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Tag: asia

  • Salim Group backed Indonesian bread maker forays into Philippines

    Salim Group backed Indonesian bread maker forays into Philippines

    Indonesia’s top bread producer Nippon Indosari Corpindo on Monday said it will enter the Philippines bakery market by setting up a joint venture factory with local food company Monde Nissin Corporation.

    A girl looks at breads shaped like roasted pigs, locally known as “Lechon”, sold for $3 at a bakery in Manila December 31, 2012. Lechon is a popular delicacy served during New Year revelries in Philippines. © Reuters

    A girl looks at breads shaped like roasted pigs, locally known as “Lechon”, sold for $3 at a bakery in Manila December 31, 2012. Lechon is a popular delicacy served during New Year revelries in Philippines. © Reuters

    Nippon Indosari will own 55% of the joint venture, Sarimonde Foods Corporation, which will have a total paid up capital of $12.5 million. It plans to start producing white and sweet bread in 2017.

    The Philippines marks Nippon Indosari’s foray into overseas markets. Established in 1995, the company produces the locally well-known Sari Roti branded sweet bread sold in local retail stores and commands a 20%-plus market share. The company logged 1.56 trillion rupiah ($109 million) in revenue for the nine months ended September, a 15% increase from the previous year, while net profit rose 46% to 192 billion rupiah.

    But competition at home is intensifying. A joint venture between Japan’s Yamazaki Baking and Mitsubishi Corp. began producing bread locally in 2014 under a partnership with Sumber Alfaria Trijaya, which runs a network of 12,000 convenience stores and mini supermarkets. Nippon Indosari wants to establish a new source of revenue in the Philippines, a populous and growing consumer market.

    “The Philippines is a very attractive market to serve as the company’s overseas expansion area because it has a very large population,” Nippon Indosari said in a news release. “The Philippines has a demographic profile that is no different from Indonesia, where 60% of the population is aged under 30 years, has a growing middle economic class, and has the trend for healthy and practical food that fits their busy lifestyle.”

    The Philippines is also a core market for Salim Group, which owns 31.5% of Nippon Indosari’s shares through its Indonesia-listed investment vehicle Indoritel Makmur Internasional. The group, controlled by Chinese-Indonesian billionaire Anthoni Salim, has interests in Philippine Long Distance Telephone, the country’s largest telecommunication company, and infrastructure developer Metro Pacific Investments. But its presence in the food industry was small.

    Japan’s Sojitz Corp. and Pasco Shikishima Corp. also have minority stakes in Nippon Indosari.

    Monde Nissin is a major snack maker in the Philippines. The privately held company produces packed instant noodles, biscuits, cookies and yoghurt drink. In most product segments, the company directly competes with Universal Robina, a leading producer of branded consumer foods.

    The 35-year-old company founded by entrepreneur Betty Ang has been expanding aggressively in the last few years by teaming up with other brands and acquiring companies. With vast distribution network and market presence, cereal maker Kellogs partnered with the company last month as its distributor. In October 2015, Monde Nissin signed a joint venture agreement with Thailand’s Malee Beverage Public Co. Ltd., a leading juice and canned fruit manufacturer. In the same year, it acquired British meat substitute maker Quorn and Australian food producers Menora and Black Swan.

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  • China Consumption Growth To Stay Strong In 2016

    China Consumption Growth To Stay Strong In 2016

    China’s consumption will grow at a quick pace in 2016, the country’s Minister of Commerce Gao Hucheng assured investors Tuesday, while tackling issues such as impact of yuan devaluation, building more free trade zones and the U.S.-led Trans-Pacific Partnership (TPP) at a news conference.

    A slowdown in China’s traditional economic drivers — heavy industries and manufacturing — last year sent jitters in global financial markets and commodity markets, as China’s policymakers look to shift the balance of the economy toward a consumption-led growth.

    “China realized a major transformation of economic growth, from growth mainly driven by investments and foreign trade to one mainly driven by domestic demand, especially by consumption,” the minister said. In terms of consumption, China’s total retail sales of consumer goods rose 10.7 percent to hit 30.1 trillion yuan ($4.59 trillion) in 2015, he added.

    Consumption accounted for 66.4 percent of China’s GDP growth in 2015, the Chinese statistics bureau said in January.

    A weaker yuan has not had a direct impact on China’s foreign-trade growth, Gao said, adding: “I don’t believe yuan exchange-rate volatility since the August reform can have big impact on our trade.” The renminbi, has declined by a further 3 percent against the U.S. dollar after China devalued its currency by nearly 2 percent on Aug. 11 last year.

    Earlier in February, China had announced monthly trade figures that missed expectations with exports slipping 6.6 percent in January compared to a year earlier, while imports fell 14.4 percent year-on-year.

    China’s trade decline in 2015 was much lower than those of its main trading partners and the world in general, Gao said Tuesday.

    Gao also said that the ambitious TPP agreement, signed earlier in February among twelve Pacific Rim countries — of which China is not a member — and the China-led Regional Comprehensive Economic Partnership, are moving in the same direction.

    “Bejing does not think that the (TPP) targets China,” Gao said.

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  • E-commerce ‘unstoppable’ as 4G rollout goes rural in Thailand

    E-commerce ‘unstoppable’ as 4G rollout goes rural in Thailand

    On The Ground: Mobile will be the catalyst for digital-focused communications and online retail—aided by a data sector in its infancy. Apart from King Bhumibol Adulyadej, there is another unifying force in Thailand: mobile.

