Apple is continuing its aggressive retail expansion into the Middle Kingdom, with plans to open 5 new Apple stores in China in the early days of 2015. Prior to Spring Festival, the company has reportedly said it will open 5 new retail shops, including the new store in Zhengzhou that opened earlier this month. The next one on the list will be in Hangzhou, where doors will open at Apple’s new West Lake store on 24 January.
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India set to become a big bakery market
Fieldfresh Foods, a joint venture between Bharti Enterprises and California-based Del Monte Pacific, says India is becoming a big bakery market. The company, which sells pastas, sauces, is in the process of increasing its brand penetration both in the business-to-business (B2B) and business-to-consumer (B2C) segments.
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JD.com eyes rural areas to tap huge potential
China’s online retailer JD.com said it plans to open more than 500 county-level service centres this year to boost deliveries to lower-tier cities and inland regions as it bids to boost its market presence.
The centres will hire local staff and delivery men to expand the firm’s delivery network into regions with few third-party courier companies. The firm will also open up to 1,000 service stores targeting home appliance buyers and help vendors provide one-stop service of installation and repairing of household appliances sold to rural consumers.
It is hoped that the county-level centres and the planned hiring of promotion staff will help rural consumers become better acquainted with JD.com as well as online purchasing and after-sales service by the end of June.
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HK retail sales up 0.2pc in first 11 months last year; 2015 to be challenging for retailers
“The overall sentiment in the retail market has improved after the political protests, and retail sales have seen a mild increase in the last quarter. However, retailers need to be cautious of the gradual decrease in luxury consumption from mainland Chinese shoppers. This, coupled with expensive rents in first tier streets, may result in overall prime street shop rents falling up to 5 percent with premises in the second tier locations likely to experience a more significant decline,” said Joe Lin, Executive Director, Retail Services, CBRE Hong Kong.
The “Occupy Central” protests have had no material impact on tourist arrival growth and overall retail leasing demand in the fourth quarter of 2014, according to the report. Retailers were initially cautious when the protests began to develop but confident was soon restored in the second half of the quarter as the protests in the core retail areas of the city prompted many shoppers to visit non-core retail districts where traffic and pedestrian flow was less affected.
“Mainland Chinese tourists’ increasing preference for mid-range products instead of luxury goods also helped to route some shopper flow to non-core retail areas, a trend which mitigated the impact of the protests on overall retail sales during the quarter,” noted the report.
Overall Hong Kong retail sales recorded mild growth of 2.8 percent year-on-year (y-o-y) in October and November combined – mainly driven by consumer durable goods – bringing growth for the first 11 months of 2014 to 0.2 percent. The sales of consumer durable goods grew 19.5 percent y-o-y in October and November combined, boosted by the strong sales of new smartphones released during the period.
Watch and jewellery retailers continued to lead demand for the first tier street shops in core locations although sales dropped 6.7 percent y-o-y in October and November combined.
“Weaker retail sales growth, greater economic and political uncertainty and the increased availability of space in fringe areas all combined to exert pressure on retail rents. Overall rents for prime streets shops remained largely stable during the fourth quarter with a slight drop of 0.2 percent q-o-q, with the exception of Central witnessing a modest fall of rents by 0.8 percent q-o-q due to softer demand from luxury brands,” says the report.
The increasing trend for Chinese tourists to shop for luxury goods in other markets will continue to prevent high-margin luxury brands from expanding aggressively in Hong Kong. CBRE predicts that the leasing market will be driven by mid-tier brands which appeal to both locals and tourists.
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Worst yet to come for Myer and David Jones
If the endless influx of global retailers is hitting David Jones and Myer where it hurts, it is just the beginning, a retail expert says.
Retail Doctor founder and chief executive Brian Walker points to Deloitte’s Global Powers of Retailingreport, which said that of the top 250 retailers, just 15 percent had a presence in Australia. “That means there’s a lot more to come,” he said.
Nearly five years after cult denim retailer Gap opened its first Australian store in Melbourne, a steady stream of international retailers have invested in Australian bricks and mortar. The long list includes Sephora, H&M, Uniqlo, Zara, Topshop, Pottery Barn with Williams Sonoma, and Victoria’s Secret.
Walker said the success of the international brands reflected Australian and New Zealander’s love of travel and awareness of these brands, as well as the online presence the stores had before launching. “Australian retailing is not facing a cyclical change but a large structural change,” he said.
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Good, bad, unattractive: retail’s patchy start in Australia
A slow but solid festive season for discretionary retailers in Australia has been followed by a spate of downgrades, making sentiment buoyant but patchy.
Analysts say the key festive season was a good one, albeit at the price of margins. Discounting has been estimated to have added AUD800 million (USD656.9m) to sales, and Citi analyst Craig Woolford has argued cheap-as-chips petrol and big spending on food suggests Australians have the ability to spend when they have the yen.
Last week, Harvey Norman chairman Gerry Harvey explained a jump in the furniture and homewares company’s share price by reporting a “big surge in sales” during the Christmas and New Year period.
