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Tag: China

  • Hong Kong’s Fung Group injects US$35M into India’s B2B e-commerce ShopX

    Hong Kong’s Fung Group injects US$35M into India’s B2B e-commerce ShopX

    The Fung family has invested US$35 million in Indian technology platform ShopX.

    The funds came from Fung Strategic Holdings a member of Fung Investments, the private investment vehicle of the families of Dr Victor Fung and Dr William Fung.

    ShopX is described as India’s leading B2B e-commerce company, connecting India’s consumers and small merchants with brands and suppliers directly to purchase products and services.

    India’s retail market is estimated to reach US$1.1 trillion by 2020, and small-to-medium sized businesses play an important role in the Indian economy, making up about 90 per cent of the retail sector. Until now, they largely remain ‘offline’ in small villages and towns serving the local surrounding population.

    ShopX, founded by Amit Sharma and Apoorva Jois in May 2015, aims to be the preeminent e-commerce platform serving more than 12 million small merchants across India, enabling everything from ordering to delivery, payments and localised customer support. ShopX already covers 50,000 retailers in more than 300 locations across India.

    Nandan Nilekani, a leading entrepreneur, has been an early investor in ShopX, supporting the company from inception with more than $18 million in personal investment and active mentorship.

    “The ShopX model provides small retailers access to the same cutting-edge technology and supply chain solutions as any established e-commerce or organised retailer,” he said.

    “This access provides an onboarding ramp into the formal economy for millions of India’s small retailers and the next 400 million consumers. ShopX has been built on scalable and sound business principles like platform thinking, capital efficiency and a sustainable growth model. We are very excited to welcome the Fung Group into ShopX, and look forward to expanding the platform with their investment and strategic synergies.”

    Victor Fung added: “This is one of a series of investments the Fung Group and its companies are making to advance new, disruptive technologies shaping the future of retail and supply chain. ShopX is combining technology and an innovative business model to transform the traditional retail model in India. Given the country’s sheer population size and rising consumer spending power, not only do we see tremendous opportunity in India, but also the successful application of this model to other parts of the region.”

    Tech focus

    The ShopX investment follows recent Fung Group initiatives and investments in new technologies including:

    • A partnership with Tencent-backed WeDoctor to create an e-commerce platform connecting China’s myriad of hospitals with medical device manufacturers and service providers to centrally procure medical devices, consumables and services.
    • A partnership with JD.com to develop AI-driven retail solutions.
    • A new innovation lab with Shima Seiki, the Japanese company behind the world’s most advanced computerised flat knitting machines, to conduct specialised materials R&D.
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  • Wutopia Lab has transformed Building 25 of the Sinan Mansions in Shanghai into Bookstore

    Wutopia Lab has transformed Building 25 of the Sinan Mansions in Shanghai into Bookstore

    Chinese design house Wutopia Lab has converted a multi-story house in Shanghai into a bookstore which provides “a space for learning and thinking” for city-dwelling public.

    The project – Sinan Books: Shanghai Sanctum – was commissioned by Shanghai Century Publishing Group and Yongye Group in Building 25 of the Sinan Mansion.

    The design team envisioned the store “as a person with a system of acquiring knowledge while discovering oneself and the surrounding”.

    The entrance level of Building 25 is set on the second floor which features a cafe, an area for literature and the public and an “intimate Sinan living room”. On the floor above, there is an area focused on art, a peaceful Sinan music room and flexible spaces that can host exhibitions, book club events, and small concerts.

    “It’s a perfect place to experience the charm of art,” explained the Wutopia Lab design team.

    On the fourth floor, a writer’s study “symbolises the bookstore’s thoughts”.

    “Small cultural saloons will be held here; it’s a place for conversations and debates.”

    A basement was conceived as the bookstore’s ‘sub-consciousness’, hosting a collection of history and philosophy books. Here, a labyrinth made of bookshelves offers visitors their own space. On the west side of the labyrinth is a special selection from the London Review Books, a sister bookstore of Sinan books, while on the east side, a large study room features a central table displaying creative product design.

    Spaces underneath the building’s two staircases are used to create two reading rooms for individuals and pairs. The underused south patio was redesigned into a flower porch, using planters to create a vivid backdrop for the bookstore.

