Tag: asia

  • Most e-commerce transactions still use ‘COD’

    Most e-commerce transactions still use ‘COD’

    THE majority or 80 percent of e-commerce transactions in the Philippines are still cash-on-delivery transactions, according to a report by the Asian Development Bank (ADB) and United Nations Economic and Social Commission for Asia and the Pacific (Unescap).

    This despite the high Internet penetration rate in the Philippines. The report, titled “Embracing the E-commerce Revolution in Asia and the Pacific,” said there are 56.75 million Filipinos who have access to the Internet.

    The report said this can be due to the lack of available e-payment options that force Filipinos to resort to cash on delivery, placing consumers at risk.

    “The lack of well-developed e-payment systems forces e-commerce firms to rely on fragile business models. For instance, COD can create friction between buyers and sellers, because it involves a high degree of uncertainty whether vendors get paid. Another is the safety of customers, who can be threatened if they refuse to pay for unsatisfactory goods,” the report stated.

    This could be one of the reasons e-commerce transactions in the country remain low. In 2015 the report said, only 0.5 percent of retail sales in the Philippines are conducted online in 2015.

    Apart from these reasons, geography concerns, particularly for island economies, prevent the increase in e-commerce transactions.

    The Philippines, being an archipelago, further complicates the delivery and return of goods bought via online or electronic transactions.

    “An underdeveloped delivery system is a major roadblock for developing e-commerce. But improving delivery systems are difficult when geographic factors are involved. For example, Indonesia has more than 17,500 islands. The Philippines has 7,641. So delivering products cost-effectively is challenging,” the report stated.

    The underdeveloped e-commerce system poses a huge disadvantage, especially to small and medium enterprises (SMEs) who stand to benefit the most from such a system.

    In a statement, the ADB said that through e-commerce systems, SMEs can “reach global markets and compete on an international scale” while “creating many jobs in the process.”

    The ADB cited the need to develop viable e-commerce ecosystem which requires a holistic approach and concerted efforts by all stakeholders in e-commerce development, including national governments and international development institutions, trade associations and industry bodies, businesses (e-commerce vendors, payment service providers, and logistics service providers, among others) and consumers.

    It added that policy priorities should be on establishing a legal and regulatory framework for e-commerce, harmonizing international laws and standards, promoting information and communications technology infrastructure development, broadening Internet access and affordability, and supporting financial and e-payment infrastructure.

    “Emerging digital technologies are transforming the e-commerce landscape and offer a new set of modern solutions and opportunities to build more inclusive growth and spur innovation,” ADB Vice President for Knowledge Management and Sustainable Development Bambang Susantono said.

    “It offers a chance to narrow development gaps—whether demographic, economic, geographic or cultural. It also helps narrow the rural-urban divide. However, realizing the full potential of e-commerce calls for coordinated regional and global efforts,” Susantono said.

    Asia and the Pacific is the world’s largest business-to-consumer e-commerce marketplace and continues to grow rapidly, the report said.

    By the end of 2015, the size of e-commerce relative to gross domestic product was 4.5 percent in Asia and the Pacific compared to 3.1 percent and 2.6 percent in North America and Europe.

    The Internet retailing market share of Asia and the Pacific is expected to reach around a half of the global total by 2020.

  • Cashless payments to pave growth for cashlite companies

    Cashless payments to pave growth for cashlite companies

    Mobile and cashless payments are the next stage of growth for cashlite companies looking to tap into a larger consumer database, while reducing the hidden cost of handling physical tender, according to Fave Group Pte Ltd.

    The mobile reward and payment platform currently facilitates over US$100 million (RM403 million) in online transactions via FavePay, boasting close to 15,000 merchants and 600,000 transactions a month across Singapore, Malaysia and Indonesia.

    Fave founder Joel Neoh Eu-Jin said acceptance among previously offline businesses has been strong due to the recognition of cash as being an “inefficient” form of payment both in terms of marketing reach and hidden costs.

    “For a majority of these companies, a problem they face is how to grow their businesses without having the access to data that bigger companies have,” Neoh said yesterday, adding that Fave bridges this gap by connecting mobile payments to marketing.

    “These businesses want to reward customers for coming back, but don’t know how to do it well — and physical promotions such as stamp cards and vouchers tend to get lost,” he added.

    Via a mobile payment platform, he said companies now have access to a database of consumer trends and behaviour, while simultaneously having a marketing platform to reach out to customers.