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Spencer’s to firm up e-commerce plan by April
Spencer’s Retail Ltd, a CESC subsidiary, will finalise its e-commerce plan by April. Shashwat Goenka, Sector Head of Spencer’s Retail, told reporters that the brick and mortar stores and the e-commerce prices, however, would be the same. “We would freeze the e-commerce business model within next couple of months. Then over a timeframe, we would implement it. We are likely to begin with a few categories of products for our online store,” he added.
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Could HK lose its status as a luxury shopping destination to South Korea?
The popularity of South Korean pop culture and products in China shows no signs of abating, as South Korea has seen more Chinese shoppers than ever, but it could come at a cost to Hong Kong. Erwan Rambourg, a consumer goods analyst for HSBC and the author of “The Bling Dynasty,” has seen the surge in shoppers first hand. He estimated that Chinese shoppers accounted for around 70 percent of South Korea’s duty free sales and accounted for about one third of all luxury purchases in the country, reports The Wall Street Journal.
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Wearable devices have bright future in China
A latest survey showed that wearable devices will become more popular in the Chinese market in the next five years.
For wearable health devices, 39 percent of respondents worldwide plan to buy one by 2020, but 65 percent of Chinese consumers surveyed already have an interest in buying one, according to a survey filed to Xinhua Saturday by Accenture, a consulting and technology services company.
As many as 67 percent of Chinese consumers are likely to buy wearable fitness monitors and 73 percent wants smart watches in the coming five years, more than doubled 32 percent and 27 percent in the United States.
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Thai government looks to expand duty-free services
The government is exploring ways to allow more companies, including South Korea-based Lotte Group, to operate duty-free services at airports and downtown areas.
Currently, King Power, the country’s largest duty-free company, is the sole concessionaire operating duty-free shops at Suvarnabhumi, Don Mueang and Phuket airports overseen by the Airports of Thailand (AoT).
Transport Minister ACM Prajin Juntong has revealed that Lotte Group’s executives met him last week. The South Korean operator inquired about the possibility of it stepping in as a new player in Thailand’s duty-free market.
However, King Power currently holds the concession as the sole operator of duty-free shops at Suvarnabhumi until 2019 and at Don Mueang until 2022. Therefore, it is impossible for the government to allow new duty-free shop operators at the airports.
Once a new terminal is built as part of Suvarnabhumi’s second phase of development, there is likely to be more than one duty-free shop operator, but until then, King Power holds the concession, said the minister.
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GCH to open 4 more Giant hypermarkerts, supermarkets this year
GCH Retail (Malaysia) Sdn Bhd, the owner of Giant, Cold Storage, Mercato, Jason’s and G-Express stores, is to open four new Giant hypermarkets and supermarkets in Malaysia this year to add to the 126 it already has.
They will be in the Klang Valley, Sarawak, Perlis and Trengganu and will further strengthen its position as the country’s largest hypermarket group.
Its G-Express, a convenience store subsidiary, is also embarking on a similar expansion plan and targets to open 500 nationwide within the next five years.
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Stranded online parcels claim ‘partly untrue’
China Post has said reports that thousands of parcels from overseas have been languishing at a Shanghai port for months because it owes millions of yuan in port fees are “partly untrue.” This follows online claims that 200 containers mostly containing haitao — goods bought online from overseas — brought by ship to the city are piled up at a Shanghai port. Items transported by air are unaffected. They are mainly said to be items bought from Japan between October and November — including diapers and other infant products ordered by parents. It has been claimed online that the delay is because the China Post Express Mail Service owes some 5 million yuan (US$817,730) to Shanghai International Port Group and has refused to pay.
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Pizza Hut to sell gluten-free pizza
Beginning Jan. 26, roughly 2,400 of the chain’s 6,300 domestic locations will begin selling gluten-free pizzas. The move comes two years after rival Domino’s rolled out a pizza sold with a gluten-free crust — but not entirely gluten free. Pizza Hut will be the first major pizza chain to sell a pizza that is certified gluten-free.
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E-retailer Zalora bets big on Southeast Asia
Asian fashion e-commerce start-up Zalora aims to become a multi-billion dollar company, and according to managing director Michele Ferrario, Southeast Asia’s burgeoning market holds the key to achieving that goal.
“Singapore is well-served in terms of online and offline retail, but when you think about smaller towns in Indonesia, the Philippines, Vietnam and Thailand, people there do not have the same access to fashion as people in developed markets,” he told CNBC’s “Managing Asia.”
Home to more than 600 million consumers, the region’s internet retail market is at an “inflection point,” according to a UBS report published last June. Analysts estimate online spending across Southeast Asia is poised to hit USD35 billion by 2020, on the back of high internet penetration and widespread smartphone usage.
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COACH aspires to luxury upgrade with new ‘honest’ approach
COACH’s debut at London Fashion Fashion week with its menswear 2015-16 Fall Winter Collection signals the aspiration of the brand to a luxury upgrade positioning which was launched when Stuart Vevers (ex LOEWE) was appointed as Creative Director in 2014. The new collection was inspired by the aesthetic of Gus Van Sant’s “My Own Private Idaho” and functional winter street style in the designer’s new home, New York City. “New Yorkers are quite practical, and they don’t sacrifice function,” Stuart Vevers said. “There are no tricks — the collection is straightforward with honest construction.”