Retail News CRM

Tag: asean

  • Index Living Mall plans ASEAN expansion

    Index Living Mall plans ASEAN expansion

    Home-furnishing retailer Index Living Mall has announced its 2020 vision to continue its push beyond Thailand into other ASEAN countries.

    With franchised stores already trading in Malaysia, Thailand and Vietnam, the company believes the region’s urbanisation has shifted consumers toward a more modern lifestyle, including the way they buy and use home-furnishing products. It also notes a rise in the number of middle-income earners throughout the ASEAN Economic Community.

    MD Kridchanok Patamasatayasonthi says the company aims to double the present 5 per cent contribution to its total revenue from AEC markets by 2020. The company’s total revenue of Bt9.5 billion (US$264.8 million) last year was 5 per cent up on 2014.

    “Our market expansion through international franchisees is the result of growth in the home-furnishing and accessories sectors among ASEAN member countries,” says Kridchanok. “Other positive factors, including the bustling economic outlook, rising gross incomes and similar customer behaviour, helped accelerate our decision to look for investment opportunities in new markets.”

    She says the company has appointed VinDS, the retail investment arm of Vietnamese commercial property developer Vingroup, as its franchisee to tap into the home-furnishing and accessories retail market in that country. The first Index Living Mall under that partnership had a soft opening last month in Ho Chi Minh City, occupying 7000 sqm in Vincom Mega Mall Thao Dien. Costing more than Bt200 million, the store is expected to achieve Bt350 million in sales in its first year.

    Index Living Mall has had a store trading in Ho Chi Minh for more than four years, effectively testing the market. Now with VinDS it expects to open 10 more stores in major cities in Vietnam, including Ho Chi Minh, Hanoi and Da Nang, within five years.

    “Economic growth indicators show that the Vietnamese retail market is number two in Asia, after only China,” says Kridchanok.

    “During the first half of last year, the Vietnamese economy posted 6.28 per cent growth, the highest since 2008. With a population of 90 million, this will continue to grow, thanks to per capita income rising more than 10 per cent over the past decade.”

    Kridchanok says it is expected that the number of Vietnamese earning a median income of 15 million dong ($673) a month will grow to 33 million by 2020.

    Index Living Mall’s director for international business development Ekaridhi Patamasatayasonthi says the company’s venture into Vietnam highlights its marketing direction to tap into emerging CLMV (Cambodia, Laos, Myanmar and Vietnam) markets, aimed at strengthening its leadership position in the home-furnishings and accessories retail market in the ASEAN region.

    Ekaridhi says the company plans to open store in Manila in September via a joint venture with SM Retail, a Philippine business conglomerate involved in shopping mall, property development, banking and retailing. Index Living Mall has a 30 per cent stake in the venture.

    In Malaysia, Index Living Mall opened its first home-furnishing store in Putrajaya last year in a joint venture with AEON. Three more stores are planned for Malaysia this year – in Kuala Lumpur in March, Kota Bharu in April and Johor Bahru in the fourth quarter.

    Ekaridhi says there are six franchised stores in five countries – Malaysia, Russia, Maldives, Nepal and Vietnam – as well as dealers in Laos and Myanmar. In its home country, the company has 25 stores in 17 provinces, of which nine are in Bangkok. It plans to invest Bt470 million this year to open two stores, in Nakhon Pathom and Chachoengsao.

    Index Living Mall expects to post Bt10 billion in revenue this year and to grow its annual sales by 10 per cent over the next five years.

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  • SSI hunts ASEAN retail brands

    SSI hunts ASEAN retail brands

    Leading Philippines retail group SSI says it is actively seeking to acquire brands and suppliers in the region that can help it build its ASEAN retail portfolio.

    “We continue to seek brands and suppliers that manufacture within the Asean region that would allow us to make the most of Asean free trade agreement. That is a key to our expansion and success in the recent past – to expand our retail concepts in new geographic areas,” SSI president Anthony T. Huang told the Manila Times.

