Retail News CRM

Tag: China

  • Xiaomi eyes offline expansion

    Xiaomi eyes offline expansion

    Chinese smartphone vendor Xiaomi Corp unveiled a new smartphone with China Mobile Communications Corp on Thursday, as the company steps up efforts to expand offline retailing channels.

    China Mobile, the country’s largest telecom mobile carrier by subscribers, said it hopes to sell 30 million Xiaomi handsets this year, signaling a boost for Xiaomi, which is wrestling with declining shipments and mounting competition from rivals such as Huawei Technologies Co Ltd.

    Priced from 899 yuan ($136), the new phone, the Redmi Note 4, will be on sale at China Mobile’s 20,000 offline stores and more than 100,000 bricks-and-mortar retailing partners’ stores.

    Lei Jun, CEO of Xiaomi, said the company has sold more than 110 million smartphones under Redmi, a brand known for its cost-effectiveness. “The new phone is our latest effort to offer a quality smartphone that everyone can buy.”

    The move came as China’s online smartphone sales hit a ceiling, and market players are banking on bricks-and-mortar retail partners for growth.

    James Yan, research director at Counterpoint Technology Market Research, said it is highly possible to achieve the sales target, given China Mobile’s sprawling offline presence.

    “Telecom operators’ retail channels account for 30 percent of China’s total smartphone sales, and more than half of that are handled by China Mobile,” Yan said.

    The new phone’s good design and sophisticated body, better than most of Xiaomi’s previous phones, will also help boost sales. And the Beijing-based firm’s supply chain partner Wingtech Group is able to ensure an abundant supply of the new phone, he added.

    In 2015, China Mobile and Xiaomi jointly unveiled a smartphone called Redmi Note, whose total sales volume hit 27.5 million units, but that happened when Xiaomi was growing rapidly.

    The partnership between Xiaomi and China Mobile will also be expanded to Southeast Asia, as China’s smartphone market is reaching saturation point and local players are eyeing overseas markets for opportunities.

    Li Huidi, vice-president of China Mobile, said the company is making investments in India and Southeast Asian counties where Xiaomi has established a presence.

    “We will partner with hardware vendors such as Xiaomi to bring more domestic devices to overseas markets,” Li added.

    He did not disclose details, but analysts said it is likely for China Mobile to leverage its overseas investments or foreign partners to build retail channels for Chinese handsets.

    Lees ook:

    Lees ook:

  • Flying start for Innisfree China at Disneyland

    Flying start for Innisfree China at Disneyland

    Korean beauty brand Innisfree China, known for its natural ingredients, has come up with a fresh idea to promote its new store in Shanghai Disneyland.

    Using the “Jeju flying bike”, it is offering customers a virtual visit to the company’s home base of Jeju Island. They mount the bike and put on VR goggles for the journey, created by PostVisual.

    They “fly” from the 16.5 sqm store to the 1650 sqkm island, which is a Unesco World Heritage Site for its volcanic landscape. Through eye-tracking technology, the virtual tourists can fly around the island and “collect” natural ingredients such as canola blooms, green tea leaves and nutmeg.

    To create the 360deg aerial and underwater surroundings, PostVisual spent about three months producing the content, even building its own VR drone camera in-house.

    innisfree VR

    Thousands of visitors have already taken the virtual ride, and the concept will be rolled out this year to flagship stores in Hong Kong, Indonesia, Singapore and Vietnam as well as elsewhere in the US.

    Lees ook:

  • Why retailers should embrace showrooming

    Why retailers should embrace showrooming

    Trends eventually stop being trendy and either disappear into obscurity or become part of everyday life.

    The trends which end up only being fads often come in with a bang and leave with a thud, leaving embarrassing photos and fashions in their wake. Remember those 80s hairstyles?

    The other trends — the ones that create a whirl of buzz and actually manage to stick around — can often change social, cultural and political landscapes. When it comes to the world of retail, trends are often born and die in a single day. This isn’t without good reason.

    Consumers now control the retail landscape. Your competitors are now only a click or tap away. Lower prices, more sizes and dynamic shopping experiences are waiting in the shopper’s purse or pocket as they navigate your retail spaces.

    This specific shift in consumer behavior has led to one trend that has now become part of nearly every shopping experience.

    Love it or loathe it, showrooming is a behaviour that retailers need to embrace.

    Many retailers have taken a defensive stance against consumers visiting their physical stores to research items they find and often plan to purchase only online.

    Headlines encouraging retailers to “battle” or “combat” showrooming conjures images of war.

