Retail News CRM

Tag: China

  • Blackmores stumbles on China costs and fish oil shortages

    Blackmores stumbles on China costs and fish oil shortages

    Blackmores CEO Richard Henfrey is wrestling with supply constraints for some ingredients and a more competitive market in China.

    Blackmores is grappling with shortages of ingredients such as whey protein and fish oil, and competition in China is becoming more fierce but chief executive Richard Henfrey says the long-term growth projections for the vitamins maker are robust.

    Blackmores shares tumbled more than 15 per cent in early trading on Thursday to $135 as the company said it was working with ingredients suppliers to shorten lead times in its supply chain and that profits from its China business had grown by 4 per cent as it bumped up investment and spent more on expanding its in-country presence in China.

    Mr Henfrey said Blackmores still expects solid growth in the second half of 2017-18, after generating a 20 per cent per cent rise in net profit after tax to $34.2 million.

    He said on Thursday that Blackmores was a more consistent business now after going through extreme volatility in the past couple of years and it would be some time before it was able to repeat the stellar full-year profit of $100 million notched in 2015-16. “That was the gift year,” he said, when booming demand from China fuelled extraordinary profit growth.

    Cost-cutting inside the business and a reduction in discounts to customers enabled Blackmores to generate a 20 per cent rise in bottomline profits, with revenues up 9.3 per cent to $287.4 million. The company lifted its first half dividend by 15 per cent to $1.50 per share, to be paid on March 22.

    But the soft Australian retail market is expected to crimp growth in the second half, while Blackmores is also wrestling with some supply constraints. “We’re working with our suppliers to shorten lead times,” Mr Henfrey said. Whey protein and fish oil were two specific areas where there had been constraints.

    The China market is becoming a tougher market in which to compete, as different players step up their efforts to gain a bigger share of the market as Chinese consumers flock to “clean and green” products from countries like Australia.

    “It’s becoming a more competitive space,” Mr Henfrey said. China sales were up 27 per cent. But Mr Henfrey said profits from China grew 4 per cent as more investment was made in bolstering the in-country presence. Blackmores was also hit by an increase in doubtful debts provisions in China of $2.8 million.

    Blackmores has a new distribution centre at Bungarribee in western Sydney which went into full overdrive in December after a staged ramp-up. “We’ve finished building out the technology in there,” he said. But it was at the start of the supply chain where headaches emerged. “It’s at the other end of the chain,” he said.

    Mr Henfrey, who took over from long-serving chief executive Christine Holgate in August 2017, said sales revenue in Australian and New Zealand slipped marginally to $121 million as more sales which had previously been emanating in Australia from entrepreneurs buying up in local retail stores and then selling them online in China, shifted across to direct sales online in China by Blackmores itself. But EBIT from Australia and New Zealand was up 19 per cent to $26 million.

    Blackmores shares had almost doubled in the past six months from $87 in late August 2017 to $160 on Wednesday before the fall on Thursday.

    This was on renewed optimism returned about Mr Henfrey’s strategy of ensuring a more consistent and reliable Blackmores with a focus on lifting investment returns with tighter management.

    Lofty gains

    Blackmores shares reached the lofty heights of $220 in early January 2016 on the strength of enormous appetite from Chinese buyers for “clean and green” vitamins brands.

    It was largely driven by the Chinese entrepreneurs buying up large volumes of vitamins from Australian supermarkets and big box outlets such as Chemist Warehouse, and then selling them online on e-commerce sites in China.

    But then regulatory uncertainty resulted in a pull-back. Chinese tourists and exporters changed their buying patterns and the Australian market became much more competitive, with high levels of stock left in warehouses, which blunted the speed of replacement orders.

    Rival Swisse was acquired in two tranches for a total of $1.7 billion in 2015 and 2016 by a company now called Health & Happiness, which changed its name from Biostime International.

    Lees ook:

  • Coca-Cola Amatil-owned fruit brand SPC to enter China market in 4500 stores

    Coca-Cola Amatil-owned fruit brand SPC to enter China market in 4500 stores

    Managing director Reg Weine said that its premium Goulburn Valley 700g fruit range, SPC snack cups and pouch ranges, and IXL jam would be the first products to enter stores.

    SPC’s snack cups are already available on online retailer JD.com and Weine said the full range of SPC, Goulburn Valley and IXL products will progressively be available across major online and offline retailers in China.

    In end-January, SPC finalised an agreement with China State Farm Agribusiness (CSFA) Shanghai to export SPC, Goulburn Valley and IXL lines of processed fruit products to China.

    CSFA Shanghai, a wholly-owned subsidiary of China National Agriculture Development Group Corporation — one of China’s largest agribusiness conglomerates — will be “master distributor” of SPC’s brands and product lines in China.