    ASEAN, which comes into effect later this year, groups 10 economies in Southeast Asia, creating a free trade zone with less restricted borders. Participating countries are Indonesia, Malaysia, the Philippines, Singapore, Thailand, Brunei, Cambodia, Laos, Myanmar and Vietnam.

    “We’re hopeful because we have ongoing discussions [with potential acquisitions and partners] but nothing final at this time,” Huang said.

    “We’ve really been focused on the new acquisitions that we have to roll out next year and on the existing brand portfolio that we’re continuously rolling out and the continued expansion of FamilyMart,” he said.

    SSI is also in talks with other foreign brands outside the ASEAN group as it builds a portfolio of lifestyle and fashion brands. Its most recent deal was to partner with Canadian fashion label Joe Fresh.

    Huang says foreign brands find the Philippines appealing because the culture is westernised, it has a young population, strong growth and rising middle class with discretionary income.

    “We have the youngest population in the region. ‘Youngest market’, that’s the magic formula.

    “We’re seeing continued interest that many of the international retail concepts that should be in the market are in fact already in the market. But interests from new concepts are coming in to expand in the region,” he said in the interview.

    SSI’s portfolio already includes 115 brands.

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  • Five trends in Vietnam retailing

    Five trends in Vietnam retailing

    Vietnam’s retail market is set to grow by 8.4 per cent annually until 2020, making it one of the fastest-growing markets in south-east Asia.

    Against a backdrop of increased disposable income, rapid urbanisation and an appetite for change among younger shoppers, we take a look at five trends defining the marketplace for pan-Asian retailers right now.

    Confident investment

    January 2015 marked the first time non-domestic retailers could take full ownership of commercial property in Vietnam, following commitments made to the World Trade Organisation. Now, new trade agreements with Japan, Korea and the countries that make up the Association of South-East Asian Nations (ASEAN) look set to support further growth for international retailers in Vietnam:

    Tailoring the best of international retail

    Domestic retailers may have the advantage when it comes to local shopper knowledge but
    international retailers are drawing on their own strengths to help them compete.

    Dairy Farm, FamilyMart and Aeon have brought their expertise in loyalty schemes, private label and innovative marketing to their stores in the region.

    Other points of difference include appealing to busy office workers with a fast food to go counter (seen at Family Mart and B Mart) and bringing an international flavour to the in-store hot food offer (Aeon Mall).

    Alternative store concepts

    Many retailers have established themselves in Vietnam with a hypermarket presence in one of the major retail hotspots like Hanoi or Ho Chi Minh City.

    Lotte and hypermarket chain Aeon are appealing to families and experimental shoppers with department store formats that act as wider shopping and entertainment destinations. Aeon is also making its mark with a loyalty scheme that includes tailored offers for mums – such as birthday treats or discounts on baby care.

    In the convenience channel, Guardian is the first combined-format health, beauty and drugstore in Vietnam. The store is making waves with its clean layout, colourful signage, bold promotional activity and sales assistants offering a superior level of service.

    Product innovation for a changing market

    A new concept in Vietnam, private label is appealing to young, experimental shoppers thanks to its lower prices and alternative products.

    Aeon has introduced its TopValu private label range, which taps into the popularity of Japanese culture by offering authentic Japanese ingredients and home cooking kits. The retailer is now working with local suppliers to explore domestic production.

    An increasingly affluent middle class is also supporting demand for exclusive and imported novelties. Dairy Farm is well-known for attracting these shoppers with its packaged food, household, health and beauty ranges.

    Expanding to national coverage

    A priority for most retailers is to create a nationwide presence. Lotte has built a network of ten hypermarkets spanning six big cities across Vietnam, making them the first pan-Asian retailer to achieve such a spread of coverage. Meanwhile, Ministop (Aeon), Guardian (Dairy Farm) and Shop&Go are pushing their convenience format in retail hotspots.

