a few days it will be one year since the implementation of the Goods and Services Tax. Although the GST has been widely unpopular, many economists consider GST as the most efficient way of widening Malaysia’s tax base. Currently, almost everyone pay taxes.

    The Malaysia Consumers Movements commend the Ministry of Domestic Trade, Cooperatives and Consumerism and the Royal Customs Department, who have worked extremely hard in curbing profiteering activity and ensuring that price increases were not excessive. Enforcement officers have acted promptly on complaints lodged against unethical businesses for unfairly increasing prices, while prosecuting a few for related offences.

    The Customs Department has reportedly collected RM51 billion since April last year, as compared to only RM37.2 billion before the GST.

    It is therefore clear that the GST has indeed provided a lifeline to the government but this has come at an expense. Consumers today are grappling with high cost of living issues while business complain of high cost of operating, forcing consumers to tighten their belt and businesses to retrench staff.

    It is important to note that the amount of taxes collected through GST will be highly dependent on the strength of domestic private consumption, which is influenced by consumer confidence in the economy.

    According to industry report compiled by the Retail Group Malaysia, Malaysian retailers are not too optimistic on the growth for the sector in the first quarter of 2016 and expect a negative year-on-year growth of 0.4%. Consumers are fearful of high prices and are increasingly reluctant to spend.

    Bank Negara in its report has projected 4.0-4.5% growth rate in 2016, compared with 5% last year. The Statistics Department indicated that the consumer price index in February rose to a seven-year high at 4.2% from a year earlier. The inflation rate is highest since December 2008 when it hit 4.4%. This rise was attributed to higher costs for food and consumer goods.

    These not very convincing statistics calls for us to review, rethink and refine solutions for riding the projected storm ahead.

    1. Stop the Bickering

    Negative news will have an impact on consumer and investor confidence. What we say and do backfires on us in negatively portraying our country’s image. We must collectively demonstrate political stability, a key factor for investors and consumers. Malaysia practices parliamentary democracy where leaders are elected every 5 years. It therefore ignites sheer concerns when attempts are made to dislodge sitting elected government by force. Street demonstration is not our culture, and it shouldn’t be!

    2. Corruption is Detrimental

    The government must demonstrate political and administrative will when implementing austerity measures and fighting corruption. There is a big time need to plug leakages and tackle corruption. The recent report of misappropriation totalling RM107 million by a senior government official surely sends a wrong message to consumers. Questions surface if there are more of such cases?

    3. Promote Healthy Competition

    It is important for the government to promote competition and speed up further liberalisation of key economic sectors. Monopolies are detrimental and must be dismantled as it harms consumers. There is a need to reassess the approved permit policy. Improve business efficiency by eliminating bureaucratic red tape which significantly increases cost of doing business.

    4. Transparency in Action

    Implementation of policies must be openly deliberated. Stakeholders at all levels must be consulted and their expectations adequately managed. Unilateral decisions must be stopped immediately. The era of government knows best is over. The point being, whenever there is any price revision announcement, it distorts cost elements throughout the supply chain, and more often than not, negatively impacting consumers.

    5. Halt Price Increments

    The government and businesses must pledge not announce any more price increases. Consumers are still grappling to deal with what was announced in 2015 and any new increases will definitely not be of any help.

    6. Ethical Trade Practices

    Businesses must demonstrate integrity in action across the value chain. Profit should not be derived at the expense of consumer suffering. Business leaders must uphold high standards of social responsibility which must go beyond mere CSR or brand-building gimmicks. There is only so much that the government can do to audit. Businesses must own up!

    7. Prudent Consumption Patterns

    Consumers should re-examine our consumption patterns and make adjustments. The era of cheap goods and services is over. Malaysia practices a competitive open market economy and it is therefore unfair to completely shift blame on the government for failing to reduce prices.

    We must avoid wastage and over-consumption, where we purchase things.

    8. Ramp Up Enforcement

    It is commendable that the ministry has done very well in monitoring, tracking and acting against errant businesses which unfairly raise prices. But why only expect the regulators to do the auditing. In the era of social media, we are all empowered to highlight real time issues and ensure they are addressed in a timely manner.

    Name and shame those manipulating the system, why must we keep silent?

    It is time to close ranks and face the storm together as one team. We hold the trump card, in charting the destiny of our nation.

