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Tag: China

  • New Hua Du Supercenter buys vending machine group

    New Hua Du Supercenter buys vending machine group

    Chinese supermarket chain New Hua Du Supercenter has acquired a vending-machine company just weeks after Alibaba and Auchan launched self-service convenience stores.

    Based in Fujian, the chain says it has signed an equity-swap agreement with Beijing Ubox Online Technology Corporation. Under the deal, Ubox, which runs more than 57,000 vending machines – more than any other similar company – will be absorbed into New Hua Du.

    New Hua Du has a market value of RMB5.7 billion (US$850 million), smaller than its new subsidiary Ubox, which is valued at RMB6.5 billion. New Hua Du’s profit last year rebounded to RMB54 million from a loss of RMB373 million a year earlier, driven in part by the three e-commerce companies it acquired.

    “The acquisition comes at a time when staffless retail is hot,” says Haitong Securities analyst Wang Liting. “The deal will enable integration between supermarkets and smart vending machines.”

    After Amazon.com launched its Amazon Go self-service shop last year, Chinese companies have taken up the staffless shop concept with Alibaba Group Holding opening Tao Cafe in Hangzhou and Groupe Auchan introducing BingoBox in Shanghai.

    Wang says the vending-machine market has significant potential in China. Ubox’s profit last year more than doubled to RMB81 million.

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  • Urban Chinese consumers are more selective spenders in 2017

    Urban Chinese consumers are more selective spenders in 2017

    While China’s economy continues to grow at a moderate pace, consumers have become more selective spenders in 2017 as a result of increased pressures both at work and with their personal finances. New research from global market intelligence agency Mintel reveals that, today, urban Chinese consumers* are more conservative with regard to increasing their spending than they were in 2016, as 36% of surveyed consumers report spending more in 2017 compared to 43% who said the same in 2016. Meanwhile, consumers are more likely to control their spending this year, with nearly half (49%) reporting that they are spending “about the same” as they did in 2016.

    However, while consumers in general have a positive outlook for their financial status, they are aware of potential future risks in life, and want to make sure that every purchase they make can be justified, and that what they buy is worth the price.

    Mintel research indicates that overall consumer expenditure increased by 10.5% to reach RMB 33,511 billion in 2016. The categories that experienced the most growth in 2016 include transportation, holiday, leisure and entertainment, and OTC (Over-the-Counter) and pharmaceuticals. Mintel forecasts that consumer expenditure will increase 8.4% year-on-year through 2021, while holidays will surpass clothing and accessories to become the third largest spending sector. Meanwhile, transportation and leisure and entertainment, as well as beauty and personal care, will also see an increase in consumer spending .

    Laurel Gu, Research Director at Mintel, said,

    “Demand for upgraded consumption for new options, better quality and greater convenience will be the major driving factor in 2017. The development of the consumer products and services market is expected to remain active over the next five years to 2021, with health and experience being the two major themes. When it comes to Chinese consumers in tier one to three cities, perceived trends in spending are similar with holidays being the most popular and alcoholic drinks the least popular. However, although in-home food, clothing and accessories, as well as eating out, are enjoying moderate increases in total spending, they are among the top sectors where consumers claim to be spending more this year. This suggests potential gaps that consumers living in towns or rural areas are not yet picking up as a part of upgrading their living quality.”

    Achieving a healthy lifestyle continues to be Chinese consumers’ top priority, with “have a healthier diet” (80% of consumers say they will definitely do this in 2017) and “exercise more” (75% report they will definitely do this in 2017) the top two goals that consumers are determined to achieve in 2017, as was the case in 2014. “Travelling to new places” is a goal that has become increasingly important to consumers over the last four years, rising from ninth place in 2014 to third place in 2017. Meanwhile, “spend more time with family” – which 73% of consumers say they will do this year – dropped from third position in 2014 to sixth position in 2017.

    “While living a healthy lifestyle continues to be a focus area for consumers, over the last few years we see that spending time with family and having a better work-life balance are being deprioritised for other goals like traveling and getting household finances in order. The reason for these changes in life priorities is likely because consumers, Mintropolitans in particular, tend to associate a healthy lifestyle with not just exercising and watching what they eat, but also a variety of meaningful leisure and social experiences.” Laurel continued.