    The Wutopia Lab team says it believes a monochromatic colour scheme cannot sufficiently depict the diversity of the period.

    “Colour has always been closely related to people’s feelings and emotions. Relating Sinan Books to a human body, its color should be a perceived colour, experienced in relation to the light of the day as well as one’s mental state at a given moment.”

    The store’s entrance features a red arcade, indicating Sinan books’ attitude of openness. Different hues of green offset the exhibition spaces, while the gold of the reading room offers “a hidden surprise”.

    To view the full pictures, check the gallery below (5 images) :

    • Images copyright Wutopia Lab.
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  • McDonald’s China opens its 300th store

    McDonald’s China opens its 300th store

    McDonald’s China has opened 300 new stores during the last year, pressing ahead with an expansion strategy tied to deals with property developers.

    The company has signed contracts with Country Garden and Evergrande Group, giving it access to more locations in new retail centres.

    And the company has also invested in digital technology with more than 75 per cent of its stores now offering kiosk ordering and payment facilities for customers. Using touchscreens, customers can select their purchases and pay by electronic means before collecting their food from a counter.

    McDonald’s China is also eyeing further expansion into tier 3 and 4 cities. By 2020, about 45 per cent of its anticipated 4500 outlets will be lower-tier locations.

  • Baidu sales, profit lift on increased online ads

    Baidu sales, profit lift on increased online ads

    China’s Baidu reported strong sales and profit in the recently closed second quarter, on the back of surging online advertising revenues.

    The Internet search engine said total revenues rose by nearly 25 percent to 26 billion yuan, marking the sixth straight quarter of revenue growth at the company.

    For the three months ended June 30, online advertising sales gained 25 percent to 21.1 billion yuan, said the Beijing-based Baidu, showing the video platform and newsfeed provider remained unhinged by the internet censorship spike to hit China in recent months.

    The US-listed media company said net income rose 45 percent to 6.4 billion yuan, or 18.14 yuan per American depositary share/

    “We are able to maintain a high standard and a close dialogue with [Internet] regulators,” Robin Li, Baidu’s chief executive, told investors in a conference call when discussing the earnings and the firm’s ability to dodge censorship restrictions.

    Baidu’s streaming service iQiyi Inc. also reported better-than-projected sales with its subscriber base increasing by 75 percent to 67.1 million users.

    The company continued to invest in Artificial Intelligence with research and development costs into AI doubling to 4 billion yuan in the latest quarter from 2 billion yuan in the first quarter of 2016.

    The driver of the costs involved staff, particularly as the company lost it chief operating officer in May, Lu Qi. Qi was the spearhead behind the AI investment.

    Looking ahead, the company said it expects third-quarter revenue of 27.37 billion-28.77 billion yuan, representing an increase of 23-30 percent year-over-year.

  • Is Google going to make it into China?

    Is Google going to make it into China?

    Google wants to get back into China, and is laying the groundwork for a key part of the initiative: bringing its cloud business to the world’s second-largest economy.

    The internet giant is in talks with Tencent Holdings Ltd., Inspur Group and other Chinese companies to offer Google cloud services in the mainland, according to people familiar with the discussions. They asked not to be identified discussing private matters.

    The talks began in early 2018 and Google narrowed partnership candidates to three firms in late March, according to one of the people. Trade tensions between China and the US now loom over the effort. It’s unclear if the plans will proceed, this person said.

    The goal is to run Google internet-based services – such as Drive and Docs – via the domestic data centers and servers of Chinese providers, similar to the way other US cloud companies access that market. In most of the rest of the world, Google Cloud rents computing power and storage over the internet, and sells a collection of workplace productivity apps called G Suite that are run on its own data centers. China requires digital information to be stored in the country and Google has no data centers in the mainland, so it needs partnerships with local players.

    Google Cloud chief Diane Greene said last week that she wants the business to “be a global cloud,” but declined to comment specifically about China. Still, the company is seeking a Shanghai-based business development manager for its cloud business. The job posting lists “experience in, and knowledge of, the Chinese market” as a preferred qualification.