    “It takes significant time and resources to build brands in overseas markets, which is why we are partnering with China’s leading agricultural firm. Their enviable track record of successfully bringing premium foreign brands to China is very attractive to us,”​ said Weine

    Marketing to middle class​

    He added that CSFA Shanghai had the dedicated personnel and sales and marketing support that SPC needed to build its brands, as well as the distribution capability to reach China’s burgeoning middle class.

    At the signing ceremony, he said, “It’s about taking our market-leading brands into markets where provenance plays a part and there is a large enough consumer segment that is affluent and willing to pay a premium for Australian produce.”​

    To this end, they have engaged Chinese singer and actress Ye Yiqian, who as a “deep connection with aspirational Chinese consumers”​ to be brand ambassador.

    Extensive distribution ​

    Weine confirmed that the exported fruit products will be available in over 4,500 premium retail and mother and baby stores, which he said will provide a considerable market for the company’s products.

    “We will have a strong presence in bricks-and-mortar retailing ​— including Alibaba’s HEMA retail outlets, Ole supermarkets and mother and baby chain Kidswant,”​ he said.

    Initially, they will be in China’s tier one cities including Beijing, Shanghai, Guangzhou and Tianjin, and later will include Shenzhen and Chongqing.

    The products will also be carried by leading e-commerce platforms such as such as JD.com, Kaola, and Alibaba’s T-Mall.

    Asian expansion​

    Said Weine, “This hopefully will only be the beginning of our relationship with Chinese consumers.”​

    He emphasised that China represents a significant business opportunity for SPC in the years ahead, with its processed fruit market five times that of Australia.

    Among further plans for expansion, Weine said SPC’s ProVital, functional and fortified fruit products in accessible packaging, will also appeal to China’s ageing population.

    In the vast Asia Pacific region, aside from China, SPC already exports to Hong Kong, Japan, Singapore, Malaysia, Pacific islands and the Middle East.

    In February, SPC will also be launching its Perfect Fruit frozen fruit whip dessert in India and, shortly after, to Japan as well.

    Coca-Cola Amatil-owned SPC is the largest producer of premium packaged fruit and vegetables in Australia, processing about 150,000 tonnes of fruit a year. Its products include processed and packed fruit, vegetables, spreads and jams, prepared meals, snack foods, sauces and condiments.

    CSFA Shanghai already has established business relationships with several Australian companies including A2 Milk and Stanbroke Premium Beef. The company will organise staff and carry out sales and marketing to build SPC’s product brands in China.

  • Bossini reports Bossini $12m interim loss

    Bossini reports Bossini $12m interim loss

    Apparel brand Bossini International Holdings remains optimistic despite a slip in revenue and profit turning to loss for its six months to the end of December.

    It says growth is projected to continue rising in emerging markets and developing economies, supported by a favourable global financial environment and a concomitant recovery in advanced economies.

    “The regional picture is particularly encouraging as expansion in Mainland China and other parts of Asia remains solid, reflecting the strength of a broad-based upturn that saw global growth reaching its strongest rate since 2011. Mainland China is spearheading this long-overdue regional expansion, its economy having grown following two years of decline.

    “Hong Kong’s apparel retailing industry seems to have bottomed out after shrinking for consecutive years. Nonetheless, various downside risks remain evident, including geopolitical tensions, sudden capital outflows, policy indecisiveness and a sharp adjustment in Mainland China.”

    Bossini’s revenue for the six months fell by 5 per cent to HK$974 million (US$124 million), with gross profit slipping 1 per cent to $512 million.

    The group’s operating loss was $10 million with a -1 per cent operating margin, down from a positive 2 per cent a year earlier. Loss for the period attributable to the owners was $12 million, a switch-around from a $17 million profit 12 months earlier.

    Economic backlash

    Bossini says it weathered economic backlash from the China government’s “one trip per week” policy, more in-depth travel instead of retail shopping, and changes in tourist buying patterns. These factors hit retail sales in Hong Kong and Macau, which accounted for more than half of the group’s consolidated revenue.

    The drop in profit attributable to the owners was mainly because of the decrease in the profit derived from the retail and export franchising business in the Hong Kong and Macau segment. There was a 5 per cent drop in overall revenue and a 2 per cent decline in same-store sales for the period. However, same-store sales rebounded in the second quarter, particularly in China and Taiwan.

    Gross margin improved by two points to 53 per cent.

    Same-store sales in Hong Kong and Macau and Singapore declined by 4 per cent, an improvement over a 6 per cent decline the previous year, and 8 per cent (no change) respectively. Same-store sales in Mainland China and Taiwan grew 9 and 5 per cent (both had 2 per cent declines previously).

    Overall, same-store sales slipped by 2 per cent, an improvement on the previous period’s 6 per cent decline.

    At the end of the six months, the group had a presence in 29 countries and regions with  total 940 stores, the same as at June 30. The number of directly managed stores dropped by two to 282, while the number of franchised stores was 658, up two.

    Hong Kong/Macau remained the group’s core market and major contributor to the total revenue. A new outlet lifted the overall total number of stores to 41 while the export franchising business added five stores to the global network, taking the total to 656 across 25 countries.

