Category: Living

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

  • Bamboo Airways to sign deal for 10 Boeing planes during Trump-Kim summit

    Bamboo Airways to sign deal for 10 Boeing planes during Trump-Kim summit

    Vietnam’s newest carrier, Bamboo Airways, which began flying last month, is set to sign a deal with Boeing to buy 10 aircraft. The signing will take place on the sidelines of the second summit between U.S. President Donald Trump and North Korean leader Kim Jong-un in Hanoi on Wednesday and Thursday, an unnamed airline executive said. In July last year the airline had signed a provisional deal to buy 20 Boeing 787-9 wide-body jets worth $5.6 billion at list prices.

    “We will sign with Boeing a deal to buy 10 Boeing 787s,” the executive said. “This is different from the deal signed earlier for 20 Boeing planes.”

    The U.S. Federal Aviation Administration (FAA) recently allowed Vietnam to operate direct flights to the U.S.

    Bamboo Airways and other Vietnamese airlines have expressed interest in operating direct flights to that country.

    Bamboo was set up by private conglomerate FLC in 2017 with a charter capital of VND700 billion ($30 million), which it recently increased to VND1.3 trillion ($55.68 million).

    Budget airline Vietjet also plans to sign on the sidelines of the summit a deal to buy 100 narrow-body Boeing aircraft.

    Vietnam’s aviation industry is booming demand. The country welcomed 12.5 million air passengers last year, up 14.4 percent from 2017, according to the General Statistics Office.

  • Nintendo makes comeback in Korea with Switch

    Nintendo makes comeback in Korea with Switch

    Nintendo, the Kyoto-based game company, returned to Korea. After almost disappearing over the past decade in the storm of mobile and online games, it is returning to the market with Switch, a retro console that marries the latest technology with old favorites, like Pokemon. A 41-year-old surnamed Kim, a father of three, recently found his new favorite hobby: playing Switch. His two favorite games are Diablo 3 and Legend of Zelda: Breath of the Wild, both of which he used to enjoy years ago at attending university.

    He now plays the latest versions.

    “To advance to a higher level on smartphone games, I have to spend a lot of time and money, so I lost interest,” said Kim. “As for Switch, it’s like the games I played when I was younger. Just like arcade games, I can save the game and can continue playing it where it ended whenever I want. Also, the game itself is not too difficult.”

    Plenty of people seem to agree with Kim.

    Global sales of Switch from its introduction in March 2017 through late 2018 totaled 32.27 million units, according to a report from Nintendo. On average, 33.5 Switch consoles have been sold per minute. A total of 163.61 million Switch titles were bought during the same period.

    The Switch ended 2018 as the year’s best-selling hardware platform both in unit and in dollar sales terms, according to a report from NPD Group, a U.S.-based market-research company. Both in units and dollars, the Switch was the best-selling game since Sony PlayStation 4 in 2015.

    The Switch boom is evident in Korea, where consoles are not generally very popular. The product has been generating 51 percent of game sales at Emart, the main marketing channel for Switch.

    According to a report from Korea Creative Content Agency (Kocca), the size of the console game market in Korea grew by 42.2 percent from 2016 to 2017. Sales of Switch – which totaled more than 110,000 units in the first month of its release in Korea in December 2017 – and the rise of the related software sales were major contributors to the game market expansion, the report argues.

    Revival of Retro

    Nintendo, which was founded in 1889 as a playing-card company, most recently became an icon of innovation around year 2000 when it introduced Nintendo DS and Wii. Each sold more than 100 million units, and the strong sales in Korea led to the development of similar games locally.

    The success was short lived. The market began to change around 2010 as smartphone games started to develop and lead the market. In 2011, Nintendo experienced its first annual earnings loss since it was listed on the stock exchange in 1983.

    The company sought a rebound the following year with the Wii U, but only 13 million units were sold.

    Nintendo suffered losses for three years, and its presence in the console game market gradually waned with the dominance of the Sony PlayStation 4 and Microsoft’s Xbox. Nintendo’s share price dipped to as low as 8,060 yen ($73) from its November 2007 peak of 70,500 yen. The company’s weak performance continued until 2016, when Nintendo shook the game world with Pokemon Go, its wildly popular augmented-reality smartphone game.