    Thailand is the world’s leader in mobile internet usage, ahead of Saudi Arabia and Malaysia, with four hours of web time per day, about 44 percent of a Thai’s total internet time. “Thailand is a mobile-led society, as is most of Southeast Asia except Singapore,” said Grant Bertoli, CEO of Marketbuzzz.

    Thailand did not see internet adoption kick in until the end of the Web 2.0 wave in 2007, and most of the access to the internet was through mobile. “Thailand leapfrogged straight to mobile as the primary device, and as people dwell longer on it, the mobile is increasingly becoming the device,” indicated Pathamawan Sathaporn, managing director of Mindshare Thailand.

    Smartphone ownership, largely driven by lower costs, has accelerated to a point where current We Are Social numbers show that 69 percent of Thais own at least one smartphone. Mobile connections, thanks to budget packages in the competitive telco market, stand at 122 percent as a percentage of the total population.

    With the realisation of 4G service in Thailand (more of which in tomorrow’s On The Ground feature), mobile will be the catalyst for digital-focused communications and rich-media content in 2016, said Rattakorn Potharam, general manager and executive creative director of MRM Thailand.

    “This is noteworthy as rural areas are now given a better chance at mobile ubiquity.” Potharam already observes content in three prominent categories: tear-jerking dramas, Thai-humour comedies and gossipy ‘insights’ transcending above-the-line formats to digital.

    Above average social use

    As the pool of mobile internet users in Thai provinces expands, social-media users will follow suit accordingly. Thai urbanites already spend more time on social networking than the global average, with Facebook being the most popular platform. In fact, Bangkok is the number one city of Facebook users in the world with over 104 percent penetration, according to Social Bakers. And 65 percent of all locals use Facebook to search for brand information according to eMarketer—the fourth highest in APAC.

    According to TNS, 74 percent of Thais also use instant messaging daily, well above the 55 percent worldwide figure. Line is the leading app in Thailand with more than 33 million users—that is half the Thai population using Line.

    These social platforms are playgrounds of expression for Thai consumers, but they are open only in their digital lives while more conservative in person. “Whatever we are expressing on Facebook, when it comes to reality we may not do so, as rooted in the Thai culture of being accommodating,” said Yupin Muntzing, chief executive officer of McCann Thailand. This dynamic can be inspiring for future developments in brand communications.

    E-commerce opportunities abound

    Coupled with that, there are numerous implications for marketing without the burden of a PC-internet legacy. Thailand being a mobile-first market allows businesses a unique position to capitalise.

    On the commerce side, Lazada began operations only a few years ago and made a bold statement to become the Amazon of Southeast Asia. And they were one of the first e-commerce players in the region to launch both iOS and Android apps. Now, the brand claims that more than half of its traffic comes from mobile.

    New faces in the e-commerce sector include Shopee, a mobile-only discounted marketplace, Eatigo offering daily lifestyle deals, and GrabBike (rebranded to Grab) delivering urban commuting services.

    In 2015, overall internet retail recorded healthy value growth of 30 percent to stand at THB47 billion (US$1.33 billion), according to Euromonitor, with fashion and consumer electronics significant contributors.

    The Thai e-commerce market is expected to more than triple in size to THB138.86 billion (US$3.94 billion) between now and 2020, according to DHL that introduced a next-day logistics addition to its delivery infrastructure in January for this reason. At present, Thailand’s share of the market is still relatively low compared to other high-growth economies, according to DHL E-commerce Asia Pacific CEO Malcolm Monteiro. Only 1.7 percent of DHL’s total sales in Thailand are from e-commerce, compared to more than 10 percent in China.

    Anisa Ngandee, research analyst at Euromonitor, is of the view that pure internet retailers such as Lazada, WeLoveShopping and iTrueMart perform much better than multi-channel players due to the shift in buying behaviour. The provision of mobile payments, especially when facilitated offline, will be a differentiator, Marketbuzzz’s Bertoli advised.

    “Although Thai people like shopping online, they find it more convenient to pay upon delivery, especially consumers within provincial areas. Sales are still limited to younger generations,” added Ngandee.

    In the meantime, MRM’s Potharam feels e-commerce will be “unstoppable and borderless”, at least among younger buyers on social media. “Thai consumers are born social. They are yearning for relationships, rapport and chemistry. In this sense, social commerce is undergoing a makeover to match this demand for socialising, while Line, Instagram and Facebook are becoming storefronts for interaction and conversation.”

    Social and content collide

    As a result, smaller Thai brands have embraced their entrepreneurial spirit in these mobile times, selling their products and services in as many ways as possible, whether Luuk Thep dolls or clothes. Preetanjali Kukreja, strategy director at Brand New Day, has noticed local businesses “getting a lot more aggressive” on Instagram, prioritising these accounts over official websites or Facebook pages. “Somehow it feels less intrusive on Instagram compared to Facebook,” she said. “It’s simple, quick, visual, and cheap as a sales tool. People just scroll through pictures of products, click to see the price, then ‘line’ the vendor and you’re done.”

    It is of little wonder that Line is one of the go-to channels for SMEs to reach consumers, not simply for shopping, but for lifestyle solutions as well, like content. The Feb 2015 launch of Line TV, competing with digital television, provided exclusive content to customers via mobile.