    Going against the tide of consumer behavior will rarely lead to success. Especially when you consider MasterCard’s recent Mobile Shopper study, which found that nearly one-third of shoppers in Singapore (31.9 per cent) will use their phones to research product costs and details while in a brick and mortar store.

    Understanding the reasons consumers want to showroom can help you to find ways to embrace this consumer behaviour and connect with your shoppers in a way that encourages them to buy when they are ready.

    Retailers must consider the catalysts for showrooming, the information consumers seek and how to position their brand as a source for everything they need to be an informed consumer.

    Let’s look at a few of these behaviours more closely.

    Research purchases

    A primary reason shoppers showroom is to research items they have discovered online. The knowledge that better deals and desirable products are so easily accessible has motivated consumers to become informed shoppers.

    Retailers can meet this showroomer need by ensuring product pages are optimised for mobile devices and that the information on these pages is comprehensive. Communicate product specifications as well as other value propositions that help your brand stand out. Are your materials locally sourced or all natural? Let your shoppers know! Have your handbags been carried on the red carpet? Share the photos!

    Help the in-store consumer to reconnect with the items they shopped online by making the shopping cart accessible on a mobile device and include details such as SKU, product number, brand, style, size and color as potential search criteria.

    Finding a lower price

    After viewing an item in your store, the shopper may try to find a lower price at one of your competitors. If price is not a differentiator, other shopper services could cause the showroomer to stray.

    Promote information about low price guarantees as well as return and exchange policies. Show perks such as repeat buyer discounts or loyalty program rewards.

    Tout services such as ship from store or in-store pick up at nearby locations. These also include low-price guarantees, in-store pick up, loyalty rewards and international shipping.

    phone, shopping mall, hand

    Look-alike items

    Many showroomers may use your app to locate an item in your stores. Give the shopper more reasons to buy from your brand by including product recommendations based on their shopping, buying and profile information.

    This level of customer intelligence is now more accessible to marketers and packs a lot of power to keep the showroomer engaged with your brand while helping to raise your average order value.

    Virtual store representatives

    Lastly, think of all the ways your store shoppers interact with your store staff.

    What questions do the shoppers ask? What concerns or problems do they encounter in your stores? Your site needs to serve as a virtual store representative by being making all of this information easily accessible.

    Consider how many times you’ve asked a store representative if they have an item in a different size only to find out they don’t have your size in stock. Now consider that 32 per cent of global respondents to PWC’s Total Retail 2016 study said they would be happier shoppers if they could check stock levels at other stores while in a store. That’s nearly one in three shoppers in your stores that want this kind of information.

    Make sure they can find answers! Additional areas to cover are product reviews, manuals, detailed specifications, installation information, warranties, demos, product videos… anything that answers the most commonly asked questions in your stores.

    Rather than seeing showrooming as a threat to your sales, accept the fact that this is how today’s consumer will shop — so find ways to use this behaviour to your advantage, keeping shoppers engaged.

    Shifting your perspective to empower today’s multi-device, multi-channel shopper will only help to boost sales and show your shoppers that you care.

    *Benjamin Glynn is managing director for Southeast Asia with Emarsys.

    Lees ook:

  • Foreign convenience stores in China to face lower-tier challenge

    Foreign convenience stores in China to face lower-tier challenge

    • Convenience store growth is surging, bucking the trend of weakening physical retail store sales. 7-Eleven is the market leader, though FT Confidential Research’s latest consumer brands survey found that other foreign chains were increasingly popular.
    • This is, however, a highly fragmented market and foreign chains will struggle to expand into lower-tier cities, where domestic operators offer greater competition, sometimes supported by local governments.
    • International operators are also coming under pressure from other big foreign retailers in China, while domestic newcomers are expanding aggressively in the belief that online-to-offline (O2O) services will help them seize market share and overcome short-term profitability issues.

    Convenience stores continue to eat into the retail market share of larger formats. In a second-quarter FT Confidential Research survey, 83.4 per cent of urban consumers described themselves as regular convenience store patrons, 0.9 percentage points up on our previous survey in the fourth quarter of last year, while the proportion regularly frequenting supermarkets or hypermarkets fell 1.2 percentage points (see chart).

    The convenience store format has been a standout in an otherwise gloomy market for bricks-and-mortar retailers. Though nationwide sales of fast-moving consumer goods rose 13.2 per cent last year, according to Kantar Retail, a consultancy, hypermarket sales slipped 0.2 per cent and sales at traditional, independent grocery stores fell 10.4 per cent.