    The comeback was confirmed with the release of Switch the following year.

    Popular with young and old

    Nintendo’s timing couldn’t have been better. It released Switch just as the newtro trend was gaining ground. Newtro, a portmanteau of new and retro, is reviving many long-dormant styles and products.

    The most popular titles in the early days of Switch – Super Mario Odyssey, Legend of Zelda and Pokemon: Let’s Go, Pikachu! – are the latest versions of classic games that people now in 30s and 40s used to enjoy when younger.

    “Switch looks very similar to the portable arcade games that people now in 30s and 40s first used in their childhood,” said researcher Jang Min-ji from Kocca. “As the generation that grew up with these games now has purchasing power, similar games are bought by people in that generation.”

    “Even younger people – those in their teens and 20s – who have never experienced these games, are finding Switch refreshing in that unlike smartphone and traditional console games, users can carry it around and play it while in bed, not to mention connect the games to television. Such charms of Switch have captivated people across age groups,” Jang said.

    The global newtro trend was evident at Consumer Electronics Show (CES), held in Las Vegas in early January. Though many people gathered to experience Sony’s state-of-the-art games with virtual reality and augmented reality, bigger crowds gathered at booths for classic games, like Street Fighter II and Double Dragon.

    “It has become a new trend for people in their 30s and 40s to reminisce about their past, while the younger generation fulfills their fascination for the newtro style,” said Kim Gyeong-geun, a merchandiser at a local toy seller, Toy Friends.

    Growing tired of mobile games

    Another key contributor to the growing demand for classic games is the gradual loss of interest in mobile games, which dominated the local market over the past several years. Players are growing tired of the free-to-play model, which is employed by the majority of mobile massively multiplayer online role-playing games (Mmorpg).

    With free-to-play mobile games, players can download the game either for free or at a low price, but they are compelled to spend more to improve the gaming experience.

    In a report on the success of Switch, Lee Taek-su from KB Research wrote, “In the past, most people did not agree with the idea of spending money on console game software that costs between 50,000 won [$44.40] and 60,000 won, since they could easily play mobile games for free or for around 1,000 won to 2,000 won. But as a growing number of players start to have the experience of spending much more cash on mobile games, their perceptions have started to change.”

    The diversity of games that could be interesting to people of different ages and gender, and the fact that these games can be enjoyed by multiple people at once through the connection of hardware, are few reasons Switch is gaining popularity.

  • Retail report says holiday sales were disappointing

    Retail report says holiday sales were disappointing

    Shoppers did not spend as much as expected this past holiday season. Holiday sales were up just 2.9 percent in 2018, the National Retail Federation said, on the heels of the Commerce Department announcing retail sales for December fell 1.2 percent, the largest decline since September of 2009. NRF, the retail industry’s trade organization, had been calling for 2018 holiday sales, those from Nov. 1 through Dec. 31, to rise between 4.3 and 4.8 percent.

    “It appears that worries over the trade war and turmoil in the stock markets impacted consumer behavior more than we expected,” NRF President and CEO Matt Shay said in a statement. “There’s also a question of whether the government shutdown and resulting delay in collecting data might have made the results less reliable.”

    NRF said online and other nonstore sales were up 11.5 percent this past holiday season, while the group had been calling for growth of between 11 and 15 percent.

    It said sales, both in stores and online, were down 1.5 percent in November year over year, and in December were up just 0.9 percent. It added that October sales were up 5.7 percent year over year, but spending during that month isn’t included in NRF’s holiday sales tally.

    NRF chief economist Jack Kleinhenz said the sales results were “truly a surprise” and “in contradiction to the consumer spending trends” NRF had been monitoring.

    The fresh retail sales data from the Commerce Department has, meanwhile, raised new concerns about a recession. But economists also say the biggest drop in nine years clashes with other data and may be suspect.

    NRF is still calling for retail sales, excluding automobile dealers, gasoline stations and restaurants, to climb between 3.8 and 4.4 percent this year, amounting to as much as $3.84 trillion.

