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Tag: China

  • Slower sales for Chinese New Year goodies, Chinatown retailers say

    Slower sales for Chinese New Year goodies, Chinatown retailers say

    Food takes centrestage during Chinese New Year, like most festive celebrations. But in the lead up to the occasion this year, retailers selling festive goodies say business is more lacklustre compared to 2015.

    Family-run bak kwa (sliced barbecued pork) stall Bee Kim Heng has seen festive retail sales drop by 10 to 20 per cent compared to last year. Based at People’s Park Food Centre, Bee Kim Heng – which is run by Mr Teo Ah Thin, 81 – has been in operation for almost 50 years.

    “We suspect it’s the economy, it’s because of the retrenchments that are going around in the market,” said Mr Damien Teo, who helps his father out during busy periods like Chinese New Year.

    Mr Teo, who is in his 30s, added: “A lot of our business is very dependent on regular customers. Some of the regular customers, for example – in the year before, they’d buy 3kg, maybe 5kg. This year, some of them have cut down in terms of the quantity they buy. They just want to save up a bit, I guess.”

    Similarly, fruit and nut supplier Tian Ran has experienced a 30 per cent drop in sales for the festive period. “A lot of people of browsing and tasting, but fewer are buying. I think it’s due to the bad economic situation,” said a Tian Ran employee, who only wanted to be known as Mr Fang.

    Mr Fang has been selling peanuts and melon seeds – traditional Chinese New Year snacks – for the past eight years. While this year’s takings are poorer than last year, the 40 year-old said he feels things are not as bad as in the aftermath of the 2008 global financial crisis.

    Less than a few hundred metres away, in the annual Chinatown Festive Street Bazaar, employees running a temporary waxed meat stall also opined that buying sentiment is poor.

    “We’re mainly in distribution, but we have set up a stall at this bazaar for many years. This year, sales are down about 30 per cent,” said a stall employee, who only gave his name as Mr Liang.

    The 56-year-old who been in the business for 30 years, believes that caused shoppers have held back due to the rainy weather, and a poorer economic climate.

    A MIXED PICTURE, OVERALL?

    Outside of the Chinatown area – the epicentre of Chinese New Year shopping – other consumer businesses appear to be faring a little better.

    For example, Paradise Group, which will have over 20 restaurants in operation on the first and second day of the Chinese New Year period, told Channel NewsAsia these restaurants are already 80 to 90 per cent booked for the first day.

    Hotel Fort Canning also expects to “sell-out for the season”, as it caters to both foreign visitors and local staycationers. In an email reply, a hotel spokesperson said: “Demand for our rooms are typically higher during this extended period of festivities and the hotel usually runs at full capacity.”

    Meanwhile, online travel agency ZUJI has recorded a 17 per cent year-on-year increase in staycation hotel bookings during the Chinese New Year period, with an average spend of S$190 to S$220 per night.

    “We’re also seeing more 4-star hotels being booked on ZUJI this year, as compared to last year which had an almost even split of both 4 and 5-stars bookings. This could possibly be due to Singapore travellers being more budget conscious,” said Ms Chua Hui Wan, CEO of ZUJI Singapore.

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  • Chinese shoppers in South Korea shun luxury for local brands

    Chinese shoppers in South Korea shun luxury for local brands

    Chinese visitors to South Korea are buying less from global luxury mainstays like Louis Vuitton and Chanel in favor of cheaper homegrown brands, as young, independent travelers make up a bigger share of tourists.

    Lured by the “Korean Wave” of culture exports, from soap operas and K-pop music to food and fashion, price-conscious younger Chinese visitors are seeking a more authentic and less expensive shopping experience.

    South Korea trails only Thailand as an overseas destination for Chinese travelers, whose heavy retail spending has helped make South Korea the world’s largest duty free shopping market.

    The emphasis on value will put further pressure on global luxury retailers already grappling with slowing sales in China after years of skyrocketing growth, as a government crackdown on graft and lavish spending bites.

    “You can buy those big brands everywhere, and it is actually cheaper to buy those brands in other countries compared to the prices in South Korea,” said 21-year-old Zhu Xin, who was shopping at the Stylenanda store in Hongdae, a Seoul neighborhood popular with young adults.

    “Now that we are here, we should buy local brands,” she said.

    Average prices on best-selling items from global luxury brands in South Korea are cheaper than they are in mainland China, but still cost more than in Europe, Singapore and Dubai, according to HSBC data.

    At downtown Seoul duty free shops run by Hotel Lotte’s, Lotte Duty Free and the Samsung Group’s Hotel Shilla, LG Household & Healthcare’s Whoo and Amorepacific’s Sulwhasoo cosmetics were the top-selling brands in 2015, overtaking Louis Vuitton, Chanel and Richemont’s Cartier, store data shows.

