Tag: asia

  • Oil rises as traders expect Venezuelan supply disruptions amid U.S. sanctions

    Oil rises as traders expect Venezuelan supply disruptions amid U.S. sanctions

    Oil prices rose on Wednesday as concerns about supply disruptions following U.S. sanctions on Venezuela’s oil industry outweighed downward pressure from a darkening outlook for the global economy. U.S. West Texas Intermediate (WTI) crude futures were at $53.54 per barrel at 0455 GMT, up 23 cents, or 0.4 percent, above their last settlement.

    International Brent crude oil futures rose 37 cents, or 0.6 percent, to $61.69 per barrel.

    The gains followed a 2 percent price jump in the previous session, when markets first digested the U.S. sanctions on Venezuela’s oil exports.

    Washington on Monday announced export sanctions against state-owned oil firm Petroleos de Venezuela SA (PDVSA), limiting transactions between U.S. companies that do business with Venezuela through purchases of crude oil and sales of refined products.

    “The sanctions so far have been mostly disruptive for refiners on the U.S. Gulf Coast, who are being forced to seek alternative heavy crude supplies, and have stepped up purchases from Canada,” said Vandana Hari of Vanda Insights, an energy consultancy.

    She added, however, that Canadian oil exports would be “constrained by pipeline capacity bottlenecks.

    The sanctions aim to freeze sale proceeds from PDVSA’s exports of roughly 500,000 barrels per day (bpd) of crude oil to the United States.

    Although the move pushed up oil prices, markets appeared relatively relaxed as the sanctions only affect Venezuelan supply to the United States.

    “The (Venezuelan) export volumes will not be eliminated from the market, but rather rerouted to other countries,” said Paola Rodriguez-Masiu, an analyst at consultancy Rystad Energy.

    With the United States dropping out as a customer for Venezuelan oil, she added that “China and India … will be able to pick up these oil volumes at great discounts.”

    Despite this, some analysts said that non-U.S. oil trading firms with operations in the United States may still avoid dealing with Venezuelan oil.

    The Schork Report, a daily oil and gas trading publication, said on Wednesday that many “international oil traders … have significant trading operations in the U.S. … At least in the short-term, these traders will undoubtedly quit buying from Venezuela until such a time that they are assured that they are not running afoul of U.S. sanctions.”

    TRADE TALKS

    Other analysts also pointed to economic weakness as countering supply-side efforts to tighten the market such as the voluntary supply restraint by the Organization of the Petroleum Exporting Countries (OPEC).

    “Pulling in the opposite (oil price) direction are heightened concerns about global growth, particularly that of China,” said Ole Hansen, head of commodity strategy at Denmark’s Saxo Bank.

    Global economic growth and fuel consumption are expected to slow this year amid a trade dispute between the United States and China, the world’s two biggest economies.

    Officials from Washington and Beijing are set to launch a new round of trade talks on Wednesday aimed at resolving their disputes amid which both sides have slapped hefty import tariffs on each other’s goods.

  • Apple sales and profit slip as demand falls

    Apple sales and profit slip as demand falls

    Tumbling iPhone demand drove an uncharacteristic decline in Apple sales in the first quarter trimming back its profit for the period. Sales of its iPhone range slumped 15 per cent year on year, and although burgeoning revenue from services like digital media subscriptions – up 19 per cent to a new high of US$10.9 billion – and other products compensated, total sales were down 5 per cent to $84.3 billion.

    Sales in China slumped 26.6 per cent during the period.

    Net income fell by $100 million, from $20.065 billion in the December 2017 quarter to $19.965 billion in the latest quarter. While the company championed setting “an all-time earnings per share record” that was a consequence of a share buyback program reducing the share pool rather than an improved bottom line.

    Commenting on the results, GlobalData Retail MD Neil Saunders said while Apple is still a money-making machine, the sales decline “symbolises a company that is starting to run out of steam”.

    “In our view, this is something to be corrected, not least because Apple is a costly company to run and it relies on strong revenue growth to drive up the bottom line. As this quarter’s figures show, failure to achieve that results in profit erosion.”

    Saunders said the slowdown in iPhone sales reflected Apple’s inability to come up with meaningful and valuable innovations that wow consumers.

    “The latest iPhones might be works of art from an engineering perspective, but they are essentially incremental products that lack the excitement and newness of earlier models. With the higher price points of top-end models, consumers expect a lot more for their money. The blunt truth is, Apple’s latest line up of phones doesn’t do that much more than the generations that came before.”

    He said the slowdown in China is a problem Apple shares with many other companies.

    “The country is suffering from more sluggish consumer demand which has put the brakes on retail growth rates across many sectors. However, the issue for Apple is that this has coincided with a rise in competition from local phones and devices which has helped to eat into its own growth. In short, China is no longer the engine of growth for Apple that it once was and this makes Apple uncomfortably more reliant on mature markets to drive revenues. Some of those markets, like Europe, are also not delivering – thanks to very high price points and consumers that are hesitant to spend on big-ticket items.”