  • AirAsia unveils plans to begin international flights to Vietnam city

    AirAsia unveils plans to begin international flights to Vietnam city

    AirAsia will start flying from Kuala Lumpur and Bangkok to Can Tho in Vietnam’s Mekong Delta in the next few months. The budget carrier has announced it will begin the Kuala Lumpur – Can Tho service on April 8 with four flights a week and the Bangkok – Can Tho service from May 2 with three flights, AirAsia said in a recent statement. Tran Viet Phuong, director of the city’s Department of Culture, Sports and Tourism, told local media that the services would help increase the number of foreign tourists visiting the Mekong Delta.

    He added that visitors from not only Southeast Asia but also from India and Australia would find it easier to reach the city given AirAsia’s network.

    AirAsia Malaysia CEO Riad Asmat said: “We foresee the new route not only contributing to the socio-economic development of the city, but also providing new opportunities for the people in Mekong Delta to connect with ASEAN and beyond through our wide network.”

    According to the Can Tho Tourism Association, 8.48 million tourists visited the city in 2018, a 12.5 percent increase from the previous year.

  • Vietnamese airlines continue to be plagued by pilot shortage

    Vietnamese airlines continue to be plagued by pilot shortage

    With increasing demand for pilots as they expand, Vietnamese airlines have had to raise salaries, spend more on training and hire foreign pilots. Figures from the Civil Aviation Authority of Vietnam show that by 2020 Vietnam will need a total of 2,680 pilots for commercial flights, 1,320 more than now. Vietnam Airlines, the country’s flag carrier, needs to hire 193 more pilots to increase the number on its payroll to 1,293 pilots to meet demand in 2019, according to the carrier’s recent assessment report.

    The assessment forecast the demand to keep rising increasing to 1,340 by 2020 and 1,570 by 2025. This is a challenging number given the increasing shortage of pilots globally, according to industry insiders.

    According to a recent report from Boeing, the global aviation industry will need 790,000 new pilots by 2037, or double the current number, driven by an anticipated doubling of the commercial airplane fleet, record travel demand and tightening labor supply.

    Pilot training has always been extremely expensive, with stringent health and technical knowledge requirements, meaning that the number of pilots qualifying is always limited, according to industry insiders.

    A former Vietnam Airlines pilot revealed that because of the shortage, soon after he gave notice of termination he received many offers from airlines both domestic and foreign.

    He said many other pilots at Vietnam Airlines also constantly offered 15-25 percent higher salaries by head hunters.

    As a result the carrier has been focusing on hiring trainees. Duong Tri Thanh, its general director, said given the global shortage of pilots and carry out its expansion plans in time, Vietnam Airlines has been training internally and recruiting foreign pilots despite high costs.

    Similarly, Jetstar Pacific or Vietjet Air are facing difficulties filling their vacancies with pilots when trying to rapidly expand in South Korea, Japan, and other countries in Southeast Asia. Currently, the number of pilots at these firms is largely foreign due to limited domestic supply. Typically, at Jetstar Pacific, foreign pilots account for 80 percent of their fleet.

    However, foreign pilots can be hard to come by since many other companies in Asia can offer them better remuneration and working conditions.

    An aviation expert said airlines need to combat the pilot shortage by investing in training facilities and recruitment programs and subsidizing training for pilot trainees.

    Vietnam’s aviation industry has been growing rapidly in recent years. There were 12.5 million air passengers last year, up 14.4 percent from 2017.

    The number of flights in the country grew by 16 percent on average between 2010 and 2017, according to official data.

    Vienam’s five airlines are Vietnam Airlines, its low-cost carrier Jetstar Pacific, budget airline Vietjet Aviation, Bamboo Airways and Vietnam Air Services Co.

  • Higher fuel prices dent AirAsia X’s Q4 performance

    Higher fuel prices dent AirAsia X’s Q4 performance

    AirAsia X Bhd suffered a net loss of RM99.27 million in the fourth quarter ended Dec 31, 2018 compared with a net profit of RM84.42 million a year ago due to higher fuel prices. In a filing with Bursa Malaysia, the airline reported an increase in average fuel price to US$89 per barrel during the quarter from US$69 per barrel a year ago, which resulted in a lower net operating profit of RM27.4 million from RM120 million a year ago.

    In addition, the group provided an impairment on amount due from joint venture amounting to RM24 million during the quarter under review.

    During the quarter, the group reported a 1% improvement in cost per available seat kilometre (CASK) to 12.27 sen while CASK ex-fuel improved by 16% from 8.22 sen to 6.94 sen a year ago, due to enhanced cost management.