    Convenience store chains are stealing market share, with store count growing an average 10 per cent each year from 2010 to 2015. Our survey found that 88.6 per cent of younger shoppers, aged 24-29, frequently go to convenience stores, up 3.4 percentage points from our survey six months ago. In contrast, the proportion of this cohort regularly going to supermarkets or hypermarkets fell 0.8 percentage points in that time.

    Despite growing demand, the convenience store market remains fragmented, with no national leader. The most popular chain was different in 10 of the 11 major markets in China, according to our survey (see chart).

    Beyond Shanghai

    Growth is concentrated in first-tier cities such Beijing and Shenzhen and certain second-tier cities. Shanghai, the biggest market by far, is now saturated, with store count increasing just 2.9 per cent in 2015, having shrunk in 2013, according to the China Chain Store & Franchise Association. Shanghai had one convenience store for every 3,466 residents, a far greater concentration than in Beijing (7,185 people per store) and Chongqing (28,846 people per store). Second-tier Harbin, Wuhan and Changsha were the three cities with the fastest-growing store count in 2015, while Beijing came in seventh (see chart).

    Foreign chains out in front

    Our survey found that foreign brands remain more popular than their domestic peers. Japanese brand 7-Eleven was the most popular, with 20.4 per cent of respondents saying they frequently shopped at its stores, up 1.1 percentage points from the fourth quarter of last year (see chart). The popularity of two other Japanese chains, FamilyMart and Lawson, also rose, up 0.8 and 1.2 percentage points, respectively.

    After years of losses, foreign brands may finally have found ways to consistently turn profits in China. Shanghai FamilyMart, a joint venture between FamilyMart Japan and Ting Hsin Group formed in 2004, turned a profit for the first time in 2013. This ¥745m ($7.4m) profit expanded to ¥1.5bn last year.

    FamilyMart’s clean, reliably stocked outlets appeal to white-collar workers, but it is the prepared fresh food options that have really proved popular. The company now has four factories preparing ready-made food in or around Shanghai and reportedly sells about 300,000 bento boxes each day in the city. Prepared fresh food makes up roughly half of the total sales of each FamilyMart store, according to Ting Hsin vice-president Wei Yingxing.

    Bottlenecks to expansion

    The nature of convenience stores makes brand loyalty tough to engender: is a Shanghai urbanite going to walk further to their favourite chain for something as basic as a bottle of water?

    This is helps explain why the expansion of foreign brands into lower-tier cities has been harder than they anticipated. In 2010, FamilyMart set a goal of opening 4,500 stores in China, but had only reached one-third of that by February 2016. Three years ago, Lawson targeted 1,500 stores in Shanghai and 500 in Chongqing by 2015. As of May 2016 it had opened just 506 and 111, respectively. Among the top 10 chains nationally, the market share of domestic chains has actually rebounded slightly since 2012, while the rapid growth of foreign chains has slowed, according to Kantar (see chart).

    Domestic competition tough to overcome

    Shanghai has provided domestic companies with a case study in how to compete against foreign entrants. Almost all big domestic convenience store chains have beefed up their offerings of ready-to-eat food products, mimicking FamilyMart’s success in Shanghai. Many are now accelerating store openings in areas dominated by foreign chains, while some have managed to poach middle managers from international companies.

    This competition from domestic chains is dragging on store count growth for the multinationals: the number of 7-Eleven stores in Chengdu dropped to just 56 by May this year from 87 in February 2013 (see chart). FamilyMart has also expanded only slowly in Chengdu. In contrast, local leader Hongqi has 1,543 outlets in the city, and reported a 15.2 per cent increase in operating revenue and a 5.3 per cent rise in net profits to Rmb170m ($26m) in 2015.

    The target demographic of foreign convenience stores is much smaller in second-tier cities than in the major coastal hubs, given lower incomes and different consumption patterns. In Beijing in 2015, the daily revenue of each 7-Eleven outlet was, on average, more than Rmb16,000. The equivalent figure in Tianjin and Chengdu rarely breaks Rmb10,000. This has forced foreign companies to be more strategic about where they open outlets in these cities.

    Government policy may also limit expansion. Since 2009, the Chinese government has banned retailers with foreign backgrounds from selling cigarettes nationwide, a business we estimate could account for a third of convenience store sales. In Shanghai, the municipal government also offers subsidies to state-owned firms, and in second-tier cities the relationship between local companies and local government is usually even closer.