    “For every dollar saving offered to the consumer, a company can track and reach out to that customer — card and cash payments do not have this advantage.”

    He added that there are a lot of hidden costs in handling cash offline, including security risks, staff costs and money lost upon exchanging hands.

    While over US$30 billion in mobile payments are projected in South-East Asia by 2021, adoption among retail and food and beverage (F&B) players remains low.

    Neoh said 95% of payments in the retail and F&B segments in Malaysia are conducted offline, while less than 5% is done via e-commerce platforms.

    “Retail and F&B are actually the biggest category of payments — if these segments are not on board, it will be very difficult to get people to move into cashless (payments),” he said.

    Government and financial institutions play a big part in facilitating digital payments both via policies and licensing, and Malaysia together with its central bank are pushing towards this end.

    For instance, the Malaysian government is encouraging petrol dealers in the country to adopt digital payments as 70% to 80% of transactions are still in cash, according to Neoh.

    “As a consumer, when you are paying RM50 at the pump and the petrol station takes a RM200 deposit, it deters you from going cashless,” he said.

    “These are small things, but it has a large impact on the consumer — when we remove all these friction points, we will see better cashless adoption.”

    Fave completed its acquisition of Groupon Malaysia — part of the larger US-based reward and online marketplace Groupon — earlier in 2017 and is striving to provide a holistic blend between promotions and payments, which was absent in the previous Groupon model.

    “Groupon Malaysia was a good model, but it cannot stand alone (as a reward platform exclusively) because businesses do not offer promotions all year long, but instead three to four times a year,” Neoh said, adding that deals need to be complemented by a reliable payment platform.

    “If a customer can pay via a specific platform and get a better deal and discount at the same time, then you drive more volume in both payment and promotions — they work in tandem.”

    He said Fave is now being equated more with its payment platform Fave- Pay than its previous Groupon links as its volume of payment with cashback currently exceeds promotion volume.

    Neoh said Fave has a few agreements in the pipeline to add to its high profile partnership with AirAsia Group Bhd’s loyalty programme, which will be announced over the next months.

    The company is further looking to enter two to three new Asean countries next year — namely the Philippines, Thailand and Vietnam.

    By year-end, Fave is aiming to double its 600,000 transactions and grow its merchant base by 50% to 100%.

  • Innisfree & Dimensi build Asia airport beauty presence at KLIA

    Innisfree & Dimensi build Asia airport beauty presence at KLIA

    The opening at the Malaysian gateway, in association with travel retailer Dimensi Eksklusif, consolidates the Amore Pacific-owned beauty firm’s airport influence in Asia, having already established a footprint at Hong Kong International and Singapore Changi.

    Earlier this month, Dimensi revealed that it had secured a one-year contract extension at the airport, as operator Malaysia Airports Holding Berhad concludes plans for an overhaul of its passenger facilities.

    TRENDING BRANDS

    Speaking at the official opening of the store, Amorepacific Global Travel Retail Senior Vice President David Park said: “Innisfree is one of the fastest-growing brands in the Amorepacific Group and Korea’s number one natural beauty brand.

    “Apart from Singapore Changi International Airport and Hong Kong International Airport, KLIA is our latest Innisfree airport store outside of Korea. We look forward to great success of the brand at this wonderful airport.

    Dimensi Managing Director Tan Sri Zainul Azman says the travel retailer is constantly searching for ‘trending brands’ and is delighted to partner with Amorepacific to showcase leading Korean names at KLIA.

    P&C SALES GROWTH

    Meanwhile, Malaysia Airports Senior General Manager for Commercial Services Nazli Aziz predicts an increases in sales of perfumes & cosmetics linked to wider product choice and rising Chinese passenger arrivals.

    “In the first quarter of this year, sales of products under the perfumes and cosmetics category grew by 29% against the figures recorded in the corresponding period of last year,” he stated.

    “Our strategy of collaborating with famous brands like Innisfree is part of an ongoing initiative to enhance the total airport experience of travellers at our airports.”

    Innisfree and several other global brands are expected to provide entertainment for travellers in the coming weeks when the annual Malaysia Airports Shopping Campaign begins in July.

    “We hope all the activities and campaigns which we have undertaken and those we are planning to implement will eventually lead to the infusion of a sense of place among travellers, making KLIA an ideal and joyful place to shop,” added Nazli.