    “This doesn’t necessarily imply that luxury retailers have to launch cheaper stuff but it does necessarily imply that they have to be more relevant at every price point,” said Erwan Rambourg, an analyst at HSBC in Hong Kong.

    The number of Chinese tourists to South Korea dipped 2.3 percent in 2015 to about 6 million due to the deadly Middle East Respiratory Syndrome (MERS) outbreak. However, brokerage CLSA says Chinese inbound traffic growth rebounded from September and should jump by 28 percent in 2016. The South Korean government expects a record 8 million Chinese visitors this year.

    NEW GENERATION

    Chinese tourists to South Korea are getting younger: the share of those in their 20s and 30s rose to 46.1 percent last year, from 40.9 percent in 2013, according to the government-run Korea Culture and Tourism Institute.

    While older Chinese tourists typically travel in groups where they are ferried between shops catering to them, Chinese millennials tend to be better-informed about what they want, travel independently and spend less on shopping.

    “I use my mobile phone to research what products to buy in South Korea,” said 20-year-old Chinese tourist Liu Yuting. “Many Chinese girls like South Korean products, because most of them are cheap and cute.”

    At Lotte Department Stores, a chain owned by Lotte Shopping Co Ltd, average spending per Chinese visitor fell to 500,000 won ($412) in 2015 from 900,000 won in 2013, although the surge in overall visitors made up the difference, an official with the chain said.

    “Whereas past generations blindly purchased luxury goods, the younger generations have a more price-conscious consumption pattern,” KB Investment & Securities analyst Yang Ji-hye said.

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  • A jar of British fresh air sells for 80 pounds in China

    A jar of British fresh air sells for 80 pounds in China

    A British businessman is shipping something insanely unique to China and making fortune out of it. It might sound insane for some but not for Leo De Watts, who is believed to have made thousands of pounds by exporting fresh British air to China. Report suggests that the elite and well to do Chinese customers are more than happy to buy fresh air for a cost of £80 per jar. The business started off just a week back has till date sold more than 200 jars of fresh air, which, considering the nature of the business, is a huge success.

    The 27 year old Leo De Watts collects his ‘raw material’ from British countryside and ships to Beijing and Shanghai which are among the most polluted cities in the World. Wealthy Chinese are willing to buy packaged fresh air despite the fact that each jar could only offer them a few seconds of fresh air.

    The air products that are put on sale include fresh air collected from Dorset, Somerset and Wales, each one having unique qualities, Leo De Watts claims in his website. Fresh air jars are been branded under the label Aethaer. His website says: “Aethaer is filtered organically by nature as it flows between the leaves of woodland trees, absorbs pristine water as it passes over babbling brooks and forest streams, and is lovingly caressed as it rolls over and between mineral rich rock formations, after which it is blown up over vistas of untouched beauty to where the Aethaer is collected and bottled.”

    There are many who buys the product just to treasure it as a memorabilia. Makeshift nets are used to collect the air which are later packaged using a process Watts describes as ‘air farming’. Watts is planning launch a ‘Chinese New Year special’ fresh air pack which contains 15 jars and sells for £888.

     

     

     

     

     

     

     

     

     

     

     

     

     

     

     

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  • Alibaba and Amazon China gear up for the Chinese New Year

    Alibaba and Amazon China gear up for the Chinese New Year

    Feb. 8 will be the most important holiday this year in China, as it marks the Chinese New Year. Family members will come together to celebrate with holiday feasts and most workers will enjoy a one-week vacation, many returning to their rural homes from big cities for the festivities. A lack of delivery personnel during this period is leading many sellers on China’s biggest e-commerce marketplaces to shut down, but Amazon China says it will keep delivering in big cities.

    Many merchants on Alibaba Group Holding Ltd.’s marketplaces Taobao and Tmall have announced that they will stop taking orders Feb. 4-Feb. 14 because shipping companies are unable to deliver orders.

    But Alibaba, whose online marketplaces account for more than three-quarter of online retail purchases in China, organized a major promotion in advance of the New Year’s vacation, the Ali Chinese New Year Shopping Festival, which lasted from Jan. 17-23.

    Alibaba reports consumers purchased 2.1 billion holiday items from its websites during the sale, mostly food and gifts. 15% of the orders came from rural residents, a focus of the promotion, and sales at the 12,000 Taobao service centers in rural areas were 331% higher than average, the company says.