    In response, Lawson has signed a franchise contract with Wuhan Zhongbai, authorising Hubei’s leading retailer to open Lawson convenience stores in the province — even though Zhongbai has its own convenience store chain, named Haobang. These sorts of tie-ups may be a solution for foreign chains to expand in the provinces, but maintaining service quality will prove a challenge.

    Here come the newcomers

    Furthermore, the market’s rapid growth is luring in new players. Large, established foreign retailers are looking to leverage their brand popularity and existing infrastructure. Carrefour, for example, has already opened 13 Carrefour Easy convenience stores in Shanghai. Germany’s Metro also recently opened its first two My Mart convenience stores in the city.

    Domestic entrants are even more aggressive. Quanshi has opened 270 stores in Beijing since it was established in 2011. In comparison, 7-Eleven had 192 stores in Beijing as of May 2016, having entered the market in 2004.

    Quanshi’s ampm brand (not to be confused with BP’s chain of service stations) is one of a swath of Chinese operations, across numerous industries, banking on O2O services to drive growth. The chain claims that short-term profitability issues from its model can be overcome once economies of scale are achieved. Companies like Quanshi see O2O services, including package storage but also delivery, as the future of the convenience store business.

    The commercial viability of this strategy is so far unproven. A deal between JD.com and Taiyuan Tangjiu, a Shanxi chain, in which the online mall hosts the convenience store’s online presence while its couriers provide one-hour delivery, has not been a success.

    Given such intense competition, we believe the convenience store market will remain fragmented and locally focused. For now, it is unclear that a national leader will emerge, as 7-Eleven has in Japan. In second- and third-tier cities, lower incomes and local protectionism mean that foreign chains may take over bustling, high-rent street corners, but will struggle to establish a dominant position.

     

  • SAP China teams up with Alibaba Cloud

    SAP China teams up with Alibaba Cloud

    SAP China and Alibaba Cloud have teamed up to launch three cloud-based SAP services to Chinese customers by the end of the year.

    The companies have revealed plans to launch in-memory computing platform SAP HANA Cloud Platform and two other services in 2016.

    The two other services are the cloud-based SaaS CRM solution Hybris Cloud for Customer, as well as SAP Business ByDesign, integrated cloud suite tailored for mid-sized businesses.

    Alibaba Cloud president Simon Hu said the partnership is aimed at addressing the growing ubiquity of cloud services.

    “Cloud computing has become the new infrastructure for businesses around the world,” he said. “Through in-depth collaboration, Alibaba Cloud and SAP will join hands to bring more world-class cloud products with highly reliable and strong capabilities to companies in different industries.”

    SAP Greater China president Mark Gibbs said the company achieved triple-digit growth in the region from its cloud business in the first half of 2016.

    “The cloud business is a key part of SAP’s digital framework and one of the driving forces behind our rapid business growth in China.” he said.

    “The three cloud-based solutions that we are about to launch with Alibaba Cloud will further expand SAP’s cloud footprint in China, and meet the needs of more Chinese enterprises. It will help Chinese companies to effectively embrace the opportunities brought by digital transformation.”

  • China to fuel VF Corporation brands

    China to fuel VF Corporation brands

    Multibrand fashion group VF Corporation sees Asia – and especially China – as the primary driver of growth in the years ahead.

    VF Corporation brands include Vans, Kipling, Lee and The North Face.

    The US-headquartered company says it is focused on expanding geographically to take advantage of its scale in markets around the world.

    “The Asia Pacific (APAC) market, and in particular China, represent robust growth opportunities for VF, according to the company’s business lead,” the company revealed in an online newsletter.

    “Asia Pacific is an important region for business development and remains a priority focus for the company,” said Aidan O’Meara, VF’s Asia Pacific president. “Our plan is to continue to focus on locally relevant innovation, further invest in demand creation and leverage our scale and capabilities as ‘One VF’ to fully capitalise on the growth opportunities and take market share.”

    VF’s APAC business continues to expand. In 2015, currency neutral revenues in the region were up 10 per cent reaching US$1.2 billion.

    China, which accounts for roughly half of APAC revenue, has seen consistent, strong growth from the country’s three largest brands: The North Face, Lee and Vans. In particular, Lee in China has experienced consistently strong growth over the years for the company, with product innovations driving recent success.

    Denim leads the charge in China

    VF brands currently maintain presences in more than 170 Chinese cities. And, that number is expected to increase in coming years.

    “We see growth potential in a market with increasing affluence, a burgeoning middle class and increasing sophistication and demand for quality jeanswear,” O’Meara said.