  • Why fast-fashion brands like H&M are losing millennial customers in Malaysia and Singapore

    Why fast-fashion brands like H&M are losing millennial customers in Malaysia and Singapore

    Melissa Chi, 30, remembers when her wardrobe was full of H&M clothing and accessories. After discovering the Swedish brand during an internship in Washington, the Singaporean, who runs an online healthy lifestyle store, quickly became a fan of its smart design, decent quality and affordable prices.

    Today, however, Chi rarely wears fast-fashion items, H&M or otherwise. Since she became a convert to sustainable living two years ago, she has learned just how damaging the fast-fashion industry is for the environment.

    “The whole mentality that we should buy more because it’s cheap just didn’t seem right any more,” she says.

    It was a 180-degree sartorial turn for Chi, one that many other young Singaporeans and Malaysians are going through.

    More than 1,000 shoppers queued outside H&M’s Singapore flagship store when it opened in 2011, excited to become its first customers. The following year, about 1,500 people did the same at its Kuala Lumpur flagship on its first day of business. And when H&M collaborated with luxury brands Balmain and Kenzo, launching the collections in 2015 and 2016 respectively, similar frenzies occurred.

    Fast forward and H&M’s quarterly report ending February 28 indicates Asian millennials’ appetite for the brand’s trendy apparel may be on the wane. Malaysia recorded a 1 per cent drop in sales over the quarter, while the Singapore operation saw sales fall by 10 per cent.

    A similar downward trend is being seen in other parts of Asia, including China. That’s after two decades of strong growth globally during which the company regularly reported double-digit sales increases.

    In the three months to February 28, H&M’s operating profit fell by 62 per cent, causing its shares to hit a 13-year low on Stockholm’s bourse. A US$4.3 billion stockpile of clothing and accessories had accumulated in thousands of warehouses and stores around the world, the company reported.

    What had happened? Business analysts say the company failed to adapt to fierce competition from the boom in online retail and lower prices offered by a growing number of similar fast-fashion outlets. Chi agrees that these have been factors in Singapore and Malaysia.

    “I definitely think the demand [for fast fashion] is cooling off and not just because of the growing awareness that fast fashion is bad,” she says, referring to allegations of abuses against workers and environmental concerns. “It is also because of intense competition from all sorts of brands online, globally.”

    Abby Wee, communications manager for H&M Singapore and Malaysia, said that 2018 is a “transitional year” for the brand, adding that the fashion retail landscape is changing rapidly.

    “While there is a decline in sales in Singapore and Malaysia, we don’t see that as an indication that we are not one of the top fashion destinations for our customers,” she says in an email.

    Wee points to last year’s launch of the online store hm.com, and the positive reviews that it has been getting in both Singapore and Malaysia, as proof that its “omnichannel presence” is expanding.

    However, hm.com is competing in a crowded online market of brands that have had a web presence for years. Singapore government data shows that as early as 2011, 50 per cent of the country’s internet users aged 15 years and older were already shopping online. In 2012, regional e-retailer Zalora set up operations in both Malaysia and Singapore. Other e-retailers, such as Asos and American Apparel, had been targeting Singaporean shoppers by offering free shipping long before hm.com came along.

    Sarah Kok, a 22-year-old broadcast journalism student in Malaysia, says she no longer shops at H&M for several reasons. Since Uniqlo, the Japanese mass-market clothing brand, expanded in Malaysian malls several years ago, Kok now does most of her shopping for daily work outfits there. She says it offers more comfort, better quality and greater diversity than H&M.

    Environmental sustainability and a fair supply chain matter, too. These are Kok’s main reasons for shunning H&M today, she says.

    H&M has been accused of using prison labour in China, employing children in Myanmar, firing Cambodian women who got pregnant, suppressing unions, and causing environmental damage, among other issues.

    “If you can sell things at such a cheap price overseas, that means you’re getting it cheap as well,” Kok says. “So, that equals cheap labour.”

    Uniqlo may not be entirely innocent, either. A report by anti-poverty charity War on Want asserted in 2016 that Chinese factories making clothes for Uniqlo were abusing workers’ rights. Despite the brand’s commitment to “corporate social responsibility” and “making the world a better place”, undercover investigations by Students and Scholars against Corporate Misbehaviour said it found excessive overtime, low pay, dangerous working conditions and oppressive management practices in Uniqlo’s supplier factories in China.

