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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.

  • Indonesian fishery products showcased at Boston expo

    Indonesian fishery products showcased at Boston expo

    Maritime Affairs and Fishery Minister Susi Pudjiastuti hoped that the visitors and prospective buyers of fishery products at the seafood exhibition in Boston, the United States, would recognize the progressive market and potential of Indonesia.

    “With our sincere efforts to combat illegal, unreported, and unregulated (IUU) fishing, the people will witness a rapid growth in our fishery products,” the minister noted on the sidelines of the seafood fair held in Boston on Sunday local time.

    The minister was also optimistic of receiving valuable feedback from both the exhibitors and visitors to boost the exports of its maritime products and to garner global recognition.

    “I also hope that the Indonesian fishery businessmen would engage in fishing in a responsible manner,” Susi said, adding that the Indonesian fishery community is not only selling the products but also engaging in rightful fishing practices and not violating IUU.

    The minister also urged the Indonesian businessmen to continue developing the fishing industry in ways that are environment-friendly.

    “I see a great opportunity for the exports of Indonesian marine products, although there are still obstacles to be faced, and certainly, we can solve such problems,” she emphasized.

    Susi also gave assurance to the Indonesian maritime businessmen that curbing illegal fishing would open up a larger market, and thus, they must follow the international regulation on fishing.

    “The Indonesian fishery businessmen have been urged to follow responsible and sustainable fishing practices,” Susi remarked.

    As many as 17 fishery companies, including PT. Central Proteina Prima, Tbk, Sustainable Fisheries, Sekar Bumi, PT. Wahyu Pradana Binulia, PT Permata Marindo Jaya, and Kudatama Mas had showcased their products at the Indonesian pavilion during the seafood exhibition.

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  • “Wonderful Indonesia” promoted on sidelines of OIC Summit

    “Wonderful Indonesia” promoted on sidelines of OIC Summit

    Indonesias Tourism Ministry promoted “Wonderful Indonesia” brand on the sidelines of the Fifth Extraordinary Summit of the Organization of Islamic Cooperation (OIC) held at the Jakarta Convention Center on March 6-7.

    The ministry extended support for conducting the summit, the ministrys spokesman Billy Iqbal Alamsyah said here on Monday.
    “We provided support in several forms, including by providing souvenirs, etc.,” he said.
    The summit was also a strategic forum to promote “Wonderful Indonesia” brand as a total of 605 delegates from 57 countries and two international organizations were present in the meeting, he said.

    While the OIC leaders held a closed-door meeting, the ministry showed a video on Indonesias top tourist destinations at the media center set up to facilitate some 500 national and foreign journalists.

    Heritage and Wonderful Indonesia stands presenting the Indonesian Beauty Pageant were set up in front of the media center.
    Widayanti Bandia, head of the tourism business partnership department of the Tourism Ministry, said the ministry, in cooperation with Mustika Ratu, offered free spa treatment to delegates.

    “The spa that we offer here is halal and in accordance with Syariah (Islamic laws),” she said.

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  • Lifestyle’s 2015 results have no impact on its ratings

    Lifestyle’s 2015 results have no impact on its ratings

    Moody’s Investors Services says that Lifestyle International Holdings Limited’s 2015 results have no impact on its Baa3 issuer rating.

    The rating outlook remains stable.

    “Despite the weak retail markets in Hong Kong and China, Lifestyle maintained stable revenue and operating profits in 2015. Combined with its flat debt leverage compared to a year ago, this resulted in a credit profile appropriate for its Baa3 ratings,” says Lina Choi, a Moody’s Vice President and Senior Credit Officer.

    “While the negative sales growth trend in the first two months of 2016 point to increased operating challenges, we expect Lifestyle will maintain credit metrics consistent with its Baa3 ratings in the next 12-18 months,” adds Choi, who is also the Lead Analyst for Lifestyle.