    “By hosting this online shopping event, we enabled rural customers to access an extensive range of New Year goods from home and abroad, while making agriculture products from rural China more available among urban customers.” Alibaba Group CEO Daniel Zhang said at the event kickoff meeting.

    Meanwhile, Amazon China, No. 5 in the Internet Retailer 2015 China 500, says it will continue to fulfill orders during the holiday period in 20 big Chinese cities, including Beijing, Tianjin and Shanghai. In fact, the largest overseas e-retailer operating in China says it will extend delivery hours to midnight during the holiday in order to allow Chinese online shoppers to get their orders on time.

    Amazon China operates 13 fulfillment centers in China and employs its own fulfillment staff. The subsidiary of Amazon.com Inc. offers same-day delivery in 123 Chinese cities and second-day delivery in over 1,400 Chinese cities and towns.

    For a fuller report on the openings for foreign companies to sell online in China, see “Open Door Policy” in the November 2015 issue of Internet Retailer magazine.

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  • Waitrose café replaces China cups and plates with paper crockery

    Waitrose café replaces China cups and plates with paper crockery

    Waitrose customers have furious to boycott a store over its plan to ditch china plates and replace them with paper crockery. Clients of a branch of the general store in Chichester, West Sussex, have apparently complained to administration in what has been named the most middle class row ever.

    As though that wasn’t sufficiently horrifying, the branch additionally picked to swap out its couches for wooden seats.

    The issues all started when the bistro moved from inside the Waitrose grocery store to the adjacent building, which previously housed a Costa espresso.

    Because of reasons of convenience, the café started to serve its hot beverages in paper glasses and replaced its “shocking” couches with simple to-clean plastic seats.

    A cafe staff part said that a dishwasher would need to be introduced at the new site before china mugs could be used.

    A Waitrose representative said: ‘The criticism of our clients is importent to us and the remarks we have gotten will shape any future arrangement.’

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  • China Jo-Jo Drugstores launches remote hospital network in Zhejiang

    China Jo-Jo Drugstores launches remote hospital network in Zhejiang

    China Jo-Jo Drugstores has launched the first Internet-based Remote Hospital Network platform in Zhejiang Province, China.

    The virtual physician platform will be offered onsite at its retail pharmacy locations.

    This would allow the company to partner with virtually any accredited physician or hospital in providing medical consultation to customers who would then have immediate access to printed prescriptions and pharmacy dispensary services at the drugstores.

    China Jo-Jo said it is currently in discussion to secure exclusivity for the Internet hospital platform in Zhejiang province and is in negotiations with an accredited regional hospital to provide physician services on the platform through a profit sharing agreement.

    Lei Liu, Chairman and CEO of China Jo-Jo, said roughly 90 percent of China’s pharmacy prescriptions are handled by hospital dispensaries. The goal of the program is to increase transaction volume at China’s Jo-Jo retail locations while driving healthcare reform and innovation in the retail and online pharmacy business in China.

    “In alignment with the recent healthcare reform in China, we continue to meet the needs of consumers by increasing products and services that expand prescription dispensary services from the hospital system into local communities,” he said in a news release. “As the Chinese government pushes for healthcare reform we will continue to provide ways to increase access and to provide competitive pricing for prescription drugs, especially for residents who do not live in major cities.”

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  • General Motors China Sales Up 7.3 Percent In January 2016

    General Motors China Sales Up 7.3 Percent In January 2016

    General Motors and its joint venture partners in China reported 421,023 new retail vehicle sales during January 2016, a 7.3 percent increase on a year-over-year basis.

    “This year, GM and our joint ventures will continue to offer an unmatched choice of products across market segments along with new services to meet the needs of China’s car buyers,” said GM Executive Vice President and GM China President Matt Tsien. “Our new models, such as the Cadillac CT6 and Chevrolet Malibu XL, will be strong additions to our portfolio.”

    Increasing demand for SUVs and luxury vehicles continued to support GM’s robust sales last month. The Buick Envision and Baojun 560 led the growth in sales of GM’s SUVs in January, with demand growing 188 percent-year-over-year.

    Chevrolet

    Chevrolet sales in January declined 27 percent year-over-year to 56,133 units.

    The automaker attributes the drop to the end of the fuel economy subsidy for the Sail. Chevrolet sales are expected to improve with the arrival of several new models in 2016, including the Malibu XL on February 27.

    Buick

    Buick sales in January grew 39 percent year-over-year to 138,907 units.

    Sales of the brand exceeded 130,000 units for the first time, led by the Excelle GT and Envision SUV. Sales of the Envision more than doubled on a year-over-year basis.

    Cadillac

    Cadillac sales luxury cars increased 16 percent from a year earlier to 8,337 units, making January the sixth consecutive month of double-digit sales growth.