    A Google Cloud spokesman declined to comment. Inspur and Jane Yip, a Tencent spokeswoman, didn’t immediately respond to requests for comment on Friday.

    A tie-up with large Chinese tech firms, like Tencent and Inspur, a major cloud and server provider, would also give Google powerful allies as it attempts a broader return to mainland China, where it pulled its search engine in 2010 over censorship concerns.

    After years of slowly rebuilding a presence in China, Google has pressed the accelerator recently. It’s building a cloud data centre region in Hong Kong this year and opened an artificial intelligence research centre in Beijing in January. Along with other Alphabet Inc. units, it has begun investing more in Chinese companies. Plans for a censored search app in China surfaced earlier this week, sparking a furious debate about whether Google is putting profit over its mission to “organize the world’s information and make it universally available.”

    A cloud partnership for Google in China would help the company compete more with larger rivals Amazon.com Inc. and Microsoft Corp. In late 2017, Amazon agreed to sell its Chinese servers and some other cloud assets to local partner Beijing Sinnet Technology Co. The move complied with laws introduced that year mandating the storage of data within the country and bolstering government control over the movement of information. The move mirrored a similar set-up between Microsoft and its local partner 21Vianet Group Inc.

    With Tencent, Google would have an even more high-profile ally – but would also go up against local competitors including Alibaba Group Holding Ltd., which operates a major cloud business in China.

    China is the second-largest cloud market, but local companies dominate, making it difficult for outsiders like Google, according to Synergy Research Group. “You can never say never, but that is an incredibly tough proposition,” Synergy analyst John Dinsdale said. A June report from Synergy ranked Google fourth in the Asian cloud market, behind Amazon, Alibaba and Microsoft.

    In January, Google struck a patent-sharing deal with Tencent. The agreement came with an understanding that the two companies would team up on developing future technologies.

    Tencent operates its own cloud service and is building an ecosystem of partners that includes Cisco Systems Inc., Nvidia Corp. and Deloitte, according to Tencent’s website. It already offers a cloud service called the Tencent Kubernetes Engine that’s based on a popular Google technology by the same name. Google could host services, such as Gmail, Drive and Docs, on Tencent’s data centers, and the Chinese company may suggest existing cloud customers try Google offerings.

    Tencent founder Pony Ma is a representative of China’s National People’s Congress, and Inspur, formerly the state-owned Shandong Electronics Devices Plant, could provide political cover for Google as it seeks to gain approval from authorities to operate more of its largest businesses in country.

    Google has touted the security and AI strengths of its cloud division. Tensorflow, a coding library for AI applications created by Google, is growing in popularity with researchers and software developers in China. While the feature is compatible with other cloud services, it’s designed to work most efficiently with Google’s cloud.

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  • China boosts L’Oreal high growth rate

    China boosts L’Oreal high growth rate

    Chinese consumers are powering massive sales growth for beauty products giant L’Oreal in Asia Pacific.

    During the first half of this year, like-for-like sales in the region soared 22 per cent and it is now on the brink of surpassing North America as L’Oreal’s second largest geographic region in sales, behind Europe.

    “This strong growth is being boosted by Chinese consumers, as reflected in the growth in China and Hong Kong across all divisions, especially for premium brands,” said L’Oreal in a statement. “E-commerce and travel retail accelerated in the first half. Southern Asia is extremely dynamic, with market share gains particularly in India and Malaysia.”

    Globally, L’Oreal achieved sales of €13.39 billion, with €3.54 coming from Asia, €3.56 billion from North America and €4.13 billion from Western Europe. Across all markets, like-for-like sales rose by 6.6 per cent. But in Western Europe, sales slipped 2 per cent in the second quarter and 0.8 per cent over the first half.

    Chairman and CEO Jean-Paul Agon said the beauty market is becoming more premium.

    “The good sales growth and the quality of the first-half results reinforce our confidence in our ability to once again outperform the cosmetics market in 2018, and to achieve significant like-for-like sales growth and an increase in our profitability.”

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  • Dufry blossoms in Asia market

    Dufry blossoms in Asia market

    Asia “continued to boom” for travel retailer Dufry in the first half of this year.