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  • HKG offers instant ‘cash’ to airport shoppers

    HKG offers instant ‘cash’ to airport shoppers

    Hong Kong International Airport (HKG) is running a double promotion to travellers, which includes instant rebates in the form of coupons worth up to HK$5,000/$645, as well as a free delivery service.

    From 1-11 April travellers spending more than HK$20,000 and HK$50,000 by electronic payment on the same day at the 68.5m-passenger hub can receive an instant rebate of HK$1,200 and HK$5,000 respectively in the form of HKG cash coupons. These must be spent at airport outlets, TRBusiness has confirmed.

    Separately, travellers who spend more than HK$1,000/$129 in a single transaction at HKG airport benefit from complimentary local delivery. Free delivery service to mainland China, Macau and Taiwan is also offered to travellers who spend more than HK$2,500 on clothing, bags and accessories in a single transaction.

    SHOPPING AND DINING OFFERS

    As well as these offers, during the promotion period, HKG is collaborating with its retailers to provide travellers with a series of other shopping and dining offers, as well as a selection of complimentary gifts. Travellers can get more details by scanning the QR code on the promotion materials.

    HKG was the fifth most important duty free and travel retail sales location in the world in 2015.

  • Indonesian shoppers flock to Singapore as rupiah surges

    Indonesian shoppers flock to Singapore as rupiah surges

    Tourist arrivals will spike this year.

    Buoyed by the resurgent rupiah, Indonesian holidaymakers are once again trooping to Singapore to shop and splurge, according to a report by Bloomberg.

    The rupiah has surged 9.9 percent against the U.S. dollar over the past six months, second only to Malaysia’s ringgit among emerging markets, as slowing inflation and a nascent commodity-price recovery lured money to the nation’s assets.

    “The rupiah has done really well this year and it makes things look cheaper elsewhere for Indonesians,” said Nizam Idris, head of foreign-exchange and fixed-income strategy at Macquarie Bank Ltd. in Singapore. “The currency will find support from decent yields and bottoming commodity prices.

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  • Bison Consolidated debuts with small discount, but picks up momentum

    Bison Consolidated debuts with small discount, but picks up momentum

    Save for the first initial public offering (IPO) this year on the Malaysian market, corporate debuts on Bursa Malaysia has seen dampened openings thus far. Convenience retail chain store operator Bison Consolidated Bhd listed on the Main Market of Bursa Malaysia on Tuesday, opening at MYR1.09 on a volume of 2.2 million shares, a small discount to its IPO price of MYR1.10. This was despite encouraging reception prior, where the 15.5 million new public shares offered had been 6.94 times oversubscribed. The counter closed its first trading day positively, however, at MYR1.17, marking a 6.36 per cent premium to the opening price. 68,480,900 shares traded hands.

    Bison is the third Malaysian IPO in 2016, and the last for this first quarter period. The first two had been building materials supplier Chin Hin Group Bhd earlier this month, and Ranhill Holdings Bhd mid-March. Bison is an investment holding company, and through its subsidiaries, it is involved in the business of press and convenience retailing under its main trade name of “myNEWS.com”.

    It also operates eight outlets of WHSmith, under its equal joint venture with UK retailer WHSmith Travel. Managing director Dang Tai Luk told reporters after the listing ceremony that the group intends to open another 115 stores with the IPO proceeds over the next 36 months. It has already opened 20 stores, with another 50 targeted to be opened within 2016. “Our target for 2016 is achievable; we have already identified 30 locations, and are considering another 30 locations. From those numbers, I would say we are targeting to open 70 stores a year,” he said, adding that a key criteria is the population density in the selected locations. Bison seeks to build its network of stores in high-street locations, departing from its old strategy of setting up in commercial buildings and various types of shopping malls.

    Its IPO prospectus noted that the group has 255 outlets, as at February 10, which carry a range of print media, convenience retail products and offer consumer services like electronic payment services and money remittance services. According to Smith Zander International Sdn Bhd, Bison owns an estimated market share of 8.6 per cent in outlet numbers, and 6.6 per cent in terms of revenue for the year 2015. The company is also looking to establish another distribution centre either in the north or south of Peninsular Malaysia, looking at either Penang or Johor states.

    It currently has one 125,000-sq ft warehouse facility in central Peninsular, and Dang noted that the new warehouse will not be bigger than the existing one. “We have always managed our own distribution, and we want to improve and make it more efficient,” he said.