    Lifestyle recorded 1.6% year-on-year gross sales proceeds growth to HKD13.8 billion in 2015 from HKD13.6 billion in 2014. Driven by 2.3% revenue growth at SOGO Causeway Bay and SOGO Tsim Sha Tsui, Hong Kong and a strong performance in Shanghai Jiuguang, the group’s total revenue grew by 3.4% to HKD6.2 billion from 2014 levels.

    Gross sales proceeds declined by low-teen percentage points in the first two months of 2016 from the same period last year, pointing to increasing operating challenges. Lifestyle plans to lengthen promotion periods over the course of the year to avoid repeating the magnitude of revenue declines seen in January-February 2016.

    Meanwhile, Lifestyle’s adjusted EBITDA was around HKD3.1 billion in 2015, flat when compared with 2014 levels. Moody’s estimates the company’s profitability, as measured by adjusted EBITDA/gross sales proceeds, was 22%-23% in 2015, also largely stable from the above 20% reported since 2010.

    Moody’s expects the company’s adjusted EBITDA/gross sales proceeds ratio will remain above 20%, supported by the company’s established brand name and track record of effective cost control in down cycles.

    Although Lifestyle’s adjusted debt increased by around HKD2 billion to HKD14.3 billion at end-2015, this level remains within Moody’s expectation. Accordingly, 2015 adjusted debt/EBITDA for Lifestyle increased to around 4.8x in 2015, a level still appropriate for its Baa3 ratings.

    Moody’s expects the company’s leverage level to stay within 4.5x-5.0x in the next 12-18 months. This is based on the expectation that the company will pay down a HKD3.2 billion loan by mid-2017.

    Lifestyle’s liquidity remains solid. The company held HKD8.6 billion in cash on hand at end-2015, which is more than sufficient to cover its HKD3.2 billion debt due in the next 12 months.

    The principal methodology used in this rating was Retail Industry published in October 2015. Please see the Ratings Methodologies page on www.moodys.com for a copy of these methodologies.

    Listed on the Hong Kong Stock Exchange in 2004, Lifestyle International Holdings Limited is a Hong Kong-based retail operator that focuses on mid- to upper-end department stores, through its two retailer brand names, SOGO and Jiuguang. The company operated two SOGO stores in Hong Kong and three Jiuguang stores in China at end-2015.

     

  • Changi retail +8% to $1.56bn is new record in 2015

    Changi retail +8% to $1.56bn is new record in 2015

    Singapore Changi Airport has formally reported that it achieved an 8% record increase in retail and food and beverage sales worth S$2.2bn ($1.56bn) in 2015, compared with the previous trading period in calendar year 2014.

    The Changi Airport Group includes 350 retail shops and 160 food & beverage outlets within its ‘retail’ definition and it says that last year’s sales performance benefited from several innovative retail concepts.

    These included the introduction of duplex stores for duty free liquor and tobacco (DFS Group) and beauty (Shilla), a varied retail mix and successful retail campaigns – including the hugely popular ’Be a Changi Millionaire’.

    New Shilla Duplex Sept 2015 opening

    The relatively new Shilla Duty Free duplex store in Changi Airport Terminal 3 which opened in September 2015.

    CAG says that its top customers by nationality were from China, Singapore, Indonesia, India and Australia, while its shoppers’ favourite product purchases (in order) were led by Liquor & Tobacco; Cosmetics & Perfumes; Luxury Goods; Electronics & Gadgets; and Chocolate/Candy/delicatessen.

    Interestingly, Changi Airport management added that the top three product categories bought on iSHOPCHANGI.COM were Cosmetics & Perfume, Electronics and Wine & Spirits, while the top three customers using this service were from China, Singapore and Malaysia.

    HUGELY POPULAR EVENT…

    Meanwhile, the ‘Be a Changi Millionaire’ campaign has literally crowned five winners since the competition draw began back in 2010, with another 333,828 instant winners drawn from an incredible 1.9m entries.