    Revenue for the quarter fell 5.93% to RM1.15 billion from RM1.22 billion a year ago.

    For the financial year ended Dec 31, 2018 (FY18), the group also swung into the red registering a net loss of RM312.7 million compared with a net profit of RM98.89 million a year ago while revenue fell marginally to RM4.54 billion from RM4.56 million a year ago.

    AirAsia X said its current forward booking trend and average fares for the first quarter of 2019 are within expectation and prospects are anticipated to remain encouraging.

    The airline will be adding up to five aircraft through operating leases this year via AirAsia X Thailand while AirAsia X Malaysia will remain with 24 aircraft.

    AirAsia X Malaysia will focus on maximising aircraft utilisation of its current fleet and leverage on the group’s strategy in new route launches as well as increasing frequencies of core routes.

     

  • Vietjet to ink $13 billion Boeing deal during Trump-Kim summit

    Vietjet to ink $13 billion Boeing deal during Trump-Kim summit

    Vietnamese budget airline Vietjet will sign next week a deal to buy 100 narrow-body Boeing aircraft. The signing will take place on the sidelines of the upcoming Trump-Kim summit, sources said. The sources also said Vietjet will finalize next week a provisional deal agreed last year to buy 100 narrow-body Boeing 737 MAX jets worth almost $13 billion at list prices.

    The U.S. Federal Aviation Administration (FAA) last week gave Vietnam a Category 1 safety rating, allowing local airlines to operate direct flights to the U.S.

    Vietjet, along with other local airlines, had previously expressed interest in operating direct flights to the U.S.

    The carrier, the largest private airline in Vietnam, had also signed a deal to buy Boeing 737 MAX narrow-body jets when former U.S. President Barack Obama visited Hanoi in 2016.

    It also finalized a deal in November last year with Airbus for 50 A321neo jets during a visit to Hanoi by French Prime Minister Edouard Philippe.

    Vietjet currently operates 40 domestic routes and 66 international routes. It has 385 flights daily within Vietnam and to places such as Japan, Hong Kong, South Korea, Taiwan, Singapore, mainland China, Thailand, Myanmar and Malaysia.

  • Korean Air plans to make 16 trillion won in sales by 2023

    Korean Air plans to make 16 trillion won in sales by 2023

    Korean Air unveiled its mid-term business strategy Tuesday, saying it aims to record 16.2 trillion won ($14.4 billion) in sales by 2023. The goal comes as the airline’s March shareholders’ meeting draws near. Korean Air Chairman Cho Yang-ho’s term at the country’s largest airline ends this year and shareholders will vote on his re-election. To achieve the sales target, it needs to grow by an average 5.1 percent every year. Last year, the airline inked 12.7 trillion won in sales.

    Its operating profit target for 2023 is 1.7 trillion won, about 2.5 times more than last year’s 692.4 billion won.

    The company said it will work to raise the profitability of its business to reach a 10.6 percent profit to sales ratio. Last year, the ratio stood at 5.5 percent. Along with improved profits, the company plans to lower its debt ratio to below 400 percent from last year’s 699 percent.

    To expand sales, Korea’s largest full-service carrier plans to expand routes connecting America and Asia through a joint venture inked with U.S. airline Delta Air Lines last year. The partnership enables the two companies to share revenue, costs, flights and sales networks with antitrust immunity on their trans-Pacific operations.

    The airline also plans to open up new flight routes headed to Europe and Southeast Asia, both growing as popular travel destinations.

    As for its cargo business, the airline plans to bolster its business with emerging markets like Vietnam, India and Central and South America.

    In the aerospace business, the company said it will develop new technologies to build parts for passenger aircraft and start mass producing unmanned aerial vehicles to secure future growth engines.

    This year, Korean Air proposed a target of 13.2 trillion won in revenue and 1 trillion won in operating profits.

  • Emart24 ups the booze to capture solo drinker market

    Emart24 ups the booze to capture solo drinker market

    Convenience store chain Emart24 will expand its alcohol selection tenfold at around 500 branches this year, the brand said Wednesday. The products will be offered using the shop-in-shop model with 120 products, including wine, whiskey and micro-beers, displayed in a dedicated corner. Three to six racks will be added at each outlet to hold the products.