    When it comes to the quality of their life, one quarter (24%) of Chinese consumers say spending on holidays is what makes them feel their quality of living has improved. Other top areas include spending on technology (eg. mobile phones) (9%), clothes and accessories (eg. apparel) (9%) and leisure (eg. working out) (4%), which is largely in line with consumers’ spending priorities.

    Mintel’s annual Chinese Consumer 2017 report tracks spending across 15 major consumer markets, revealing the categories that present areas of opportunity, disruption and innovation in the years ahead. Highlights from the 2017 report include:

    Better-for-you foods drive further growth

    Mintel forecasts that the in-home food market will reach RMB 7,001 billion in value by 2021, driven by the demand for more trading-up options in the form of better-for-you versions and higher quality ingredients. Looking forward, yogurt products positioned as an indulgent pleasure and cheese for snacking occasions will see the greatest potential. On the other end, both ready meals and instant noodles are in jeopardy due to the thriving food delivery service.

    Healthy drinks take leading positions in non-alcoholic drink market

    Thanks to a nourishing and healthy image, plant protein drinks (PPDs), functional beverages (eg. sports drinks, energy drinks), as well as some light flavoured beverages, are all growing in popularity. Overall, the Chinese non-alcoholic drink market is likely to retain its positive growth with a CAGR of 7.2% in the next five years. Besides consumers’ ongoing interests in pursuing healthy food and drinks, their knowledge of nutrition and ingredients is also growing. As such, the premium soft drinks market is expecting products featuring a clean and natural ingredient list that create associations with functional health benefits.

    Beauty products designed for special occasion have room to grow

    Consumer spending in the beauty and personal care (BPC) sector is estimated to have reached RMB 566 billion by the end of 2016 – increasing by 8.1% from 2015. Mintel forecasts that the sector will grow, driven by innovations from local brands, imported products and consumers trading up to premium products for better quality. In 2017, there will be increasing demand for safety products and segments that are designed to cater to special occasions, including the athbeauty trend and consumers in need of time-saving routines.

    Technology and communication market on a slow incline over the next five years

    Smart phones and more niche technology gadgets like smart wristbands or VR (virtual reality) headsets will enjoy strong growth in 2017, while computers and games consoles face challenges. Upgrading technology products, especially those consumers use daily (like smartphones), may help consumers improve their quality of living. High product quality, such as high processing speed for smartphones or reliable health-monitor function of smart wristbands, are essential for technology brands to win fans in the years ahead.

    More demands on social and leisure activities drive transportation spending

    The fact that the segment is closely related to two other strong sectors – holiday, and leisure and entertainment – together with accelerating new car sales, growing car usage spending, as well as increasing public transport cost, are all key drivers of spending in transportation. In the five years to 2021, Chinese consumer expenditure on transport is projected to see a 12.7% CAGR and reach RMB 3,605 billion. Opportunities exist for market players tackling daily commute issues, including those in the ridesharing and bike-sharing industries.

    Urban Chinese consumers seek more experimental activities

    Chinese consumers are becoming more sophisticated and selective in terms of where they spend their time and money for entertainment and relaxation. Mintel forecasts that the leisure and entertainment sector will reach RMB 2,823 billion in value by 2021. This is largely driven by the shift from products to lifestyle services and experiences, and the trend of trading up from mass to premium offerings; both are reflecting the change in life priority from wealth accumulation to a more balanced life. In 2017, there will be increased demand for virtual entertainment products, health and fitness services and family-focused recreations.

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  • China star performer for L’Occitane International

    China star performer for L’Occitane International

    With 26.9 per cent growth in sales, China led the charge for wellbeing company L’Occitane International for the three months to the end of June.

    China had same-store sales growth of 14.7 per cent, with “staggering” 250 per cent first-quarter growth for marketplaces, says the company. A marketing campaign with Chinese artist Lu Han launched in May drew traffic online and offline.