    Changi also claims that all of these sales and other achievements placed the airport amongst the top three in the world for concession sales.

    Singapore Changi Airport capped a resilient performance in 2015 with new benchmarks for passenger traffic and aircraft movements, handling a record 55.4m passengers and 346,330 landings and take-offs during the year. This represented a rise of 2.5% and 1.4% respectively.

    Changi Airport infographic retail 2015

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  • China’s Retail Sector Emerged as a Bright Spot in Slowing Economy

    China’s Retail Sector Emerged as a Bright Spot in Slowing Economy

    China’s retail sector shines

    China is facing an economic downturn, but Chinese consumers are hopeful about its economy. According to Boston Consulting Group, China’s total retail sales are forecasted to grow by 50% to $6.5 trillion by 2020 with online transactions growing by nearly 25%.

    Retail sales were up by 11.2% in January 2016 due to Lunar New Year holiday shopping. In 2015, retail sales grew by 10.7% YoY to 30.09 trillion yuan, slower than the 12.0% increase recorded in 2014. Urban retail sales of consumer goods were up by 10.5% YoY to 25.9 trillion yuan.

    Rural areas have become a major source of retail sales growth. Retailers are focusing on rural China to increase the penetration of e-commerce. In 2015, rural retail sales were up by 11.8% to 4.19 trillion yuan.

    Chinas Retail Sales 2016-02-28Enlarge Graph

    E-commerce played a major role in driving up retail sales. In 2015, the national online retail sales of goods and services grew 33.3% YoY to 3.88 trillion yuan, according to the National Bureau of Statistics of China. Some of the leading players in China’s e-commerce segment are Alibaba Group Holdings (BABA), Baidu (BIDU), JD.com (JD), NetEase (NTES), and 58.Com Inc. (WUBA).

    According to Fortune Character, a luxury product consulting firm, Chinese consumers accounted for 46% of global sales of luxury products in 2015.

    Transition from export-oriented economy to consumer-driven economy

    After a slowdown in demand and rising debt levels in the manufacturing sector and reduced dependence in the export business, China is shifting its focus to a consumption-driven economy. Although this transition would be painful in the near-term, it has the potential to deliver robust growth to China in the long term.

    Mutual funds such as the Templeton China World Fund (TCWAX) and the Fidelity Advisor China Region Fund – Class A (FHKAX) have exposures of 31.3% and 21.5%, respectively, to the consumer discretionary and consumer staples sector combined. These funds stand to gain immensely due to positive performance in the retail sector.

    After having a brief overview of China’s macroeconomic indicators, let’s begin our assessment of China-focused mutual funds.

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  • Macau retail sales weaken

    Macau retail sales weaken

    Sales of watches and jewellery, which comprise a major segment of Macau’s retail business, fell 10.4 per cent last year, fuelling the territory’s first annual retail sales decline since 2000.

    Department-store goods and leather products were also hit, according to the latest Macau retail sales data from the Statistics and Census Service.

    Overall, retail sales volume was down 7.9 per cent for the year, with their value reaching nearly MOP60.9 billion (US$7611 million), says the survey. However, the drop was in double digits for watches, clocks, jewellery, department-store goods, leather products and footwear. The watches, clocks and jewellery segment accounted for 22.2 per cent of all retail sales value – a drop of 25 per cent year-on-year to MOP13.53 billion.

    Department store goods, the second-largest retail segment, had sales fall 13.7 per cent year-on-year to MOP8.93 billion.

    Meanwhile, cosmetics and sanitary articles as well as communication equipment had double-digit increases in sales for the year, reaching MOP2.36 billion and MOP1.68 billion respectively.

    Nearly half of the retailers covered in the survey anticipate a further drop in sales for the first quarter of this year compared with the same period last year, while nearly 40 per cent expect the sales volume to be stable.