    Mainland China had 166 stores (down two) comprising 164 directly managed stores and two franchises. Two non-performing stores in both Taiwan and Singapore were closed, giving both markets 16 outlets.

    During the six months, the group continued to launch its “on-the-go” collection to ride on the athleisure trend.

    Lees ook:

    Lees ook:

  • Thai low-cost carrier Nok Air pins turnaround on more China, India flights

    Thai low-cost carrier Nok Air pins turnaround on more China, India flights

    Nok Airlines Pcl, the struggling low-cost subsidiary of Thai Airway International Pcl, aims to turn around operations by growing international revenue with more flights to China and India, a top executive said on Monday.

    The carrier, which posted a loss of 1.85 billion baht ($58.95 million) last year, aims to increase revenue by 3 billion baht this year from 20.4 billion baht in 2017, by carrying 9 million passengers, 4 percent more than a year prior, Chief Executive Piya Yodmani said.

    He also said the carrier aims to increase revenue from international operations to 40 percent of its total from 20 percent a year earlier.

    Piya, who took over as CEO in September after the resignation of Patee Sarasin, said Nok targets aircraft utilization of 12 hours, up from 10.4 hours in 2017, with more red-eye flights and routes in China to boost earnings as Chinese tourist arrivals surge in Thailand.

    “We are waiting for approval to fly into three cities in India with the possibility of increasing routes there,” Piya said.

    Hotel and retail groups are among the main beneficiaries of a Thai tourism boom, while Thai airlines struggle with competition and fuel costs.

    Nok is deferring delivery of 8 Boeing Co 737-MAXs to next year through 2021 due to a “red ocean of competition,” Vice President Surachart Angkasuwan said.

    Tourism accounts for about 12 percent of Southeast Asia’s second-largest economy, with the country expecting 37.55 million arrivals this year, up 6.1 percent from 2017.

    Lees ook:

    Lees ook:

  • Renault partners with Chinese online retail giant

    Renault partners with Chinese online retail giant

    China, a strategic market for Groupe Renault, is the top priority in the company’s new mid-term plan, “Drive the Future.” The Chinese joint venture, Dongfeng Renault Automotive Company, has set a target of 400,000 passenger cars sales by 2022 based on nine local models.

    “One of the key objectives of returning to Formula 1 was to leverage its global platform for Groupe Renault,” said Cyril Abiteboul. “China has been identified as a market of strategic importance and partnering with high-profile companies like Alibaba’s Tmall will provide opportunities to significantly improve Renault brand awareness and opinion in China, with a strong presence over the Chinese Grand Prix in April, but also throughout the year.”

    “We are excited to partner with the Renault Sport Formula One Team to make our activity around the Chinese Grand Prix a success and to be working closely together to bring one-of-a-kind experiences with the Renault Sport Formula One Team to our customers,” added Wei Yu, General Manager of Tmall Auto.”

    Alibaba Group’s mission is to make it easy to do business anywhere. The company aims to build the future infrastructure of commerce. It envisions that its customers will meet, work and live at Alibaba, and that it will be a company that lasts at least 102 years.

    Launched in 2008, Tmall caters to consumers looking for branded products and a premium shopping experience. A large number of international and Chinese brands and retailers have established storefronts on Tmall. According to iResearch, Tmall was China’s largest third-party platform for brands and retailers in terms of gross merchandise value in 2016. Tmall is a business of Alibaba Group.

    Lees ook:

  • VIP.com, first Chinese partner of the London Fashion Week

    VIP.com, first Chinese partner of the London Fashion Week

    The new relationship is truly special as this is the first time a Chinese retailer becomes an Official Sponsor of London Fashion Week. Vip.com will be working closely with British brands to help them launch in its hugely lucrative and ever-expanding home territory.

    “The fashion market in China is extraordinarily sophisticated and fast paced, and hungry for new design talent,” says Jenny Jioe, Managing Director of Fashion at Vip.com. “Our consumer is aware of London’s creative pedigree, and ready for both news and product. I know from first-hand experience that the brands in London, with all their energy and unbridled creativity, are precisely what we are looking for.”

    Vip.com is one of China’s top 3 ecommerce retailers, with annual retail sales of $11.2b, 57.8million active customers, over 335million orders in 2017, and eight individual international sourcing offices. In 2016 Forbes ranked Vip.com as No.2 in its top 100 companies with the highest growth.

    London Fashion Week is a renowned launch pad for emerging fashion talent. “The nature of working with so many new businesses, is that they don’t have the advertising power of the global fashion brands,” says Caroline Rush, Chief Executive British Fashion Council. “What they have is incredible products that a fashion-forward Chinese consumer is going to love. Our role is to shine a light on these businesses and work with our partners at Vip.com to introduce these brands to a highly engaged audience in China.”