    In Japan, sales growth remained healthy at 4 per cent in local currency, with same-store sales growth of 2.4 per cent. The company’s e-commerce channel performed well, helped by new Line promotion campaigns and “encouraging” growth by emerging brand Melvita.

    Travel-retail and distribution channels were the main props for Hong Kong’s sales growth of 2.9 per cent.

    Overall group net sales grew to €279.5 million (US$325.7 million) by 4.1 per cent at reported rates and 2.7 per cent at constant rates, both rates an improvement from the financial year ended March 31.

    Web sell-out channels (own e-commerce and marketplaces) delivered “encouraging” growth of 27.3 per cent to reach 13.2 per cent of total sell-out sales.

    During the first quarter, sell-out sales accounted for 73.8 per cent of net sales, amounting to €206.4 million. This was growth of 3 per cent at reported rates or 1.5 per cent at constant rates. Major growth drivers were new and renovated stores, marketplaces, and its cafe and spa businesses.

    Same-store sales for the period eased by 0.6 per cent, an improvement from the 1.3 per cent drop for the same period last year, thanks to double-digit same-store growth in China.

    Sell-in sales at €73.2 million accounted for 26.2 per cent of total sales, an increase of 6.2 per cent at constant exchange rates. The company says this was primarily driven by dynamic growth in distribution, travel retail, B2B and web-partner channels of the L’Occitane brand. Emerging brands also drove overall sales growth.

    The group maintained its selective global retail expansion with four store openings during the quarter, compared with 23 for the same period last year. Twenty stores were refurbished (13 during the same period last year).

  • Jing Ting restaurant offers northern Chinese cuisine

    Jing Ting restaurant offers northern Chinese cuisine

    Just opened in City of Dreams Manila, Jing Ting is a casual-dining restaurant serving northern Chinese cuisine.

    Its speciality is Xi’an cuisine from the ancient Chinese capital which is the starting point of the Silk Road. It is Chinese-style food with different cultural influences including Middle Eastern. Jing Ting holds back on the more spicy dishes for which Xi’an cuisine is known to adapt to the Filipino palate.

    Chef Yang Chen Fei was trained by the chef of former Chinese president Hu Jintao and has had 15 years of experience in five-star hotels and restaurants in China.

    Jing Ting has an open kitchen and most of its dishes are served family style.

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  • Do you want fries with that?

    Do you want fries with that?

    If you could increase your average sales by 10 per cent, how much would your profit increase by? I am sure that all of us have experienced both good and bad service in a retail store. What creates that difference in the experience is made up of all the senses banding together and leaving an overall impression. But the most telling one is the interest shown in you by the sales personnel. The greeting, the smile, the relevance of questions asked and the interest shown in going that little bit extra to help you find what you are looking for. That’s what creates a good experience!

    In today’s ongoing search for additional sales, the difference between sales achieved by an average experience and great sales assistance can be as much as 25 per cent. On analysis of the difference in sales achieved between most staff and good sales people, the most telling factor is the average docket value. These good sales people consistently achieve more than the average, sometimes as much as double.

    Customers already in your store are by far the easiest way to find additional sales. So many times customers want to be given good advice and are quite willing to buy a second related item, if they were told about it, or introduced to something new.

    McDonalds is one business that realised this at the outset, have you? If a retail business sales increased by just 10 per cent across the board, due to the results of effective sales people, profits would increase exponentially, often double in most retail models.

    And that is true, even if one has to pay 10 per cent above the going rate to get the right people. Why then do business owners tolerate mediocre sales people? Do the sums in your business and see what a 10 per cent increase in sales will mean to your bottom line.

    Can any retail business afford not to have the best sales people? So simple, so effective, so ignored by so many businesses!

  • McDonald’s China sales boom ahead of spin-off

    McDonald’s China sales boom ahead of spin-off

    McDonald’s China sales posted solid quarterly growth ahead of the division’s spin-off. Global same-store sales rose 6.6 per cent in the three months to June 30. In what the company terms its ‘High Growth segment’, second quarter comparable sales increased 7 per cent, led by a strong performance in China. The segment’s operating income rose 28 per cent, with about half of that resulting from lower depreciation expense due to the accounting treatment related to the pending sale of the China and Hong Kong businesses.