    Retail sales for the fourth quarter of last year fell 10.5 per cent to MOP15.59 billion, with sales volume dropping 7.7 per cent. There were significant decreases in footwear (down 24.5 per cent), watches, clocks and jewellery (down 16 per cent), leather goods (down 11.3 per cent) and department store sales (down10 per cent).

  • Lego to open largest retail store in Shanghai

    Lego to open largest retail store in Shanghai

    Danish toy giant Lego A/S will open its largest retail store in the world near the Shanghai Disney Resort, the company said on Tuesday.

    The 1,000-square-meter store will be located on the main shopping street outside Disneyland, and will be operated by Lego.

    The resort, the first Disney theme park on the Chinese mainland, is scheduled to open in mid-June.

    “It will be a testament to our confidence in the China market,” said Jacob Kragh, general manager of Lego China.

    Lego to open largest retail store in Shanghai

    Kragh was speaking during a conference call following the release of Lego’s annual report, which showed revenue surged 25 percent to 35.8 billion kroner ($5.2 billion) last year.

    The company did not share the size of individual markets, but China has enjoyed what Lego called a “highly satisfactory” 34 percent growth year-on-year in 2015.

    Meanwhile, CEO Joergen Vig Knudstorp told China Daily that he believes there will be opportunities for Lego to grow as China transforms into a consumption-driven economy.

    While all of the 140 countries where Lego products are sold have posted double-digit growth in 2015, China has been one of the fastest-growing markets.

    Knudstorp expects that China will join the United States and Germany as the top three largest markets for Lego soon.

    Consulting firm Euromonitor International has forecast that by 2017, the Chinese toy market will be worth 100 billion yuan ($15.36 billion) and the Asia-pacific region will outnumber North America in sales as the world’s largest traditional toy market.

    While domestic brands still dominate the market, experts said that Chinese parents are likely to spend more on foreign toys in the coming years.

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  • Sogo switching its promotion plans after predicting a bumpy year ahead

    Sogo switching its promotion plans after predicting a bumpy year ahead

    Department store Sogo expects a gloomy year ahead due to a strong Hong Kong dollar and weak mainland tourists numbers. Its iconic Causeway Bay outlet recorded a 4.5 per cent year-on-year drop in sales, according to figures released yesterday.

    To survive in the increasingly tough local economy, the shop’s operator Lifestyle International is considering extending its twice-yearly sale weeks, which traditionally see customers cramming into the stores to hunt for bargains.

    “2015 was not too bad, but 2016 will be very challenging,” chief financial officer Terry Poon Fuk-chuen told reporters at the company’s annual results meeting yesterday.

    He pointed out that the Hong Kong dollar is strong, since it is pegged to the rising greenback, and it is having a dire effect on the already battered retail sector, which has been suffering from a shortage of mainland shoppers.

    The average daily customer traffic in the Causeway Bay branch dropped 2.4 per cent to 81,700 people last year and average sales per ticket shrank 3.1 per cent to HK$850 from the previous year.

    Chief executive Thomas Lau Luen-hung expects a flat year ahead, after sales at the island outlet experienced a double-digit decline over the past two months, compared with the same period last year.

    “I am not sure when the retail market will bottom out, but the chances are slim for a short-term rebound,” said Lau.

    The total number of visitors to Hong Kong declined 2.5 per cent last year – the first drop since 2004 – and mainland tourist numbers dipped 3.0 per cent.

    However, Lau is confident the long-term outlook of Hong Kong’s retail market is positive, as he believes the city is still an attractive place for mainland tourists, thanks to the expanding middle class and ongoing economic reforms north of the border.

    Despite more discounts being offered to customers in a period of weak consumer sentiment, Sogo has been luring in younger customers in a shift away from the previous focus on tourist promotions.

    Lau said shoppers have become younger and they prefer individuality to brand names when choosing what to buy.

    To adapt to this trend, more emerging international brands have been added to the first and second floors at the Causeway Bay shop over the past year, Lau said.