    From must have to might buy

    Saunders said Apple’s iPads and some of its Macs are good, quality items, however they are simply not impressing the market and Apple is losing its lustre in terms of producing compelling products.

    “In our view, Apple has moved from a position of ‘must have this and must have it now’ to ‘might buy this at some point in the future’. Price increases may mitigate this but, ultimately, such a shift can only ever result in a softer sales performance.”

    While services are performing well, Saunders said Apple must push much harder.

    “Amazon is successfully creating an ecosystem of services through Prime. Apple needs to do something similar by building on its Apple Music subscription and its App Store offering. Movies and television content are also needed to propel sales.

    “In our view, Apple should seriously consider a big acquisition such as Netflix. Content is a big growth area and is becoming increasingly linked to devices. Apple needs to play more heavily in this space both to generate new opportunities but also to defend its own device business.”

    While Apple remains a solid and financially successful company, he said, a lack of serious and significant innovation means it runs the risk of diluting future earnings.

    “Apple thrives off serving a mass market; at the moment its moves to provide more expensive items to fewer people will ultimately do further harm to the bottom line. The clear blue water that once existed between Apple and its rivals is much diminished. The company has time to reopen the gap, but to do so, it needs to pull something new and unique out of its hat sooner, rather than later.”

    Cook’s positive spin

    Apple CEO Tim Cook delivered a positive spin on the results: “While it was disappointing to miss our revenue guidance, we manage Apple for the long term, and this quarter’s results demonstrate that the underlying strength of our business runs deep and wide. Our active installed base of devices reached an all-time high of 1.4 billion in the first quarter, growing in each of our geographic segments. That’s a great testament to the satisfaction and loyalty of our customers, and it’s driving our services business to new records thanks to our large and fast-growing ecosystem.”

    At the end of the quarter, Apple’s net cash balance was $130 billion.

  • Lancôme uses Alibaba Cloud Technology for Chinese New Year promotion

    Lancôme uses Alibaba Cloud Technology for Chinese New Year promotion

    Lancôme has teamed up with Alibaba Cloud, the cloud computing arm of Alibaba Group, to launch its Chinese New Year campaign in Hong Kong. The partnership leverages Alibaba Cloud’s cutting-edge technologies and Lancôme’s bestin-class beauty offerings to bring consumers the warmest festive wishes with fun and engaging experiences.

    As a leader of the beauty industry and a pioneer in adopting technology-enabled customerengagement, Lancôme has worked with Alibaba Cloud to create an augmented reality (AR) game for customers.

    The game, alongside a Lancôme pop-up store in Harbour City, Hong Kong, enable customers to engage with an online and offline brand experience during the Chinese New Year anywhere in the city, at any time. Lucky consumers will be able to bring home limited edition Lancôme products and special gifts.

    “Lancôme is glad to partner with Alibaba Cloud to engage with our consumers in Hong Kong using the most advanced data technologies. One of the brand’s priority is to build ‘Beauty-tech’ leveraging the latest innovations to transform our campaign and offering our customers better interactive experiences. We are excited to see these technological advancements helping us to create a modern Chinese New Year with better understanding of the consumer behavior and eventually with great business uplift with high conversion,” said Lee Sue Jong, Brand General Manager, Lancôme Hong Kong.

    “We are excited to partner with Lancôme to foster the digital transformation of Hong Kong’s retail industry. Our technologies not only offer innovative ways of engaging consumers, but also help Lancôme better understand customers’ needs using data analytic tools,” said Leo Liu, General Manager of Alibaba Cloud Hong Kong, Macau and Korea.

    Lancôme will spread joy and good wishes across the city for the coming Year of the Pig with thehelp of Alibaba Cloud’s image search technology and cloud services. Consumers can participate in a Lancôme-branded AR game on their smartphones. Those who find and capture augmented reality images of Lancôme’s signature beauty product Genifiques on their smartphone will be invited to send their seasonal wishes for a chance to win a selection of prizes.

    Alibaba Cloud Image Search is an intelligent service based on machine and deep learning. It enables end-users to take a screenshot or upload an image to search for desired products and fulfill other search requests.

    Alibaba Cloud’s cloud-based technology is part of the Alibaba Operating System, a holistic onestop solution to accelerate the digital transformation for corporations. With strong cloud-computing capabilities, the infrastructure is able to deliver insights and analytics instrumental to better satisfying customer needs and growing their business. New Retail, a strategy that drives innovation around online and offline solutions, is a key interface through which businesses can tap into the Alibaba Operating System.

    The latest collaboration on Lancôme’s Chinese New Year campaign follows L’Oréal Group’s longstanding working relationship with Alibaba businesses across multiple platforms. The beauty company has continuously deepened its use of Alibaba’s ecosystem to meet and create new aspirations from consumers. In terms of grasping the benefits of New Retail, L’Oréal Group was an early adopter of merging online and offline during the 2018 11.11 Global Shopping Festival.