    Bali, Cambodia, Indonesia, Macau and South Korea all achieved double-digit sales growth during the half year, with Chinese tourists credited for much of that growth. Australia also achieved “strong double-digit performance” after the full renovation of Dufry’s stores there.

    “Eastern Europe, Middle East, Asia and Australia continued to outperform, driven by a growing number of Chinese passengers,” the company said in an earnings statement. Organic growth across Eastern Europe, Middle East, Asia and Australia rose 22.1 per cent.

    Globally, the Swiss company’s turnover grew by 7.2 per cent to CHF 4.097 billion (US$4.112 billion). Earnings before interest and tax grew 38.4 per cent to CHF 124.6 million.

    Dufry says its organic sales growth rose by 5.5 per cent thanks to an expansion and refurbishment program across the group.

    In the first half of this year, it expanded and opened 13,200sqm of gross retail space, which included new operations aboard 12 cruise ships, totalling 3500sqm across 38 stores. A further 22,400sqm of refurbishments are planned during the second half year, including the implementation of its new generation store concept at Heathrow Airport’s T3.

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  • Tse Sui Luen makes big mainland expansion plan

    Tse Sui Luen makes big mainland expansion plan

    Hong Kong Jeweller Tse Sui Luen (TSL) has moved to target the Chinese middle class, according to a report.

    TSL has announced plans to open 100 outlets in the Chinese mainland within two years, taking its total number of stores to 487.

    The firm’s deputy chairman and chief strategy officer Estella Ng Yi-kum commented that “Even though the yuan is on a downward trend, we have strategies to adjust pricing and use product designs to fit the appetite of our customers to boost sales.”

    She said that China will be “the growth engine for TSL for the coming 20 years,” attributing this to the rise of the Chinese middle class, which is expected to flourish under changes planned for China’s tax code.

    Ng did admit to concerns about the weakening of the RMB making TSL products more expensive for Chinese shoppers in Hong Kong and devaluing TSL’s assets in China comparative to the US Dollar-pegged HKD. The firm will address these issues strategically by potentially raising prices in China and focusing on smaller, more profitable diamonds.

    “We use design to make a 0.3 carat diamond look like half a carat,” Ng said. “So we can have a good margin and attract customers.”

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  • Moncler sales up on China, Japan

    Moncler sales up on China, Japan

    Luxury down jacket brand Moncler reported strong double-digit sales growth in the first half of 2018, on the back of solid revenue gains in China and Japan.

    The Milan, Italy-based brand said consolidated revenues reached 493.5 million euros for the six months ended June 30, an increase of 27% (at constant exchange rates), compared to 2017.

    In outlining the results, Moncler’s CEO, Remi Ruffini, hailed “major growth across all distribution channels—retail, wholesale and digital—and across all markets.”

    The group’s retail distribution channel increased to 376.8 million euros, up 33%, while comparable sales jumped 27%. Wholesale saw a 12% uptick.

    For the six months, net income climbed 47% to 61.6 million euros for a margin of 12.5%, while operating profit increased 35% to 85.7 million euros.

    In Italy, revenues rose 9%, mainly driven by the strong growth of the retail channel, while in Asia and ROTW, revenues leaped 42, helped by Japan, which significantly accelerated in the second quarter, thanks to the launch of ‘7 Moncler Fragment Hiroshi Fujiwara’.

    Moncler said it continued to register “very good performances” in China, which saw double-digit organic growth, following the Chinese government decision to reduce import duties.

    From the beginning of July, Moncler reduced its prices in China by 3.5% on average, it added.

    Revenues in Korea recorded a solid increase, with a sales acceleration in the second quarter, “mainly due to the organic growth of the existing stores’ network.”

    In the EMEA marker, Moncler’s revenues grew 17%, while the Americas grew 29%, said the company.

    Moncler currently operates 209 retail directly operated stores globally, with 65 shop-in-shops.

    It operates some 84 points-of-sales in Asia alone.

  • Yum China sales performs growth from expansion

    Yum China sales performs growth from expansion

    Yum China sales rose 12 per cent in the quarter to June 30, boosted by more stores and currency gains.

    But same-store sales declined across both of its brands and margins contracted.

    The company reported total sales of US$2.1 billion which on a currency-neutral basis was 5 per cent better than for the same quarter last year. KFC sales rose 5 per cent, partially offset by a 1 per cent decline by Pizza Hut.