    In an emailed statement, Wong Xinyi, sustainability manager for H&M Southeast Asia, points out that the company has signed a “global framework agreement” with workers’ organisations based in Sweden aimed at improving workers’ rights in the supply chain.

    It is also one of a number of global brands that have initiated the ACT (action, collaboration and transformation) agreement, which aims to ensure fair wages and better working conditions in the supply chain.

    Wee claims that the supplier factories H&M works with the most through long-term partnerships – representing 50 per cent of its product volume – have democratically elected representatives who can speak on behalf of the workers, achieving one of the company’s 2018 goals.

    To address the issue of environmental pollution, Wee points to the brand’s collaboration with the Zero Discharge of Hazardous Chemicals Programme to raise awareness and industry standards, and its partnership with the organisation Changing Markets to implement the “road map towards responsible viscose and modal fibre manufacturing” within its existing sourcing policy.

    H&M has also set 2030 as a target date to have all products made from recycled or otherwise sustainably sourced materials. By 2040, it aims to become “climate-positive” throughout its value chain.

    “Our customers in Malaysia and Singapore trust our brand and they have also responded positively towards our sustainability initiatives,” Wee says. “Therefore, it is clear to us that our customers expect us to operate our business responsibly and we are determined to exceed their expectations in this area.”

    However, whether all this means we are seeing a new dawn for fashion in Southeast Asia, with fast-fashion companies complying with a more sustainable and ethical framework in their production lines, is questionable. So, too, is whether there is really enough demand for more conscionable clothing among Malaysian and Singaporean millennials – known for being materialistic – to encourage companies to follow more sustainable practices.

    Both are highly unlikely, according to Nicholas Harrigan, a senior lecturer in sociology at Sydney’s Macquarie University.

    “Unfortunately, not enough young people in Singapore and Malaysia are conscious enough about ethical fashion for it likely to make much of an impact on sales,” says Harrigan, who previously lectured at Singapore Management University.

    Google “sustainable fashion in Malaysia and Singapore” and a few brands with limited offerings will pop up. Biji-Biji Design, arguably Malaysia’s most prominent eco- and labour-friendly company, sells bags and accessories made using discarded advertising banners, car seat belts and even old kimonos, with some products at prices comparable to H&M. Such companies, however, are few and far between.

    Harrigan believes other factors could be at play, such as the growing influence of blogshops – retailers operating on blogging platforms – on Singaporean youth, which provide more variety and are more convenient than going out shopping.

    Price could be another issue. Harrigan posits that despite H&M’s products being cheaper than brands such as Zara, they are still expensive given the quality.

    Still, sceptics note that the relatively low prices of fast-fashion brands will continue to be attractive to young people.

    Norashahera Hakem, head of fashion at Biji-Biji, remains optimistic. Although it is difficult for a brand like hers to survive in Malaysia, there are signs of a shift in mindset. People are starting to care more about quality and the effect of their unused piles of clothes on the environment, she says. Price is no longer the sole factor, as millennials are looking at the stories behind a product.

    “It is possible to survive with a lot of hard work and determination, as the concept is still quite new in this region,” she says. “People need to realise that quality and sustainability have an extra cost and [be] willing to pay for it.”

  • Japan’s Go! Go! Curry lands in Houston

    Japan’s Go! Go! Curry lands in Houston

    Japanese franchise Go! Go! Curry plans to open in Houston this August.

    The restaurant’s new Chinatown location will serve traditional Japanese curries under the operation of franchisee Daxin.

    Originally from Japan’s Kanazawa, the franchise first opened in the US more than a decade ago in New York’s Times Square, and has already established seven locations on the East Coast and beyond. It is named after the number 55 jersey worn Kanazawa native Hideki Matsui, who played for the New York Yankees. “Go” is the Japanese number five.

    Daxin founder Shishen Li said that while Asian food is gaining rising popularity in the US, Japanese comfort food is an untapped subgenre.

    “We are thrilled to bring the new curry craze to the Houston community before it becomes a saturated market like the ramen or sushi trends before it.”

    In a nod to its name, the chain plans to open 55 franchises throughout North America by 2022.

  • Tomas Maier to close down

    Tomas Maier to close down

    After more than twenty years of operation, Tomas Maier is no more. The luxury fashion label, founded in 1997 by the German designer of the same name, will cease operations by year-end.