  • Ready-To-Eat Food: Millennial’s new favourite

    Ready-To-Eat Food: Millennial’s new favourite

    Convenience food is a concept that has been prevalent and popular in the western countries for a long time now. Globally, the demand for ready-to-eat (RTE) food products has been increasing over the last few years on account of busier lifestyle of consumers and their rising income levels. Similar factors are fuelling the growth in the packaged food sector in India.

    Increased employment opportunities have increased migration of people from tier 1 and tier 2 cities to metropolitans, which is an important driver for RTE food products in the country. Nuclear families and bachelors residing in metros for study or employment purpose are among the major consumers of RTE food products in India. The number of working women is particularly on the rise, which is again driving the demand. All these factors are creating significant awareness about ready meals among consumers. Growth in retail chains and outlets is also adding to the product awareness among consumers in the country’s, supermarkets, convenience stores and hypermarkets, which are emerging as the key points-of-sale for offering a wide range RTE food products.

    The Indian cooking styles have undergone considerable changes over the past few years owing to the advent of modern technology and several other changes such as urbanization, increasing working population, increase in female work population and the rise of nuclear families. People have been increasingly shifting to ready-to-eat food items in order to save the time involved in preparing meals.

    With the growing media awareness, literacy rates and standard of living, people have grown more responsive towards the health and hygiene standards associated with food products. There has been a shift witnessed in the customers focus from price to quality in the recent years, particularly in the urban and a few semi-urban areas. Consumers have been drifting from openly or loosely sold food products to the consumption of hygienically packaged fortified RTE foods.

    The Indian food and grocery market is the world’s sixth largest, with retail contributing 70 percent of the sales. The Indian food processing industry accounts for 32 percent of the country’s total food market, one of the largest industries in India and is ranked fifth in terms of production, consumption, export and expected growth. It is believed that the Food Processing industry will be a US$ 25 billion market in India by 2020. Out of which, the serviceable metro market is expected to be close to almost US$ 20 billion. The past couple of years have seen a tremendous growth of this segment due to high consumer acceptance for convenience food nationwide.

    A recent survey done by Assocham (Associated Chamber of Commerce and Industry of India) says about 79 percent of Indian households today prefer to have instant food due to time constraints. With two working parents and families becoming nuclear, people prefer authentic, nutritious store bought options rather than spending hours in the kitchen after work. In recent years, the focus of the ready-to-eat market has gradually shifted from just homemakers or students to young professionals and families.

    It is found that 76 percent of parents in big cities, mostly both working with children under the age of five, are serving easy-to-make meals in some form or the other, at least 10-12 times every month! No wonder that the RTE market continues to expand at a brisk pace. The market for spreads, sauces and dips is now close to US$ 2 billion and growing at 22 percent CAGR. The RTE meals market is currently valued at INR 23 crore. It grew at a compounded annual growth rate of 3-5 percent in the last five years. According to data research company Nielsen, the breakfast mixes market is growing at 17 percent and is currently pegged at Rs 275 crore.

    However, as fancy as the various breakfast cereals available in the market might be, we crave the satisfaction that only a traditional dish can give. And hence the traditional brands are coming up with options that are suitable for the Indian palate. The traditional brands such as ITC and MTR have forayed into items such as bhel bar, pot upma, poha which can be had on the go, anytime, anywhere.To fulfil the demand of this large section of consumers, one will find a lot of new RTE brands in the market.

    Unlike the giant brands though, the new entrants are trying to create a niche category for themselves, be it breakfast cereals, canned, frozen foods, spreads, chutneys, and so on. Companies are looking to attract consumers within areas like olive oil, spreads and ready meals by offering promotions, new product developments, health and nutritional benefits and attractive packaging.

    The Indian consumer behaviour has been influenced by exposure to other cultures primarily in the West through travels, and popular literature. The ready-to- eat market is somewhat saturated in the West, hence developing countries like India are attracting the majority of big players in the promise of a high growth opportunity. The booming food sector, multiple food outlets, the popularity of international brands and distinctive distribution channels adopted by players are expected to help the market grow at a continuous pace.

    Consumers are increasingly realizing that majorly RTE foods are loaded with preservatives for a longer shelf life. Increasing health awareness, particularly in the young generation, is hindering the growth of this market. Still a large Indian population is price sensitive and therefore the price factor of RTE food makes them affordable only to select economic classes of the society. Hence it becomes all the more essential for new players in this field to marry convenience with health benefi ts to ensure convenience food does not mean compromising on quality. The key is to provide RTE food options focused on Indian taste for everyday consumption, which are is not harmful in the long run.

    This is the challenge taken up specifically by food tech start-ups who want to be considered as serious players and are getting into the game after years of R&D. With state of the art technology in packaging and processing to ensure the end product is not just a world class product that can eventually be on the shelves in countries across the globe but a product that is a strong contender in being a game changer.

  • Puregold reveals expansion plan

    Puregold reveals expansion plan

    Philippines’ retail chain Puregold will open 25 outlets this year to boost its nationwide footprint. Parent company Puregold Price Club also plans to open four more S&R Membership warehouse stores. Planned locations include Metro Manila, Southern Luzon, and outside Metro Manila. Puregold VP for investor relations John Marson Hao said the company would use proceeds from the recently-concluded P4.69-billion public offering to fund the construction of the new outlets.