    McDonald’s CEO Steve Easterbrook was positive about the company’s performance.

    “We’re building a better McDonald’s and more customers are noticing. Our relentless commitment to running great restaurants and keeping the customer at the center of everything we do is generating broad-based strength and momentum across our entire business.  For the quarter, we delivered our strongest global comparable sales and guest count results in more than five years.  We’re now introducing our Velocity Growth Plan accelerators in more restaurants around the world, bringing meaningful benefits to more customers through digital, delivery and our Experience of the Future.”

    Second quarter highlights

    While sales were up, consolidated operating revenues slipped 3 per cent, or 2 per cent in constant currencies, due to the impact of the company’s strategic refranchising initiative.

    Systemwide sales increased 8 per cent in constant currencies, due to strong comparable sales performance and restaurant expansion.

    Consolidated operating income increased 24 per cent (26 per cent in constant currencies), which included a benefit from the prior year’s strategic charges of approximately $230 million.

    US operating income for the quarter increased 5 per cent, reflecting higher sales-driven franchised margin dollars and higher gains on sales of restaurants, among other factors.

    “Whilst we’re encouraged by our results from the first half of 2017, we’re not complacent.  Today, we’re acting like a leadership brand, taking on new challenges and opportunities and moving with a greater sense of purpose and urgency,” said Easterbrook.

    “We’re building on our momentum, leveraging our size and scale and executing with greater precision against our priorities to retain, regain and convert customers by giving them even more reasons to visit and enjoy McDonald’s.”

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  • Walmart and JD.com plan shopping festival in August

    Walmart and JD.com plan shopping festival in August

    Walmart and JD.com are set to launch a new online shopping festival for August 8, in an onmi-channel alliance that will see the two retail juggernauts link their supply chains and other operations.

    As the fight for the online Chinese consumer intensifies, the festival will help the US retailer “reach the 99 per cent of the country’s population that JD.com’s delivery network covers, bringing high-quality Wal-Mart products to more Chinese customers nationwide,” said an announcement.

    Helping the sale garner promotional traction, coupons have already been made available across 400 Walmart stores in China, allowing shoppers huge discounts during the upcoming online sale.

    “Our ability to tap into JD.com’s advantages across logistics, big data, technology and customer service gives Wal-Mart a huge advantage in reaching China’s rapidly expanding consumer class,” Ben Hassing, senior vice president of Wal-Mart China e-commerce and technology, told WWD.

    “We look forward to further bringing together our strengths in digital and physical retail to take the customer experience in China to the next level.”

    The date, August 8, was chosen for its symbolic numerical links, the double 8. The number eight is considered a lucky number in the country.

    The two companies also confirmed plans to integrate supply chains, “to significantly improve delivery efficiency for customers, optimize delivery routes for JD.com and increase Wal-Mart’s inventory turnover rate.”

    The change allows customers to place orders online with JD.com, where then the system will find out if a JD.com warehouse or Walmart store is closer to the delivery address. From here, the order will dispatch a JD.com courier accordingly.

    The trial project will launch initially in Beijing, Shanghai, Guangzhou, Shenzhen, Chengdu and Wuhan.

  • Huawei maintains China smartphone lead

    Huawei maintains China smartphone lead

    Huawei maintained its lead in China’s smartphone market for the second straight quarter during Q2, while Xiaomi supplanted Apple to take fourth place, according to Canalys.

    Huawei shipped over 23 million handsets during the quarter, the research firm said. China’s smartphone market is now firmly dominated by local vendors, with Oppo taking second place after increasing its shipments by 37% year-on-year to 21 million, and Vivo taking third place with 16 million.

    Likewise, Xiaomi reported a strong 60% quarter-on-quarter growth in handset shipments to 15 million, taking over from Apple in fourth place. Xiaomi is achieving this momentum by focusing on low-cost handsets, according to Canalys research analyst Lucio Chen.