    French luxury conglomerate Kering, which acquired the women’s wear brand in 2013 via a jointly owned company of which it was a major shareholder, confirmed this week it “is ending its partnership with the label, which is ceasing operations.”

    The label has between 20 and 30 employees, and “in the next few months, [Kering] will make every effort to protect their jobs, coordinating with the label’s local employee representatives,” read a press release.

    Furthermore, writing appointments for the resort 2018 and men’s spring 2019 collections have been cancelled and it is understood the next collection probably will not be produced.

    Earlier in the month, Tomas Maier resigned from his role as creative director of Bottega Veneta, which is also part of Kering.

    With a resume that reads Guy Laroche, Sonia Rykiel and Hermès, Maier was pivotal in making Bottega Veneta’s sales go from €50 million to €1 billion in 17 years.

    However, the brand lost momentum in recent years, and Kering changed its creative leadership. Daniel Lee, most recently director of ready-to-wear at Céline, succeeds Maier from 1 July.

    Parent of luxury brands including Gucci, Balenciaga, Saint Laurent and Boucheron, Kering has been selling-off its stake in less profitable fashion brands. It recently disclosed it is in talks to sell its shares in Christopher Kane back to the namesake designer and bid adieu to sports brand Puma earlier in the year.

  • Subway Hong Kong to open more stores

    Subway Hong Kong to open more stores

    Subway Hong Kong is embarking on an expansion strategy, scouting for new locations and new franchisees as it unveils a restaurant and menu makeover.

    Next month, a 900sqft Subway outlet which seats 40 will open at City University in Kowloon Tong. Not only will it be one of the chain’s largest restaurants in the territory, it will be a showcase of the brand’s future here.

    “Basically it’s Subway stepping into the 21st Century,” Subway Hong Kong & Macau Development Office GM Jamie LeBrun said.

    Subway Hong Kong currently has 25 outlets across the two territories. Three of those are in the process of being refurbished in the new look and style and more stores are under development or planning. Within the next 10 years, Subway Hong Kong plans 100 new outlets.

    “Our franchise family is growing with four new franchisees this year and we are looking for engaged and dedicated franchisees with a team player mentality to join us,” said LeBrun.

    Dubbed Fresh Forward, the new store design features light, bright colours, digital menu boards, the new generation Subway logo and graphics, and self-service beverage areas. Gone are the stained timbers and dark colour schemes, the result of a root-and-branch revamp of the brand’s positioning in the US, where Subway’s fortunes aren’t currently as buoyant as in Hong Kong. Some of the local stores may feature self-ordering kiosks in time.

    Fresh produce will be on display, addressing the fact Hongkongers don’t realise vegetables like tomatoes, capsicums and cucumbers are delivered fresh and whole to be cut on site, says LeBrun.

    Besides the fresh style, new stores like the one at City University will be set up to cater better to online ordering.

    “With the move towards services like Deliveroo and Foodpanda, we have redesigned the back of house so where we have a prep bench, you can lift it up and you’ll have a salad bar so you can assemble orders at the back of the store for delivery. So when orders are coming in online during peak hours, someone will be out the back preparing orders and not interfering with the in-store trade.”

    LeBrun says some Hong Kong Subway stores can earn up to 25 per cent of their sales online.

    “That’s how big the online space is. When it’s raining, no one wants to go out and pick it up. People have got short lunchtimes too – no one wants to go stand in line.”

    Localised menu

    Adapting the menu to local customers is also a focus.

    “Product innovation is a cornerstone of future success. But we really were not doing a lot of that until now. So far this year we have already released six new products including a Prime Australian Beef Pastrami  and we are launching avocado products in July, with more localised options to follow.

    LeBrun and his team, who have more than 50 years experience with the brand between them, took over the Subway Hong Kong development office last October after several stores were closed across the city. They adopted a back-to-basics approach focusing first on engaging franchisees, establishing a team culture in stores, fine-tuning operations, and improving the customer experience. The results are already obvious: sales have been growing steadily this calendar year with stores averaging a 10 per cent year-on-year uptick. Some have achieved as much as 22 per cent growth.

    “Customers want good food and clean stores. And we’re giving them that,” said LeBrun.

    “If you walk into a Louis Vuitton or a Gucci you expect the same service, anywhere in the world. It has to be similar. Subway is the same.”