    However, same-store sales declined 1 per cent year-on-year, with flat same-store sales at KFC and a 4 per cent decrease at Pizza Hut.

    During the period, Yum China opened 164 stores, taking its network to 8198 across more than 1200 cities.

    Operating profit rose 13 per cent to $193 million (or by 5 per cent excluding foreign exchange effects).

    Joey Wat, CEO at Yum China, said the growth was driven by “solid business fundamentals and accelerated new store development”.

    “We are on track to add 600-650 new stores, led by KFC, by the end of the year. This strategy will set us up for long-term growth in both profitability and market share,” she said.

    While Pizza Hut continued to face challenges in China’s competitive casual dining space, Yum China added new talent to its team and is working on repositioning the brand with its target customers.

    “We remain dedicated to revitalising the brand and strongly believe that our initiatives including delivering more innovative products and introducing new store formats will restore the brand to the level of consistent growth that our shareholders expect,” said Wat.

    Jacky Lo, CFO at Yum China, said the company stepped up food investment and promotional activities during the quarter, which inevitably had some impact on its margins.

    “This reflects our strategic decision to invest in our brands for long-term market share gain.”

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  • China says US disappoints the world by upping the ante in trade war

    China says US disappoints the world by upping the ante in trade war

    China warned the United States today that upping the ante in a tit-for-tat trade war will “only serve to disappoint” the world as Washington threatened to raise the tariff rate on the next US$200 billion (RM814 billion) of Chinese imports.

    Beijing said it would be forced to take countermeasures to defend Chinese interests, free trade and the international order.

    “The US has no regard for the world … playing both soft and hard ball with China will not have any effect, and only serve to disappoint the countries and territories opposed to a trade war,” China’s Ministry of Commerce said in a statement, adding that it still hopes to turn the situation around.

    Foreign ministry spokesman Geng Shuang called Washington’s actions “blackmail” and urged the US “to return to rationality and not act on impulse. It will only hurt themselves.”

    President Donald Trump asked the US Trade Representative to consider increasing the proposed tariffs to 25% from the planned 10%, USTR Robert Lighthizer said on Wednesday.

    “We have been very clear about the specific changes China should undertake. Regrettably, instead of changing its harmful behaviour, China has illegally retaliated against US workers, farmers, ranchers and businesses,” Lighthizer said in a statement.

    Officials, however, downplayed suggestions the move was intended to compensate for the recent decline in the value of the Chinese currency, which has threatened to take much of the sting out of Trump’s tariffs by making imports cheaper.

    The US dollar has been strengthening since April as the central bank has been raising lending rates, which draws investors looking for higher returns.

    “It’s important that countries refrain from devaluing currencies for competitive purposes,” a senior administration official said. “But I wouldn’t draw the conclusion that the announcement we’re making today is directly linked to any one practice.”

    Washington and Beijing are locked in battle over American accusations that China’s export economy benefits from unfair policies and subsidies, as well as theft of American technological know-how.

    Trump has threatened to slap tariffs on virtually all of China’s exports to the US.

    Officials said they remained in regular contact with their Chinese counterparts but could announce no new meeting.

    The US already imposed 25% tariffs on US$34 billion in Chinese goods, with another US$16 billion to be targeted in coming weeks.

    On July 10, Washington unveiled a list of another US$200 billion in Chinese goods, from areas as varied as electrical machinery, leather goods and seafood, that would be hit with 10% import duties.

    Increasing the rates to 25% could make them significantly more painful.

    The comment period on the proposed penalties, which includes public hearings where business can ask for exemptions, due to take place later this month, would be extended into September, the officials said.

    Much of American industry and many members of Trump’s own Republican Party have expressed outrage but have so far been unable to thwart Trump’s trade policies.

    The US Senate last week passed legislation which if enacted would lower trade barriers on hundreds of Chinese imports.

    Jake Colvin, vice-president of the National Foreign Trade Council, said the Trump administration could be boxing itself into a corner.

    “It’s hard to see how this action lends itself towards a resolution to what is increasingly a trade crisis,” he told AFP.