    Thailand now has a “huge appetite” for content across all forms—a push factor for advertising, media and even telecoms operators, said Sunee Paripunna, CEO of Omnicom Media Group Thailand. True Digital Plus, a Thai telco, has increased its budget from US$1 million to US$3 million to buy digital content in 2016, for example.

    In the past, Thai advertisers have focused their attention on content creation in the pursuit of digital marketing, but have missed opportune moments of context now made possible by mobile technology, said MRM’s Potharam. To reap the benefits of mobile, the key is gearing towards “contextual content” that is targeted and personalised. “The context will matter a lot and unveil new spot-on insights into creativity,” he said.

    Data driving integrated marketing

    Also, mobile development will open more doors for brands to collect real-time data generated by consumers who are connected online. Big data, though in its infancy stage, will transform communications, particularly for retail, telecoms, finance and lifestyle services, said Potharam.

    For starters, Julien Chalté, co-founder and co-CEO of WearYouWant, has gathered data to identify the bulk of the online retailer’s classic customers. “In December 2015, the profile that emerged was a 36 year old woman, living in Bangkok who likes to shop on Wednesdays between 11 am and 2 pm,” he said. Half of WearYouWant purchases were made during this shopping peak of the year. Outside of Bangkok, 20 percent of customers filled shopping carts from Chiang Mai, with white shoes being the favourite purchase during December. In Nonthaburi, home to a fifth (19 percent) of shoppers, skincare and makeup products were the top category. A tenth of customers placed orders in Chonburi and was mainly looking for black outfits (79 percent of all orders).

    With more data like the above, real integrated communication—“something marketers have dreamed of”, said Potharam—has potential to blossom in 2016. In the past, marketers have “tried to be visible everywhere in the digital world but were seldom standouts”. To steal a march on their rivals, brands need a “unified ecosystem of experiences under one enriching brand story”, he said.

    That represents a new canvas for shoppable content, stated Mindshare’s Sathaporn. “People will move more quickly from seeing to shopping”.

    As Thai advertisers compete to reach multi-tasking, ad-avoidant consumers, the type of content that will stick are reality shows, singing contests and other international content formats adapted for Thailand, said Sathaporn, who expects the domestic advertising industry to grow by only three to six percent in 2016—a lower growth forecast than 2015 amid economic uncertainties.

    So, even as Thailand’s king ails and its economy slithers, advertisers may be able to rely on mobile and content for continued joy.

  • Rail option for Indian online shopping deliveries

    Rail option for Indian online shopping deliveries

    While eCommerce can go off the rails when it comes to delivery, train companies are coming to the rescue.

    Because most customers are not at home during the day when parcels are delivered, Network Rail in the UK is solving this with its Doddle mail collections points at train stations – an idea now being trialled by the Delhi Metro Rail Corporation in India, reports Springwise.

    Indian online shopping site customers will soon be able to arrange to collect their purchases from 10 Metro stations in New Delhi, including MG Road, Huda City Centre and Kashmere Gate.

    When making online purchases, users will have the option to choose “station collection” as a delivery method. They then click on their preferred station and will be given a one-time password via email or SMS. Their order will be delivered to the designated station, where they can collect it from a kiosk during their commute to or from work.

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  • Hong Kong tourism, retail continue slump with less mainlander visits

    Hong Kong tourism, retail continue slump with less mainlander visits

    The Hong Kong Tourism Board (HKTB) said on Jan. 19 that the number of visitors to the city fell 2.5 percent last year over 2014 to 59.31 million, among whom 45.84 million were from the Chinese mainland, down 3 percent. The number of overnight mainland visitors dropped 5.7 percent to slightly less than 18 million.

    Even Christmas season failed to meet expectations, with the number of mainland travelers being merely 3.72 million in December, down 15.5 percent, the biggest monthly drop in 2015.

    The total number of visitors to Hong Kong had been on the decline for seven consecutive months since June, the HKTB said.

    On the other hand, the retail sector also had a difficult time. According to the latest data from Hong Kong’s Census and Statistics Department, retail sales totaled 475.2 billion Hong Kong dollars in 2015, down 3.7 percent from 2014, the biggest drop since 2002.

    Last December’s retail sales were estimated at 43.7 billion Hong Kong dollars, down 8.5 percent year-on-year, while the total volume of retail in the same month fell 6.1 percent.

    Sales revenues of jewelry, watches and luxury gifts registered the biggest fall, down 17 percent in December year-on-year and 15.6 percent last year from 2014. In addition, clothes, commodities at department stores, medicine and cosmetics all saw a fall in revenue.

    The retail sector has been falling since March 2015, and saw revenue drops for ten months in a row last year. Retail sales in August totaled 37.9 billion Hong Kong dollars, down 5.4 percent year-on-year, the biggest fall in 2015.

    On February 15, Hong Kong Disneyland said it suffered a net profit loss of 148 million Hong Kong dollars, the first of its kind since 2012.

    Besides, Ocean Park,recently reported a double-digit fall in the number of mainland visitors during the Spring Festival holidays, while total admissions to the park fell 14 percent in 2015. Tom Mehrmann, the park’s chief executive, said the number of mainland visitors now has dropped to a mere 40 percent of the total admissions from over 50 percent in July 2015, and he expected a further drop in numbers during the months to come.

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  • Prada Asia fortunes wane

    Prada Asia fortunes wane

    Prada Asia is the Italian luxury label’s achilles heel with the company reporting  a 16 per cent decrease in sales in the region in the year to January 31.

    “The economic situation of the Chinese market remains negative although there was some improvement in the final quarter,” Prada said in its earnings statement.