    “Xiaomi still offers the best value in the Chinese market, and it remains the preferred choice for price-conscious consumers. The online channel continues to be a key route to market for Xiaomi and this quarter saw it take the lead in the 618 online sales events across online retail platforms, such as JD.com and Tmall,” he said.

    The rest of China’s top ten smartphone vendors, including Apple, Samsung and Meizu all suffered annual shipment declines during the quarter.

    With the top five brands accounting for almost three quarters of shipments for the quarter, the smartphone market is showing signs of continuing to consolidate, Canalys said.

    Total shipments also fell 3% during the quarter to 113 million, putting an end to six consecutive quarters of growth.

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  • China Unicom’s mixed ownership pilot approved

    China Unicom’s mixed ownership pilot approved

    China’s National Development and Reform Commission (NDRC) has given approval for a pilot program involving opening investment in China Unicom to the private sector, to evaluate transitioning to a mixed ownership model for the market’s state-owned operators.

    In an announcement, Unicom confirmed that the NDRC has given in-principle approval for the pilot program.

    But the details of the pilot – such as the identities of the private investors, pricing terms and percentage of shareholding to be allocated – will still require approval from various ministries.

    While media outlets are reporting that Alibaba and Tencent are expected to lead the private investment in China Unicom, the operator stressed that the company has not entered any legally binding agreement with any potential investors. But the company did not explicitly deny that negotiations with the internet giants are underway.

    “[Unicom’s controlling shareholder] is not aware of the source of  information in those media reports and has not entered into any legally binding documents, including framework agreement or subscription agreement, with any potential investor,” the company said.

    The Chinese government is conducting the pilot as part of plans to evaluate opening China’s telecoms sector up to private investment to reform the ownership structure and competitiveness of Unicom as well as rivals China Mobile and China Telecom.

    Unicom was selected for the pilot because it is the least profitable of China’s big three operators.

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  • China Telecom expanding data center reach

    China Telecom expanding data center reach

    China Telecom is expanding its data center capacity in Hong Kong as part of the collaboration agreement with Global Switch signed in April.

    The company has added a new floor with its Shatin data center to increase server capacity, and has also arranged to build and operate the colocation areas for two of the new buildings from the in-construction Global Switch Tseung Kwan O (TKO) data center.

    The agreement with Global Switch is designed to allow China Telecom to tap into its partner’s extensive data center capacity outside of mainland China.

    The 45,000 square meter TKO data center will offer a power capacity of up to 70 mega-volt amps.

    It is expected to boast Tier 3 status and also provide access to local and international Tier 1 and Tier 2 carriers, and to boast connectivity to three subsea cables – the Asia-Pacific Gateway, the Asia-Submarine cable Express and the East Asia Crossing – due to its proximity to the TKO landing station.

    The facility is targeting LEED Gold and BEAM PLUS Gold energy efficiency ratings.

    China Telecom subsidiary China Telecom Americas has meanwhile expanded its network coverage in North America with three new PoPs, in Oregon and Illinois in the US and Quebec in Canada.

    The network expansion is aimed at bolstering the operator’s trans-Pacific proposition and helping the company stay ahead of growth in demand for bandwidth.

    “China Telecom is proud to be enhancing its Hong Kong data center portfolio with the expansion of its best-in-class Shatin facility and the addition of a new site at Tseung Kwan O in partnership with Global Switch,” China Telecom Americas President Joe Han said.

    “China Telecom’s latest investment in Hong Kong data centers and North America points of presence means our customers can expect reliable, low-latency, worldwide connectivity. This will enable them to deploy applications fast and flexibly.”

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  • Alibaba cafe without cashier attracts queue

    Alibaba cafe without cashier attracts queue

    An Alibaba cafe without a cashier attracted a queue of shoppers for its opening in Hangzhou. Entry into Tao Cafe is via smartphone scan through ticket gates similar to those at subway stations.

    Offering drinks, fast food and snacks, the 200 sqm store can accommodate 50 customers. To enter and make a purchase, shoppers need only a smartphone with Alibaba’s Taobao e-commerce app. The store’s e-shopping system developer, Alibaba subsidiary Ant Finance, has assigned a team to help customers.