    Trump and senior administration officials believe the volume of US imports and vigorous health of the American economy give Washington an advantage in the current confrontation.

    But Fred Bergsten, founding director of the Peterson Institute for International Economics, told CNBC that China would be able to absorb blows more easily than Washington.

    “They can expand their stimulus, fiscal spending, bank lending,” he said.

    “They can compensate much better than we can. They come from a much higher base.”

    And Bergsten warned that the US economy is likely to slow and a trade war only makes that expected decline worse.

  • E-Land to stop selling Coffee Bean & Tea Leaf in China

    E-Land to stop selling Coffee Bean & Tea Leaf in China

    South Korean fashion and retail group E-Land is surrendering its Coffee Bean & Tea Leaf China franchise licence.

    The move is expected to improve the conglomerate’s reportedly strained cash-flow situation and mark a more focused approach to retail. It comes after expanding the franchise to 17 locations in China over the past two years. It had originally pledged to expand the Chinese business to 1000 stores.

    The group’s liquidity has been under significant pressure in recent years, forcing it to relinquish its resorts and cruise businesses as well as other holdings. It currently runs around 250 brands spanning retail, fashion and restaurants.

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  • Blow for House of Fraser as Chinese firm drops plan to invest

    Blow for House of Fraser as Chinese firm drops plan to invest

    C.banner International has dropped its House of Fraser rescue plan, dealing what some observers in the UK are describing as a potentially fatal blow.

    Hong Kong-listed C.banner, which is the parent of toy retailer Hamleys, had undertaken to invest £150 million into House of Fraser assuming control of the business.

    In June, the deal appeared to be confirmed after creditors of House of Fraser agreed to a Company Voluntary Agreement in which 31 stores would close in the UK and Ireland and 6000 jobs cut. After the downsizing, House of Fraser would have just 28 stores in the UK and Ireland. Creditor approval of the CVA was a pre-condition of C.banner’s investment.

    However in a statement issued to the Hong Kong stock exchange, C.banner has backed out.

    “In view of the fact that the recent market prices of the shares as quoted on the stock exchange have significantly dropped to a level which is far below the placing price range of HK$2.40 to $3.00 per placing share, the company and the placing agent are of the opinion that the placing has been rendered impracticable and inadvisable, and therefore no longer intend to proceed with the placing.”

    C.banner’s share price has fallen to $0.71 since June 1, when it announced the plan.

    Furthermore, C.banner has issued a profit warning, predicting a loss of RMB20 million in the six months to June, compared with a RMB39 million profit for the same period last year.

    Talks with new suitors

    Meanwhile, House of Fraser is now in negotiations with other parties, including Mike Ashley, the owner of Sports Direct, over a rescue bail-out – it needs £50 million rapidly to avoid collapse.

    As reported, the department store group is struggling to pay a quarterly rent bull of nearly £25 million due in late September and to fund the purchase of millions of pounds of stock for the peak Christmas trading period.

    And, subsequent to creditor approval of the CVA, some of the company’s landlords have launched a legal challenge against the planned store closures and rent reductions. While all creditors had a vote on adopting the CVA, it only required a majority of 75 per cent to be carried. The landlords were on the losing side of that vote.

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  • Starbucks and Alibaba form New Retail Partnership in China

    Starbucks and Alibaba form New Retail Partnership in China

    Starbucks China and Alibaba have announced an alliance that stretches way beyond the latter’s online delivery platform Ele.me.

    The two companies describe their pact as “a deep, strategic New Retail partnership” that will enable a seamless Starbucks experience and transform the coffee industry in China.

    The partnership spans Ele.me, the food delivery platform acquired by Alibaba last month, Hema supermarkets, Tmall, Alipay and Taobao. Pilot delivery services by Starbucks China will start next month with the coffee company opening delivery kitchens to fulfil orders and “co-create an unprecedented virtual Starbucks store”.

    Starbucks China CEO Belinda Wong says the partnership with Alibaba breaks the physical and virtual barriers between the home, office, in-store and digital space.

    “It will make China the first Starbucks market to deliver a seamless Starbucks experience across all facets of our customers’ lives.”