    The Puregold group operates 397 stores nationwide, including 345 Puregold stores, 16 S&R membership shopping warehouses and 36 S&R New York Style outlets.

  • Gold scales 8-month peak on Fed rate pause hopes, trade woes

    Gold scales 8-month peak on Fed rate pause hopes, trade woes

    Gold prices edged up on Wednesday to hit their highest since May, supported by uncertainty over U.S.-China trade relations and expectations the U.S. Federal Reserve will keep rates on hold later in the day. Spot gold was up 0.2 percent at $1,313.91 per ounce by 0245 GMT, after touching its highest since May 15 at $1,314.10 early in the session. U.S. gold futures rose 0.3 percent to $1,312.30 per ounce.

    “For the short-term gold is going to move higher as the Federal Reserve will have a dovish tone, which should weaken the dollar and give gold a bit of a move up,” said INTL FCStone analyst Edward Meir.

    The absence of an agreement in U.S-China trade talks should also benefit gold, he said.

    Investors are waiting on the Federal Reserve’s policy decision later in the day, with expectations officials will reinforce their recent dovish stance given a stalemate on global trade, signs of a slowdown in the U.S. economy, and waning business and consumer confidence.

    The Fed raised interest rates four times last year.

    Investors are also concerned that criminal charges against China’s Huawei Technologies Co. Ltd. for violating U.S. sanctions against Iran could complicate U.S.-China trade talks.

    China’s Vice Premier Liu is due to meet with U.S. Trade Representative Robert Lighthizer later in the day.

    “Gold also looks good on the charts … Physical demand seems to be improving in some markets and ETF buying has been increasing. In general the path of least resistance is probably higher from here,” Meir said.

    Underscoring investor interest in the bullion, holdings of SPDR Gold Trust, the world’s largest gold-backed exchange-traded fund, rose 1 percent to 823.87 tonnes on Tuesday, to their highest since June.

    SPDR gold holdings have risen 4.6 percent so far this month, their best since September 2017.

    “A combination of falling treasury yields, anxiety over Brexit and Venezuela is all helping gold,” said Nicholas Frappell, global general manager at ABC Bullion.

    British lawmakers rejected most amendments that aimed to keep Britain from leaving the European Union without a deal, reviving worries of a chaotic withdrawal from the trading bloc that would damage the UK economy.

    Silver rose 0.3 percent to $15.88 per ounce, having hit its highest since July 2018 at $15.92 in the prior session.

    Palladium fell 0.2 percent to $1,343.50, while platinum was up 0.4 percent at $813.

  • Singapore Plum stops delivering food

    Singapore Plum stops delivering food

    Hong Kong food-delivery startup Plum has closed its Singapore operations. An email delivered to Plum’s customers read: “It is with great sorrow to announce that we are ceasing our operations in Singapore from 21st January. Plum would like to thank you for your past support and going on this wonderful journey with us. We would not have achieved what we had without you. Best wishes to the year ahead.”

    Plum’s Singapore operations lasted less than a year in a highly competitive market, which saw the exit of hawker food delivery service Fastbee several months ago. The firm’s entire Hong Kong staff were let go in November to “right size” operations.

    The market is set to get even more competitive this coming year as Grab and Go-Jek struggle for market share in the territory.

  • Deciem skincare firm founder passed away

    Deciem skincare firm founder passed away

    Brandon Truaxe, the founder of Canadian skincare company Deciem, has died at the age of 40, the firm announced in an Instagram post. Truaxe launched the brand, best known for its affordable skincare line The Ordinary, in Toronto in 2013. Since then it has since expanded worldwide, with stores in the US, the UK, South Korea, Australia, Mexico and the Netherlands.

    “Brandon, our founder and friend. You touched our hearts, inspired our minds and made us believe that anything is possible,” a Monday post on Deciem’s Instagram reads.

    CIUDAD DE M?????????XICO, marzo 30 (EL UNIVERSAL).- Brandon Truaxe, joven creador del concepto, recibi?????????? a decenas de invitados en este nuevo espacio, donde las personas podr?????????n solicitar asesor??????????a sobre los tratamientos m?????????s efectivos para mejorar el estado del cutis y otras zonas del cuerpo. Foto: Agencia EL UNIVERSAL (GDA via AP Images)

    “Thank you for every laugh, every learning and every moment of your genius. Whilst we can’t imagine a world without you, we promise to take care of each other and will work hard to continue your vision. May you finally be at peace.”

    The Estée Lauder Companies, an investor in Deciem since 2017, said in a statement: “Truaxe was a true genius, and we are incredibly saddened by the news of his passing … he positively impacted millions of people around the world with his creativity, brilliance and innovation. This is a profound loss for us all.”

    Truaxe was removed as co-CEO of Deciem in October 2018 following a lawsuit brought by Estée Lauder, after his posts on the company’s social media accounts became increasingly erratic.