    “Consequently, in the 2015 financial year, the entire Asia Pacific area (excluding Japan) recorded a 4 per cent revenue decrease at current exchange rates and a 16 per cent decrease at constant exchange rates.”

    Japan proved a better market, for the label: for the fifth consecutive year, sales rose, this time by  11 per cent at current exchange rates, or 4 per cent at constant rates.

    Global sales changed little – for the second year in a row – largely due to the strengthening US dollar.  Total revenue was 3.552 billion euros (US$3.96 billion) in 2015. Sales in the US fell 9 per cent excluding currency fluctuations.

    “Throughout 2015, we had to deal with an economic environment characterised by extreme volatility in currency markets, as well as by the deteriorating geopolitical situation in many world regions,” commented said CEO Patrizio Bertelli, in a clear reference to the falling demand for luxury goods in China and the Paris terrorist attacks.

    “These two factors have made prices fluctuate wildly and diverted tourist traffic in sudden and unpredictable ways. Our retail network – now truly global thanks to investment in recent years – enables us to keep developing a direct relationship with our ever more demanding customer all over the world. In the coming months, the group will be focusing its energies on the development of new commercial and marketing initiatives to sustain organic growth, also by means of an extensive digital project to strengthen dialogue with our customers. These actions, taken against the background of rigorous and disciplined cost control, will enable us to consolidate our market position with satisfactory margins and returns on investment.”

    Prada is listed in Hong Kong.

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  • Reebok Launches Tuk Tuk Inspired Sneakers

    Reebok Launches Tuk Tuk Inspired Sneakers

    A new sneaker collaboration between Reebok and international sneaker destination store 24 Kilates in Barcelona pays homage to Bangkok and, even more specifically, to the bright colors of the city’s iconic tuk tuk.

    The video, released a few days ago in advance of the sneaker’s March 12 drop date, plays out like a two minute-long love letter to Bangkok.

    The clip opens with a sunrise over Bangkok and the ambient traffic noise that is the never-ending soundtrack to life in the city. The viewer follows the sneakers as they visit many of Bangkok’s key sites: the Chao Phraya River, the Grand Palace, Wat Arun, the Giant Swing, Asoke intersection and what appears to be Soi Cowboy. The entire homage is set to the driving line of a morlum tune.

    And how does the dude wearing the sneakers get from place to place around our giant city? In a tuk tuk that matches the shoes, of course.

    The sneaker design is the brainchild of the owners of 24 Kilates. The two men come to Bangkok often, saying they have fallen in love with the city and also plan to open their second 24 Kilates location in the capital in the not-too-distant future.

    Whether you care about sneakers or not, seeing the city through their eyes in this video is a worthwhile way to spend a few minutes.

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  • World catches the Chinese holiday shopping bug

    World catches the Chinese holiday shopping bug

    Chinese consumers have long enjoyed the annual ritual of shopping in the run-up to Spring Festival in January or February, and now e-commerce is beckoning shoppers worldwide to share in the fun.

    Elena Zhang, sales manager of Xi’an Silk Road Crafts Co, said the company started receiving overseas orders for Spring Festival in July last year.

    One order last month came from Spain, for more than 1,000 red hanging lanterns made of Chinese fabric.

    Orders for various products related to Chinese New Year had come in from Canada, France, Germany and Russia, she said. AliExpress, a website that sells made-in-China products to overseas customers, is by far the most used online shop.

    Our China Dream series of lanterns are the bestsellers among overseas Chinese this year. It belongs to Alibaba, China’s largest e-commerce player. “Fabric lanterns priced between $1.50 and $4.30 (£1-3) each were the most popular items this year,” Ms Zhang said.

    “Overseas buyers usually place their Spring Festival orders in summer. But we have had orders at the end of the year, too. Enthusiasm overseas in Chinese New Year shopping seems to be increasing, and e-commerce is helping increase sales.”

    Sales by AliExpress to overseas consumers from the city of Yiwu, Zhejiang province, well-known as a centre for small commodities, have risen sharply since the company began to ship worldwide on Dec 31.

    To the end of January it had shipped more than one million parcels overseas. One of the companies making full use of this new service is Yiwu Wonderful Lantern Co.

    Xia Rongwang, the company’s manager, said many overseas orders had been placed since the middle of January, especially from overseas Chinese in countries such as Malaysia.

    Some buyers said the lanterns make them feel as though they are back home celebrating new year

    “Our China Dream series of lanterns are the bestsellers among overseas Chinese this year. Some buyers have said the lanterns make them feel as though they are back home celebrating the new year.”

    Apart from Spring Festival-related items such as lanterns, overseas consumers are buying other products made in China selling at bargain prices in the holiday period and just before it. DHgate, a Chinese online wholesale marketplace, said sofa and bed cushions are particularly popular among Canadian shoppers.

    Russians are said to be the most numerous overseas buyers. AliExpress says they love buying clothes made in China, their keenness to shop online spurred by a depreciating rouble. Consumers in countries where winters tend to be very cold buy made-in-China down jackets and other winter-wear.

    Felix Zhang, sales manager for Shaoxing Goldson Dress Co in Zhejiang province, said Chinese down jackets in the $40 to $47 price range are popular among buyers in Kazakhstan, Estonia and Latvia. “We offer discounts of up to $500 for buyers who order more than 10,000 down jackets. The reason is obvious: Online selling means we cut the costs resulting from going through intermediaries.”

