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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.

  • Royal Selangor to open in Chelsea, London

    Royal Selangor to open in Chelsea, London

    Malaysia-based pewter brand Royal Selangor is to open its first standalone store in the UK.

    It chose the upmarket London suburb of Chelsea for its debut, a site adjacent to the Designer’s Guild at 261 Kings Rd.

    The 1317 sqft store is due to open as early as June.

    Established in Malaysia in 1885, Royal Selangor is now a global family business with stores in more than 20 countries.  Its UK flagship on King’s Rd will stock customised and designer homewares, as well as ornaments and personalised gifts, all made from pewter. In addition, Royal Selangor’s two complementary brands Selberan jewellery and the 350-year-old sterling silver brand Comyns will both be available in store.

    Royal Selangor is famous for its exclusive collaborations with international designers including Denmark’s Erik Magnussen, Freeman Lau from Hong Kong, and champagne houses Veuve Clicquot Ponsardin, Dom Perignon and Krug. Royal Selangor has also created trophies for numerous Formula One races, the Shanghai ATP 1000 Masters, as well as the Sime Darby LPGA Malaysia Golf Tournaments.

    Peter Coleman, MD of Royal Selangor UK, said the company wanted to launch its first store in a destination that reflects its quality and heritage.

    “The King’s Rd met our requirements perfectly due to the great mix of brands that share a similar ethos to our own and the cachet it holds as one of London’s most significant retail addresses.”

    Richard Everett, estate manager at Sloane Stanley, who brokered the lease deal, said the company is committed to creating a unique mix of retailers with a certain style on the King’s Rd, and the arrival of Royal Selangor is consistent with this strategy.

    “They will appeal to residents and visitors alike, reaffirming the King’s Rd’s position as one of the most important retail streets in London.”

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  • FitFlop unflappable about Thailand investment scheme

    FitFlop unflappable about Thailand investment scheme

    The Primer Group of Companies, a Philippines lifestyle fashion company, believes sales of FitFlop shoes in Asia-Pacific this year will outpace last year’s with Thailand driving growth.

    Camille Karaan, deputy director and vice-president of Primer International Management Ltd, the operator of FitFlop shops in Asia-Pacific, said despite the Thai economy slowing it would maintain its investment in the Thai market, particularly for exclusive product designs.

    The company started producing exclusive shoe designs for Thailand three years ago, which received a warm response from ASEAN customers, particularly the Shasha collection. About 150,000 pairs of Shasha sandals were sold in Asia-Pacific last year, compared with a record high of 100,000 pairs for its regular collections.

  • New rich drive Vietnam luxury boom

    New rich drive Vietnam luxury boom

    The rapidly rising ranks of Vietnam’s uber-rich are fueling growing demand for luxury goods in the fast-growing economy.

    The number of ultra high net worth individuals (UHNWI) in Vietnam is predicted to double to 300 by 2024, according to the Knight Frank Wealth Report 2015.

    The increase of 159 per cent makes Vietnam the country with the fastest growing population of persons with a net worth of more than US$30 million, followed by another ASEAN member state, Indonesia (132 per cent). Ultra-rich individuals in Asia hold net assets of US$5.9 trillion, now even surpassing North America’s US$5.5 trillion. Furthermore, the report predicts that cities across Asia will see an increase of 91 per cent of UHNWIs in the next decade.

    But not only the uber-rich are on the rise: according to Euromonitor International more than 100,000 Vietnamese in 2013 had a disposable income of more than US$75,000 per year. As in China, the highly affluent in Vietnam are constantly looking for opportunities not only for investing their money, but also to spend it.

    A survey conducted by Nielsen concluded that Vietnam ranks third in the world in terms of fondness for branded goods, only surpassed by China and India. Moreover, 56 per cent of the participants responded that they are willing to pay more for designer products than for less known brands despite same functionality.

    Another study by the Japanese advertising agency Hakuhodo found that female consumers in Ho Chi Minh City are the only customers in Southeast-Asia that preferred design over functionality.