    Coffee and innovation

    LeBrun says the chain will continue to expand the menu with both short-term promotions and long-term offers.

    “Hongkongers love product innovation. Look at McDonald’s – every month they have new promotions. That’s where we need to be.”

    Coffee will soon be added to Subway Hong Kong menus so customers who want a hot or iced drink can buy it at the same place as their sandwich, salad or cookies.

    “Coffee is growing in Hong Kong. So we are looking for a way to feature high quality beans and fresh milk. We will offer high-grade coffee at affordable prices.”

    The final part in the Subway Hong Kong renaissance is marketing, and LeBrun says the company has that in hand as well.

    “There hasn’t been enough advertising until now and it hasn’t been in the right channels. We will be doing more targeted marketing via social media and digital channels which appeal to our core demographics.

    “We also want to better communicate the sustainability practices Subway adheres to regarding animal welfare and our environmental impact. There are many positive stories of Subway doing the right thing that we want to share.”

    “It’s good news,” LeBrun says of the transformation. “Because we’ve been talking about how it is going to happen. Now it is happening.”

  • EU set to lift ‘yellow card’ on Vietnam fisheries next year

    EU set to lift ‘yellow card’ on Vietnam fisheries next year

    Vietnam will have to wait another six months for the European Union to consider lifting a ‘yellow card’ restriction slapped last year because of illegal fishing.

    After an evaluation done May 15-24 this year, the EC decided that they would consider lifting the yellow card in January next year, as Vietnam has shown “improvement,” according to a statement issued by the Directorate of Fisheries under the Ministry of Agriculture and Rural Development.

    The European Commission (EC), executive body of the 28-nation bloc (including the U.K.), had issued an official warning on October 23 last year that it would ban seafood imports from Vietnam unless Hanoi did more to tackle illegal fishing carried out by Vietnamese vessels in other countries’ territories.

    The directorate, however, admitted that problems continued to dog the sector, especially in controls of fishing and tracing origins.

    Vietnam currently has around 33,000 offshore fishing vessels, but only 3,000 of them, or 9 percent, are equipped with satellite navigation devices, it said, adding that the high cost of installation was a constraining factor.

    Though Vietnam has acted on suggestions from EC last year to improve controls over offshore fishing in the 2017 Fishery Law, there was still room for improvement in the actual implementation process at local provinces, the directorate said.

    Vietnam ranks among the top ten seafood producers in the world, according to the FAO, the U.N. food and agriculture organisation.

    The E.U., the world’s biggest fish importer, adopted a regulation that took effect in 2010, aiming to avoid complicity in illegal fishing and promote sustainable use of the sea resources.

    The EC estimates that each year, between 11 and 26 million tons of fish, at least 15 percent of the global catch worth 8 and 19 billion euros, are caught illegally.

  • Tealive to apply for stay of execution after injunction threatens to close 161 outlets

    Tealive to apply for stay of execution after injunction threatens to close 161 outlets

    Tealive owner Loob Holding Sdn Bhd will file an application for a stay and for leave to appeal to the Federal Court after the Court of Appeal granted an injunction by Chatime franchisor La Kaffa International Co Ltd against Tealive from continuing its operations.

    La Kaffa had filed the appeal after the High Court dismissed its injunction bid in May 2017 against former franchise holder Loob from carrying a similar business as Chatime.

    “This matter is being handled by our lawyers and we will let the due process of law take its course. We have instructed them to make the necessary application to the courts to allow us to maintain status quo until final settlement of the entire legal process,” Loob said in a statement today.

    Loob is now at risk of closing 161 of its Tealive outlets, which will affect 800 staff, if the injunction stays.

    Tealive was created following a dispute between Loob and La Kaffa last year that saw the Taiwanese franchisor terminate its Chatime master franchisee contract with Loob.

    Loob has since expanded Tealive overseas, including in China, Australia, India and Vietnam.

  • Jeweller Luk Fook time to shine after years of decline

    Jeweller Luk Fook time to shine after years of decline

    Jeweller Luk Fook has reversed a three-year trend of declining revenue in its latest financial year, boosting sales by 13.8 per cent to HK$14.578 billion (US$1.857 billion).

    Releasing its results for the year to March 31, the company said the turnaround was the result of improved retail sentiment, especially in its largest market of Hong Kong-Macau. Profit attributable to shareholders grew 34.7 per cent to $1.4 billion.