    The company sees a competitive edge in the market, particularly at Lee. VF launched Lee as the company’s first owned business in China in 1995.

    “Statistics show that while jeans ownership is about eight pairs per person in North America,” O’Meara said. “In China, it is less than one pair per person, and if you look at India, there is still a lot of room as jeans ownership averages about three pairs per person.”

    O’Meara noted there was a time when many jeans manufacturers rested on their laurels. However, as competition intensified, many consumers lost excitement with the products available on the market, opening a door for an innovative new product.

    Lee saw this opportunity and put its research and development to the test. The resulting JadeFusion Denim has been a resounding success and garnered a Bronze Innovation Edison Award in the Materials Science category.

    JadeFusion immediately accounted for 13 per cent of China’s denim sales in its first season on the market in the spring and summer of 2015.

    “Lee exemplifies VF’s continuous innovation as one of the key strategies which differentiate us from our competitors,” O’Meara said.

    Lees ook:

    Lees ook:

  • New Arrival app helps Chinese shop abroad

    New Arrival app helps Chinese shop abroad

    A new fashion app, New Arrival, aims to introduce Chinese travellers abroad to lesser-known boutiques abroad.

    The New Arrival app serves as a platform and guide for brick-and-mortar stores Chinese shoppers might otherwise miss in their travels.

    Founded by Howell Hu, the app has two sections. One part focusses on “new arrivals” from on-ground stores, letting users browse products with a swiping feature. Shoppers swipe right to like a product and see more like it, swipe left to “pass” on the product, and swipe down to add it to their shopping cart.

    From there, they can either access more information about the store or arrange to make the purchase directly on the app via Alipay. Users can also browse using a navigation system to shop by category.

    The other section of the New Arrival app lets users tour shops by city. A “nearby” option lets travellers find stores on the go, or they can search by city (destinations include Beijing, Shanghai, New York, Paris and Hong Kong).

    More than 200 stores are presently collaborating with the app, all of them either multi-brand stores or individual designers. While most of the countries included are major tourist destinations, China is also represented as well as several destinations in Asia, such as Johor Bahru in Malaysia.

    The New Arrival app allows returns within one week, and the stores themselves handle shipping.
    Available for iPhone, the app will have an Android version next month.

    Lees ook:

  • Private-label deal for E-mart Korea

    Private-label deal for E-mart Korea

    Discount seller E-mart Korea has signed an agreement to supply its private-label items to Metro China.

    It is introducing four items from its No Brand range, to be sold from next month. It is the first time for E-mart to export to an overseas offline store.

    E-mart’s private-label products already sell in Mongolia and Vietnam. Sales of its No Brand range at its Ulaanbaatar branch, which opened last month, have already reached 600 million won (US$533,000), accounting for about 7 per cent of total sales. No Brand contributed 3 per cent of sales at its Vietnamese outlet, which opened in December.

    Introduced in April last year with nine items, No Brand now has more than 300 products, from butter cookies to car window wipers, and posted 63.8 billion won turnover in the first half of this year.

    Metro is a German retailer that is the third-largest franchise globally following Walmart and Carrefour. It has more than 2200 outlets in 33 countries, with 88 in China.

    Lees ook:

    Lees ook:

  • Ikea Group China launching eCommerce trial

    Swedish home furnishings retailer Ikea Group China will launch into eCommerce in Shanghai and start selling its products online within the next couple of weeks.

    As it is a pilot program, delivery services will be limited to Shanghai initially. All its ready-to-assemble furniture, appliances and home accessories, except for food and green plants, will be available.

    If the trial is successful, Ikea plans to roll out its eCommerce services across China as part of its multi-channel retailing strategy. It does not have any stores in China’s third- and fourth-tier cities, but in May Ikea established a pickup and order point in Wenzhou, Zhejiang province. The stores in nearby Ningbo will provide goods for that service.

    In its latest financial year, Ikea China had sales revenues of 11.7 billion yuan (US$1.76 billion), jumping 19.4 per cent year-on-year. About 83 million customers visited its stores, up 20 per cent from the previous year. Ikea’s websites also had more than 67 million individual visits, a 25 per cent increase.

    Ikea opened three new stores in China this year, in Chengdu and Suzhou in Jiangsu province, and Foshan in Guangdong province. It says it will keep to its plan of opening three new stores in China every year.