  • SmarTone opens online store for smartphones, accessories

    SmarTone opens online store for smartphones, accessories

    SmarTone has launched a new online store for customers looking to buy smartphones and accessories.

    The store at shop.smartone.com will provide customers with a range of online exclusive offers, including a 12-month screen replacement warranty for smartphones and HK$50 off on accessories for every HK$1,000 smartphone purchase.

    Customers will be able to use the shop to choose their own numbers for prepaid SIMs from a pool of sought after numbers.

    The store will also offer free delivery to commercial addresses in Hong Kong for every order over HK$300.

    As a promotional offer, the company is providing winning customers with up to a HK$1,000 rebate on their orders, for a total pool of store credit worth HK$100,000. The promotion ends on Tuesday.

    SmarTone interim CEO Stephen Chau said the new store is aimed at adapting to the changing demands of Hong Kong consumers.

    “SmarTone has always focused on delivering an outstanding experience to our customers. In recent years, we have observed the trend of Hong Kong consumers shopping online,” he said.

    “To better serve customer needs, our new online store focuses on bringing products from quality brands internationally to customers, and they also enjoy our renowned customer care such as gift wrapping service and 24/7 Web Chat. Leveraging on our omni-channel capability, we aim to provide customers with an enjoyable shopping experience.”

  • Vietnam risks losing entire retail market to Thailand

    Vietnam risks losing entire retail market to Thailand

    Industry insiders have warned that Vietnam is on the brink of losing its entire retail market to neighbor Thailand. Made-in-Thailand goods, from confectionery to luxury items, are making their largest-ever ‘invasion’ of the Vietnamese market, and many local firms are looking like being acquired by Thai investors.

    Last month, Thailand’s TCC Holding Co. officially acquired Metro Cash & Carry Vietnam’s operations from Germany’s giant retailer Metro Group for an enterprise value of €655 million (US$712.14 million).

    The business includes 19 wholesale stores and related real estate portfolios across Vietnam.

    Another major Thai investor, Berli Jucker (BJC), is also is keen to buy the Big C Vietnam supermarket chain from its French operator, Casino Group.

    The French company reportedly wanted to sell its Vietnam business after completing the transfer of its business in Thailand, Thai Big C, to home player TCC in a $3.5 billion deal earlier this month.

    “If Big C Vietnam is sold to a Thai investor, it can then be said that the entire Vietnamese retail market is in Thailand’s hands,” said Vu Kim Hanh, chairwoman of the Business Association of High-Quality Vietnamese Goods.

    In 2013, BJC acquired the Vietnamese convenience store chain from Japan’s Family Mart and renamed it B’s Mart.

    Later that year, Family Mart teamed up with a new Vietnamese partner to keep the Family Mart chain running, not to be confused with the Thai-operated B’S Mart.

    “A supermarket chain is the missing piece at a time when Thai companies are already running wholesale markets, convenience stores, and even traditional retail channels in Vietnam,” Hanh told us recently.

    With multiple retail channels under their control, Thai investors can easily cut costs and increase competitiveness, and “it will be more difficult for Vietnamese goods to enter Thai-controlled retail outlets,” Hanh said.

    In fact, Thai goods are currently dominating the B’s Mart chain in Vietnam following its acquisition from Family Mart, according to the director of a processed food company.

    “There have been huge changes in the way these stores source products, with Thai candies, snacks and packaged food dominating shelves,” she told Tuoi Tre.

    A real threat

    Shelf space for Thai goods has also increased in other Thai-owned retail channels in Vietnam.

    One executive from a Ho Chi Minh City-based frozen foods trading firm said they had stopped making private-label products for Metro late last year, even before the cash and carry business was sold to TCC.

    Private-label goods are typically those manufactured or provided by one company sold under another company’s brand name.

    “Several procedures have taken longer than usual since the Thais have controlled Metro,” she added.

    “It took me six months to pull some products from their shelves, and requests to adjust prices also took a long time to be effected.”

    Other Vietnamese businesses said the trading policies of Metro, under the new owner, have changed a lot.

    “We are offered higher commissions, but sales have been much slower,” one company director said.

    N.T.C., director of a fresh food producer, said Metro Cash & Carry Vietnam has a new marketing policy that openly favors Thai suppliers.

    “Across product categories, only the Thai ones are subject to repeated promotional campaigns, which leave Vietnamese suppliers like us in shock,” he said.

    The presence of Thai-made products has even increased in retail outlets not owned by the Thais, including South Korea’s Lotte Mart and Co.op Mart, which is Vietnam’s largest supermarket chain.

    “Thai businesses are receiving huge support from the government, in terms of both policies and capital, in their ‘invasion campaign’,” said Vo Xuan Trung, director of IBP Co., a local distributor of Thai snacks.

    While there used to be only one annual Thai goods fair in Ho Chi Minh City, the event has been held four times annually since 2014, Trung said.

    “Having said that, we should acknowledge that most Thai products are of better quality and available at more attractive prices than their local competitors,” he said.

    Tran Anh Tuan, general director of Pathfinder, a Ho Chi Minh City-based market consulting firm, said it was a real threat for Vietnam to lose its home market to Thai retailers.

    “Once Thai retailers are in Vietnam, it is certain that they will try to increase the presence of their goods,” he said.

    Tuan underlined that timely policies should be made before the second, bigger risk comes.

    “Soon we will see not only our consumers rush to buy Thai goods, but also Vietnamese firms acquired by Thai investors,” he warned.