    The company explained the efforts are motivated by the rise of solo drinkers, those who enjoy a few drinks after work as opposed to drinking in larger groups.

    The reduction of the workweek to 52 hours and changing lifestyles, which prioritize work-life balance, have further driven up the number of solo drinkers. Before the announcement, the convenience store tested the shop-in-shop model at 19 branches for two months from November. Sales of wine, craft beer and whiskey increased 20-fold. Overall sales at these 19 branches doubled.

    Emart24 said it plans to expand the shop-in-shop concept to products other than alcohol in the future. It is considering fresh food and imported snacks.

  • King Power duty free monopoly ending soon

    King Power duty free monopoly ending soon

    Thailand’s much-maligned airport duty-free monopoly appears set to be nearing an end. For years, major Thai retailers have complained that incumbent operator King Power has controlled the retail offer – and prices – at Thailand’s largest airports, especially Suvarnabhumi outside Bangkok. Frequent travellers often comment that airport ‘duty-free’ prices are higher than at other airports in the region, including Singapore and Hong Kong.

    On Wednesday, state-owned Airports of Thailand (AOT) approved guidelines for concessions for duty-free and commercial activities at its airports, the first step in opening up retail spaces to other companies.

    According to Reuters, AOT will offer three retail licences at an upcoming auction, clearing the way for Thai retail giants Central Group and The Mall Group, along with South Korea’s Hotel Shilla, to enter the fray.

    King Power’s current licence ends next year.

    AOT says contracts will cover duty-free retail, commercial businesses such as food and beverage outlets and pick-up counters for shoppers who buy goods in town and collect them at the airport after clearing customs and immigration.

  • Japanese Brand Muji Will Open First Vietnam Store in 2020

    Japanese Brand Muji Will Open First Vietnam Store in 2020

    Japanese household goods and apparel chain Muji plans to open in Vietnam next year. The company will establish its subsidiary Muji Vietnam this August with headquarters in Ho Chi Minh City. The first store is scheduled to open in the second quarter. Muji’s parent Ryohin Keikaku says it chose Vietnam as Muji’s next overseas market because of the country’s fast-paced development. Vietnam has the third-largest population in ASEAN and is undergoing rapid economic growth.

    “From our business’ point of view, it is one of the major markets in ASEAN, with the estimated real GDP growth of 7.1 per cent last year,” the company said in a statement released in Japan.

    “We expect that our experience and knowhow in the global market will help in running stores that serve everyday living and [that will] increase Muji’s fans in the area.”

    Muji products are among the most popular items hand-carried back into Vietnam from travellers visiting countries such as Thailand, Singapore, Hong Kong and the Philippines.

    The opening of first Muji Vietnam store is expected to attract many Vietnamese youngsters, with the minimalist lifestyle reflected in the retailer’s product range currently a trend in the country.

    Muji has more than 450 stores in Japan, and 470 stores in other countries.

  • Incheon Airport to add AI to security systems

    Incheon Airport to add AI to security systems

    Never mind airport security, artificial intelligence (AI) may also be rooting through your luggage in the near future at Incheon International Airport. Incheon International Airport Corporation said Wednesday it will incorporate AI into its security systems in a bid to improve accuracy in screening passenger luggage for prohibited items.

    The airport has already started working on the project to develop an AI-based X-ray screening system to be tested in the second half of next year.

    Instead of the existing system that relies on X-ray scanning, manual image checking by security officers and a final physical check, artificial intelligence will crosscheck the X-ray scan and the analysis will be available to officers along with the X-ray image.

    The first-stage AI scan is expected to complement and improve the accuracy of the security check as an officer will continue to be responsible for the final call to physically inspect luggage.

    The airport said it will apply deep-learning technology on over 600,000 pieces of footage of around 20 prohibited items and 20,000 commercially sold liquid products to develop an algorithm for imagery interpretation and improve the AI’s screening accuracy.

    The development project is expected to take two years overall, with a proof-of-concept system to take 10 months to develop.

    “By preemptively incorporating AI technology into security, [we] will strengthen airline security and plan to provide a safer and more convenient environment for passengers,” said Chung Il-young, CEO of Incheon International Airport Corporation.

    This will be the country’s first large-scale practical application of the technology, according to the airport.