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  • SM Investments to consolidate its retail assets under one entity

    SM Investments to consolidate its retail assets under one entity

    February 29, 2016:

    SM Investments Corp (SM), the holding company of Philippine-based conglomerate SM Group of Companies, is merging its retail arm SM Retail Inc with related retail firms earning revenues up to $1 billion.

    SM earlier disclosed that its board of directors approved the merger of SM Retail with companies operating leading local retail chains such as Ace Hardware, SM Appliance Center, Homeworld, Our Home, Toy Kingdom, Watsons, Kultura, Baby Company, Sports Station and several other specialty stores. Together they operate 1,374 outlets and in 2015 delivered total revenues of P53 billion.

    SM is expected to own 77.3 per cent of the enlarged SM Retail.

    The merger will complement the existing retail portfolio of SM Retail which includes 53 SM department stores, 44 hypermarkets and 213 supermarkets as well as majority stakes in the local operations of Alfamart, Forever21, Crate & Barrel and other specialty and apparel retailers in addition to a minority stake in Uniqlo.

    The combined entity will have 1,927 outlets and 2.4 million sq m of gross floor area across a diverse portfolio of food, household appliances, DIY, furniture, apparel, footwear, pharmaceuticals/cosmetics and specialty retailing stores. The portfolio will serve a wide range of Filipino consumer needs in both staple and discretionary goods categories and will continue to leverage extensive synergies across the SM group.

    SM president Harley Sy said, the move is similar to the consolidation the company undertook in 2013 to create its large-scale, mixed-use property business.

    “The merger adds greater diversity and a more extensive footprint to SM Retail’s portfolio and is consistent with our goal of simplifying our corporate structure,” Sy said. “As a result, SM Retail will be even better positioned to address the growing needs of Filipino consumers and we expect the merger to be accretive to SM Retail earnings in future years.”

    SM’s net income increased 13 per cent in 2015, while consolidated net income stood at P28.4 billion, posting the same level in 2014. Consolidated revenues grew 7 per cent to P295.9 billion for the period.

    “Our strong underlying earnings growth in 2015 was due to favorable domestic market conditions and improved efficiencies which helped us widen our margins particularly in retail and property,” Sy noted.

    SM’s underlying earnings increase was driven by a 17 per cent growth in retail earnings, 14 per cent growth in property recurring net income and 10 per cent growth in bank net income. For 2015, banks accounted for 40 per cent of SM’s consolidated earnings, property 38 per cent and retail 22 per cent.

    SM’s last trading price decreased 2.96 per cent or P25 to close at P820.

     

  • Singapore economy grew 2% in 2015, weakest since 2009

    Singapore economy grew 2% in 2015, weakest since 2009

    The Republic’s economy expanded by 2 per cent in 2015, the weakest annual growth since 2009 when the economy was hit by the global financial crisis, according to figures released by the Ministry of Trade and Industry (MTI) on Wednesday (Feb 24).

    The figure was a sharp drop from the 3.3 per cent growth the previous year, and was revised downwards from the 2.1 per cent growth initially projected.

    Growth was mainly supported by the wholesale and retail trade, and finance and insurance sectors, according to MTI.

    For the fourth quarter, the economy expanded by a slower-than-expected 1.8 per cent from a year ago, after industrial production in December suffered its biggest year-on-year slump in eight months. The initial estimate was for a growth of 2 per cent.

    On a quarter-on-quarter seasonally-adjusted annualised basis, the economy expanded by 6.2 per cent in the fourth quarter, MTI said.

    The MTI has maintained its forecast of growth between 1 per cent and 3 per cent this year.

    “Even though global growth is expected to improve, the continued slowdown in China, the services-driven nature of growth in the US, as well as the trends of in-sourcing in China and the US, may mean that external demand for our exporters may not see a significant boost this year,” said MTI’s Permanent Secretary Ow Foong Pheng.