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  • Mobile shopping is doubling in China each year

    Mobile shopping is doubling in China each year

    On the back of strong growth in household income and wealth, retail spending has been one of the few shining lights for the Chinese economy of late. The pace of growth, no matter what method used to measure it, has been phenomenal since the turn of the century.

    According to analysis produced by UBS equity analysts Xinyu Liao and Yunyun Hu, retail sales of consumer goods grew at a compound average growth rate (CAGR) of 13.8% since 2000, leaving the total amount spent by Chinese households last year at a mammoth 30 trillion RMB (US$4.6 trillion).

    From the levels of 2000, that represents a more than six-fold increase.

    As as the chart below from UBS shows, despite a recent deceleration in the pace of growth, retail sales of consumer goods, let alone services, is still growing at a rate of around 10% per annum.

    Breaking down the retail sales figure further, there’s one component that stands head and shoulder above the rest when it comes to annual growth: online retail sales.

    It grew by an astonishing 33.% in 2015, accounting for more than 10% of total retail sales, a figure that dwarfs comparable online spending figures from the US and Japan.

    With mobile usage in China exploding, so too is retail spending on mobile devices. It grew by over 100% in 2015, continuing the trend seen since late 2013.

    According to Xinhua, citing a research report from the China Internet Network Information Center (CINIC), Chinese internet traffic through mobile devices surged by 36.79 million people in the first six months of 2015, taking the total number accessing the web through smartphones to 594 million.

    Massive growth, and combined with Chinese demographics, one that looks set to see spending on mobile devices skyrocket even further in the years ahead.

    Of China’s more than 1.3 billion people, 43% are aged between 10-39 years. While less than half of the population, what they lack in numbers, comparatively speaking, they make up for in terms of internet usage.

    Nearly 80% of China’s internet users come from this age group, presenting an enormous opportunity for retailers as their numbers, and wealth, increase.

    “With younger people set to become China’s most influential group of consumers in the next few years, we expect growth in online and mobile consumption to continue, say Liao and Hu. “Equally importantly, their consumption habits are likely to influence the next generation, as more of these younger consumers go on to become parents. Thus, we believe the shift from offline to online channels could have far-reaching implications for the spending habits of Chinese consumers.”

    Based on the changes witnessed in Chinese household spending patterns over the past 25 years, those firms offering discretionary items look set to do well.

    Like most economies making the transition from developing to developed status, the proportion of household spending directed to necessities has been steadily falling, replaced by discretionary spending such as education and housing.

    Clearly the opportunities to tap into marketplace are immense, as discovered by many firms in and outside of China over recent years. However, the formula to do that successfully, particularly for foreign firms, might not be so easy to crack.

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  • Explore bittersweet world of coffee at ‘Thailand Coffee Fest’

    Explore bittersweet world of coffee at ‘Thailand Coffee Fest’

    With the bittersweet scent of coffee in the air and the endless coffee products on display, Thailand Coffee Fest 2016 will turn Queen Sirikit National Convention Center into a heaven for coffee addicts.

    Organized by SCATH and CP Link, Thailand Coffee Fest 2016 will be a hub for all things caffeinated. The event features shopping and will showcasing products from Thailand’s leading coffee companies, along with fancy appliances that can help you to brew your perfect cup.   

    The event will host various exhibitions including a photography gallery, while coffee lovers can head to workshops to learn basic barista skills including the art of latte making and cold drip coffee, and coffee-themed seminars.

    Thailand’s Brewer Cup and Latte Art Championship 2016 will pit skilled baristas against each other, while the Highlight will host the search for quality coffee and the 10 best coffee beans of the fair, followed by an auction of the coffee treats.

    You can register for workshops and seminars on the website.

    Thailand Coffee Fest 2016 takes place from Feb. 25-28 at Plenary Hall, Queen Sirikit National Convention Center. Entry is free.

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  • New ‘Siam Discovery-the Exploratorium’ to open Q2 as Thailand’s first hybrid retail store

    New ‘Siam Discovery-the Exploratorium’ to open Q2 as Thailand’s first hybrid retail store

    Siam Piwat Co., Ltd., the owner and operator of prestige retail developments such as Siam Paragon, Siam Center, Siam Discovery, and Paradise Park, as well as the joint venture partner of ICONSIAM, today, announced that it is introducing a revolutionary new retail concept to Thailand with the opening of the new Siam Discovery retail destination in the second quarter of 2016, after a Bht 4,000 million re-build.

    Mrs. Chadatip Chutrakul, Chief Executive Officer of Siam Piwat Co., Ltd. said: “The new Siam Discovery is the first hybrid retail destination in Thailand.  We have created a venue where thousands of lifestyle brands are brought together under a single universal concept that puts customers at the centre, rather than brands.  That means everything presented at Siam Discovery is not organized by brand, or category, as in traditional retailing, but by the visitors’ interest, because our purpose is no longer just to sell products but to provide an extraordinary and emotional experience to the visitor allowing them to discover themselves, as well as express themselves.

    Mr. Oki Sato, Chief Designer and Founder of nendo and Mrs. Chadatip Chutrakul, Chief Executive Officer of Siam Piwat-1

    “We then enhance that experience by presenting a story rather than just products, and by making the experience in our store highly interactive as well as allowing visitors to personalize their purchases.  We give visitors opportunities to make a statement about their life preferences, whether it be about sustainability or a love of nature, and to support those preferences through their purchases, and through occasions to interact with like-minded people and communities.  And then we further enhance those experiences through the power of the most advanced digital technology,” she said.