    A woman shopper says she enjoyed the experience of buying a cup of coffee in the store. “Your profile picture is shown on the screen after you place an order. It also shows the wait time. There is no hassle of waiting for your name to be called like in ordinary cafes.”

    A tourist from Shenzhen says helpers told him to pick up goods slowly from the shelf so the system has time to confirm his selection. “We need to learn – it is a whole new shopping experience.” As he walked out of the cafe, his bill was automatically paid via the e-payment account on his smartphone.

    Ant Finance senior technical advisor Zeng Xiaodong says the cafe combines automated visual sensors and facial recognition to reduce error rates.

    All goods in the cafe are digitalised, he says. Each commodity, its placement on the shelf and its purchase are subject to digital recognition.

    “This store is our endeavour to explore new modes of brick-and-mortar retail combined with e-commerce,” says Alibaba CEO Zhang Yong.

    Theft test

    The system has been tested by technicians pretending to steal items, but the checkout machines recognised their selections and processed the charge.

    “It’s not about Alibaba wanting to open cafes, it’s about digitalising the footprints of visitors to an offline store,” says Alibaba Group chief marketing officer Chris Tung.

    He says offline retailers can improve by adopting online data capabilities to link the identity of the customers and optimise their shopping experience. “The more a user browses, the better the system understands their interests, and the better it can provide more relevant and personalised messages for them – it’s a healthy cycle.”

    Once retailers understand what their customers need online, the products can be allocated to the physical store.

    “The cafe is just a demonstration of what can be done for retail,” says Tung.

    Smart shopping has attracted attention after an unmanned 24-hour BingoBox convenience store opened in Shanghai last month. Customers must register in advance using social-media app WeChat or Alibaba’s mobile wallet app Alipay, then scan a QR code to enter the 10 sqm store, where goods are about 20 to 30 per cent cheaper than those in other convenience stores.

    Once customers have completed their purchase they scan another QR code to exit the store.

    BingoBox has raised US$15 million in funding to expand its business, and says only four staff members are needed to run about 40 stores.

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  • Abercrombie launches on Alibaba’s Tmall

    Abercrombie launches on Alibaba’s Tmall

    Abercrombie & Fitch has announced it is launching both its Abercrombie & Fitch and Abercrombie Kids brands on Alibaba Group’s Tmall this month. Abercrombie & Fitch Tmall is China’s largest platform for brands and consumers.

    Through Tmall, Alibaba reports reaching 454 million annual buyers. The core consumer is under 35 and shops primarily on their mobile devices. Abercrombie’s target customer is in their 20s and shops digitally.

    Pairing up with Tmall is a data driven move that should result in much needed financial success for Abercrombie as it continues to rebrand.

    Moving onto Tmall reveals insight into Abercrombie’s plans for chasing the Chinese consumer. Abercrombie recently opened a new retail concept flagship in Hong Kong’s Harbour City. Additionally, Abercrombie operates 10 retail stores across China.

    Abercrombie’s rebranding began with a revitalization of its retail concept. The brand describes its new retail concept as intimate and service oriented. To that end, Tmall offers the capabilities to make online shopping more individualized through marketing tools.

    Tmall offers live streaming options and big data options designed to personalize and streamline the shopping experience.

    “Alibaba Group places a strong emphasis on consumer engagement, which aligns with our focus on creating a unique online brand experience for our customers, as well as facilitating a seamless and frictionless shopping experience” said Fran Horowitz, Chief Executive Officer of Abercrombie & Fitch Co.

    Tmall has sold the Hollister brand since 2014. This month is the first time Abercrombie has put its namesake brands on the platform.

    Jessica Liu, President of Tmall Fashion, Alibaba Group said consumers both online and in China have “sought [the brand] out for some time.”

    Abercrombie will begin selling a full assortment of men’s, women’s and kid’s product on Tmall starting July 26.

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  • Apple Greater China has new leader

    Apple Greater China has new leader

    Wireless technologies team leader Isabel Ge Mahe has been appointed to the newly created role of VP/MD of Apple Greater China, reporting to CEO Tim Cook and COO Jeff Williams.