    The management has no plans to expand beyond Malaysia at the moment, as it believes there are more opportunities to tap onto in the domestic market. Bison raised MYR88.68 million ($22.19 million) from the IPO, of which MYR35.55 million or 40.1 per cent will be utilised for the purpose of outlet expansion and enhancing the group’s existing outlets; and MYR14.45 million or 16.3 per cent will be used to improve its nationwide logistics and IT capabilities to support its growing network and product base, the establishment of an additional distribution centre, food preparation and packaging facility and acquiring additional transport equipment. Another MYR32.23 million or 36.3 per cent will be utilised to finance inventory stocking for new and existing outlets as well as other working capital requirements. The proceeds will be utilised for these purposes over the next 36 months. The remaining portion will fund listing expenses.

    CIMB Investment Bank was the principal adviser, managing underwriter and sole bookrunner for the IPO.

  • Shell seeking new upstream growth

    Shell seeking new upstream growth

    Following the sale of its shares in Shell Refining Company (federation of Malaya) Bhd (SRC) to a Chinese company, Royal Dutch Shell plc is seeking new opportunities for further growth in its upstream portfolio in Malaysia and to reinforce its joint ventures here with Petroliam Nasional Bhd (Petronas), besides strengthening its position in the retail segment.

    In a press conference held in conjunction with the Offshore Technology Conference Asia 2016 yesterday, its upstream director Andy Brown reaffirmed the oil and gas (O&G) major’s commitment in growing in the exploration, development and production side of the industry in Malaysia.

    “If I look at Shell in Malaysia, over the last two years, we have made 11 gas discoveries. We are very focused on our upstream business in Malaysia, seeking new opportunities for further growth, but also reinforcing our joint ventures, like the Baram Delta Offshore that we have [with Petronas].

    “I think it is not the time to be spending a lot of money, but we are demonstrating that we are here to stay, that Malaysia is an important part of Shell’s upstream business,” said Brown. Shell is the second-largest oil and gas producer in Malaysia after state-owned Petronas.

    On Feb 1, Shell Overseas Holdings Ltd entered into a conditional sale and purchase agreement with Malaysia Hengyuan International Ltd for the disposal of its 51% stake in SRC for US$66.3 million (RM265.2 million).

    The disposal sparked rumours that Shell might look at selling off some of its stakes in its O&G fields in Malaysia. However, Shell dispelled any connection between the disposals of the refinery with its upstream business in Malaysia.

    In a press release dated Feb 17, Shell explained that the sale of the stake in SRC should be seen in context with the oil major’s global strategy and portfolio activities. It said a refinery of SRC’s scale is not a strategic fit for its portfolio and that it would find it difficult to compete for new capital.

    Yesterday, Shell Malaysia Ltd chairman Datuk Iain Lo said the sale of the refinery is actually to ensure the stability and continuation of fuel supply in the country, as there was a concern that the SRC is a weak link in the supply chain.

    “We were concerned, [that] perhaps this is a very weak link in the supply chain of fuel supply in Malaysia. That is why we decided to find somebody who is prepared to invest in it, because it is not strategic for Shell to invest in it,” said Lo.

    In the upstream sector, Shell has been pioneering deepwater field developments in Malaysia, through the Gumusut-Kakap and Malikai fields, both offshore Sabah, and the Central Luconia and Baram Delta projects off Sarawak.

    According to Brown, Gumusut-Kakap has a peak production capacity of 135,000 barrels of oil equivalent per day (boepd). About 20% of Malaysia’s average oil production of around 650,000 boepd, comes from Gumusut-Kakap. Malikai will also be coming online soon.

    “When it comes to Malaysia, we’ve been here over 100 years, starting with Miri in 1910, and we’ve grown from that position. Last year for instance, we produced half the gas in Malaysia.

    “We have built in Malaysia a business that has the key elements of integrated gas, deepwater, and our fundamental fuel retail and lubricants, which really kind of mirrors the key focus areas for Shell now and going forward. We continue to look at ways we can partner with Petronas to continue to build that position,” said Brown.

  • Hong Kong Retailers Seek to Keep Strength

    Hong Kong Retailers Seek to Keep Strength

    Hong Kong has been branded as “shopping paradise” to many for a long time, but the city seems to have lost its attractiveness in recent years, as retail sales have been dragged down by a significant drop in tourist numbers.