    Luk Fook finished the year with 1642 stores globally, 137 more than the previous year with almost all of the new stores on the mainland.

    Wong Wai Sheung, group chairman and CEO,, said that despite the impact of the slowdown in economic growth in Mainland China and the changes to the Individual Visit Scheme, there was gradual improvement in spending per capita.

    The retail business, the group’s primary source of revenue, improved 14.3 per cent to $10.995 billion. Within that, sales of gem-set jewellery increased 24.2 per cent. Sales of gold and platinum products increased by 10.2 per cent.

    Luk Fook reported same-store growth in Hong Kong and Macau of 9.4 per cent last year, a huge contrast to the 19.5 per cent decline of the previous year. Mainland China same-store sales grew by a more modest 4.6 per cent, compared to a 4.8 per cent drop the prior year.

    Besides adding 132 new stores in Mainland China, Luk Fook opened its first licensed store in Cambodia and one store in each of Hong Kong and San Francisco.

    Rebound continues

    Wong Wai Sheung said the improved overall economic environment and increased visitor arrivals in Hong Kong and Macau is reflected in ongoing positive retail sentiment since April this year.

    Same-store sales growth continued to run in the double digits this year and sales of gem-set jewellery in the mainland market had returned to positive growth.

    “However, under the influence of US-China trade war and geopolitics, there are still many uncertainties around.”

    That aside, he said the continuing growth of the mainland’s middle-class population  fuelled optimism about Luk Fook’s mid- to long-term business prospects.

  • Mandatory addition of micronutrients hurting Vietnam’s food industry

    Mandatory addition of micronutrients hurting Vietnam’s food industry

    A decree requiring the addition of micronutrients to food products is making them unattractive and more difficult to sell, industry insiders say.

    The decree, which went into effect last year, requires businesses to include iodine in salt and iron and zinc in wheat flour.

    Asahira Keita, deputy marketing director of food firm Acecook Vietnam, said the mandatory inclusion of minerals like iron or zinc in flour has hurt his company.

    Keita said the resulting flour has a darker color than normal flour. Its texture also changes and makes the end product less appealing to customers, he added.

    “To make our food products more appealing, we would have to research new recipes, which would certainly cost us more,” he said.

    Keita had other concerns too. Several countries don’t allow the inclusion of micro-nutrients in food products, so Vietnamese food firms would need to go through lengthy procedures to export food products with micronutrients into such countries. Foreign customers are also not fond of food products with micro-nutrients, he said.

    “This is a tough challenge for businesses like ours. We might even have to stop exporting products into these long-time partner countries, just because they don’t have the same requirements as Vietnam does,” Keita said.

    He said one solution could be to create two types of flour separately; one for domestic use and another to be exported. But doing so would be too costly and expensive, as the firm, which is currently deploying an automation-focused production model, can only afford one automated system. Right now, it is being used to make flour infused with iron and zinc for domestic use.

    Therefore, flour without iron or zinc that is used for export products, must be manually packaged.

    “This is too costly, time-consuming and inefficient,” said Keita.

    Processing challenges

    Businesses are also finding it hard to follow the decree’s guidelines as the processing method could change the levels of micro-nutrients in the products.

    Lam Ba Nhi, quality control director of Vietnamese meat processing firm Vissan, said the application of heat during food processing could destroy the iodine included in food products.

    Therefore, when food products are tested, levels of iodine present could be lower than the decree’s mandates, Nhi said.

    Lam proposed that the inclusion of iodized salt should not be made compulsory in food processing.

    Last month, the government had said the Health Ministry should carry out further research so that appropriate changes can be made to the decree, in which the inclusion of micro-nutrients in food products should only be encouraged, and not made compulsory.

    The Ministry of Health has not responded since.

    “We want the Ministry of Health to take action and follow the government’s suggestion,” said Nguyen Hoai Nam, deputy general secretary of Vietnam Association of Seafood and Producers.

    The decree came in the wake of advice from the Iodine Global Network, which ranks Vietnam among the top 19 iodine-deficient countries.

    The network had advised that Vietnamese people use iodized salt directly in food seasoning, food processing, and livestock feeding.

    Prolonged iodine deficiency can cause nerve damage among infants and children; and make pregnant women suffer miscarriages or go into preterm labor. Adults can also suffer goiter, nerve damage and mental illness.