    Lees ook:

    Lees ook:

    Lees ook:

  • China still strong for Lenovo Group

    China still strong for Lenovo Group

    While sales fell 9.8 per cent in China for technology giant Lenovo Group for its first quarter ending June 30, the country accounted for 28.4 per cent of the company’s worldwide sales.

    Consolidated sales reached US$2.9 billion, and pre-tax profit margins were flat at 4.8 per cent amid softening PC demand.

    Lenovo says its mobile business is moving the portfolio to higher price bands and improving user experiences in China. Data-centre revenues grew 14 per cent year-over-year, a premium for the market, supported by growth from hyperscale and contributions from new partnerships.

    Sales in the Asia Pacific region reached US$1.7 billion, 16.7 per cent of the worldwide figure, while pre-tax profit margins were down 1.2 points to 1 per cent, mainly because of a weaker PC market in Japan and the impact of currency fluctuation.

    PC market share again edged up, by 0.4 points to reach 16.4 per cent. The mobile business outgrew the market in key countries, including India and Indonesia, while the data centre group continues to work on improving profitability.

    Overall revenue for Lenovo was US$10.1 billion, down 6 per cent, with a net income of US$173 million, up 64 per cent.

    During the quarter Lenovo’s core markets saw either slow growth or year-over-year industry declines: PCs were down 4.1 per cent and tablet shipments fell 11.1 per cent, while server industry shipments were flat and smartphone markets grew 0.7 per cent.

    “Going forward, in PCs we will focus on high-growth segments and leverage industry consolidation,” says chairman/CEO Yuanqing Yang. “In smartphones, we will leverage innovative, differentiated products and continue to shift to higher price bands to drive growth and turn around this business.”

    Lenovo’s Data Center Business Group (DCG), which covers servers, storage, software and services sold under both the Lenovo ThinkServer and the System X brands, continues to face stiff challenges in mature markets, it strengthened its lead in the market in China, increasing revenue 14 per cent.

  • Segway China launches flagship store

    Segway China launches flagship store

    ‘Short-distance transport’ brand Segway China has launched a flagship store in Beijing.

    Segway COO Zhao Zhongwei and VP for Asia Pacific sales Huang Chen has issued licences to eight dealers from across greater China.

    segway store

    With a minimalist interior design, the Beijing store’s dominant tone is set by the black-and-white Segway VI. Cambered elements and intelligent lighting systems create different colours and a futuristic atmosphere.

    Covering 629 sqm, the store has five zones – demonstration, test drive, after-sale services, VIP reception and an office. The demonstration zone features Segway and Ninebot‘s latest offerings as well as and futuristic products like the Segway Robot and Puma.

    The Segway flagship is at the Beichen Century Center.

    Segway China launches

    Attending the opening ceremony were Segway Group investor Yu Quan and global sales agents. Speakers included Segway CEO Gao Lufeng and investor representatives Hu Haiquan and Chen Yufan.

    Lees ook:

  • Outlet malls booming in China as department stores feel the pinch

    Outlet malls booming in China as department stores feel the pinch

    Designer outlet malls are sprouting up all over mainland China, even as department stores find themselves struggling amid a slump in retail sales.

    At least 17 new outlet malls are scheduled to open in China in the second half of 2016, according to a report by Outlet Sight, which tracks the industry. Some developers are betting on outlet malls because they typically offer off-season or factory excess goods priced at a discount to the in-season products sold by the same brands in department stores.

    “We think designer outlets are more defensive than high-street retail,” said Chris Reilly, Asia-Pacific managing director at TH Real Estate, a property fund that manages nearly US$100 billion of real estate in Asia, Europe and the US. “Their fundamentals are better in terms of supply and demand.”

    China’s department store sector has been battered in recent years by sluggish sales growth and declining profits, with store closures intensifying since 2015. Offline sales at the mainland’s top 50 retailers declined 3.1 per cent year on year in the first half of 2016, according to figures from the National Commercial Information Centre of China.

    However, the discount mall sector appears ripe for strong growth; for a country with China’s population and spending power, there are relatively few factory outlet malls – just 40 at present – compared with as many as 300 in the US, said Zhong Beichen, chief executive of outlet developer Beijing Capital Juda, which has already opened four such outlets, in Beijing, Hainan, Zhejiang and Jiangsu.

    “We aim to open outlets in more than 20 cities by 2020 and become the largest outlet operator in China,” Zhong told the South China Morning Post. “Discount malls can perform well despite economic ups and downs” because they offer customers cheaper price points, he said. “When the economy expands, people shop to dress nice, but outlets will still be the first choice for those seeking affordable luxury in an economic slowdown.”