    Retail sales have declined for 11 consecutive months as of January this year in Hong Kong, while the unemployment rate in the sector is on the rise. Signs of improvement are not in sight at the moment.

    Rents in Russell Street, once the most expensive shopping place in the world, has been slashed by half now. Hong Kong General Chamber of Commerce Chairman Y K Pang says it seems that less cost would benefit shop owners as well as customers, but as of now it appears that is not the case.

    “The competition is really fierce. Other regions are so eager to share a slice of cake from us. No matter how low the cost is, without customers, there is no money to make. So we should welcome all visitors regardless of where they are from.”

    Currently, there are less than 50 mainland cities allowing their residents to visit Hong Kong on an individual basis. Some are suggesting expanding the Individual Visit Scheme to boost Hong Kong’s tourism as well as its retail industry, but C K Chao, Founding Chairman of Federation of Hong Kong brands, has another view.

    “When tax lowers on the mainland, and people are better off, they could buy the same products there without paying more, or even less than in Hong Kong, why would they come? Hong Kong should establish our own brands, so visitors are here to buy watches, jewelry, and clothes made in Hong Kong. ”

    Chao is hoping the government can establish a specialized department to regulate as well as guide the retail sector for further growth.

    At the same time, Dr. Szetu Chi Man with the Institute for Entrepreneurship at Polytechnic University of Hong Kong, says local companies should get fully prepared to embrace technology to expand business.

    “Small companies in Hong Kong still think that they can make money through traditional channels, so they are not ready to use technology yet. I hope the government could help them improve their service to stay competitive in the market. ”

    Raymond Tang is the Managing Director of Kingvic International Limited, a footwear company in Hong Kong. He says manpower is vital to retailers, and more people should have the access to professional training and courses.

    “The turnover rate is high. Many young people take retail jobs before they get a formal one, and they only stay for a couple of months. So we are always short of hands and they have no experience to offer good service.”

    He admits that it is not easy to transform the business model, and Hong Kong should waste no time to act to save the retail sector; otherwise, this “shopping paradise” could soon lose its glamour.

     

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  • Chinese customs breaks $4.4m smuggling ring

    Chinese customs breaks $4.4m smuggling ring

    Mainland Chinese Customs recently smashed a $4.4m South Korean cosmetics smuggling racket operating between the Chinese port of Ningbo and Incheon Port, South Korea.

    This follows a crackdown on organised crime smuggling branded goods into China, according to the General Administration of Customs in the People’s Republic of China.

    According to China Customs, this latest raid which it has made public involved the seizure of more than 110,000 pieces of cosmetics in the Ningbo port and industrial hub in east China’s Zhejiang province [south of Shanghai on Hangzhou Bay-Ed].

    The smuggled South Korean brands included Sulwhasoo, Whoo, Mamonde and Laneige. Customs said in a statement that the head of the operation – referred to only as ‘Li’ – admitted that the operation has smuggled nine containers into China worth more than $4.4m from South Korea since November 2013, using false declarations.

    Customs officers examine the smuggled cosmetics from South Korea

    Customs officers examine the smuggled cosmetics brands originally labelled as ‘plastic particles’ from South Korea.

    The operation also smuggled charcoal back into China using the empty containers which were labelled as ‘plastic particles’ on the official documentation.

    Customs officers smashed the ring after raiding cargo storage facilities on the wharf at Ningbo where the cosmetics were temporarily stored before being distributed into the Chinese black market.

    TRACING THE SOURCE…

    Exactly where these cosmetics brands were originally sourced within South Korea will obviously be a matter of some interest to the original manufacturers, distributors and retailers.

    Meanwhile, the General Administration of Customs in the People’s Republic of China says it is now employing considerable resources to try to stem the tide of all branded smuggling – both in and outside of China.

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  • Singapore’s SME retail exporters can now gain better access to US market

    Singapore’s SME retail exporters can now gain better access to US market

    The revised de Minimis Threshold increases the limit to the United States from US$200 to US$800.

    Web-based small and medium enterprises (SMEs) retail exporters in Singapore can now gain better access to the United States market with the revision of de Minimis Threshold.

    The revised de Minimis Threshold – the amount at which US import duties apply – increased the limit from US$200 to US$800. This means that sellers no longer need to pay the US import duties when the price of their products is under US$800.