    Mrs. Chutrakul added, “Taken together, this new retail format makes a visit to the store an exciting, emotional experience that gives visitors a great opportunity to play, to experiment, to discover and re-discover themselves.  We want people to fall in love with that experience.

    “Our role as a retailer has advanced to another level and become one of managing visitors’ experiences and emotions at the destination, rather than just one of managing products, categories and displays,” she said

    “We target all genders and all age groups, and there is something for everyone at all price points,” Mrs. Chutrakul said.

    “Come Play With Me”

    Empowering visitors to create their own personal style

    Siam Discovery Infographic

    According to Mrs. Chutrakul, “The new Siam Discovery says ‘Come play with me!’ to visitors, inviting them to experiment by trying out new products, new ideas, re-thinking conventions, and customising their purchases, all across 40,000 square metres of floor space.”

    “We are completely overturning past retailer practice of organising and presenting products by brand or category.  Instead, at the new Siam Discovery, multiple brands and complementary merchandise are brought together for the convenience and enjoyment of the visitor and unified with underlying stories.  They are organised and presented by type, function, relevance and, most importantly, the visitor’s interest.

    “This is a pioneering retail concept that empowers visitors to mix and match across brands and categories to discover, define and create their own distinct, personal style, while also pursuing related interests and passions that need not be tied to any purchase intent.  It has never been done before in Thailand and on such a scale, and it’s a concept that will bring new excitement to any visit to Siam Discovery.  We estimate it will also double Siam Discovery’s per-square-metre sales within a year,” she said.

    Mrs. Chutrakul added that the new Siam Discovery is called ‘The Exploratorium’ and is a ‘lifestyle lab’ because it allows every individual to explore who they want to be and what is the style that best reflects their true self without the constraints of a particular brand or school of design.  She said that visitors can try new ideas across the hundreds of categories and more than 5,000 international and local brands on offer, many of which are first-time-in-Thailand brands.  It includes everyday products, sustainability products, trend products, collaboration and limited edition collections, as well as innovative products.

    Visitors can go even further in experimenting with creating their own style because the new Siam Discovery also provides bespoke personalisation opportunities that let customers tailor their purchases to their own personal preferences.

    Immersive Story-Telling, Advanced Digital Technology, Interactive Experience

    The presentations of products have a very strong story-telling component.  As visitors move through the various parts of Siam Discovery, they are immersed in the heritage and the intangibles of a brand and a category.  They are also drawn into stories relevant to their interests, their beliefs, and trends rather than just being presented a selection of products.

    “These experiences are enriched and heightened through advanced digital technology as well as many interactive experiences that are offered to the visitor.  It’s a totally new and an extraordinarily exciting way of presenting products and their associated lifestyles,” she said.

    “As part of this ‘immersive experience’, Siam Discovery has created areas for people of similar interests to interact, share experiences, make friends and create their own communities, whether they be designers, sportsmen, collectors, health gurus, or travellers.  Not only can they do things with other people, they can also do things for other people: through their purchases, they will be able to indulge in their passions and convictions, such as supporting sustainability or other causes important to them,” she added.

    Siam Discovery Visual Ad-1

    Thailand on the World Stage

    Mrs. Chutrakul noted that the introduction of a revolutionary, new retail concept will reinforce Bangkok’s appeal as the retail hub of the ASEAN Economic Community (AEC) and help make the city a favourite shopping destination for the world.

    “Siam Area is Bangkok’s top-ranked retail destination with more than two million square metres of world-class attractions and the widest variety of shopping, dining, art, culture and education offerings in Thailand, attracting traffic of over 160 million visits, annually.  The new Siam Discovery enriches the total package of offerings in Siam Area by introducing a completely new proposition,” she said

    Top Global Designer ‘nendo’

    ‘nendo’ (Mr. Oki Sato), who is one of the world’s top designers and a person voted as among the ‘100 Most Respected Japanese’ by Newsweek Magazine, provided the overall design inspiration for the new Siam Discovery.  He was engaged as the chief consultant for the building design as well as the interior design, while Urban Architect Co., Ltd. was the Thai architectural design and interior design company for the project.

    The new Siam Discovery is nendo’s largest project, ever, and his first in Thailand.

    Mrs. Chutrakul said, “We invited nendo to provide the inspirational design concept for Siam Discovery because Siam Piwat looks at the future from a global perspective rather than just the potential of the Thai market.  This is because Siam Piwat is committed to the business of creating extraordinary experiences for customers who are not only Thai people but also visitors from every corner of the world.

    “In line with our growth strategy, Siam Piwat is creating unprecedented destinations in Thailand that can compete with the best of the world’s destinations and help support Thailand to become a top-ranked global retail and entertainment paradise.”

    “Within the first year, we aim to have 100,000 people a day visit and fall in love with the new Siam Discovery, of which around 65% are expected to be Thai and 35% to be international visitors.  What our visitors will have in common will be their progressive, independent-minded outlook on life, and a passion to explore and try new things,” she said.

    The new Siam Discovery follows from Siam Piwat’s highly successful Bht 1,800 million     re-build of Siam Center three years ago, which pioneered a revolutionary retail development concept where the developer worked collaboratively with retailers and brand owners to give the entire venue a consistent visual identity that is clearly and distinctly Siam Center.  The concept has been showered with eight highly prestigious international awards, including recognition as one of the world’s 5 best-designed retail centres by the retail industry’s leading international association – the International Council of Shopping Centers (ICSC).