    All that is driving a Vietnam luxury boom, with growth especially prevalent in jewellery, fashion, cars and wine…

    Gold and Jewellery

    Although demand in gold and coins in Q4 of 2014 has dropped 15 per cent to 13.3 tones (amounting for US$514 million) compared to the same period in 2013, Vietnam remains the world’s seventh largest gold consumer. Bullion, historically one of the most inflation-resistant investments allowed people to save and pass these savings on to children and their family. Gold also has a cultural significance in Vietnam: The fifth day of the first month of the lunar year, the so called God of Wealth day traditionally pushes gold prices up in Vietnam and customers queue up in front of stores for hours to have a chance to buy the desired metal, hoping for good fortune all year.

    Recently, the government changed its policy regarding the hoarding of gold bars, issuing a ban on interests on gold deposits when stored in financial institutes and releasing regulations to turn the central bank into the sole importer of gold bars.

    Formerly, many real estate purchases were conducted using gold as a payment method. Listing housing prices in gold was common practice in Vietnam, until in 2011 the State Bank issued a decree imposing fines on advertising goods, services and property in foreign currency or gold.

    Being a country rich in gemstones, especially jade, sapphires and topaz, jewelry is especially popular in Vietnam. In 2014, jewellery worth US$519 million was traded, a decline of eight per cent from 2013, though demand was still higher than in other Asian countries with higher GDP per capita including Thailand and South Korea (US$250 and 382 million, respectively). At this time, licensing restrictions limit joint ventures to manufacture jewellery for export only. The popularity and demand of jewellery, combined with the fact that it has to be imported, is a unique opportunity for foreign investors.

    Fashion

    The market for apparel in Vietnam is predicted to reach US$4.2 billion by 2017, according to Euromonitor International’s forecasts. Among the first high-end fashion brands in Vietnam was the French company Louis Vuitton, and since 1997 many followed: Dior, Burberry, Ermenegildo Zegna, Bulgari, and Hermes, only to name a few. It was a profitable decision: the Hermes boutique in Hanoi, opened in 2008, increased its profits gradually by 20 to 30 per cent each year.

    Salvatore Ferragamo opened up it’s fifth store in Vietnam two years ago. Other luxury brands are operated under a franchise system, such as Loewe, Marc Jacobs, Givenchy and Balenciaga, which monobrand stores are operated by a single partner. There are of course risks involved; the official partner of Gucci was investigated for tax evasion in 2010.

    Cars

    Several luxury car brands have established themselves within Vietnam in the recent years, including Lamborghini, Jaguar, Bentley and Rolls-Royce. Customers benefit from these permanent establishments within the country, since previously they had no other chance than importing them at a costly price through dealers and were forced to pay exorbitant maintenance fees because of the lack of licensed service providers.

    Other manufacturers, who are not new players to the Vietnamese market are reporting positive figures. Mercedes Benz entered the country’s market 20 years ago, and sold 1106 units in the first six months of 2014, marking a 70 per cent increase over the same period in 2013. Earlier this month, Mercedes-Maybach, the relaunched luxury brand from Daimler reported 10 orders for its S600 model, which costs VND9.6 billion (US$451,850). Notably, only 50 units of that model will be produced worldwide in 2015.

    Most affluent customers own more than one car, and due to Vietnam’s heavy traffic and shortage of car parks a lot of them rely on a driver. Customers may care as much about the amenities in the back seats, than technical gadgets on the dashboard.

    Automobile manufacturers will have to face a challenge when inner-ASEAN import tariffs will be cut to zero per cent in 2018. Imported, completely built units from Thailand and Indonesia, where a lot of companies already have established factories will be cheaper than cars partly assembled in Vietnam.

    Wine

    While young Vietnamese obtain more purchasing power, consumption of wine is rising. As of 2012, France held the lion’s share of the Vietnamese wine market at 35 per cent, with it’s biggest contender being Chile, accounting for 20 per cent, followed by Australia, the US and Italy.

    However, Chilean market share is expected to grow over the next years due to the Chile-Vietnam free trade agreement (FTA), that took effect in January 2014. Import tax on Chilean wine has dropped from 56 per cent to 20 per cent and until 2030 will approach zero, similar to the abolition of tariffs on Chilean wine imported to China, earlier this year. The Chile-Vietnam FTA marks the first agreement of its kind for Vietnam with a Latin-American country.