    The new partnership takes sponsorship at London Fashion Week into new, global realms of business and marketing savvy. “We are going to stage a show that is exclusive run by Vip.com,” says Paul Tyce, the Chinese e-commerce site’s UK country manager. “We will offer live streaming to our customers in China, in-depth cooperation with designers, and fashion and art exhibitions. This isn’t just about title sponsorship.”

  • WeChat Pay available at European airport retailers

    WeChat Pay available at European airport retailers

    WeChat Pay, a popular mobile payment method among Chinese consumers, will be available in several European airport retail destinations, as part of the travel retail industry’s attempts to appeal to large visitor numbers from China.

    Lagardère Travel Retail, which operates retail, foodservice, and duty-free premises at airports around the globe, has first launched the payment service in Terminal 1 of Charles De Gaulle Airport in Paris.

    Timed to coincide with Chinese New Year, a popular period for travel among Chinese consumers, shops operated by Société de Distribution Aéroportuaire – a joint-venture by Lagardère Travel Retail and French airport operator Groupe ADP – will be the first to accept WeChat Pay. It will be launched in additional airports in due course.

    WeChat Pay is a smartphone-based payment service and has around 600 million active users. It is integrated into internet group Tencent’s WeChat app, which is the most popular social network in China with nearly one billion users.

    To make a payment users scan QR codes generated within their WeChat mobile wallet stored on their smartphones.

    Travel retail is often perceived to be behind the times in terms of digital transformation when compared with the wider retail sector, but there are a number of new services being rolled out. Lagardère Travel Retail is one of several airport shopping companies to launch click & collect, enabling passengers to order products online and pick them up as they travel through the terminal.

    And as the travel industry looks to cater for international travellers in ways they are familiar with from their home countries, there is set to be further innovation in the space.

    Last week, for example, tax-free shopping company Global Blue announced it has teamed up with Tencent at Madrid Airport to allow WeChat Pay users to receive their tax refund digitally. For the first time, consumers can receive instant tax refunds into their WeChat Pay Wallet, once their tax-free forms have been validated by customs officials.

    Lees ook:

  • Chinese New Year brings retail opportunities for UK brands

    Chinese New Year brings retail opportunities for UK brands

    UK plc is an exceptional example of what London Business School expert terms an “attractive market segment”, one which has been curated and matured over a long period of time. Chinese consumers in particular are attracted to British brands, with a high percentage of shoppers in mainland China regarding British goods as “genuine and well made”. UK entrepreneurs and established retailers should leverage the appeal of “Brand Britain”, with a particular focus on Chinese New Year and an anticipated online shopping bonanza in mid-February.
    “It’s axiomatic that consumers are still eager to pay for the best, most trusted brands. However, there’s a rising number of aspirational consumers within the world’s emerging middle class who want to choose brands that have a clear purpose, set of values and meaning,” says John Mullins, Associate Professor of Management Practice at the School.

    “With its history, cultural significance and reputation for quality consumer goods, the UK regularly scores very well in international ‘nation brand’ league tables. Consistently scoring well in tourism, culture, people, exports and governance the UK is a well-rounded marque which is consistently well received by consumers.”

    This perception appears to be particularly strong with Chinese consumers. In a March 2017 Marketing to China editorial, it was acknowledged that in a market “renowned for a fake, cheaper products”, the label of ‘being British’ represents real quality. And in a recent UK Royal Mail survey it was found that within the online arena more than half (55%) of shoppers in China bought items from British brands in a three-month period, spending an average of £104 per month.

    “There is a real appetite for ‘Brand Britain’ with its goods regarded as being well made and genuine,” says Dr Mullins. “Survey after survey appears to indicate that Chinese buyers want to be certain about their purchases and obtaining a genuine article with a trusted and well-respected provenance. The UK shines in this respect.”

    In his book, The New Business Road Test, Dr Mullins asserts the view that whether one is launching a start-up or an investor sure way to mitigate the long odds is to make certain one has identified an attractive market segment. “An attractive market segment where the customers are almost certain to buy what you’ll offer. The UK is a powerful, composite nation brand which has matured over many hundreds of years. It bristles with both appeal to would-be consumers, and opportunity to entrepreneurs.”

    On the online shopping bonanza near Chinese New Year, he commented, “As Jack Ma, the founder of Alibaba, once said, ‘in other countries, e-commerce is a way to shop; in China, it is a lifestyle’. McKinsey reports that 76 percent of China’s urban population will be considered middle class by 2022, but there is already a huge consumer community in China which presents numerous opportunities to promote the UK brand to an already very receptive market.”

    Lees ook:

    Lees ook:

    Lees ook:

  • Alibaba, Tencent rally troops amid $10 billion retail battle

    Alibaba, Tencent rally troops amid $10 billion retail battle

    China’s tech giants Alibaba Group Holding Ltd and Tencent Holdings Ltd, worth a combined $1 trillion, are on a retail investment binge, forcing merchants to choose sides amid a battle for shoppers’ digital wallets.