    Sales of the ATS-L advanced 14 percent. The Cadillac CT6 full-size prestige sedan is the full-size top-of-the-range prestige sedan was launched on January 27th and is offered at Cadillac dealerships across China. It is first model manufactured at SAIC-GM’s new Cadillac plant in Shanghai.

    Baojun

    Sales of Baojun vehicles jumped 101 percent from a year earlier to 78,367 units.

    The Baojun 730 MPV and Baojun 560 SUV led their respective segments, while the 2016 Baojun 630 family sedan with enhanced styling and upgraded performance was launched at the end of last month at a lower price.

    Wuling

    Wuling sales in the Chinese domestic market decreased 17 percent from a year earlier in January to 139,227 units. The brand was impacted by continued contraction of the mini-commercial vehicle market.

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  • Baccarat crystal opens in Beijing

    Baccarat crystal opens in Beijing

    French fine crystal manufacturer Baccarat has opened its first Chinese flagship store, in Beijing’s China Central Place complex.

    A stainless-steel mirror at its storefront draws attention to the two-storey boutique outlet, designed byGilles & Boissier of France.

    Attending the opening ceremony were Baccarat crystal global CEO Daniela Riccardi and Beijing Guohua Real Estate chairman Fang Chao. Singer Lin Yi Lun was among the guests. The Beijing opening follows the company launching a luxury hotel in New York last year to mark its 250th anniversary.

    Baccarat’s history goes back 200 years, and it represents the French art of living, according to theChina Central Place website. The new store offers an extensive product display, and includes many elements of the Baccarat flagship store in Paris, including a bar. Its decor also combines French and Chinese elements, with a Zenith 64-light chandelier illuminating the crystal works on display.

    Baccarat store Beijing

     

    Some of the products being offered are limited edition, including the Sun Mirror designed by Georges Chevalier in 1948, a set of crystal chess pieces by Oki Sato, founder of the Japanese design studioNendo, vases by Dutch designer Marcel Wanders, and panthers by French sculptor Jan Tésar.

    Baccarat’s store is on the ground floor of China Central Place, which is in the Trade Center in Jianguo Road, Chaoyang District. Among its international brands the mall also features Apple, Meissen, Rimowa and Tesla.

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  • Logistics operators intensify e-commerce focus in Thailand and China

    Logistics operators intensify e-commerce focus in Thailand and China

    Global logistics companies continue to pile into the Asia e-commerce market, with Damco launching a China solution and DHL expanding its growing presence in the region deeper into Thailand.

    DHL is building a 32,000 square foot, central distribution center in Bangkok and a network of over 20 depots located throughout Thailand to provide full coverage across the country. To meet increasing business demands, the integrator plans to more than double the number of depots in Thailand by 2017 and expand its fleet primarily in two-wheel vehicles that can operate more efficiently in the traffic situations in Thailand’s major cities.

    “The Thai e-commerce market is expected to more than triple in size to $3.93 billion between now and 2020 and with this investment, we are well positioned to support the growth of e-commerce businesses in Thailand,”  said Thomas Kipp, CEO, DHL eCommerce.

    Only 1.7 percent of total sales in Thailand were obtained from e-commerce, compared to more than 10 percent in China, said Malcolm Monteiro, CEO, Asia Pacific, DHL eCommerce.

    “We see major strategic opportunities for e-commerce growth in Thailand, particularly with the Asean Economic Community which is expected to increase the movement of goods within the region,” Monteiro said.

    “Despite e-commerce already being a billion-dollar sector with extremely rapid adoption, Thailand’s e-commerce share of the retail market is still relatively low compared to other high-growth economies.”

    Damco has focused its latest service offering in China where it is launching an end-to-end e-commerce solution, from inbound goods management and consumer order receipt to final delivery.

    Damon Gu, Damco’s head of supply chain management for Asia, said the large and rapidly growing Chinese market for online shopping was a magnet for both importers and domestic producers.

    “Online shopping events such as China Singles Day are already creating world-beating levels of activity for e-retailers locally in China, as well as globally,” he said. “Discerning Chinese consumers in this highly competitive marketplace expect the highest standards of fulfilment. This new program helps companies to guarantee that level of service.”

    Using its 1,500 local staff and 26 locations in China, Damco will arrange delivery to end-consumers in more than 1,600 Chinese cities.

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  • Alibaba Beats Profit, Sales Estimates on Rural China Push

    Alibaba Beats Profit, Sales Estimates on Rural China Push

    Alibaba Group Holding Ltd. beat analysts’ estimates for revenue and profit after an online-sales extravaganza and expansion into rural China helped the nation’s biggest e-commerce operator defy a slowing economy.