    “The revised de Minimis Threshold provides a timely opportunity for local businesses to internationalise. The US is the number one export destination for eBay Singapore sellers with its strong consumer purchasing capacity and high expenditure in e-commerce,” said Teri Canayon, country manager of eBay Singapore Cross-Border Trade. “With a lower barrier for cross-border e-commerce for our Singapore SMEs, there will be even greater incentives to boost exports to the US market, ultimately driving greater growth.” 

    Sellers can also mail higher value products directly to the US market, which allows them to better manage their supply chain and inventory costs.

    In addition, the cost of products to American consumers is lowered. This encourages them to buy more overseas, which may eventually give Singapore businesses a better chance to grow sales in the US market.

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  • Real Singapore retail sales rise

    Real Singapore retail sales rise

    Real Singapore retail sales recovered slightly in January, rising 1.4 per cent year-on-year.

    The headline figure widely reported by business media of a 7.5 per cent increase included motor vehicles.

    Real retail sales fell 0.5 per cent from December to January, and by 1.2 per cent with vehicles included.

    The total retail sales value in January 2016 was estimated at $4.1 billion, higher than the $3.8 billion in January 2015.

    Retail sales Jan 2016 Singapore

    Medical goods and toiletries and department stores showed the strongest year-on-year gains, while telecommunications goods and computers accounted for by far the largest fall.

    The accompanying charts show the sales trends by product category.

    Sales of food & beverage services (seasonally adjusted) increased 2.4 per cent month-on-month in January Year-on-year, they declined by 0.6 per cent in January.

    The total sales value of food & beverage services in January 2016 was estimated at $685 million.

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  • Australia Strengthens Presence in Indonesia

    Australia Strengthens Presence in Indonesia

    Australian Foreign Minister Julie Bishop, as part of her busy schedule, visited Jakarta, Makassar in South Sulawesi Province, and Bali during a working visit on March 20-23, 2016.

    Bishop started her agenda by holding meetings with her Indonesian counterpart Foreign Minister Retno Marsudi and Vice President M. Jusuf Kalla in Jakarta to discuss efforts to boost bilateral, political, trade, and investment cooperation.

    Foreign Minister Bishop then formally inaugurated Australias newly constructed embassy in the Patra Kuningan area, South Jakarta, which includes a five-storey Chancery, accommodation for some Embassy staff, and a recreation and medical center covering an area of more than 50 thousand square meters.

    “The state-of-the-art building and joint project between Australian and Indonesian companies symbolizes our commitment to strong and enduring ties with Indonesia. The new embassy facility will accommodate Australias increased presence in Indonesia and will provide a secure working environment for our personnel,” she stated.

    The new embassy complex was built by Indonesian company Total Bangun Persada in partnership with Leighton (Asia) and continues to make a positive contribution to the local economy.

    Some 2.5 thousand local workers were employed at the site during the construction process. The Australian government is also upgrading infrastructure in the embassys neighborhood.

    “The embassy showcases the best in Australian innovative design and cutting-edge technology to make the most out of Indonesias environment while minimizing the impact on local water and energy sources,” Australian Ambassador to Indonesia Paul Grigson noted.

    The new embassy is the largest ever to be constructed by an Australian government in the world and reflects the depth of the relationship between Australia and Indonesia, he remarked.

    The embassy complex uses low-resource technologies such as rainwater harvesting and solar water heating systems.

    Extensive landscaping was carried out during construction. Four mature Banyan trees were also relocated. This relocation is the biggest of its kind to be ever undertaken and has been recognized by the Indonesian Guinness Book of Records. The effort also won a Museum Rekor Indonesia Award.

    The distinctive colors chosen for the Chancery are designed to represent Australias wealth in minerals and metals such as copper, zinc, brass, steel, and aluminum.

    “The new Australian Embassy complex is not only a tribute to the countrys creative design and innovation but is also a tangible example of a very successful Australian-Indonesian construction partnership,” Grigson emphasized.

    Bishop expressed hope that more number of Indonesian tourists would visit her country.

    “Every year, a million Australians visit Indonesia. We wish to push for an increase in the number of Indonesian tourists visiting Australia,” Bishop stated here on Monday after inaugurating the new Australian embassy.

    She said Australia applies a universal visa system across the world. Currently, Australian tourists do not require a visa to visit Indonesia.

    From January to November 2015, the number of Australian visitors to Bali was the highest, reaching 876,748 out of the total of 3,631,195 foreign tourists arriving on the island.