    “Brandon will always be the founder of Deciem,” the company posted on Instagram in October. “We will take the passion and values he has instilled within us as we continue to grow the brands we have created with transparency, integrity, authenticity, function and design.”

  • Food trends and their impact on consumption

    Food trends and their impact on consumption

    We are a young nation of 1.2 billion consumers. We are more connected to each other and the rest of the world than ever before. We travel within India and outside India more frequently. We are more informed about ourselves, about what we eat, about our environment and also about the impact of our consumption on environment. We see a large number of trends and counter trends that influence us. Some of these are fads that just pass away and some are here to stay. Here are some key trends that will have an impact on the way we consume.

    Food is an experience

    Indians have historically valued pure, freshly cooked home-made meals. The trend of eating out, widely prevalent in the West, has slowly emerged in India over the past few years. Eating out is no longer considered as a means of satiating hunger nor is it limited to the rare occasions. Shopping and casual outings, spending free time and experimentation are, not surprisingly, the new reasons for eating out!

    As per a recent Nielsen report, on average, Indians spend Rs 6,300 per year on eating out with affluent Indians spending approximately twice as much as their middle class counterparts.

    Usage of “Let’s Do…” for food is a true reflection of Food as an Experience. Consumers are frequently experimenting with a variety of cuisines, flavors, and combinations of food that were hitherto either unavailable or unheard of in the Indian market.

    Cross-cultural influences abound in dishes. Some examples of the innovative confluence of flavors are peri peri bhel, Schezwan and chocolate dosas and a wide variety of Frankies. Even the quintessential lassi can be found with a multitude of western influences such as chia seed additions and imported fruit flavors. Tikka and tandoori flavored mayonnaise, Indian versions of Chinese dishes, Chettinad sandwiches and paneer tikka pizzas are instances of Indian flavors seeping into western culinary dishes. The same is reflected in some of the food product launches.

    Variants range from quinoa rawa upma insta mix, smoky tikka mayonnaise & tamarind date chutney to beverages such as jamun kalakhatta, kokum, gol gappe ka pani, aam panna, and jal jeera made specifically as substitutes to fruit- based juice. These immensely popular products reveal the inclination of the Indian consumer towards mixing flavors.

    Health is Imperative

    As a nation, India is performing better on all indices of health such as quality and longevity of life. Indians are living better, longer and have healthier life spans. Thanks to mobile apps and wearable devices, it is possible to constantly monitor the heartbeat, quality of sleep, blood pressure and even the number of steps taken during the day. The entire idea of health has transformed from being curative to becoming preventive in nature.

    Although consumers are time constrained due to hectic work schedules, especially in urban areas, they are looking for avenues to build and maintain a healthy life style. While physical activity forms a core part of this endeavor, Indians are proactively choosing the right food products to meet their diet and health goals.

    Food products in the market range from breakfast cereals such as oats and muesli to vitamin pills. There is a marked rise in the consumption of baked goods, health biscuits, multi-grain flours, green tea and other health drinks. Furthermore, consumers are willingly buying premium products that promise health benefits. Some of the health attributes perceived to be the most important are high protein, high fiber, low cholesterol and low fat.

    Oats-based mango flavored, calcium and fibre-rich ready-to-drink breakfast option and power sprouts, honey dates flavored malt-based food drinks are good illustrations of healthy beverages available on the shelves. Snack packs of sweet and savory yoghurt and snack combos such as the Jalapeno Greek yoghurt with barley puffs are healthy replacements for the “in between meals” snacks that Indians are prone to eating. Packed khichdi mix infuses the health quotient of broccoli, carrots and almonds in the consumer’s diet. Another unique example is the gluten-free alternative to spaghetti made by cutting vegetables into thin noodle shapes or curls.

    Consumption of dietary supplements, especially in relation to adult nutrition, has also boomed. There is an emergence of “immunity boosting” foods as a major category in the market.

    These supplements can induce weight gain or weight loss or nourish the body with vital elements such as calcium, iron, omega 3 and vitamins. Moreover, active adults are consuming copious amounts of whey proteins and energy beverages.

    Consumers are as conscious of the wellness of their children as they are of their own. For instance, consumers are willing to experiment with chocolate-flavored nutritional supplements for children in a bid to ensure holistic growth. Busy parents who rely on prepackaged food or ready-to-eat meals are some of the key purchasers of probiotic drinks meant for children.

    The wide acceptance of health and wellness foods has created a Rs 10,352 crore market with a growth rate of about 10 percent. The sales contribution is the highest in non-metro but urban cities, at 40 percent. This is closely followed by rural areas at 32 percent and urban areas at 28 percent. The category penetration is highest in the south followed by the east.