    Major retailers are seeing good growth from their franchise models, making partnerships, mergers and acquisitions hot topics.

    Aeon has partnered with local retailers Citimart in the south of the country and Fivimart in the north. The domestic chains are helping Aeon speed up its expansion plans by using their existing store networks. In return, their own customers are benefitting from the retail giant’s private label ranges and investment in infrastructure.

  • Periwinkle childrens clothing targets ASEAN

    Periwinkle childrens clothing targets ASEAN

    Periwinkle childrens clothing has opened its first store in Indonesia through a licensing agreement with an Indonesian partner.

    The Philippines retailer, which already has a presence in Singapore and Canada, received support from the Department of Trade and Industry, as part of a program to help retailers from the Philippines expand into other ASEAN markets with the advent of the Asian Economic Community (AEC) this year.

    “We intend to assist local companies with established brands, expand in the international market by partnering with foreign companies, particularly in the Asean countries, and promote the Philippines as a reliable and competitive source of global fashion retail brands,” said Trade Undersecretary Ponciano C. Manalo Jr.

    Periwinkle’s first store is a concession at the newly opened Central Department Store at the Grand Indonesia East Mall in Jakarta.

    It will open a second concession at British department store Debenhams at the Senayan City Mall and is currently evaluating franchising in Indonesia.

    Periwinkle’s partner in Indonesia is the Boga Group, which is active in the food and beverage and retail sectors, operating some 1000 hundred restaurants and retail outlets in Jakarta, Bandung, Surabaya, Yogyakarta, Medan, Makassar and Bali.

    “Periwinkle’s presence in Indonesia is an excellent opportunity for the retail brand to aim for wider regional expansion in light of the AEC 2015,” said Alma Argayoso, Philippine Trade and Investment Center Jakarta commercial counsellor.

    “We are optimistic that Periwinkle’s high-quality design will be patronised by Indonesian society, particularly sophisticated mothers, who love dressing up their children,” he said.

    The DTI is providing support to retailers through business counselling, business matching and brand promotion.

    Periwinkle executive Allan Hao Chin said the Boga Group partnership is purely a licensing agreement and the company will consider a full scale franchise and other options including a joint venture, depending on the success of the initial stores.

    “It is a milestone for Periwinkle to be present in Indonesia, Southeast Asia’s largest economy, and being able to share our brand globally,” Chin said.

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  • New Horizons eyes ASEAN

    New Horizons eyes ASEAN

    New Horizons, the world’s largest independent computer training company is planning expansion into ASEAN.

    The company, which offers a broad range of technical and desktop application training and certification courses, has signed an exclusive franchise consultancy agreement with VF Franchise Consulting with the aim of expanding to Thailand, the Philippines and Vietnam.

    Scott McDaniel, director of international development of New Horizons, says that with successful training centers already open in Singapore and Malaysia, New Horizons’ expansion into the remaining countries of the Association of Southeast Asian Nation (ASEAN) will service the existing high demand for professional IT training and certification.

    “We are happy to partner with VF Franchise Consulting to bring our world-class IT training and certification centers to the rest of ASEAN.”

    Headquartered in the US, New Horizons has been embarking upon an aggressive international expansion campaign that has seen it grow successfully in over 60 countries and over 300 locations.

    “Through our extensive research, further expansion into ASEAN is desirable due to the significant growth of the IT sector in Thailand, the Philippines and Vietnam,” McDaniel said.

    New Horizons Computer Learning Centers is one of the most successful franchises in the training industry. Over the last 30 years, the company has successfully trained over 30 million people. New Horizons offers instant recognition for franchisees as the clear market leader in IT training.

    Added Sean T. Ngo, CEO of VF Franchise Consulting: “New Horizons offers global recognition for franchisees as the clear market leader in IT training. The brand’s huge brand name and international success in the IT training industry gives its franchisees the ultimate competitive advantage.”