    “Lower oil prices have weakened the prospects for new rig orders for firms in the marine and offshore segment, and heightened the risks of further deterrents and cancellations of existing orders,” she added.

    The economic data also showed that labour productivity, as measured by value added per worker, grew by 0.5 per cent in the fourth quarter – the first improvement since the first quarter of 2014 – driven by the wholesale and retail trade, and construction sectors.

    For 2015 as a whole, overall labour productivity fell by 0.1 per cent, marginally improving from the decline of 0.5 per cent in 2014.

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  • Watsons pioneers cosmetics takeaway in China

    Watsons pioneers cosmetics takeaway in China

    Watsons has kicked off an initiative for selling and delivering cosmetics and groceries as takeaway via Baidu Waimai (takeaway in Chinese).

    Expanding online to boost sales

    The initiative has been launched in Beijing, Shanghai and Guangzhou and will be extended to all the cities that Watsons operates in. Products on Baidu Waimai include personal care, snack and beverages.

    As the leading Health & Beauty chain in China, Watsons has launched various online initiatives, such as its own online shop, stores on online platforms Amazon, Alibaba and JD.com, as well as Watsons app. The launch of takeaway service aims to attract more customers and generate new revenue streams for the retailer.

    Other initiatives to drive growth

    As the growth slows down and margins being squeezed, Watsons has been focusing on satisfying the needs of the ever-changing consumers.

    • store expansion, especially in third and fourth tier cities to reach more shoppers
    • introducing more local brands to lift profitability
    • launching more loyalty schemes and membership cards to attract young shoppers
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  • Japan manufacturing output up in January, retail sales fall

    Japan manufacturing output up in January, retail sales fall

    Japan’s industrial production rose in January from the month before, beating forecasts, while retail sales fell, suggesting the recovery of the world’s third-largest economy is still on the ropes.

    January’s increase in factory output was a turnaround from month-on-month declines in November and December. But production was down 3.8 percent from January 2015, and is forecast to fall by 5.2 percent month-on-month in February, partly due to weak demand as the world economy slows.

    Marcel Thieliant of Capital Economics said in a note that the economy would likely remain in the doldrums in this quarter.

    “The rebound in industrial production in January is unlikely to assuage concerns about the health of Japan’s economy as firms are predicting a renewed slump in February,” he said.

    Japan’s central bank recently began a negative interest rate policy aimed at getting banks to lend more to help spur business activity and fend off deflation. Japan’s inflation rate was flat in January, according to data reported earlier.

    Finance ministers and central bank governors of the Group of 20 rich and developing economies called for using all policy tools available to help fend off recession as they wrapped up a meeting in Shanghai over the weekend.

    Data released Monday showed Japan’s manufacturing index was at 99.8 in January compared with a base of 100 in 2010. Prime Minister Shinzo Abe has sought to rekindle growth with a three-pronged approach of monetary stimulus, government spending and reforms.

    Retail sales fell 1.1 percent in January from the month before and were down 4.3 percent from a year earlier. Other key data, such as wages, household spending and the jobless rate, are due Tuesday.

    So far, the “Abenomics” strategy has leaned heavily on the Bank of Japan’s unprecedented barrage of monetary stimulus through massive asset purchases. The injections of trillions of dollars into the economy each year have helped weaken the yen, boosting the profits of corporations and, for a time, pushing share prices higher.

    But since companies have shied away from raising wages or making sizable investments in operations in Japan, growth has remained tepid.

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  • China will bounce back and continue to drive global growth for decades

    China will bounce back and continue to drive global growth for decades

    Economists have often said “when America sneezes, the world catches a cold” reflecting the importance of the US to the global economy.  But the past 12 months suggest the world’s immune system is more sensitive to China’s sniffles than was previously thought.

    The country’s economic slowdown and the overdue lancing of the bubble in its stock market have made the world’s central bankers and policymakers realise that China now has a huge influence on global markets.