    Since the start of last year, the two companies have between them spent more than $10 billion on retail-focused deals, boosting their reach online and in brick-and-mortar stores.

    The aggressive drive, supported by large cash piles and soaring share prices, is part of a battle to win over consumers and store operators to the two firms’ competing payment, logistics, social media and big data services.

    The result: fewer and fewer retailers left without allegiance to either Tencent or Alibaba.

    “All of the retailers in the brick-and-mortar world are very worried. They have to take a side,” said Jason Yu, Shanghai-based General Manager of market research firm Kantar Worldpanel.

    “Otherwise they are afraid they will be eaten alive in the future.”

    Alibaba is China’s top e-commerce player and its affiliate Ant Financial leads in mobile payments. Tencent’s strengths lie in social media, digital payment and gaming. It also has a major stake in the second-largest online retailer, JD.Com.

    Tencent and JD.com have a growing range of allies, including French grocer Carrefour SA, which has announced a potential investment from Tencent, and U.S. retail giant Walmart, which has a stake in JD.com.

    Tencent also bought a stake in Yonghui Superstores Co Ltd, apparel retailers Vipshop Holdings Ltd and Heilan Home, mall operator Wanda Commercial, and this month snagged a strategic tie-up with grocer Bubugao.

    In the other corner is Alibaba, which has invested even more heavily in Suning.com>, Intime Retail, Sanjiang Shopping Club, Lianhua Supermarket, Wanda Film and IKEA-like home
    improvement store Easyhome.

    Key to the battle is China’s nearly $13 trillion mobile payment market, where Alibaba and Tencent are going head-to-head. Alibaba took a 33 percent stake in its payment affiliate Ant Financial this month ahead of an expected mega IPO.

    Ant operates China’s top mobile payment platform, Alipay, while Tencent’s payment system on its hugely popular Weixin chat app is catching up fast. Both firms are also making a big push in cloud computing and data.

    “I think for payment (the retail push) is a very critical part because it’s almost a gateway,” said Yu. Brick-and-mortar stores in China account for about 85 percent of retail sales, creating a huge lure for tech giants.

    “That’s the pot that Alibaba, JD.com and even Tencent want a slice of,” Yu added. “That’s the majority of the business where they can actually look for future growth.”

    In return, the physical stores get access to payment systems, logistics networks and other services – not to mention the reams of data on consumers that the tech firms control.

    Alibaba invested $486 million this month in a retail-focused big data firm, saying the deal meant it could better “help brick-and-mortar retailers succeed in the digital age.”

    Lees ook:

    Lees ook:

  • China strikes telecoms from list of “sensitive” outbound sectors

    China strikes telecoms from list of “sensitive” outbound sectors

    The Chinese government has reportedly taken the telecoms sector off a list of “sensitive sectors” that require special approvals for outbound investment.

    The list compiled by the National Development and Reform Commission (NDRC) names the industries that Chinese planning to invest in an overseas company or project need to secure approval for.

    Starting from next month, companies investing in overseas telecoms projects will instead only need to file the same records with authorities as required for investment in other non-sensitive sectors.

    The telecoms sector has been considered sensitive since the previous list was published in 2014.

    The change comes at a time that the Philippines government is courting Chinese investment in its mobile market through a proposed 60-40 venture that would become the nation’s third telco.

    Xinhua noted that China’s outbound direct investment outside of the financial sector fell 29.4% in 2017 to $120 billion.

    As part of the reforms to the sensitive sector list, the energy sector has also been removed while the arms industry, properties, hotels, cinemas, entertainment, sports clubs, and equity investment funds have been added.

    Lees ook:

    Lees ook:

  • China in strong growth on the organic front

    China in strong growth on the organic front

    During the last ten years organic sales have doubled in Denmark and have accounted for 9,7 percent of all groceries sold, the Danish newspaper Berlingske say. That places Denmark to be the top number one country in the world with the largest organic share of retail trade. Now China is catching up and is ranked fourth since organic food was traded for 44 billion Danish crowns in 2017.

    Globally organic trading accounted for 540 billion Danish crowns in 2016, according to the international report “The World of Organic Agriculture” which was published at this year’s BioFach in Nürnberg, Germany. USA is still by far the largest organic market globally with a turnover of 290 billion Danish crowns in 2016.

    Organic production is a rapidly developing business area with a great market. And now might be the time to throw an extra glance at organic export to China, – a market in strong growth.

     

    Lees ook:

    Lees ook:

    Lees ook:

    Lees ook:

  • Huawei might rebrand Honor 8 Pro and launch it in China

    Huawei might rebrand Honor 8 Pro and launch it in China

    Huawei, China’s leading smartphone maker, might be planning to rebrand Honor 8 Pro and relaunch it this year. Honor is Huawei’s online-only brand and the company might be putting its own branding on Honor 8 Pro at the time of its launch.