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  • Indonesia to expand seafood market to England

    Indonesia to expand seafood market to England

    Indonesian government, through the Coordinating Ministry for Maritime Affairs and Resources, will work to expand the seafood market to England and North Ireland as part of an MoU for maritime cooperation signed by the two countries in July 2015.

    “The UK is the biggest seafood market for Indonesia, and the European Union accounts for 60 percent of our total seafood market,” Deputy Minister for Maritime Sovereignty Arif Havas Oegroseno said on the sidelines of the “Bilateral Maritime Workshop” here on Monday.

    With a large market, Great Britain is considered as setting the standards in the seafood market in the world.
    “Through our collaboration with the British, we could manage our shrimps, fishes, or other seafood species to meet the world standards as well as increase the production,” Havas stated.

    In addition, he said, cooperation on marine fisheries between the two countries was also considered as an opportunity to introduce Indonesian seafood products which were free of any illegal practices, including slavery.
    Indonesia and the UK have initiated maritime cooperation through the Bilateral Maritime Forum, a meeting of which would be held in London next April.

    The UK was one of the maritime countries, known for its experience and high end technology in the field.
    Therefore, the workshop held in Jakarta was expected to focus on some maritime issues which would be later discussed in the forum in London.

    Besides expanding the seafood market, the Indonesia-UK cooperation would also involve education, maritime investment in the shipbuilding field and exchange of information on international maritime law.

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  • China’s move to curb grey market for luxury goods may have opposite effect

    China’s move to curb grey market for luxury goods may have opposite effect

    Given the still significant price gap between high-end goods inside and outside of China, parallel imports are big business. The key players in this grey market are cross-border traders known in Chinese as daigou, and they sometimes double-deal in genuine goods and fakes. While the country’s customs service has taken steps to curb the re-selling of luxury goods sourced from overseas, some evidence suggests that those measures have driven business toward daigou by making legitimate online purchases more difficult. Both trends should be considered by brands tailoring their retail and enforcement strategies to the Chinese market.

    Driven by high taxes, tariffs and the impact of different retail strategies, price differentials for luxury goods between China and developed markets like Europe and North America make buying through daigou a compelling option for many consumers. According to Fortune Character’s 2015 China Luxury Report, the average price difference last year was between 25% and 33% depending on the category of goods. For watches, certain models were nearly 90% more expensive in China.

    These disparities make it a no-brainer for Chinese consumers to look for alternatives to their local retail outlets. One result is the huge amount spent by Chinese tourists on trips abroad. But for those who are not travelling overseas in the near future, and cannot ask a friend or relative to pick up goods for them, daigou have emerged as an alternative. Often coordinating through messaging app WeChat, Chinese buyers pick up specific items for Chinese customers and ship them to China in what Bain & Company says is a 43 billion Rmb per year business in the luxury segment alone. But the introduction of this unknown third party also creates an opportunity for dishonest traders to introduce fake goods into the mix, meaning daigou customers may be getting less than they bargained for.

    Chinese shoppers do have another option – buying online direct from the brand. While only 4% of consumers told Fortune Character that e-commerce was their preferred channel for buying luxury items, more opportunities are opening up. Among these is Alipay’s ePass, introduced about a year-and-a-half ago. The service allows brands to sell directly into China through their existing online outlets by providing both Rmb payment settlement and a delivery network in China. Cutting out the middleman gives customers more confidence that the products they order are the real deal, and Bain says this option is already hurting parallel traders’ bottom line: cross-border e-commerce accounted for 48 billion Rmb in luxury sales in 2015 – a shade higher than the figure for daigou business.

    China has also introduced measures specifically aimed at curbing grey market imports and thus allowing the government to recover more tax and tariff revenue. Last summer, the Ministry of Finance cut tariffs on cosmetics, fur products and suits. It followed up in December by announcing reduced duties on sunglasses, handbags and clothing.

    So far, this sounds like good news for brand owners. But a recent report in Business of Fashion suggests that tougher customs controls – intended to check parallel traders – are instead hampering legitimate e-commerce, and may even be driving customers back to daigou sellers.

    China’s General Administration of Customs (GAC) has stepped up scrutiny of small shipments with high declared values as part of the country’s wide-ranging anti-graft campaign. That’s problematic for some consumers who prefer to buy big-ticket luxury goods directly from overseas brands. A woman named Gao described to Business of Fashion her experience of having two DHL parcels from a UK luxury retailer turned around at customs, saying: “If they’re more than 1,000 Rmb, your parcels will be returned. So I have to either order them separately and pay double DHL overseas shipping fees, or use a daigou.” Unlike legitimate sellers, daigou can attempt to get around this by not declaring an accurate value. An e-tailer who provides a legitimate platform for Chinese consumers to buy directly from brands including Chloé and Lanvin said the complaint was a common one among his customers, with many saying their parcels had been rejected “for no reason”.

    Asked why they think luxury goods cost so much more in China, 24% of people told Fortune Character it’s because “Chinese commerce channels are unduly complex”. For brands looking to sell directly into China via e-commerce, GAC may be complicating their efforts to give customers there a simple and reliable way to buy authentic products. According to Bain, the market share of luxury parallel importers contracted last year, but if cross-border e-commerce gains a reputation as unreliable and the price gap persists, the daigou could prove more resilient than brand owners would like.

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