    Alibaba CEO Daniel Zhang said Starbucks is more than a destination for premium coffee “and we share the same vision to pioneer a new coffee culture and lifestyle through innovation and technology”.

    It starts with Ele.me

    Ele.me, China’s largest on-demand food delivery platform with 3 million registered delivery riders, will start delivering Starbucks orders from 150 stores in key trading zones in Beijing and Shanghai next month. By the end of the year, that service is expected to expand to more than 2000 Starbucks stores across 30 Chinese cities.

    The two companies have worked together to develop what they describe as “a unique, customised delivery infrastructure” including dedicated delivery riders, precise delivery times, and custom carriers. They believe they will be able to offer “a best-in-class coffee delivery service standard for Chinese customers” which could well be interpreted as a challenge to local startup Luckin Coffee which has grown into a US$1 billion company in less than a year, based on a mixed delivery and in-store model.

    Starbucks will partner with Hema supermarkets to open dedicated “Starbucks Delivery Kitchens” within stores. The kitchens will use Hema’s fulfillment and delivery capabilities to complement the delivery of Starbucks beverages offered through existing Starbucks stores. Starbucks will also use Hema’s consumer insights and fulfillment expertise to reach more communities across China.

    Data from Hema stores will be used to help plan the location of future Starbucks cafes, combined with delivery kitchens. The first delivery kitchens will open in selected Hema supermarkets in Shanghai and Hangzhou next month.

    Digital transformation

    Starbucks China and Alibaba say the creation of a ‘virtual Starbucks store’ in China is a key strategic initiative under the partnership.

    Alibaba will develop a centralised online management hub, with the capability to integrate and deliver a consistent Starbucks experience across multiple digital platforms. “This innovation will transcend the traditional limitations of a single-app visit by providing the consumer an elevated, and even more personalised Starbucks digital experience across the Starbucks app and Alibaba’s customer-facing mobile apps, including Taobao, Alipay, Tmall and Koubei,” the companies said in a statement.

    “This latest innovation will revolutionise the traditional offline-to-online model by effectively extending the reach of the Starbucks experience into the everyday lifestyle ritual of the Chinese consumer, regardless of time or place. Whether it is at home or in the office, within a Starbucks store or online, Starbucks customers will be able to access and enjoy a one-stop Starbucks experience when purchasing merchandise online, buying a Starbucks handcrafted beverage to be delivered to a friend or sending a Starbucks gift of love on the “Say it with Starbucks” social gifting platform.”

    Starbucks will progressively integrate its Starbucks Rewards membership platform onto the centralised system to use its consumer insights to deliver a personalised experience to customers.

    “Starbucks China and Alibaba are trusted business partners who share common values in the spirit of innovation and the unrelenting pursuit of product and service excellence,” the statement said.

    “Thanks to the elevated customer experience delivered by our more than 45,000 partners, Starbucks is growing and innovating faster in China than anywhere else in the world,” said Kevin Johnson, president and CEO at Starbucks Coffee Company. “Our transformational partnership with Alibaba will reshape modern retail, and represents a significant milestone in our efforts to exceed the expectations of Chinese consumers. Starbucks China is one to watch, and I have full confidence in the team that will bring the new innovation behind the Starbucks Experience to life.”

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  • Flamingo Bloom plans expansion in Australia, Singapore

    Flamingo Bloom plans expansion in Australia, Singapore

    Hong Kong-based fresh-brewed tea brand Flamingo Bloom has opened four stores in its first year of trading.

    The health-conscious beverage retailer first set up just last year in Hong Kong’s Central, but has already opened a larger space in Tsim Sha Tsui, a flagship in Malaysia, and a store at the IFC mall this month, which attracted long queues on launch day.

    Founder Louisa Wong has indicated plans to open further locations in Malaysia, as well as expand to Australia and Singapore, with the intention to open in Melbourne by the end of this year.

    “Even though we’re in a quality mall, the operating costs in Malaysia are so much lower – about a third of what we pay in Hong Kong – so it’s easier to reach sales targets,” she said. “In Malaysia’s tropical climate, cold teas mixed with fresh fruits have proved popular.”

    The store retails highly Instagrammable Chinese tea-based beverages mixed with fresh fruit and boba pearls – or blended as a latte.

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