  • Homeplus Special to open first store in Daegu

    Homeplus Special to open first store in Daegu

    Korean discount store chain Homeplus has opened a bulk products and grocery store hybrid called Homeplus Special in Daegu.

    The new concept store is housed in the original Homeplus outlet that opened 20 years ago, now converted to operate the new big-box-plus-retail model following underwhelming sales figures and strong rivalry from industry competitors.

    The new hybrid-store concept will allow the brand to target both individual shoppers and businesses that buy in bulk, and aims to eliminate seasonal price differences with blanket, year-round discounts.

    A Homeplus spokesperson said the business plans to convert 15 branches into Homeplus Special stores this year. Another outlet opened yesterday in Busan.

  • Lady M announces July soft opening in Macau

    Lady M announces July soft opening in Macau

    Lady M’s is gaining more popularity.

    The glamour and luxury of Macau has been chosen as the brand’s next stop with a soft opening planned for mid-July.

    Lady M’s first Macau boutique will launch in the retail haven of Shoppes’ new phase at Cotai Central. With a 10-seat VIP room and a spacious 4,000-square-foot area, this will be Lady M’s largest boutique in the region.

    Complete with custom designed awnings that pay homage to New York City’s boutiques and al fresco vibe, Lady M Macau is sure to be a hit with visitors from around the world.

    To usher in a new era in Cotai, Lady M presents an exclusive cake for Macau in the form of the Passion Fruit Mille Crêpes.

    Featuring no less than 20 layers of handmade crêpes, a zesty and fragrant passion fruit-infused cream binds each layer to provide a perfect harmony between sweet and sour notes, resulting in a cake that was made for a gorgeous summer.

  • Honor debuts in Vietnam with first offline store

    Honor debuts in Vietnam with first offline store

    Huawei sub-brand Honor Vietnam has opened its first physical store in the country after three years selling online and via distributors.

    Located on Nguyen Hue Street in downtown, the new store attracted hundreds of Honor’s fans from the early morning.

    Apart from products already on sale in the country, Honor introduced its newest lines, including the Honor MagicBook.

    Vietnam is a part of Honor’s overseas expansion in Asia Pacific, along with Europe and the Middle East.

    Zhao Ming, Honor president, said overseas sales have doubled during the past five months, and he expects them to rise further in the second half of the year.

    The brand entered the Philippines last month.

  • GrabTaxi reiterates Vietnam-wide operations completely legal

    GrabTaxi reiterates Vietnam-wide operations completely legal

    Ride-hailing firm Grab Vietnam insists that its GrabTaxi service is legally allowed to operate nationwide.

    Grab Vietnam countered that GrabTaxi is an app for an e-commerce platform, so its operations would be in accordance with the government’s e-commerce laws.

    Grab Vietnam made the statement after the Transport Ministry has recently shot down a GrabTaxi plan to extend its services to provinces like Ninh Thuan, Dong Thap and Gia Lai. The ride-hailing firm now is allowed to operate in the five cities and provinces of Hanoi, Ho Chi Minh, Da Nang, Khanh Hoa and Quang Ninh.

    However, the firm said its GrabTaxi service is quite different from the GrabCar, which operates in the five above-mentioned provinces and cities, as a part of the ministry’s pilot plan for tech-based transportation services.

    Both GrabTaxi and GrabCar operate under the same Grab application, but GrabTaxi offers a run-of-the mill taxi service, while GrabCar is a service which connects customers with private cars for ride-hailing purposes.

    Therefore, GrabTaxi should be allowed to operate nationwide, stressed the firm.

    This isn’t the first time the ride-hailing firm has clashed with the Transport Ministry. In January, when Grab Vietnam wanted to extend its GrabTaxi service to provinces like Thua Thien Hue, Ba Ria – Vung Tau and Lam Dong, the firm also released a similar statement.

    Grab is currently under an investigation by Vietnamese authorities who say that its acquisition of Uber’s Southeast Asia operations shows signs of breaching local antitrust laws.

    A Vietnam Competition Authority (VCA) investigation found that Grab’s market share in Vietnam had exceeded 50 percent after its ride-hailing rival Uber left the Southeast Asian market in April.

    Under Vietnamese law, mergers and acquitions that result in a company gaining over 50 percent of the market share are restricted in Vietnam.

    The investigation, which began on May 18, is estimated to take 180 days and can be extended for another 120 days.