    Sales rose 32 percent to 34.5 billion yuan ($5.2 billion) in the three months ended December, the company said Thursday, compared with the 33.2 billion-yuan average of estimates compiled by Bloomberg. Net income more than doubled to 12.5 billion yuan, topping estimates of 10.3 billion. Shares rose more than 5 percent in premarket trading in the U.S.

    Record revenue during November’s annual “Singles’ Day” promotion drove transaction growth as Alibaba captured more sales from mobile e-commerce, which is replacing shopping from computers. Billionaire Chairman Jack Ma is trying to tap the spending power of the countryside with the Internet expected to blanket all of rural China by 2020, according to the China Academy for Rural Development at Zhejiang University.

    “Alibaba continues to grow as urbanization and an ever more ambitious middle class continues to drive up China’s cost of living and consumption,” said New York-based Brian Buchwald, chief executive officer of Bomoda, a consumer intelligence company with a focus on the Chinese market. “At the heart of it, is continued investment in mobile and simplifying payments for virtual and actual purchases.”

    Mobile Monetization

    Longer-term, Ma is investing in video content, media, on-demand services and cloud computing to generate new sources of income as he takes the e-commerce company global. Shares of Alibaba closed Wednesday at $69.54 in New York. The stock has declined 14 percent this year after a 22 percent slump in 2015.

    Gross merchandise volume in its China retail marketplaces rose 23 percent to 964 billion yuan in the quarter, while mobile GMV almost doubled to 651 billion yuan.

    More than half the purchases through Alibaba’s e-commerce platforms were done from mobile devices. While it’s crucial that Alibaba serve the growing ranks of consumers acquiring a taste for shopping through smartphones and tablet computers, smaller mobile screens typically generate less advertising revenue.

    “Alibaba is on track to gain more shoppers in rural areas and smaller cities in China,” said Li Yujie, an analyst at RHB Research Institute Sdn in Hong Kong. “The sales promotion in November also gave the company a boost.”

    The Nov. 11 Singles’ Day promotion logged a record 91.2 billion yuan in sales, a 60 percent increase from the year earlier. A third of buyers made purchases from merchants and brands outside of China during the one-day event.

    Overseas Push

    Ma has set a goal of getting 50 percent of the company’s revenue from beyond China with Michael Evans, a former Goldman Sachs Group Inc. partner, named president in August to lead the global push.

    Cloud computing revenue rose 126 percent to 819 million yuan, Alibaba said. Its AliCloud unit is staking $1 billion on the belief that demand for processing and storage from governments and companies will boost growth during the next decade as its tries to compete with Amazon.com Inc. in computing services. It plans to work with Nvidia Corp. on services and artificial intelligence, recently opened a second U.S. data center and plans its first in Europe this year.

    Alibaba is also expanding in the online-to-offline services market. Tencent, Alibaba and Baidu Inc. are competing for supremacy in a local-services industry primed for growth as more people turn to their smartphones or the Web to order food, schedule beauty treatments or hire domestic helpers. Users of those services could rise 29 percent to 400 million by next year, with sales expected to reach 7.28 trillion yuan by 2017.

    Last year, the company backed the merger of Didi and Kuaidi to create China’s biggest ride-hailing application.

    Investors have highlighted escalating scrutiny about the sale of counterfeits on its websites, such as Taobao Marketplace, as a key risk for 2016. Though the company has said it’s committed to combating fakes, cleaning up its image next year is crucial to Alibaba’s goal of winning the trust of merchants and shoppers overseas.

    In December, the U.S. Office of the Trade Representative warned the company it had to do better to stay off the “Notorious Markets” blacklist it escaped only in 2012. The federal agency issued a stern warning that Alibaba’s efforts to fight piracy and respond to complaints would be monitored in the coming year.

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  • Apple turns to India as Chinese market weakens

    Apple turns to India as Chinese market weakens

    As red-hot sales in China show signs of cooling, Apple Inc executives are touting India’s growing appetite for iPhones.

    In an earnings call in which the company reported meager iPhone growth and forecast its first revenue drop in 13 years, the Indian market stood out as a rare bright spot for Apple.

    Sales of the company’s flagship smartphone climbed 76% in the country from the year-ago quarter, Apple CFO Luca Maestri said on the call.

    And Apple CEO Tim Cook suggested more growth is on the horizon, noting the median age in India is just 27.

    “I see the demographics there also being incredibly great for a consumer brand, and for people that really want the best product,” Cook said. “We have been putting increasingly more energy in India.”