    When importing to Vietnam from a country or territory without an FTA in place, import duty applied to wine with alcoholic strength not exceeding 15 per cent is 50 per cent, and is further taxed with a 10 per cent VAT. Only licensed importers are permitted to import wines into Vietnam. Apart from a few multinationals, most bottles are imported by small businesses, either directly, if licensed, or via regular importing companies on a fee-based basis, usually 2-3 per cent over the total contract value.

    Vietnam leads in Southeast Asian alcohol consumption with around US$3 billion spent on alcohol every year, and the industry still has a lot of room for growth.

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  • Korean cosmetics exports boom

    Korean cosmetics exports boom

    Riding “Hallyu”, or the Korean Wave, cosmetics products have developed into strong moneymaking export items as they set records for exports and trade surplus last month.

    According to the Korea Customs Service, the value of Korean cosmetics exports in March was US$277.5 million, the largest amount since the office began tracking monthly statistics by product in January 2000.

    Imports of cosmetics products were US$158.9 million in March, resulting in a US$126.5 million trade surplus – also the largest in history.

    The trade balance for cosmetics products moved into the black last May for the first time and has maintained a surplus for 11 consecutive months.

    Exports of cosmetics products are skyrocketing thanks to Hallyu, with China and Southeast Asian countries increasing their imports of Korean cosmetics.

    By country, Korea sold US$119 million worth of cosmetics products to China, followed by Hong Kong (US$66 million), the US (US$20 million), Taiwan (US$12 million), Japan (US$15.6 million) and Thailand (US$8.4 million).

    If sales to foreign tourists in Korea are included, exports of cosmetics would be much larger than the customs office statistics.

    An industry official said: “As Korean dramas and K-pop gain popularity, Korea’s status is rising and Korean products are popular among foreign customers. Of particular note, Korean cosmetics sales in China are increasing up to 30 per cent annually.”

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  • Sa Sa wins investor honours

    Sa Sa wins investor honours

    Beauty products retailer Sa Sa International Holdings has been named “Best Investor Relations Company (Hong Kong)” for the fourth consecutive year by Corporate Governance Asia Magazine at the 5th Asian Excellence Awards.

    And CFO and executive director Dr Guy Look was named “Asia’s Best CFO (IR)”.

    Sa Sa says the awards testify to the recognition from the investment and finance community on the group’s operational strategies, financial performance, investor relations, corporate governance and ethics, as well as corporate social responsibility.

    Look said the company was “deeply honored” to win the dual awards.

    “Sa Sa has always strived to be accountable to our stakeholders and in particular the investment community. We uphold strong corporate governance and incorporate it into our corporate culture and operations. These two awards are definitely a great encouragement to our team.

    “We will continue to make ongoing efforts to improve our investor relations work, and thrive to attain the highest standards in the industry.”

    The IR honour reflects Sa Sa’s “transparent and effective communication with stakeholders through detailed, timely and fair disclosures” while the CFO accolade is given to CFOs in recognition of their ability to lead a team with vision and experience to maintain outstanding financial performances and operational strategies regardless of economic conditions.

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  • Thailand’s Mandom seeks 15pc yearly sales growth

    Thailand’s Mandom seeks 15pc yearly sales growth

    Despite the economic slowdown, Mandom Corporation (Thailand), the distributor of Gatsby and Bifesta personal care products from Japan, is set to expand aggressively here in a bid to increase annual sales by 15 percent over the next five years.

    President Tetsuaki Matsuda said Mandom will focus on expanding its Bifesta make-up remover business to serve rising demand this year as Thai women become more conscious of good skincare regimes.

    The make-up remover market was valued at THB501 million in 2013 and increased by 44 percent to THB720 million (USD22m) in 2014. The market value is expected to hit THB1 billion by the end of this year.

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  • Toys “R” Us Australia accumulates USD344m in losses

    Toys “R” Us Australia accumulates USD344m in losses

    Toys “R” Us, the self-described “world’s first toy supermarket”, has racked up accumulated losses of almost AUD450 million (USD343.9m) since arriving in Australia.