    “Apple is strongly committed to invest and grow in China, and we are thrilled Isabel will be bringing her experience and leadership to our China team,” says Cook. “She has dedicated a great deal of her time in recent years to delivering innovation for the benefit of Apple customers in China, and we look forward to making even greater contributions under her leadership.”

    As VP of Apple’s wireless technologies software engineering division for nine years, Ge Mahe has been involved in the development of cellular, Wi-Fi, Bluetooth, NFC, location and motion technologies for nearly every Apple product. She has also overseen the engineering teams developing Apple Pay, HomeKit and CarPlay.

    In China, she has worked with Apple’s R&D team and carrier partners to develop China-specific features for iPhone and iPad, including QR Code support, SMS fraud prevention and enabling the use of a phone number as an Apple ID.

    Born in Shenyang and fluent in Mandarin, Ge Mahe earned Bachelor and Master of Electrical Engineering degrees from Simon Fraser University in British Columbia. She holds an MBA from the University of California, Berkeley. She takes up her new role, in Shanghai, in the next few months.

  • Ajisen, Katrina Group sign So Pho deal

    Ajisen, Katrina Group sign So Pho deal

    Aiming to grow in China and enter the Hong Kong market, Singapore F&B company Katrina Group has signed an agreement with Big Benefit Group, a wholly owned subsidiary of Ajisen (China) Holdings.

    Under the deal, Katrina will hold a 30 per cent stake in the JV company, which manages snack bars, cafes, restaurants and other food services. It serves Vietnamese-style dishes under the brand So Pho in China and Hong Kong.

    Katrina founder/CEO/executive chairman Alan Goh says Ajisen is one of the largest restaurant chains in China. ‘This collaboration will extend our geographical reach in China and help us enter the Hong Kong market. It is a bold step in further strengthening Katrina as a regional F&B group.”

    Hong Kong-listed Ajisen China has nearly 700 restaurants in 120 cities and 30 provinces in China and Hong Kong, while Katrina Group, which specialises in multi-cuisine concepts, owns and runs 33 restaurants in Singapore under nine brands including Bali Thai and Streats.

    Ajisen China and Katrina will provide working capital for So Pho International of up to US$1.05 million and $450,000 respectively through an interest-free shareholders’ loan.

    Katrina will also trademark So Pho International in Mainland China with an exclusive right to sub-license and franchise the trade name of “So Pho”.

    “With our strong track record and Katrina’s brand development capabilities, we look forward to growing the So Pho brand in China and Hong Kong,” says Ajisen China founder/chairman/CEO Wai Poon.

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  • Commune Lifestyle parent Koda reports solid rebuilding

    Commune Lifestyle parent Koda reports solid rebuilding

    Koda, the parent of furniture retailer Commune Lifestyle, has reported a net profit of US$2.2 million for the nine months to the end of March, a 66.9 per cent increase over the same period last year.

    And the group’s gross profit margin rose to 27.7 last year from 23.6 per cent in 2014, and reversing two years of losses, the group had a net profit of $1.6 million for the financial year to June 30 last year. It attributes this to marketing, revised business strategies and restructuring.

    Koda is an original design manufacturer specialising in design-intensive household furniture for the upper middle class. Commune Lifestyle, led by the third generation of the founding Koh family, is a wholly owned subsidiary of Koda that runs four stores in Singapore, three distributor-retail (DR) stores in Malaysia and 35 DR stores in China, as well as one brand-in-store presence in Australia. It is planning to expand its DR network and set up another hub in eastern China.

    During the year to June 30, Commune added 17 DR outlets in China. There are more than 40 outlets, mainly in China.

    Meanwhile, the group has been streamlining. It has consolidated its production units, relocated factories out of China, disposed of the loss-making retail business Rossano in Vietnam, and disposed of certain non-core assets for cash.

    Koda is headquartered in Singapore with manufacturing plants in Vietnam (Ho Chi Minh City) and Malaysia (Johor and Senai). It sells to more than 50 countries, mainly Asia and the US.

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