    I was in Beijing and Shanghai last week in part to attend the G20 summit in my role as a board member of the Institute of International Finance but also to see for myself what is happening in China. There is no substitute for visiting a country if you really want to understand what is going on there. Get there, meet companies and policymakers and listen to what the people you meet have to say.

    This is especially the case with somewhere like China because it can be opaque and a lot of what is written about the country is nonsense. You can only get so much information to form a view from sitting in an office 6,000 miles away.

    One of my most interesting meetings was with Dr Pan Gongsheng, deputy governor of China’s central bank. It is true that the economy is slowing. Never mind the validity of the official figures, the 6.9pc growth achieved last year is a far cry from the double-digit expansion achieved a few years ago.

    But is this slowdown really so bad? The change in the pace of growth is as much by design as by accident. China’s policymakers made a deliberate decision a few years ago, to move the economy away from an investment-led, export-driven model towards one in which domestic consumption plays the dominant role. The country’s leaders want growth that is sustainable.

    For a long time investors have focused on China’s manufacturing data as an indicator to how well or badly the economy is doing. Recent weakness in the manufacturing data has been interpreted as a big negative and has ignored the growth of service industries, especially in the private sector.

    Real estate, finance, hospitality, retail, transport, construction and other services accounted for some 55pc of GDP in 2014, up from 47pc in 2006, according to data compiled by CLSA and Citic Securities.

    As the economy continues to move to a more domestic focus, this share will continue to rise. This is not to say everything is rosy in China. In recent years, western leaders watched with wide-eyed wonder at their Chinese counterparts’ handling of the economy. They looked on in envy at Beijing’s ability to manage the economy at a time when the world seemed to be closing in.

    That reputation has taken a major dent recently. They successfully deflated a bubble in the property market but that meant that China’s army of retail investors piled into the domestic stock markets. The authorities should not have tried to prop this over-leveraged and speculative bubble. They should have let it pop but chose to intervene and then did so in a messy, unclear and unsuccessful way.

    While they were bungling the rescue of the stock market, the authorities made a mess of communicating a loosening in renminbi policy, which fuelled suspicions the country was seeking to devalue its way out of trouble. This is prompting wealthy locals to move their cash offshore and in response the government is making it harder for money to be moved overseas.

    Local government and corporate debt are big problems, the state sector is bloated and inefficient, while the property market remains fragile. Whilst my trip provided comfort on the state of the economy, my views on the stock market remain unchanged. We have always been very cautious about investing in Chinese companies because so many are opaque and many have woeful corporate governance.

    It’s obvious if you spend time in China to see that the Shanghai and Shenzhen stock markets operate like casinos. Trading activity is dominated by retail investors who buy on rumours and flee at the first sign of trouble. It’s much more sensible to expose yourself to China’s growth by investing in companies which aren’t based there but do business there.



    It’s a much easier way of investing in companies with decent growth prospects, that have quality management and adhere to good levels of transparency and accounting standards. From speaking to companies, economists and analysts in China, it’s clear to me that the country is heading for a softer, rather than harder, landing. You need to look beyond the stock market for the clues of why, though. China’s consumer spending is still motoring. Consumers have taken to internet shopping at a startling pace.

    Barely 15pc of the population had shopped on the internet a few years ago. Now over 40pc have. Chinese shoppers spent nearly $8bn (£5.7bn) in the first 10 hours of the country’s equivalent of Cyber Monday or Black Friday. Chinese authorities might have lost some of their reputation for financial competency, but they have $3.4 trillion in foreign exchange reserves to soften the blow of a slowing economy.

    Unlike many policymakers in the West, those in Beijing still have plenty of tools at their disposal to avert economic disaster and to help the country to develop. The announcement last week of the opening up of the bond market to long-term international investors is a prime example and is a step in the right direction.

    Ultimately China will shake off its current sniffles to continue to be a driver of global growth for decades to come.

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  • Why are many Thai buyers in the Vietnam retail market?