    Natural & Ayurvedic Way of Life

    We see both these trends- Health and Tradition- coming together in Ayurveda and Natural Foods. The growing belief that natural products are uncontaminated and best is getting firmly ingrained in the minds of Indian consumers as the word “processed” implies a negative connotation of unoriginality. Ingredients recommended by our ancestors such as tulsi, turmeric, neem, lemon, mustard oil, ghee, saffron, amla juice, cold pressed oils of nuts and seeds are all finding their way on to the consumer’s plate. Food items made with these ingredients are not only considered as healthy but also as comfort food since consumers perceive that they have made a special effort to look after themselves. The re-emergence of yoga has only served to boost this trend. Consumers will continue to turn to nature to search for viable but healthy food options. This trend also manifests itself in organic foods though they are still a niche and are hampered by a lack of trust and high premiums. We foresee that the natural and ayurvedic trend will be stronger in the years to come and that multiple entrepreneurs will establish profitable ventures in these categories.

    Increasing Share of Proteins & Dairy

    The biggest trend as a Nation that we see is the shift to Proteins and Fats. For the first time in Indian history, milk has become the biggest agriculture crop at almost INR 5 lakh crore. It’s now bigger than all cereals and pulses put together and is 20% of the agricultural output. This shift towards fats and proteins from the traditional intake of carbohydrates for subsistence is the biggest perceptible proof of prosperity of the people. Though India is 70% non-vegetarian, it apparently has not yet crept into daily dietary preferences. Milk appears to be the most economic and culturally accepted protein source of daily diet in our country. It can also be seen as the reflection of the dietary habits of a younger India. In Modern Trade, we have seen milk and value-added milk products increasing their share and new entrepreneurs and new products coming up. We envision this trend to become stronger in the times to come.

    Startups in Food

    The emergence of modern trade and e-commerce has made it easy to be a single product company and has fostered innovation and entrepreneurship. Launching a new FMCG product is no longer the domain of multinationals or big players with financial and distribution muscle. Small and medium enterprises that were previously deterred by the huge capital investments required for distribution networks while launching new products can now easily develop and bring their products to the market in a cost effective manner.

    This has had a profound effect on the number of launches of innovative products in the market. Quinoa puffs, butter spreads, health and energy bars, pasta kits, packaged ready to cook idli/ dosa batters, raw juices, water based functional beverages, are all excellent examples of new age products built and marketed by small companies being widely accepted by the consumer base.

    In conclusion, the purchasing decisions of consumers are affected by trends to a large extent. As enablers in the consumer’s shopping journey, recognizing and translating these trends into viable business opportunities remains a key concern for manufacturers and retailers today.

  • Vietnam foreign investment skyrockets in January

    Vietnam foreign investment skyrockets in January

    FDI pledges for new projects, increased capital and stake acquisitions in Vietnam rose 51.9 percent year-on-year to $1.9 billion in January. In a statement Monday, the Ministry of Planning and Investment said the manufacturing sector attracted the most interest from foreign investors, accounting for $1.19 billion or 62.4 percent of the total FDI. Science and technology ranked second with $185.8 million, followed by real estate with $179.1 million.

    Japanese were the top investors with nearly $364 million. South Korea and China were next with $349.1 million and $307.8 million.

    Ho Chi Minh City is the most attractive location for FDI investors in January, accounting for around 39.1 percent of the total FDI. Southern Binh Duong Province ranked second, accounting for 12.5 percent, followed by northern Hai Duong Province with 6.5 percent.

    As of January 20 authorities had issued licenses for 226 new projects with a total capital of $805 million. Meanwhile, another $340.2 million was pledged for existing projects this month.

    The two biggest projects were Kyoshin Vietnam’s $134.7 million investment expansion in HCMC by Japanese investors to produce, process and export electrical components and molds, and Katolec Global Logistics Vietnam’s $65 million investment for warehousing and storing goods in the northern province of Ha Nam.

    Estimated FDI disbursement for the month was $1.55 billion, up 9.2 percent year-on-year.

    Vietnam reported FDI disbursement of $19.1 billion last year, up 9.1 percent.

  • Kering faces €1.4 billion Italian tax bill

    Kering faces €1.4 billion Italian tax bill

    Kering is facing an Italian claim for €1.4 billion (£1.2 billion) in unpaid taxes. The company’s Swiss-based Luxury Goods International (LGI) subsidiary has been under investigation for allegedly avoiding tax on earnings generated elsewhere. The probe has largely centred on Gucci, Kering’s star brand and biggest revenue driver. Italy’s tax police carried out checks at Gucci’s Florence headquarters and Milan offices in 2017, and drew up the report that has now been handed to Kering, a source close to the investigation said.

    Kering has consistently denied avoiding tax, saying its activities were fully compliant with all tax obligations.

    In its statement on Friday, the group said the Italian tax authorities’ findings for the years 2011-2017 had yet to be finalised by their own enforcement team.

    “Kering challenges the outcome of the audit report both on the grounds and the amount,” the company said, adding that it “does not have the necessary information” to record a provision against any potential bill for back taxes or penalties.

    The company has said that LGI is a substantial firm in its own right, with 600 employees handling inventory, billing and supply-chain logistics, with a business model “known to French and other competent tax authorities”.

    According to reports by France’s Mediapart newspaper and Germany’s Der Spiegel, Kering’s wholesale activities – the sale of products to retailers such as department stores – have come under particular scrutiny.

    Some business carried out by Kering employees in locations including Milan and Paris was billed through the Swiss unit, incurring lower tax rates, according to those reports.