    Growth in India is a tantalizing prospect as Apple grapples with the economic downturn in China, its second largest market. While revenue in Greater China rose 14% in the last quarter, Apple is beginning to see a shift in the economy, particularly in Hong Kong, Maestri told Reuters in an interview.

    India cannot immediately offset Apple’s woes in China, said analyst Neil Shah of Counterpoint Technology Market Research. The company averaged only about 450,000 smartphone shipments per quarter in India in 2015, compared with more than 15 million per quarter in China, Shah said.

    What’s more, nearly 70% of smartphones sell for less than $150, leaving just a sliver of the market for Apple’s high-end phones. The company’s smartphone market share stands at less than 2%, Shah said.

    But the Indian market seems to be turning in Apple’s favor. With 4G coverage spreading, Indian consumers will likely be more open to investing in smartphones, Shah said.

    Young consumers are already willing to spend heavily on the device at the center of their digital lives. As in China, Apple products are coveted status symbols.

    “The love for the iPhone is there,” said Carolina Milanesi, chief of research and head of US business at Kantar Worldpanel ComTech, a consumer research firm.

    Apple’s next task is expanding distribution in India, where its products are sold through third-party resellers. The company has filed an application with India’s Department of Industrial Policy and Promotion to open its own stores, an Indian official told Reuters earlier this month.

  • Alibaba’s global marketplace attracts 5400 foreign brands

    Alibaba’s global marketplace attracts 5400 foreign brands

    U.S. goods are among the best sellers on Alibaba’s Tmall Global shopping site. More than 5,400 foreign brands from 53 countries are selling goods on Tmall Global, an online marketplace Alibaba Group Holding Ltd. launched in 2014 to take advantage of China’s relaxed rules on consumer purchases from foreign websites.

    Of those 5,400 brands, 4,300 have never sold in China, according to a just-released 2015 China Cross-Border Consumption Report from Tmall Global and Chinese consulting firm CBN Data. Tmall Global allows retailers and brands without a China business license to take orders from Chinese consumers and then send the products through Chinese customers.

    Sales on Tmall Global increased 179% in Alibaba’s fiscal third quarter ended Dec. 31, according to Alibaba’s recent quarterly report. Alibaba did not report the value of sales on the marketplace for foreign goods.

    The new report says U.S. companies are most often ranked among the top 10 in various products categories on Tmall Global, followed by brands from Japan, Germany, Australia and Korea. The fastest-growing categories on Tmall Global are children’s products, nutritional items, cosmetics and snacks.

    Among the retailers selling on Tmall Global are U.S. department store chain Macy’s Inc., the U.K.’s House of Fraser and Sainsbury’s, and Metro Group of Germany. Consumers can also buy Huggies diapers from Kimberly Clark, food products from Danone of France (whose products are marketed under the name Dannon in the United States) and cosmetics from Japanese brands Kao and Shiseido.

    Alibaba has worked with government agencies in 13 countries to set up “pavilions” featuring goods from those nations. For example, the U.S. Department of Agriculture has cooperated with Alibaba on a program to sell cherries from the northwestern United States on Tmall Global.

    During the big Singles’ Day sales that Alibaba promotes every Nov. 11, 95 million consumers visited Tmall Global and 30 million made purchases, the report says.

    Alibaba’s chief rival in China, JD.com Inc., also has created an online shopping mall for foreign brands called JD Worldwide. Among the companies to recently launch on the JD site are luxury brands Tod’s and TAG Heuer.

    China in recent years has made it easier for Chinese consumers to buy goods for their personal use online from foreign companies. The government recently increased the maximum purchase allowed under these cross-border e-commerce regulations from 10,000 yuan ($1,519) to 50,000 yuan ($7,597) per transaction, according to a report on the Chinese luxury market by U.S. consulting firm Bain & Co.

    JD is No. 1 Internet 2015 Retailer China 500, which ranks retailers by their online sales in China. While Alibaba’s China marketplaces account for more than three-quarters of online retail purchases in China, it’s not ranked in the China 500 because Alibaba is not the merchant of record for those sales, instead providing a platform for other merchants to sell.

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  • The Simpsons store: a new retail phenomenon?

    The Simpsons store: a new retail phenomenon?

    The Simpsons is about to expand offscreen into a retail store network, with two flagships confirmed as the first global outlets for the popular animated US TV series.

    Beijing and Shanghai will be home to the world’s first The Simpsons stores because the 27-year-old show is familiar to Chinese audiences and Simpsons products have already been a success, reportsChina Daily. A network of 100 retail stores is planned to follow.