    Why are many Thai buyers in the Vietnam retail market?

    Berli Jucker Plc (BJC), has taken over the Japanese chain of 42 FamilyMarts and renamed it as B’mart. The Vietnamese retail market recently witnessed a series of mergers and acquisitions (M&A) in which the buyers were businessmen from Thailand.

    In mid-2014, BJC made a deal on buying Metro Cash & Carry Vietnam at $880 million, the biggest affair in the retail sector in Vietnam so far. The deal wrapped up 1.5 years later, in January 2016.

    In early 2015, Central Group successfully acquired a 49 percent stake of the Nguyen Kim home appliance distribution chain.

    Right after French Casino Group announced the plan to sell Big C Vietnam, analysts predicted that Big C chain in Vietnam was likely to fall into Thai hands. Later, BJC stated it was vying for Big C Vietnam.

    This is because, according to Phu, the Vietnamese market promises great potential: while other countries in the world focus on developing the home market, Vietnam has been gathering strength on boosting export, while paying less attention to the domestic market.Vu Vinh Phu, chair of the Hanoi Supermarket Association, who was deputy director of the Hanoi Trade Department, noted that only a few foreign retailers came to Vietnam in the past, but things are quite different now. Nearly all big retailers in the world are present in Vietnam, especially Thais.

    This explains why foreign investors have to spend several months only to find retail premises and penetrate the home market. Meanwhile, a domestic retailer told Phu that it took him three years to do this.

    “Business opportunities will be missed after such a long time,” Phu said, adding that domestic and foreign retailers are in an unequal competition.

    An analyst commented that many Thai businessmen eye Vietnam because Thailand is near Vietnam in geographical position. Thai businesspeople understand Vietnamese consumers’ taste and hobbies.

    “Thai businessmen kicked off plans to penetrate the Vietnamese market a long time ago. And they have been doing this in a methodical way and they have been step by step expanding both production and distribution in Vietnam,” he commented.

    At first, Thai businesses usually organize trade fairs in Vietnam to familiarize Vietnamese with Thai products.

    “I believe that 100 percent of families in Hanoi and HCMC use Thai products, from washing liquid to knives,” he said, adding that Thai products are present in every Vietnamese family.

    Phu commented that though Thai is less strong than Japanese and South Korean; therefore, they have been ‘waging guerilla warfare’ when attacking the Vietnamese market.

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  • Filipino supermarket giant comes to Canada

    Filipino supermarket giant comes to Canada

    A prominent Filipino supermarket announced its entry to the Canadian soil, thanks to the ever growing number of Filipino population in the Americas. Seafood City Supermarket, one of the biggest supermarkets in the Philippines announced that it would open the first grocery store in the country early next year.

    Mildred Smith, the marketing manager for Seafood City Supermarket said, “Whatever culture you belong to, everybody eats seafood.” Apart from Filipinos, the newly proposed supermarket intends to lure in people who has a  love  for international cuisine as well. Seafood  City supermarket has almost 22 store in America along with some other nearby locations like West Coast and Hawaii.

    One could find fresh ingredients for cooking Filipino and pan Asian dishes in the new supermarket. The first store would open at Heartland Town Centre in Mississauga, Ont., in the first quarter of 2017. The Canadian Seafood City Supermarket will include a Grill City, a Filipino barbecue fast-food joint, and a Crispy Town, which sells fried Filipino snack food.

    In 2011, more than 662,000 Filipino people lived in Canada, according to Statistics Canada’s 2011 national household survey, making up about five per cent of the country’s population. In 2014, the Philippines pushed ahead of China and India as Canada’s top source country for immigrants, according to the federal agency. The Greater Toronto Area and Vancouver are home to the largest Filipino communities in Canada. There are also reports that one of the major fast food chains in Philippines,  Jollibee would also come to Canada later this year. The food giant which has more than 750 stores in the Philippines serves burgers, noodles and rice meals.

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