    The US-based toy and baby products retailer has operated in Australia for more than two decades. It has more than 30 stores, 11 Babies “R” Us Superstores, online operations and about 1600 employees.

    Researchers IBISWorld said it had lost market power over the past five years, but was the second-biggest player in the AUD850 million toy and game retailing industry.

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  • AS Watson creates international role

    AS Watson creates international role

    AS Watson has created a new position to build its global health credibility.

    The Hong Kong-headquartered health and beauty retailer has appointed Steve Gray to the new role of international healthcare director with effect from January next year.

    Gray is currently healthcare director of AS Watson Health & Beauty (UK) chain Superdrug. COO Malina Ngai says the appointment reflects “the growing importance of health to AS Watson’s future strategy”.

    “In the past decade when we have aggressively expanded our network from just over 7000 to 11,500 stores today, we have put a lot of focus in building our beauty authority. We are pleased to have established defined strengths in the beauty category across majority of our businesses.

    “As a leading international health and beauty retailer, we see increasing opportunities in health and wellbeing hence decided to step up our focus on health in the total offering to our customers.”

    In his new role, Gray will work closely with Ngai to further build the company’s health strategy and strengthen implementation in its operations, with the objective of accelerating the increase of healthcare sales and margin participation across the group.

    Gray joined Superdrug in 2012 and during the past two years has grown its health business by over 20 per cent, built an online health offer via Online Doctor and led the development of Superdrug’s Wellbeing concept store.

    Before joining AS Watson, Gray was COO at Lloyds Pharmacy’s parent company Celesio.

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  • Walgreens Boots to close 200 stores

    Walgreens Boots to close 200 stores

    Drugstore giant Walgreens Boots Alliance says it plans to close 200 US Walgreens stores during the next 30 months as it reduces overheads.

    But the 8232-strong network in the US and territories will not be shrinking – the company has promised the same number of new locations will be opened during the same time as it plugs obvious gaps in its network footprint.

    The Chicago Tribune newspaper reports that the locations of the stores facing closure has yet to be confirmed and the company declined any further comment.

    After Boots and Walgreens merged, the new company last August  announced a program to cut US$1 billion in costs. This week it has expanded that target to $1.5 billion by the end of 2017, with plans to streamline its IT functions and reorganise corporate operations.

    Alex Gourlay, executive vice president of Walgreens Boots and president of Walgreen, told an analysts conference call that the store closure and opening plan is about “getting the right stores in the right places”.

  • Nova LifeStyle boosts China focus

    Nova LifeStyle boosts China focus

    US furniture designer, manufacturer and distributor Nova LifeStyle sees China as a key growth market as it feels a pinch in Europe.

    The company finished 2014 recording a 26 per cent year-on-year increase in net sales to US$98.7 million, with growth was primarily driven by a 46 per cent increase in sales in North America and 14 per cent in Asia Pacific, partially offset by a 20 per cent decline in Europe.

    Its gross profit was $19.4 million, also an increase of 26 per cent. Net income for the California-based, Nasdaq-listed company was $8.6 million.

    In China, overall sales increased by six per cent to $17 million, largely due to the opening of seven new franchised stores in the nation.

    “Throughout 2014, Nova LifeStyle implemented strategic initiatives to expand sales and distribution in China, a key growth market,” the company said in its earnings statement.

    Nova LifeStyle boosted sales on Alibaba’s B2C sites, TMall and JD.com and signed a franchise partnership with the Ablejoy Company of China, to provide Nova products to its 200-strong retail store network.

    Nova LifeStyle initiated shipping to Ablejoy in the third quarter of 2014 and will continue to supply current and future franchise stores. The company also successfully began manufacturing and shipping to Ikea China.

    Sales in other parts of Asia Pacific, including Hong Kong, Australia, and other countries, increased 46 per cent to $5.89 million in 2014.

    The company said it expects the China and US markets to contribute to top-line growth in the year ahead.

    “Sales in Asia increased significantly and we view the supply agreement with Ikea China as a testament to the quality of our products and manufacturing capabilities,” said CEO Jeffrey Wong.

    “We are witnessing the expansion of the retail furniture market in China as the growing middle class, increasing urbanisation and increased consumer spending fuel higher demand for household goods and furniture.