    Opening in the fashion district of Sanlitun in March, the Beijing store will be the first bricks-and-mortarSimpsons store in the world. The second store will be launched in Shanghai in June, according to 20th Century Fox Consumer Products president Jeffrey Godsick. Its location has yet to be announced, but it is expected to be in a high-traffic mall similar to the one in Beijing.

    Fox launched Simpsons products in China in collaboration with fashion brands nearly three years ago. It started to team up with Chinese retailers 18 months ago before deciding to open the stores last year to tap growing interest.

    Godsick says the products released in China sold out quickly, and there were routinely a three-hour queue for people to enter the fashion brand store in Shanghai that launched Simpsons products.

    Already, Walt Disney has led the way by opening its first flagship store in Shanghai’s Pudong New Area in May last year. The world’s largest Disney store, it offers more than 2000 categories of products.

    “China’s movie and television industry will bring a lot of investment opportunities for derivative product sales,” Professor Zeng Hongshan of Zhongnan University of Economics & Law has told theChina Economic Herald.

    Derivative products of Star Wars have created about $30 billion worth of business, and in 2013 and 2014 alone generated about $4.6 billion for Disney, China National Radio has reported.

    Meanwhile, the Simpsons stores will cover about 250 sqm and offer about 200 products including T-shirts, hats, jackets, pants, cellphone cases, lifestyle accessories, stationery, shoes, sneakers and socks.

    Between 25 and 50 per cent of the products will be sold exclusively through Simpsons stores, says Godsick.

    “We will continue to design individual consumer products for each of our movies and TV shows in China, and ultimately grow our brand as a company,” he says.

    In October 2014, a Simpsons World app was launched in China, allowing fans to watch all 500-plus episodes of the series for free.

  • Apple China bracing for fall

    Apple China bracing for fall

    Even as it announces record revenues and net profit, Apple says it has sold fewer iPhones in the first quarter and is bracing for a fall in sales in its critical Chinese market.

    “It’s becoming more apparent that there are some signs of economic softness,” says CFO Luca Maestri. “We are starting to see something that we have not seen before.”

    He admits the tech giant is working in a “very difficult macroeconomic environment” and projects a further slide in iPhone sales for the second quarter, reports the International Business Times. Apple’s projected revenues indicate the company’s sales are about to fall for the first time in 13 years.

    Apple’s sales stumble was masked by the record corporate quarterly profit. Conlumino analyst Neil Saunders takes a close look at the latest Apple report in our international section.

    Apple sold 74.8 million iPhones in the first quarter, ending December 26, which is the first full quarter of sales of the iPhone 6S and 6S Plus. The 0.4 per cent growth in shipments was the lowest since the product’s launch in 2007.

    Maestri says that although Apple China revenue rose by 14 per cent in the quarter, the company is starting to see a shift in the economy, particularly in Hong Kong.

    Apple had record figures in the first quarter for both net profit ($18.36 billion, up from $18.02 billion) and revenue (up 1.7 per cent to $75.87 billion). Greater China accounted for 24.2 per cent of the total revenue, more than all of Europe combined.

    An indication of Apple’s popularity in China can perhaps be gauged by the dwindling number of fake Apple stores in the southern city of Shenzhen, some of which have been taken over by unauthorised outlets for local phone brands.

    In a street of gadget stores, copycat Apple outlets were not uncommon, complete with the latest iPhone models and accessories and uniformed staff. Only four months there were more than 30, but about a third of these have gone, reports Reuters. Instead of iPhones, some of these shops are now selling Huawei, Meizu, Oppo and Xiaomi phones.

    In fact, the iPhone has become a “street cellphone” – a Chinese term that means a widely available and popular product that lacks novelty value.

    “Using an iPhone is hardly something you can show off to people now,” a Shenzhen retailer told Reuters.

    In the US, iPhones are still popular, and 60 per cent of people who had an iPhone before the launch of the iPhone 6 have yet to upgrade, says the company.

    Meanwhile, the Indian market stands out as a rare bright spot for Apple with a growing demand for iPhones, reports The Indian Express.

    Sales of the company’s flagship smartphone climbed 76 per cent in India from the year-ago quarter, according to Luca Maestri.

    Apple CEO Tim Cook has suggested more growth lies ahead with median age in India being 27 years.

    “I see the demographics there also being incredibly great for a consumer brand,” he says. “We have been putting increasingly more energy in India.”

    India cannot immediately offset Apple’s woes in China, says analyst Neil Shah of Counterpoint Technology Market Research. Apple averaged about 450,000 smartphone shipments a quarter in India last year, compared with more than 15 million a quarter in China.

    Also, nearly 70 per cent of smartphones sell for less than $150, leaving  a slim market for Apple’s high-end phones. Its smartphone market share stands at less than 2 per cent, says Shah.