    Australia is a potential market for Bali, or even Indonesia as a whole, largely due to its proximity. It has always been one of the three biggest sources of tourists to Bali.

    On March 22, Bishop opened the new Australian Consulate General in Makassar, Australias third diplomatic post in Indonesia.

    “Australia is committed to building trade and investment partnership with Indonesia and expanding our people-to-people contacts. The Consulate General will deepen our business, education, and cultural links with the provinces of eastern Indonesia,” the minister noted.

    On the occasion, Bishop announced the appointment of Richard Mathews as Australias first Consul General in Makassar, which is Indonesias fifth-largest city and a key commercial hub for Australians doing business in eastern Indonesia.

    Eastern Indonesia is an increasingly popular destination for Australian trade and investment, particularly in the resources, agribusiness, and food processing sectors.

    Mathews is a career officer with the Department of Foreign Affairs and Trade and was most recently the director of the Nuclear Policy Section. He had earlier served overseas as deputy representative in the Australian Commerce and Industry Office, Taipei; deputy head of Mission in Athens; and as second secretary in Bandar Seri Begawan.

    In Canberra, Mathews has worked in the India, Sri Lanka, Bangladesh, and Europe sections.

    He has also worked as director at the Centre for Defence and Strategic Studies; Indonesia director in the Northern Territory Government; and as a visiting fellow and Indonesia Merdeka fellow at the ANU.

    Mathews claimed that the new diplomatic facility will help to reinforce and strengthen trade and investment ties with eastern Indonesia.

    “I want to build a network of business, educational facilities, and Australian alumni in eastern Indonesia,” Mathews emphasized.

    He promised to promote sound relations between the two sides.

    Meanwhile, South Sulawesi Deputy Governor Agus Arifin Numang stated that the consulate general would help strengthen trade relations between his administration and Australia.

    “We hope that trade relations with Australia would be improved,” he noted.

    Earlier, Vice President Kalla had expressed hope to lure more Australian investments in Makassar.

    “Australia is relatively closer to the eastern part of Indonesia,” the vice president pointed out.

    Grigson listed trade, education, and culture as the three priority sectors that the consulate general in Makassar would pursue.

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  • Jakarta Convention Center to hold biggest marine tourism expo

    Jakarta Convention Center to hold biggest marine tourism expo

    The Tourism Ministry supports the countries biggest marine adventure tourism exhibition, “Deep & Extreme Indonesia 2016”, which will be held at the Jakarta Convention Center, from March 31 to April 3, 2016.

    “The Tourism Ministry supports the organizing of the event. Lets explore the beauty of Indonesias underwater world,” Tourism Destination Development Deputy of the Tourism Ministry Dadang Rizki said here on Sunday.

    Organized since ten years ago, the exhibition is the biggest and most complete of its kind held in the country. It explores marine tourism markets in various regions to be developed into world best diving tourist destinations.

    It is admitted that Indonesia is best for its beautiful undersea world with various diving destinations such as Raja Ampat in West Papua; Bunaken in Manado (North Sulawesi); Lembeh Bitung in Lombok (West Nusa Tenggara/NTB); Labuan Bajo in East Nusa Tenggara (NTT); Wangi-Wangi, Kaledupa, Tomia and Binongko in Wakatobi (Southeast Sulawesi); and Morotai as well as Halmahera in Ambon (Maluku).

    Indonesia has thousands of places of this kind that are scattered across the country from Sabang in Aceh Province to Marauke in Papua Province, he said.

    Dadang explained that the Indonesian underwater world is host to various coral reefs which serve as habitat for more than 2,000 fish species and various sea biota.

    Different fish species such as wrasse, dansel, trigger, sweetlip and unicorn are all can be found there. There are also various big fish species such as tuna, marlin, hammer head sharks, sailfish, yellowfin tuna, barracuda, dolphin and whales.

    Different tourism operators and diving organizers, government organizations, tourism promotion boards and travel bureaus will take part in the exhibition.

    The operators and diving organizers will display diving operator ship and various diving accessories, and other water sport devices. They will also exhibit underwater photography equipment.

  • Hong Kong keeps close eye on Singapore’s moves

    Hong Kong keeps close eye on Singapore’s moves

    Faced with a cloudy economic outlook, Hong Kong is casting a keen eye on action taken in Singapore, a fellow open economy buffeted by external forces – and an old rival.