    Juda was spun off from state-owned property developer Beijing Capital Land Ltd and listed in Hong Kong in 2015.

    The boom is attracting developers and investors to the fray.

    London-based TH Real Estate launched an US$850 million fund in China, with two Italian village-themed outlet malls in Wuqing in Tianjin city and Shanghai.

    “Our target shopper is the Chinese household earning more than US$20,000 a year,” said TH Real Estate’s Reilly. “This demographic group is already the largest in the world, and we expect the number to more than double over 10 years with the rise of the Chinese middle class.”

    With TH Real Estate’s Florentia Village in Shanghai 90 per cent occupied, and its Florentia Village Wuqing full to capacity, Reilly said he is confident the China Outlet Mall Fund can grow to US$2 billion by 2020. Four more Florentia Village malls are slated to open in Chengdu, Wuhan, Chongqing and Qingdao by 2017.

    Factory outlets face stiff competition from online retailers, but have the advantage of providing a complete experience, Juda’s Zhong said.

    “Our strategy is to build outlets in places with beautiful scenery to attract families for the shopping experience,” he said, citing their 110,000 square meter outlet in Beijing’s Fangshan District, which is located near a forest park.

    Themed malls, such as the Florentia Village brands, are also becoming popular. Covering 90,000 square meters and with 3,000 car parking spaces, Florentia Shanghai reconstructs scenes of Florence including an Italian-styled city plaza, paved streets, porches, fountains and luxury brands such as Versace, Ferragamo and Zegna.

    “Shoppers like to visit outlets for the discounts, they want to try on designer brands, but what’s more important, it’s like a day out,” Reilly said.

    -Originally written by Summer Zhen, SCMP

    Lees ook:

    Lees ook:

    Lees ook:

  • Qihoo 360 launches new advertising initiatives

    Qihoo 360 launches new advertising initiatives

    Chinese internet company Qihoo 360 is rolling a number of initiatives to help CMOs better connect with Chinese netizens.

    The company, named by iResearch as the number one provider of internet and mobile security products in China based on user base, is looking to make advertising effective in China’s fast-growing online market.

    Many global brands are looking to capture the potential of China’s large pool of netizens. With global brands competing with large local brands, CMOs need to fine tune their digital strategy in a market where most consumers prefer to shop online, and increasingly via their mobile phones.

    Qihoo 360 has built one of the largest open internet platforms in China to monetize its massive user base, which is 99.6% of Chinese netizens, primarily through online advertising and through internet value-added services on its open platform. Through its Qihoo 360 International Advertising Unit, the company services over 250 advertising business customers in Hong Kong and overseas markets.

    The new product updates include Huajiao, a livestreaming app showcasing user-generated content that is now available in Hong Kong. Another product, 360 Mobile Security, will soon be available for advertising placement in Hong Kong for selected advertisers, allowing them to precisely target Chinese tourists during their travels.

    Six business core business strategies were also announced for 2H 2016, including “more innovative products”, “more professional support in planning”, “more responsive customer service”, “more comprehensive technology upgrades”, “more powerful voice on behalf of the market”, and “more effective tools and systems.” they aim to help CMOs to target Chinese online customers more effectively.

    “Today, we’re pleased to showcase the power of our big data analytics services, together with the announcement of our latest business strategies and future direction – assisting brand development and boosting advertising effectiveness with branded content,” said Dr. Michael Yang, chief business officer of Qihoo 360.

    “Qihoo 360 connects with 96.6% of Chinese netizens. We aim to help Hong Kong and overseas brands effectively and accurately connect with the right audience in the China market through a comprehensive product portfolio,” he said.

  • Lin Jia Convenience Store Debuts in Times Square

    Lin Jia Convenience Store Debuts in Times Square

    Lin Jia Convenience Store, the dark horse in China’s retail market, has shown remarkable growth recently, thanks to the retailer’s particular focus on excellence in customer service and innovation. The Chinese shop recently debuted on the large billboard overlooking New York’s Times Square, giving the world a glimpse of what a Chinese retailer looks like.

    Lin Jia Convenience Store, the dark horse in China’s retail market, debuts on the large billboard overlooking New York’sTimes Square

    The chosen theme “We are not just a neighbor, we are a family friend” clearly conveys Lin Jia Convenience Store’s brand philosophy of bringing the world to each shopper’s doorstep. The famous crossroads in the heart of New York City, one of the planet’s most popular destinations, has been drawing tourists from the four corners of the globe for many decades.