  • Record results for LVMH in 2018

    Record results for LVMH in 2018

    The world’s largest luxury retailer LVMH shrugged off broader market pessimism overnight reporting record revenue of €46.8 billion last year, up 10 per cent over 2017. Excluding the closure of the unprofitable Hong Kong airport duty-free business in December 2017, the group’s organic growth was 12 per cent. Every business division delivered what the company described as “excellent performances”.

    Group profit rose a staggering 21 per cent to €10 billion with operating margin reaching 21.4 per cent, an increase of 1.9 percentage points.

    “LVMH had another record year, both in terms of revenue and results,” said chairman and CEO Bernard Arnault. “The desirability of our brands, the creativity and quality of our products, the unique experience offered to our customers, and the talent and the commitment of our teams are the group’s strengths and have once again made the difference.”

    Arnault said this year the company would continue to innovate and target investments combining tradition and modernity.

    “In an environment that remains uncertain, we can count on the appeal of our brands and the agility of our teams to strengthen, once again, our leadership in the universe of high-quality products.”

    The company’s flagship Louis Vuitton business was a standout for the group, contributing much of the 15 per cent organic sales growth of the fashion and leather goods business division where profit from recurring operations was up 21 per cent.

    “Christian Dior had an excellent first full year within LVMH thanks to the creativity of Maria Grazia Chiuri for the women’s collections and to the arrival of Kim Jones, the new artistic director of Dior Homme,” the company said in its earnings statement.

    “Fendi and Loro Piana continued to assert their know-how throughout their collections. Celine entered a new and ambitious stage of its development with the arrival of Hedi Slimane as artistic, creative and image director of the brand.”

    Givenchy, Loewe and Kenzo “progressed well” while the other brands, Berluti and Rimowa continued to gain momentum.

    Watches and jewellery profit soars

    LVMH’s watches and jewellery business recorded organic revenue growth of 12 per cent – and a stunning 37 per cent increase in profit from recurring operations.

    “Bulgari performed very well and gained market share. Its iconic jewellery and watchmaking lines Serpenti, Diva’s Dream, B.Zero1, Lvcea and Octo grew strongly.”

    Chaumet’s growth was driven by the success of the Liens and Joséphine collections, particularly in Asia.

    In the watchmaking sector, Tag Heuer continued to expand its range and Hublot enjoyed strong growth, partly due to high visibility as the FIFA World Cup official timekeeper.

    DFS returns to profit

    A return to profitability for the travel-retail business DFS after it exited its Hong Kong airport concessions at the end of 2017 was a highlight of LVMH’s ‘selective retailing’ business unit last year. The business group achieved a 12 per cent improvement in organic revenue growth (excluding the airport business from the 2017 base comparison) and a 29 per cent improvement in profit.

    “DFS progressed strongly thanks to a particularly good performance in Hong Kong and Macau. The recently opened Gallerias in Cambodia and Italy also grew rapidly,” said LVMH.

    Sephora enjoyed unspecified growth in sales and market share, with strong online sales growth in Asia and North America. About 100 new stores opened worldwide, including the new Nanjing Road store in Shanghai and the first Sephora-branded stores in Russia.

    Scents of success

    The perfumes and cosmetics business division achieved organic revenue growth of 14 per cent, driven by the performance of its flagship brands, with profit from recurring operations up 13 per cent.

    “Parfums Christian Dior experienced remarkable growth and increased its market share in all regions of the world. The launch of its new perfume Joy and the exceptional worldwide success of Sauvage and the other iconic perfumes J’adore and Miss Dior are behind the strong growth of the Maison,” said LVMH.

    “Makeup and skincare also grew rapidly. Guerlain progressed well, driven in particular by the success of Abeille Royale in skincare and Rouge G in makeup. Benefit strengthened its leading position in the eyebrow segment and Parfums Givenchy accelerated its performance, thanks in particular to makeup and its new perfume L’interdit. Fresh and Fenty Beauty by Rihanna continued their exceptional growth.”

    Strong spirits

    The wines and spirits business group achieved organic revenue growth of 5 per cent and profit from recurring operations also increased by 5 per cent.

    “The business group reaffirmed its leadership position by pursuing its value strategy and balanced geographic development.”

    The Hennessy business enjoyed “strong momentum” in Mainland China, LVMH said.

  • China’s Trendy Group buys the Denham Group

    China’s Trendy Group buys the Denham Group

    Dutch denim company Denham Group has a new major shareholder, according to reports in the Netherlands, with China’s Trendy Group named the official buyer. The parent company of denim label Denham the Jeanmaker, Denham Group was snapped up by Trendy from Amsterdam-based investment firm Amlon Capital for an undisclosed amount.

    Denham’s current chief creative officer Jason Denham will remain in the top design spot, following the acquisition, and will remain a shareholder, Trendy said in a press release.

    However, Ludo Onnink, CEO at Denham Group, will depart the company his post, with Andre Chen, senior vice president at Trendy Group, to succeed him.