    Thursday offered a good look. Finance Minister Heng Swee Keat announced a Budget that includes government spending of $73.4 billion.

    It comes a month after Hong Kong’s Financial Secretary John Tsang announced its Budget with an expenditure of HK$490 billion (S$87 billion). The reaction here is that, at first glance, the two financial czars – both men coincidentally have a Master’s in Public Administration from Harvard – might have been studying the same playbook.

    Given tough times ahead, they announced near-term relief mainly in the form of tax rebates and loan schemes for small and medium- sized enterprises (SMEs), and handouts for people to help boost consumption. Buzzwords such as innovation, robotics, and research and development also liberally litter the duo’s respective long-term visions.

    Ernst and Young’s Hong Kong tax managing partner Tracy Ho puts it thus: “They (Singapore) watch us, and we are watching them too.”

    Hong Kong is facing headwinds from a mix of political tensions and economic trends. Its retail sales recently suffered the worst decline in 13 years. Tourist numbers are down. The economy will grow between 1 and 2 per cent this year, Mr Tsang has said. But a greater anxiety is over the city’s long-term prospects. One nagging worry is the lack of diversity in its economy, in terms of its dependence on China and in its industry mix. Hong Kong is heavily dominated by the financial, hospitality and other services sectors, with a negligible manufacturing presence.

    It is in this broader vision that Singapore’s Budget on Thursday offers takeaways for Hong Kong, say those interviewed. Businessman David Ting, past president of the Chamber of Small and Medium Business, laments that unlike in Singapore, Hong Kong SMEs “do not have a clear direction on where we should go”. In particular, he lauds the Singapore Budget for being “very focused”. The $4.5 billion Industry Transformation Programme offers targeted industries a road map for how they can grow.

    On why Hong Kong businesses, known for their entrepreneurial spirit, will need such guidance now, Mr Ting says the landscape has changed. With China closed off in the past, it was easier for businesses to suss out opportunities, he adds.

    Lawmaker Charles Mok, an IT entrepreneur, says that while there are superficial similarities between both Budgets, given the emphasis on R&D, there was a distinct difference in how it is to be applied. In Singapore, the focus is on how to reinforce the manufacturing industry by introducing automation, he says.

    “In Hong Kong, we talk of developing R&D. But who is it for? Factories in China? What about our domestic industry – how do we help them get restarted?” says Mr Mok.

    On the flip side, Singapore’s Silver Support Scheme to help the elderly does not go far enough, notes social work expert Nelson Chow. “It helps the bottom 20 per cent. But in Hong Kong, this is something we’re already doing. The next step is to introduce a universal pension.”

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  • Gokongwei retires as chair of Robinsons Retail

    Gokongwei retires as chair of Robinsons Retail

    Taipan John Gokongwei Jr., the country’s second richest man according to Forbes,  has stepped down as chairman and CEO of Robinsons Retail Holdings Inc. (RRHI), which is in charge of the family’s retail business which include supermarkets and household brands Toys “R” Us, True Value, and Mini Stop.

    His only son Lance Gokongwei, 49, took his place on March 18, while his brother James Go remains as vice chairman.  Go is the chairman and CEO of JG Summit Holdings as of March 21.

    Gokongwei, who will turn 90 years old on Aug. 11, has promised to retire when he reaches 90 and just focus on his philantrophic work.

    In a rare chat with reporters in December last year, Gokongwei said Lance was doing a good job running the family-owned business empire.

    The elder Gokongwei, however, will remain chairman of the Gokongwei Brothers Foundation, which was launched in 1992 with his three brothers. It has helped schools such as Ateneo, La Salle and soon the University of the Philippines.

    Gokongwei, who was born in China to Filipino parents,  arrived in Cebu as a one year old toddler. He then built his multi-billion dollar empire in Cebu by trading goods off on a bicycle and on board a small boat off the pier of the province.

    For someone turning 90, Gokongwei said the only thing he could ask for himself is good health.

    RRHI reported a net income of P3.12 billion in the first nine months of 2015, up 18.8 percent year on year as net sales rose 12.7 percent to P63.3 billion.

    As of the end of September last year, RRHI had a total of 1,466 stores with the addition of  208 new stores. This translated to a 10.7 percent increase in gross floor area to approximately 939,00 square meters over a year ago.