    In a globalized era, the world’s most well-known intersection has become a platform where leading companies can showcase their strength and where Chinese brands can announce their global expansion plans and successes.

    Catering to a wide range of demands and providing the most shopper-centric housekeeping services to help customers effortlessly maintain their preferred lifestyle

    As part of its commitment to becoming the most conscientious lifestyle service provider for shoppers, Lin Jia has paid utmost attention to both the range of services offered and the quality of those services. The store sells a wide range of fresh and instant foods, snacks, imported products and daily necessities, 24 hours a day, 7 days a week, catering to the whims of even the most demanding consumer.

    The range and variety of foods are designed to please every shopper, regardless of preferences or dietary restrictions. The store also provides a variety of user-friendly services, including laundry, printing, free charging booths for phones and tablets, free Wi-Fi, Lakala Kiosks for offline e-payments, self-service government lottery ticket kiosks and free toilets.

    As part of being the most customer-centric lifestyle products and services retailer, Lin Jia remains open all night. Providing products and services for customers round the clock is in line with the underlying meaning of its management concept encapsulated in the tag line “Lin Jia, Life+” and the basic guarantee underlying every product and service that is offered. The retailer provides the shopper with a quiet and comfortable shopping environment.

    Leading the industry trend, differentiating itself from the competition and accelerating brand development

    As the standard of living in China improves, the pace of day-to-day life accelerates, and expectations that shoppers have of their retailers continue to climb. In the face of this trend and ongoing industry competition, it becomes ever more important for convenience stores to provide a full range of services, while introducing innovations and differentiating themselves from the crowd.

    Lin Jia has already distinguished itself among its peers in the world of retail, by having continually enhanced and continuing to further enhance the quality of its services as well as bring in new innovations, delivering a constantly improving shopping experience to each and every person who enters the store.

    Innovative services create the best shopping experience

    Unlike other convenience stores, in terms of the interior layout Lin Jia Convenience Store installed highly directional speakers for announcements to ensure a quiet in-store environment and fully sealed off the kitchens to avoid having the smell of food being cooked wafting through the sales aisles, assuring the shopper of an end-to-end pleasant shopping experience during every minute spent within the store.

    At the same time, services offered by Lin Jia, including laundry, recharging stations for tablets and cell phones as well as online shopping with 30-minute delivery, maximizes the convenience of modern day living. In effect, Lin Jia has succeeded in filling in for the family housekeeper, with the same kind of personal touch and level of care.

    Lin Jia Convenience Store, a newly emerging force in the convenience retail sector, is committed to strictly adhering to the best practices that are expected of any top-notch retailer, enhancing branding through the excellence of its products and services, and serving as a guide to consumers for identifying the best services and products to support a quality life style.

    The retailer’s appearance in New York’s Times Square shows that China’s convenience stores are ready to take their place on the international stage as they prepare to enter markets beyond the borders of the home country.

  • Carrefour China concentrating on convenience

    Carrefour China concentrating on convenience

    Carrefour China says it will concentrate on convenience store development for the rest of this year.

    The French-headquartered retailer has been losing market share in the hypermarket segment and has closed about 30 stores during the past three years. It is trying to find a new growth model for the competitive Chinese model according to IGD analyst Catherine Ellwood and IGD Singapore program director Shirley Zhu.

    Hypermarkets will still play a role for Carrefour, particularly in western and central China, they say. The retailer is changing focus because of the increasing challenges for hypermarkets.

    Carrefour reportedly plans to open 40 to 50 convenience stores in Shanghai as well as about 15 Carrefour Easy stores by the end of the year.

    Rapid urbanisation, smaller families and rising affluence levels mean Chinese shoppers are demanding more convenient solutions, says the IDG team.

    “Convenience stores present a huge growth opportunity, but winning in this sector under rising costs and fierce competition is not an easy task.”

    However, Carrefour does have the advantage of existing sourcing and supply-chain capability for fresh products. Daily delivery from its own fresh distribution centre ensures availability and quality.

    A typical Carrefour Easy store has a floor size of 250 to 300 sqm with plenty of room for fresh produce displays. The stores act as pick-up locations for online shopping, and have kiosks to provide various services. There is also free Wi-Fi and charging devices in-store.

    For mobile payment alone, the stores accept Alipay, Apple Pay, Samsung Pay and WechatPay.

    Carrefour opened an extra distribution centre in June. The 21,000 sqm centre, in Dongguan, Guangdong province, will help with expansion in south China. Carrefour aims to have six distribution centres by the end the year.