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  • Shanghai Disney Resort Launch of huge Disney theme park in China lifts stocks

    Shanghai Disney Resort Launch of huge Disney theme park in China lifts stocks

    The launch this coming June of Shanghai Disney Resort, which will be one of the largest theme parks in mainland China, is the first upbeat topic in a long time for the country which has been swayed by economic slowdown and the stock market plunge.

    Meanwhile, Hong Kong Disneyland — some 1,200km southwest of Shanghai and which celebrated its 10th anniversary last year — is concerned that the new Disneyland in mainland China could result in a decline in visitors in its home turf.

    Walt Disney of the U.S. and Shanghai Shendi Group of China, which are jointly building Shanghai Disney Resort, said Jan. 13 that the first phase of the theme park will open on June 16. The announcement boosted shares in Shanghai Jinjiang International Hotels Development, the operator of nearby hotels, and real estate developer Shanghai Jinqiao Export Processing Zone Development. These companies are expected to benefit greatly from the launch of the theme park. The stock price of Shanghai-based China Eastern Airlines, which partners with Shanghai Disney Resort, also soared on the Hong Kong stock market.

    Nearly 10 years from the plan, five years from the start of construction and two years behind the original plan, the dream of the Shanghai economic community will finally come true. Shanghai Disney Resort — which will be the sixth in the world and the third in Asia after Tokyo and Hong Kong — will be equipped with hotels and commercial complexes, with the construction cost totaling $5.5 billion.

    Structural shift

    Stock market players predict the theme park will see more than 12 million visitors in its first fiscal year, easily surpassing Hong Kong Disneyland’s 7.5 million in 2014. The numbers are expected to jump to 40 million a year once the third phase of the park is complete. The numbers could top the 31.3 million visitors to Tokyo Disneyland and Tokyo DisneySea in 2014.

    Major Chinese brokerage Haitong Securities expects Shanghai Disney Resort will “boost the city of Shanghai’s annual retail sales by 4%,” on the assumption of 15.6 million visitors and the daily average spending of 700 yuan ($106) per visitor in the first fiscal year. The theme park will also been seen as a test of whether China can shift from a manufacturing- and infrastructure-based economy to a service-driven economy.

    Meanwhile, the Hong Kong stock market was once buoyed by the Disney boom. During the period from the end of October 2004 to the opening of Hong Kong Disneyland on Sept. 12, 2005, the stock prices of luxury hotel operator Shangri-La Asia and jewelry store operator Chow Sang Sang Holdings International surged 37% and 48%, respectively, on expectation that the opening of Hong Kong Disneyland would help boost tourist numbers. The share price of Macau casino operator Galaxy Entertainment Group also jumped 120%, and the benchmark Hang Seng Index rose 16%.

    However, the share prices of retail and leisure companies in Hong Kong have remained sluggish, as the number of mainland visitors to Hong Kong has declined due to the Chinese government’s anti-corruption campaign and growing anti-China sentiment in Hong Kong.

    In a survey of mainland Chinese members conducted by U.S. travel information website operator Travelzoo on their most preferred travel destination in 2016, Hong Kong was ranked 32nd, down from 23rd place, losing out to the 31st-ranked Africa.

    Mainland-dependent

    In addition to such unfavorable trend, officials of Hong Kong Disneyland are concerned they may have to compete with their Shanghai counterpart for customers.

    Hong Kong Disneyland posted its first profit in fiscal 2012, hit by the 2008 global financial crisis and the 2009 swine flu pandemic. Its revenue base is not stable and is becoming more dependent on mainland visitors. The total number of visitors was up more than 60% to 7.5 million in 2014, from 4.6 million in 2009. The number of mainland visitors surged more than 120% during the same period, with their ratio to total visitors up from 36% to 48%.

    Comparing the share prices of Shanghai Disney Resort-related companies and retail and leisure companies in Hong Kong with the end of 2012, when the construction of Shanghai Disney Resort began full swing, property developer Shanghai Jinqiao Export Processing Zone Development and Shanghai International Airport, the operator of the two international airports in Shanghai, saw their stock prices jump 70% and 110%, respectively. On the other hand, the stock prices of Shangri-La Asia and cosmetics retailer Sa Sa International Holdings in Hong Kong fell about 60% to 70%.

    A spokesman for Hong Kong Disneyland stressed to Nikkei Quick News that the company is proud to be one of the top tourist attractions in Hong Kong over the last decade, and they strive to provide customers from around the world with a whole new experience. All eyes are on whether the two Disneylands in Hong Kong and Shanghai can coexist and prosper.

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