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  • Pop-up stores giving shopping malls a boost

    Pop-up stores giving shopping malls a boost

    Hit by rising vacancy rates and competition from e-commerce websites, shopping malls are turning to a temporary solution to attract shoppers – pop-up stores.

    At least two companies have sprung up in recent months to play middleman between retailers looking for temporary shopfronts and malls with vacant spaces.

    Invade, launched last month, has a pool of 38,000 retailers and 100 landlords. The four-month-old PopUp Angels has more than 100 spaces on its platform and several hundred brands on board.

    Those looking to rent a retail space for a short term, usually between three months and a year, can browse a list of available spaces on both websites, which will earn a fee when there is a successful match.

    Pop-up stores offer a win-win solution. Landlords can fill spaces in malls while looking for long-term tenants, and retailers get to reach out to new customers without committing to costly multi-year leases.

    Shoppers benefit as well, because pop-up stores tend to have more diverse offerings, retail experts say.

    Invade founders Kent Teo, 30, and Koh Cheng Guan, 29, started out as flea market organisers seven years ago and later ventured into multi-label pop-up stores. The idea for a real-time retail booking system came when more malls started approaching them with underused spaces.

    “Two to three years ago, we would get about one landlord a month asking (for our help). But now, we get three to four,” said Mr Teo, likening Invade to a “retail space Airbnb”. Airbnb is a popular holiday rental site.

    Invade’s pool of retailers, gathered from flea-market-organising days, include online fashion labels, artisans and tech start-ups.

    PopUp Angels was set up by Mr Adrian Chan and Mr Kit Chan, the duo behind food and beverage businesses Best Fries Forever and Cloud & Cream. The two 37-year-olds wanted to ease the “cumbersome” process of finding space and setting up and marketing pop-up stores.

    More malls have been offering short-term leases in the past two years, as the supply of retail space outpaces demand, said Mr Adrian Chan.

    Urban Redevelopment Authority data shows the islandwide vacancy rate for retail space rose from 4.5 per cent at the end of 2013 to 5.8 per cent a year later. At the end of last year, it was 7.2 per cent.

    Retail space here grew in volume by 22,000 sq m in the fourth quarter of last year. Malls that have come on the scene recently include Capitol Piazza, which opened in Stamford Road last year, and Waterway Point, which opened in Punggol in January.

    But demand for retail space has dampened, given high labour costs and growing competition from online platforms and regional shopping destinations.

    Both online and brick-and-mortar retailers are starting pop-up stores, albeit for different reasons.

    Furniture and lifestyle company HomesToLife last year opened two pop-up stores, at I12 Katong and Westgate, with leases of a year each – to “build momentum” in the lead-up to launching its flagship store, which opened in Mohamed Sultan Road early this month.

    “The stores offered a sneak preview of our products and, by monitoring the sales there, we could better design our marketing campaign,” said senior branding consultant Sotiria Kostavara.

    Ms Samantha Soh, 27, who owns online clothing store Ellysage, opened her first standalone store at Orchard Gateway in January, with the help of Invade. She hopes to extend the three-month lease, which ends this month.

    “For any fashion label, a physical store is important. A lot of my customers tell me they want to try on the clothes first,” she said.

    “It’s also a very useful touchpoint… I can interact with my customers.”

    Singapore’s largest mall operator, CapitaLand Mall Asia, which owns and manages 18 malls here, said pop-up stores form about 1 per cent of its tenants. In 2014, it opened retail zone J.Avenue at its JCube mall to cater to such stores, providing an electronic point-of-sale system and basic shop fittings to make it easier for first-time retailers.

    Ms Sulian Tan-Wijaya, a senior director for retail and lifestyle at Savills Singapore, said the trend for such stores started three to four years ago, “but it was rare and not obvious to shoppers”.

    The trend is now more evident as more online, multi-label and indie brands are sprouting up in malls alongside established global retailers, she said.

    “Pop-up stores will not pay high rents, as their business model does not allow for high margins,” she said. “But they add diversity to the mall mix with their eclectic offerings and generate shopper traffic.”

    Mr Gary Nonis, property consultancy JLL’s national director for retail, warned that too many pop-up stores in one mall could hurt the mall’s branding in the long run. He said: “It might be deemed less attractive by seasoned operators, which would rather have strong branding, and this could also hurt their potential performance in the mall.”

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