    The details of Huawei’s plan to launch a rebranded version of Honor 8 Pro were tweeted by Evan Blass. There is a possibility that the Chinese smartphone maker might be targeting the offline retail segment with its branding on Honor 8 Pro. To recall, Honor 8 Pro was launched in 2016 as company’s device competing with OnePlus 3 and OnePlus 3T in the premium mid-range segment.

    The Honor 8 Pro was one of the successful devices for Honor brand, and it helped the company establish itself in key markets including India. In terms of features, the Honor 8 Pro gets a 5.7-inch IPS LCD display with a resolution of 2560×1440 pixels. The smartphone is powered by company’s own Kirin 960 chipset coupled with 6GB RAM and 64GB storage.

    The Honor 8 Pro features a dual 12-megapixel rear camera setup with one color sensor and another monochrome sensor. It also offers an 8-megapixel selfie camera with f/2.0 aperture and support for 1080p video recording.

    Other features include Wi-Fi, Bluetooth, GPS, NFC, 4G LTE with VoLTE support. The smartphone was launched with EMUI 5.1 based on Android Nougat, but has since been upgraded to EMUI 8.0 based on Android 8.0 Oreo. The Honor 8 Pro packed a 4,000mAh battery, and was available in white, black and blue color variants.

    Huawei often rebrands Honor-branded smartphones in its home market, and targets them in the offline retail space since Honor already has strong presence in online segment. With rebranded version of Honor 8 Pro, Huawei might be planning to target those who are not getting Honor View10 and will fill a gap in the price segment.

    Lees ook:

  • Disney And Alibaba’s Youku Sign Licensing Deal For Animation Shows

    Disney And Alibaba’s Youku Sign Licensing Deal For Animation Shows

    Chinese online retail giant Alibaba and U.S. media and entertainment giant Walt Disney have inked a licensing deal which will see animation series from the latter become available on the Youku online video streaming service owned by the former. The multi-year agreement was signed by a unit of Disney, Buena Vista International, and Alibaba Digital Media and Entertainment Group.

    Besides subscribers of the Youku streaming service, Chinese households numbering nearly 30 million who use the set-top boxes of Alibaba as well as SmartTV platforms will access the Disney content. Episodes numbering over 1,000 are expected to be streamed on Youku. Besides the television shows Disney films such as Mulan, Frozen, Beauty and the Beast, and Pirates of the Caribbean are also part of the deal.

    More international content

    “We look forward to further cooperation with global entertainment companies, which will help increase our penetration in the family entertainment segment and strengthen Youku’s position as a leading multi-screen entertainment and media platform in China,” Youku’s president, Yang Weidong, said in a statement.

    Other U.S. entertainment companies that Youku has previously struck licensing deals with include NBCUniversal, Fox, Paramount and Warner Bros. Youku also has a licensing deal with Sony Pictures Television. Last year in November Youku inked a licensing agreement with Netflix allowing its subscribers to view the show Day and Night on its platform. Per Alibaba, about 580 devices are reached by Youku daily and this translates to about 1.2 billion views.

    Joint venture

    Two years ago Walt Disney and Alibaba launched a joint venture known as DisneyLife which gave the Chinese online access to content from the media and entertainment giant. However regulators shut down DisneyLife after months after launch. Last year in May Walt Disney set up an online store on the Alibaba-owned e-commerce website, Tmall, to sell its merchandise in China.

    The deal with Youku comes at a time when Walt Disney is preparing to unveil an online video streaming service in the United States as consumers increasingly abandon traditional cable and satellite services for platforms such as Netflix. The chief executive officer of Walt Disney, Bob Iger, has indicated that the planned online streaming platform won’t be expensive to start since the media and entertainment giant already has lots of existing content.

    Alibaba’s licensing agreement with Disney coincides with the Chinese online retail giant acquiring a 15% in retail firm Easyhome as it expands on its ‘click and mortar’ retailing strategy. Easyhome has a total of 223 brick and mortar stores in China.

    Lees ook:

    Lees ook:

    Lees ook:

  • From Smartphones To Smarthomes, Xiaomi’s Resurgence As A Global Hardware Leader

    From Smartphones To Smarthomes, Xiaomi’s Resurgence As A Global Hardware Leader

    Xiaomi relied a lot on online sales in its first years, selling competitively-equipped smartphones at cost. With that strategy, Xiaomi managed to rise to the top of the smartphone charts in China and India within four years of its establishment, becoming the third largest smartphone maker in the world by 2014.

    However, the rising giant hit a rough patch at home in 2015, dealing with a crowded, slowing Chinese market. Xiaomi’s smartphone shipments grew by 226 percent in 2014, slowing to just 17.6 percent growth in 2015. Shipment volume declined in 2016 to a rumored 41 million (down from over 70 million in 2015) scaling back global expansion and giving its investors something to worry about.

    That setback didn’t last. Xiaomi has since expanded its smartphone shipments to Europe, becoming the fourth largest company behind Samsung, Huawei, and Apple in Central and Eastern Europe in Q2 2017.