    It is part of broader efforts to introduce a “Smart Security System” with the Ministry of Land, Infrastructure and Transport.

    The airport is also planning to introduce a tunnel security search system, the first of its kind, which will allow passengers to simply go through security checks by walking through a tunnel.

    The airport screened around 60 million pieces of luggage last year through the conventional X-ray system and found 3 million prohibited items such as firearms and swords.

  • Ikea to launch ‘intelligent curtain’

    Ikea to launch ‘intelligent curtain’

    Ikea has developed an ‘intelligent curtain’ capable of purifying air. The invention, coated with sunlight-activated minerals that break down airborne pollutants, has been developed in collaboration with several European and Asian universities. “By enabling a curtain to purify the air, we are creating an affordable and space-saving air purifying solution that also makes the home more beautiful,” said Ikea product developer Mauricio Affonso.

    The Gunrid intelligent curtain will be sold in stores next year and is expected to sell well in areas particularly affected by air pollution.

    According to the World Health Organisation, 91 per cent of humanity lives in areas affected by significant air pollution, which kills around 7 million people every year.

    “Gunrid is the first product to use the technology,” said Ikea’s head of sustainability Lena Pripp-Kovac, “but the development will give us opportunities for future applications on other textiles.”

    “We know that there is no single solution to solve air pollution. We work long term for positive change, to enable people to live healthier and more sustainable lives”, she said.

  • CU convenience stores parent records sales leap

    CU convenience stores parent records sales leap

    The operator of South Korea’s CU convenience stores, BGF Retail, has achieved KRW189.5 billion (US$168.9 million) in operating profit last year, a leap of more than 600 per cent over last year. The company said on Tuesday its sales had risen by 515.3 per cent to KRW5.77 trillion ($5.14 billion). The results confirmed market predictions of a major upswing for the firm following demerging into separate holding and operating entities in November 2017.

    However, despite the improved trading figures, net profit dropped 98.1 per cent to KRW47.2 billion ($42.06 million). A statement by the firm explained that profits from some business activities made after the demerger had been attributed to the previous year’s statements.

  • Malaysia ranks second in SEA for Chinese tourist transactions during CNY

    Malaysia ranks second in SEA for Chinese tourist transactions during CNY

    Malaysia is the second largest market in Southeast Asia for Chinese tourists spending over the Chinese New Year holiday season, as recorded by Alipay, the digital payment and lifestyle platform offered by Ant Financial, an affiliate company of Alibaba Group. The transactions were recorded between Feb 4 and 10 this year. Malaysia saw a 16% increase in average per-capita spend by Chinese tourists this year, with a growth in transaction volume by 71% compared to 2018.

    What’s more, Chinese millennials can no longer claim to be the dominant user group spearheading spending while travelling, as 68% of Chinese tourists born between 1960 and 1979 were found to be the main driving force in outbound tourism and overseas consumption.

    Alipay head of business operation for cross-border business Janice Chen said this year’s findings highlight how mobile payment is taking root in China’s outbound tourism market, and it is excited to see the robust growth in the use of Alipay by overseas tourists from third-and-fourth tier cities and middle-aged vacationers.

    “While providing a better experience for Chinese travellers, Alipay is, at the same time, a huge drawcard for overseas merchants as a platform to help grow their business,” Chen said in a statement.

    This is in accordance to a recent report published by Nielsen and Alipay, called the 2018 Trends for Mobile Payment in Chinese Outbound Tourism.

    Chinese tourists are bringing their cashless lifestyles outside of China, paying for 32% of their overall travel transactions using mobile payment, overtaking their use of cash for the first time ever.

    The survey found that merchants offering Alipay as a payment option has experienced growth in both foot traffic (58%) and revenue (56%).

    Heinemann, a travel-retailer with a store in Kuala Lumpur International Airport 2 (KLIA2) has also reported an increase in sales. Its general manager for retail operations Alexander Maas said since implementing Alipay, it is now able to provide added convenience to its customers from China, and provide them with a familiar shopping experience, ultimately seeing over 20% of all its transactions completed on the Alipay app with Chinese tourists.

    With the increased popularity of Alipay among both young and old Chinese tourists, brick-and-mortar retailers across the region can continue to adopt Alipay as a payment option to further boost profitability moving forward.