    “Due to our efforts in 2014, we believe that Nova LifeStyle is well positioned to take full advantage of any upturns in the global economy, both in Asia and in the domestic market,” concluded Wong.

    Nova’s products are made in the US, Europe, and Asia and include LifeStyle brands such as Diamond Sofa, Colorful World, Giorgio Mobili, Nova QwiK, and Bright Swallow International.

  • Ikea Korea boosts furniture sector

    Ikea Korea boosts furniture sector

    Before the opening of the first Ikea store in Korea last year, Korean furniture companies were worried about the threat posed by the Swedish behemoth.

    Many industry observers said the impact of Ikea in Korea would be felt across the industry.

    Without a doubt, Ikea has been big hit in Korea over its first 100 days trading According to Ikea Korea, it welcomed 2.2 million customers as of March 18, and local shoppers had signed up for 300,000 “Ikea Family” memberships. Visitors praised the reasonable price tags and practical designs, and most said that they planned to revisit the store.

    However, 100 days after Ikea Korea’s debut, the real winners are Korea’s major furniture makers, who are laughing all the way to the bank thanks to the “Ikea effect”, which has helped them attract more customers.

    Sales at Hanssem, the largest furniture maker in Korea, reached 1.32 trillion won last year, a 31.5 per cent increase over the previous year. Similarly, Hyundai Livart’s revenue increased 15.92 per cent to 643 billion won last year.

    Ironically, their shops near Ikea’s Gwangmyeong store saw increases in customer visits in January and February this year. During this period, the revenue of Livart’s Gwangmyeong branch increased 27 per cent, while Hanssem’s Gwangmyeong store saw a 10 per cent increase in sales over the same period of the previous year.

    An official at Hanssem said: “The sales increase at the store was thanks to Ikea. Seventy per cent of customers visiting our Gwangmyeong branch came from Ikea. Those who could not find what they wanted at Ikea visited our store looking for alternatives. It’s the ‘Ikea attraction.’”

    To cope with the Swedish giant’s low-prices and do-it-yourself marketing power, local furniture makers armed themselves with “high quality and service” as their core competitiveness. Hanssem tried to reduce its production costs through automation and standardisation of parts. In addition, it opened its sixth flagship store, and focused on improving its customer service.

    Livart, Korea’s second largest furniture company, implemented an aggressive marketing strategy aimed at younger generation buyers looking for mid- and low-priced products. It strengthened its online sales channel, broadening its offerings to include kitchen and office furniture.

    At the center of their efforts to increase revenue against the threat of Ikea are free delivery and assembly services.

    Ikea visitors calculate the price of the products, delivery charge and unseen cost of DIY together. For example, Ikea’s Brimnes triple dresser (78cm x 95cm) costs 99,000 won, but a similar sized Hanssem triple dresser (80cm x 73cm) sells for 109,000 won. One can save 10,000 won when buying the Ikea product. However, Ikea customers also need to pay 29,900 won for delivery and 40,000 won for assembly, if they require those services.

    Choi Yang-ha, CEO and vice chairman of Hanssem, said: “Ikea is famous for its reasonable pricing and wide variety of products. However, if customers use its delivery and assembly services, its price competitiveness falls behind Korean competitors. We have our own strategy, offering free delivery and assembly services, and providing products through various distribution channels.”

    However, smaller furniture makers have been left in the cold, as they do not produce products of interest to typical Ikea visitors. As a result, small furniture shop owners have seen their revenue fall 71.8 per cent since Ikea’s Gwangmyeong store opened.

    To support small sized furniture manufacturers, Gyeonggi Province plans to invest a total of 87.5 billion won to raise its competitiveness and to revitalize the furniture industry in the province.

  • Fitness First Thailand to expand

    Fitness First Thailand to expand

    The UK-based chain operates 27 gyms, or ‘fitness clubs’ in Thailand already, part of a broad international network.

    The new gyms will be opened in at Crystal SB mall on Ratchaphruek Rd, AIA Capital Center, CentralPlaza Rama 2 and Crystal Park.

    In an interview with the Bangkok Post newspaper, Fitness First Thailand MD Mark Buchanan said the company would invest 1 billion baht (US$30.8 million) in opening the new stores and in developing a new digital communication tool to improve engagement with its membership base.