    But the world outside of China was not enough. As the world’s largest smartphone market, China is strategically important to Xiaomi, but its strategies for early success in this ever-changing region were unsustainable. Today we’ll explore how the combination of platform, offline retail, and marketing expansion has allowed Xiaomi to regain traction back in China and expand globally.

    Xiaomi’s China Struggle

    Xiaomi’s 2015 stagnation and 2016 shipment decline was due to a number of factors. Slowed growth in the Chinese smartphone market in 2015, for one, contributed to the setback. However, the changing competitive landscape in the region was possibly the unicorn’s biggest challenge.

    Competitive Advantage Disappears

    Xiaomi maintained a strategy of flash sales and relying on its loyal user base to bypass traditional marketing expenses combined with online sales to forgo the costs of brick and mortar retail stores.

    Xiaomi’s business strategy proved to be a strength in its first couple of years, but contributed to its struggle in 2015 and 2016 as the flash sales system has for other e-commerce companies in the past. Furthermore, with online sales its primary means of attracting users, Xiaomi potentially neglected key consumers in lower-tier cities and rural areas of China, where individuals relied more on local retailers because of logistical barriers.

    Emerging players like Oppo and Vivo filled the gap left by Xiaomi’s absence in these areas in 2015 and 2016, selling low-end smartphones, but also offering offline retail stores in rural areas. Oppo now has a reported 200,000 brick and mortar retailers in rural China.

    Furthermore, unlike Xiaomi, with an offline approach to sales and no online fanbase, Vivo and Oppo relied on aggressive advertising and retail subsidies to market their products and gain users. This strategy worked well for the two companies. Oppo became the leading smartphone supplier in China in 2016, with a year over year growth in shipments of 122.2 percent.

    After Xiaomi’s slowed growth in 2015, the company had to prove its viability to investors, especially with a $45 billion valuation riding on its back. It declined to release its sales numbers in 2016, with CEO Lei Jun admitting that the company “grew too fast and drew on some long-term growth.” Xiaomi refocused on switching strategies, playing off of its branding as a company for the Internet of Things (IoT), responding to retail challenges, and refocusing its marketing techniques.

    Xiaomi Responds With Investments, Brick And Mortar, And Celebrities

    As he stated stated in the early days of the company, Lei Jun always claimed to imagine Xiaomi as less of a smartphone provider and more of a smart home device innovator. Xiaomi started selling TVs back in 2014, adding to the list of non-smartphone items that it had already offered, including portable batteries, set-top boxes, and fitness trackers. The company also developed online media and gaming content.

    With players like Oppo, Vivo, Huawei, and Lenovo taking note of the company’s low-end smartphone approach, Xiaomi aimed to do more to brand itself as a tech company for the Internet of Things.

    In 2016, it launched a mobile payment service, an electric bicycle, a thin MacBook Air-like computer (the creatively-named Mi Notebook Air), a drone, a smartphone-connected rice cooker, a new, thinner MiTV, and an electric ukulele. Xiaomi’s Mainland China website is filled with connected devices, including everything from smartphone-controlled water purifiers and vacuum cleaners to story-telling kids toys and GoPro-like cameras—all connected through the Xiaomi Mi Home app exclusively on its smartphones.

    Xiaomi managed to build out its smart home platform by investing in hardware-focused startups and “giving them access to its designers, marketers, and massive supply chain in exchange for a 10- to 20-percent stake and the right to brand and sell those products.” This outsourcing strategy allowed the company to develop its smart home ecosystem. Further, the company maintained its goal of selling its flagship, increasingly innovative smartphones at lower prices than its competitors, as its earnings are driven by its other devices.

    Offering the lowest priced smartphone was key to smartphone shipment growth, but by linking its smart ecosystem exclusively through its smartphones, Xiaomi could drive growth even more. However, if the company wanted to compete with Oppo and Vivo, it could no longer neglect those retail customers outside of the urban landscape. The second part of Xiaomi’s comeback involved a huge platform shift.

    Brick And Mortar Expansion

    “Xiaomi has great ambitions, and we are not satisfied with just being an e-commerce smartphone brand,” Jun told Techcrunch in 2017. “So we have to upgrade our retail model, and incorporate offline retail for a new retail strategy.”

    The company that was built upon a platform that eschewed brick and mortar retail decided to bring its sales offline.

    Following through with this plan, by the end of 2016 Xiaomi opened more than 50 Mi Home stores in Mainland China. In 2017 it expanded that effort, opening stores in major metropolitan areas, like Beijing, with plans to launch 1,000 stores in China, and 2,000 stores globally by 2019.

    Xiaomi differentiated its brick and mortar effort from that of Oppo, Vivo, Lenovo and Huawei by essentially combining Apple’s physical retail setup with product variety. It packed its stores with its smartphones and new smart home devices to entice customers to return to the store frequently and spend more time and money buying its products.