    Denham Group

    Trendy views the Denham Group acquisition as an opportunity to nurture and expand the Denham brand in current markets such as China, via the production of new items.

    Denham Group and Trendy are familiar allies. Back in March 2017, the companies announced a joint venture to further expand the European denim brand in China, resulting in the opening of 16 retail stores in key cities in Chin. Now, there are plans to further grow the business in the coming years as a result of the acquisition.

    “We see many opportunities to grow the Denham business in the existing markets but also as the most influential denim player in the future,” said Chen.

    “This will not only be achieved by extending our jeans business, but also by adding additional product categories.”

    Founded in 2008 in Amsterdam by Jason Denham, Denham retails in some 20 cities including its local Amsterdam, as well as nearby Antwerp and Hamburg. As for Asia, it is present in Tokyo, Osaka, Shanghai and Seoul.

    In wholesale terms, the label is has global partners and is available for purchase via its namesake online store. The Denham is also headquartered in Amsterdam, with sub-offices in Düsseldorf, Shanghai and Tokyo.

    Launching in 1999, China’s Trendy Group is today a global fashion and denim mecca with a stable that includes fashion brands form the Italian house Sixty Group: Miss Sixty, Killah and Energie.

  • Coca-Cola India launches grape based sparkling drink Colour

    Coca-Cola India launches grape based sparkling drink Colour

    Beverages major Coca-Cola India on Friday expanded its Minute Maid product range by launching a grape fruit based sparkling drink branded as Colour, said a top company official. People in Tamil Nadu towns and villages used to call soft drink ‘Colour’. Coca-Cola India has branded its new grape juice sparkler as ‘Colour’ to resonate with the local lingo.

    He also said the company would launch a new product in Andhra Pradesh that would be branded under a similar philosophy.

    “The new grape juice based Colour is launched here and will be focused on Tamilian population within India. The product is part of our strategy of expanding our fruit based beverages,” T.Krishnakumar, President, Coca-Cola India and South West Asia said.

    He said the company apart from focusing on its core products – carbonated drinks – also concentrates on launching products preferred in regional markets and also on expanding the ‘fruit circular economy’ – launching fruit based drinks made with domestically grown fruits.

    “The black grapes for the drink are sourced from grape farmers in South India,” Krishnakumar said.

    He did not agree that the new brand ‘Colour’ under the broader Minute Maid brand would reduce the latter’s brand equity. Minute Maid brand is known as a fruit based beverage brand.

    “We are expanding the products under the Minute Maid brand. The new product has 12 per cent grape juice content,” Krishnakumar said.

    According to Srideep Kesavan, Director-Juices, Coca-Cola India and South West Asia, research showed that grape juice was a fast moving product at fruit juice stalls in Tamil Nadu.

    Queried about cutting down on the sugar content in the company’s beverages, Krishnakumar said it will come down soon and a start has been made with the grape sparkler Colour with 9.5 grams of sugar.

    On the value of fruit pulp/products that Coca-Cola India would source under its ‘fruit circular economy’ he said the company had committed that a sum of Rs 5,000 crore would be spent on that head by 2023 and the company is in line with that commitment.

  • CIMB completes Asean footprint

    CIMB completes Asean footprint

    CIMB Group Holdings Bhd is finally completing its operating footprint in Asean with the launch of its banking presence in the Philippines. It has received regulatory approval from the Securities and Exchange Commission of the Philippines for its investment banking joint-venture in the country, CIMB Bancom Capital Corporation.

    CIMB Group CEO (group ventures and partnerships) Effendy Shahul Hamid said CIMB Bancom will look to deliver value added advisory and cross-border capital market services to Philippine corporates looking to expand and grow across Asean, as well as capitalise on CIMB’s strong presence in the region to originate inbound deals to the Philippines.

    CIMB Bank Philippines Inc (CIMB Philippines) aspires to be the nation’s first all-digital and mobile-first bank, promising to make banking simpler, more convenient, and hassle-free, according to the group’s statement.

    “We look forward to bringing a differentiated and digital proposition to the market. Internet and mobile penetration in the Philippines remains one of the highest in the world, a clear sign of the progressive and modern society we hope to serve,” said Effendy.

    CIMB Philippines CEO Vijay Manoharan noted that consumers need innovative financial solutions that are relevant to their needs as well as help them get ahead and advance their financial well-being, but they do not necessarily need a physical bank.

    “By offering most of our products via the Octo app securely, we are offering the next-level any day, any time convenience for our customers by enabling them to effectively ‘carry’ our bank branch in the palm of their hands.”

    CIMB Philippines’ partners include 7-Eleven and DragonPay, with a total of 8,000 convenient customer touchpoints nationwide.

    The CIMB Bank Visa-powered Debit Card is accepted at any of the 20,000 Bancnet, Visa, and Visa Plus automatic teller machine (ATMs) nationwide and two million Visa and Visa Plus ATMs worldwide.

    To cater to those who want to really start preparing for what’s ahead and save for the future, CIMB Bank offers the UpSave Account, which allows greater savings with its high interest rate of 2% per annum (eight times higher than other banks).