    He said the fitness industry was showing positive signs of growth in a subdued Thai economy.

    “Health-related businesses still have huge room to grow, because Thais are more health-conscious,” he said.

    Fitness First Thailand’s turnover grew by about 10 per cent in 2014 and it now has 66,000 members across Thailand.

    The Bangkok Post reports the the Thai fitness industry is worth US$155 million annually, with 200,000 people belonging to 480 gym operators across the nation.

  • Tesco Lotus slashes prices

    Tesco Lotus slashes prices

    The Thai operator of Tesco Lotus hypermarket chain is cutting the prices of essential fresh foods by 10-50 percent for six weeks to revive consumer spending.

    Prices of more than 100 fresh food items including meat, seafood, vegetables, fruit and eggs are being reduced by up to half to help consumers during the difficult economic situation.

    The campaign began on Thursday at Tesco Lotus hypermarkets nationwide and will run for six weeks.

  • First Lush Spa to open in Hong Kong in 4Q15

    First Lush Spa to open in Hong Kong in 4Q15

    UK eco-friendly cosmetics company Lush is going to open the first Lush Spa in Hong Kong in the fourth quarter of 2015, the beauty retailer said yesterday.

    Located at Lyndhurst Terrace of Soho Square in Central, the five-storey Lush spa will have a total space of 6,909 square feet, with retail area on the ground floor and the treatment area on the second floor to fourth floor.

    “Hong Kong is a very exciting market for us, one which we have seen rapid growth and year to date LFL of 89 percent. Launching the spa starts another exciting new chapter for us here and offers our customers a unique and luxurious experience,” said Annabelle Baker, Director of Lush Asia Limited.

    Founded in 1995, the UK health and beauty brand places great emphasis on using fresh ingredients to produce handmade beauty products. Lush is the pioneer in advocating environmental protection and operating strict policies against animal testing in the cosmetics industry.

    Hong Kong & Macau have been wholly owned by Lush since the end of 2012. The company currently have seven shops in the two cities. It’s also opening a 10,000 sqf shop on Europe’s busiest shopping area – London’s Oxford Street.

    The company has launched Lush Spa in in the UK, Japan, France, Korea, Brazil and US. Hong Kong will be the third Asian market to have Lush Spa.

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  • Shilla Duty Free buys DFASS stake

    Shilla Duty Free buys DFASS stake

    The Shilla Duty Free will acquire a 44 per cent stake in inflight duty free specialist The DFASS Group for US$105 million.

    And it will hold an option to purchase a further 36 per cent of the equity in five years.

    The Shilla Duty Free, owned by Hotel Shilla, in a turn a subsidiary of Samsung Group, has spent months negotiating terms for an equity stake in the business.

    The Shilla Duty Free is the world’s eighth largest duty free retail group, according to data from The Moodie Report, while DFASS is ranked 20th and supplies some 30 airlines with onboard duty free stocks and 35 retail stores.

    In a statement the two companies said they had agreed to “enter into a broad strategic partnership to become a global leader in travel retail”.

    “Shilla will acquire a 44 per cent stake in DFASS and collaborate to develop new and existing duty free concessions, expand inflight concession services and strengthen distribution agreements with brand owners.

    “The acquisition allows Shilla to significantly expand its global footprint and capabilities in the United States, Latin America, the Caribbean, Africa, the Middle East and Southeast Asia, as well as diversifying its business to include master distributor agreements.”

    They believe the partnership will offer a strong platform to jointly develop new concessions and to expand existing ones. Key functions across those concessions would be integrated to achieve operational efficiencies.

    Shilla President and CEO Boojin Lee said the investment is consistent with the company’s strategy of profitable growth and diversification of the duty free business, the largest segment of Shilla’s business.

    “The strategic partnership will enable both companies to diversify the value chain through business collaboration and generate synergies to enhance overall revenue and profitability.

    “The alliance will also strengthen each company’s concession portfolio, inflight retail business, airport retail and distribution agreements with brand owners. We are excited about the partnership that will lead to greater opportunities, especially on the back of the recent concession extension at Incheon Airport.”