    The People’s Smartphone

    Xiaomi met its new retail and platform expansion projects with a reinvigorated marketing approach– a marked shift from relying on its online fanbase. An IDC analyst said that the company is directing more of its funds to marketing and advertising.  In 2016, more billboards and ads popped up in public areas calling its Redmi line of smartphones the “People’s Smartphone.” In July 2017, the company unveiled its new dual-camera flagship the Mi 5X along with a flashy endorsement by Chinese musical sensation, Kris Wu.

    With its shifted strategy, Xiaomi began to regain some ground in the Chinese market in 2017.

    Looking at quarterly data in the Chinese smartphone industry, Canalys analyst Hattie He told Crunchbase News that the company led in the under $200 market in China in Q3 2017 with 22 percent of the market share in the segment. In Q4 it ranked second in that category by a small margin, with Huawei taking 25 percent and Xiaomi 24 percent, followed by Vivo and Oppo at 12 and 8 percent, respectively.

    Even so, Apple overtook Xiaomi in 2017 for fourth place in China. With a decline in smartphone sales in the region in 2017, competition is only going to heat up in the industry. Companies that heavily rely on their home market for cashflow will likely face significant difficulties in 2018, with Lenovo and ZTE refocusing on the Chinese market.

    Hattie expects Xiaomi to stick to its current strategy.

    “Xiaomi will keep paying attention to in-house hardware investments, including smartphones and IoT devices… [It] will partner with other well-known hardware and software companies to go into different sectors and provide customized experiences for [the Chinese] market,” Hattie explained.

    She also expects the company to continue its online-offline approach by establishing more MiHome stores in sub-tier cities in 2018 to reach a broad consumer base and build a reliable brand image.

    Xiaomi’s Global Expansion

    In 2017, Xiaomi’s rebound was mirrored in its efforts and successes abroad. After scaling back its global efforts in 2016, the company has since expanded again to markets in South East Asia and elsewhere, taking a top five spot in Central and Eastern Europe in 2017. It increased its offline activity and partnered with local smart device companies in India in 2017, and overtook Samsung as the lead player in the region that year.

    Of course, even with these global wins, the company has a long way to go to compete with Apple in the West. It launched an online store for the U.S. and has been selling its globally successful fitness wearable and battery packs in the U.S. since 2015. It started selling set-top boxes in Walmarts beginning in 2016, and in November 2017 released a few of its products on Amazon.

    However, expanding smartphone sales to the U.S. is something the company has considered carefully. If Xiaomi entered the U.S., it would compete with Apple and Google in their home markets, but that isn’t its biggest problem. Xiaomi’s past experiences with the companies regarding intellectual property and design theft mean that the company will have to come into the market patented up and prepared for legal backlash– something Xiaomi has dealt with before. When it entered India in 2014, its sales were initially halted when it was slapped with an IP lawsuit. Coming from China, where regulations surrounding IP are significantly more lax, to the U.S. will be quite a shift.

    Beyond IP, the company will also have to face the mounting security concerns surrounding Chinese tech companies which have intensified over the past few months. As we reported, a move to the U.S. didn’t work out for Xiaomi competitor Huawei, who was abandoned by AT&T before CES 2018. Xiaomi has made efforts in the past to overcome the narrative surrounding Chinese companies by placing the data of global users in data centers outside of China. However, with the U.S. government increasingly concerned about cybersecurity, it isn’t likely that carriers will be willing to partner with Chinese companies in the near future.

    Despite these challenges, Xiaomi may prove to be the dark horse in a global competition with Apple, Google, and Samsung, as it continues to dominate in markets like India where highly-priced devices aren’t the consumer’s choice. Focusing on becoming the “People’s Smarthome” of emerging communities around the world may very well be its winning

  • Chinese tourists drive WeChat Pay growth in Philippines

    Chinese tourists drive WeChat Pay growth in Philippines

    Chinese tourists are helping drive the growth of cashless payments using Tencent’s WeChat in the Philippines, according to its Filipino partner, Asia United Bank.

    Chinese tourist arrivals are projected to hit 1 million. Staying in the country for 8 days on average, WeChat Pay in the Philippines can generate up to P48 billion in revenue, said AUB vice president and credit card business head Mags Vazquez Surtida.

    “The transaction counts are increasing. The transaction values are increasing. We can see more merchants. We see the growth happening on a daily basis,” Surtida said.

    WeChat Pay is accepted in 1,000 retail outlets in the Philippines, including hotels and restaurants, Surtida said. The number of daily transactions recently reached up to 2,500 in the run-up to the Chinese New Year, twice the average per day, she said.

    The value of single transactions were as high as P90,000, recorded in Boracay. Diners spend P6,000 to P12,000 while shoppers pay P4,000 to P7,000 using WeChat Pay, she said, Surtida said.

    Surtida said AUB hoped to grow the number of WeChat Pay merchants in the Philippines to 5,000 by March.