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Tag: China

  • Kering ratchets up legal fight with Alibaba

    French-headquartered luxury brand owner Kering has unsuccessfully sought to fast track its legal suit against Alibaba after what it considered “greatly troubling” comments by Jack Ma.

    Kering, which owns Gucci and Yves Saint Laurent among others, filed suit against the Chinese eCommerce giant in May after it considered more passive efforts to get Alibaba to stop selling counterfeit versions of its goods on its websites were not bearing fruit.

    Last week Kering has asked a US judge to waive the mandatory obligation of mediation between the two parties, citing a quote by Ma in a magazine article.

    Kering’s lawyers say the company was “greatly troubled” by Ma being quoted in Forbes saying there was no chance of settling.

    “I would [rather] lose the case, lose the money… But we would gain our dignity and respect,” Ma was quoted saying.

    Kering’s lawyers argued if this is indeed Ma’s position, mediation would be futile.

    But Judge Kevin Castel disagreed, on Monday urging the parties to continue with mediation.

    “Needless public comments can undermine talks. Yet public positions and positions in confidential talks have been known to vary… The Court strongly recommends that the parties proceed to mediation,” he wrote in an order.

    Kering maintains Alibaba is a giant conduit for counterfeiters and alleges the company has knowingly made it possible for traders to sell fake good on its sites.

    According to a letter to the judge, seen by Reuters, Kering’s counsel said of the interview: “It leaves the impression… that Alibaba‘s request for mediation was not made in good faith, but rather as a tactic to delay this case and to force Plaintiffs to expend resources spinning their wheels in an expensive and time-consuming mediation.”

    An Alibaba spokesman Bob Christie said Ma had made the comments prior to Kering agreeing to Alibaba‘s proposal to mediate.

    “If they want to return to the path of litigation, instead of mediation, we will vigorously defend our legal rights and reputation,” he said in an email to Reuters.

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  • Ecommerce offers a cheaper and faster way to market in China

    Ecommerce offers a cheaper and faster way to market in China

    Todd Fryhover, president of the Washington Apple Commission, joined China’s Singles Day celebration for the first time, hoping to sell 1.2m apples from Washington State in 24 hours.

    To help him out was the marketing juggernaut of Alibaba, the Chinese ecommerce company, where Washington apples are sold through branded website Tmall, one of a number of foreign food brands that are finding a ready market in China amid health scares over domestic produce.

    Singles Day, which began as a student celebration of singledom in the early 1990s, was reinvented by Alibaba in 2009 as a mass festival of conspicuous consumption, and more and more foreign companies are joining, hoping to use the holiday as a marketing exercise to get their brands out to the Chinese public.

    Mr Fryhover wants everyone in China to have “a repeatable, wonderful experience on Washington apples”. China is number six on the list of 60 countries that import apples from Washington’s 450 growers, but he thinks it will be number one by next year.

    He may be right. By midnight, as a video billboard in Alibaba’s Beijing auditorium showed, $14.3bn of merchandise had been bought via Alibaba’s platforms in 24 hours.

    Western companies are increasingly turning to online commerce, a cheaper and faster way to get to market than setting up store chains or penetrating the opaque retail market in China.

    To do this they are learning to love China’s internet conglomerates, informally known as BAT — Baidu, the search company, Alibaba and Tencent, the social media and gaming company. The three have begun to dominate economic life in China with amazing speed, doing everything from retail to finance to transportation, and moving into healthcare and even agriculture.

    In just a few years, the BAT conglomerates has been able to monopolise every aspect of daily life that could conceivably be put on the web and sold to the public. “They all want to own the customer, they want to be with them every second of the day, when they watch a video, chat to their friends, buy groceries, or go to a restaurant” says Chris DeAngelis from the Beijing-based Alliance Development Group.

    China’s internet giants are becoming what analyst Anne Stevenson-Yang of J Capital Research calls “tech Keiretsu”, referring to the national champions that dominated the Japanese economy in the 20th century with interests in multiple industries. “When companies are this big in China, the difference between public and private is not that important,” she says. “For all intents and purposes these companies have become the ministry of the internet.”

    But fierce competition means foreign sellers have many options for courting Chinese middle class buyers who are looking to buy imported goods abroad due to concerns about home-made counterfeit goods.

    Alibaba offers a number of options for sellers, including the free eBay-like platform Taobao, which is basically an online flea market. Most big brands set up on Tmall, which resembles an Amazon market place, a platform where big brands can set up stores and have more control over their sales and supply chains. Tmall’s first store from a fortune 500 company was Procter & Gamble, launched in 2008, which has grown 100 times since then, according to P&G vice-president Jasmine Xu.

    This year on Singles Day Ms Xu says that P&G made its first Rmb100m ($16m) in six minutes, compared with eight hours last year. “[Tmall] is a key platform to drive brand building in addition to sales,” she says.

    Some merchants have been loath to list on Alibaba, however. It gets vast online traffic, but the pressure to discount and the prevalence of fakes means it is “hard to protect a brand on Tmall,” says one consultant.

    But there are plenty of alternatives. JD.com, Alibaba’s rival, which is increasing its market share, has attracted a number of brands to its online store.

    China in many ways is more switched on to the internet than other countries which have had it for longer– Jim James

    Meanwhile, waiting in the wings is Tencent’s social media app WeChat, which has more than 500m users and is growing rapidly. Fearful of flooding the app with advertising and products, Tencent has been holding back on “monetising” WeChat.

    But advertising on WeChat is just one way of getting attention, and many companies have found they can win huge marketing success simply by using WeChat for word-of-mouth marketing.

    Fans of English country living, for example, can join a WeChat group devoted to Aga cookers, the iconic English oven brand, watch videos about cooking on an Aga, swap messages about it, and, thanks to the software which embeds the store in the chatroom, even buy one on impulse.

    “WeChat is unusually versatile; its better than Facebook, better than WhatsApp for marketing,” says Jim James, head of EastWest Public Relations in Beijing, which designed the Aga WeChat group.

    “China in many ways is more switched on to the internet than other countries which have had it for longer.”

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  • Online Shoppers Rose in China, Supported Alibaba’s Revenue Growth

    Online Shoppers Rose in China, Supported Alibaba’s Revenue Growth

    According to eMarketer, China and the US accounted for ~55% of the global Internet retail sales in fiscal 2014. It also mentioned that China and the United Kingdom have a higher proportion of “online-to-total retail sales compared to the US.” It’s important to note that ~27.5% of China’s population bought goods and services online in fiscal 2014 while 10% of the total retail transactions were through the online mode.

    In comparison, 73% of the United Kingdom’s population made online transactions. E-Commerce accounted for 13% of the overall retail sales in fiscal 2014. While the United Kingdom is positioned eighth in total retail sales, it’s third in global online retail sales.

    part2

    Alibaba, Amazon, and eBay will look to capitalize on the huge potential of rising online sales. This could be positive for their revenue and bottom line.

    Online shoppers rose in China

    According to eMarketer, there were 148 million online shoppers in China in 2010. The shoppers accounted for 11% of the population and 32% of the total Internet users in the country. By the end of fiscal 2013, the number of online shoppers in China grew to 302 million. The shoppers accounted for 22% of the population and almost 49% of total Internet users in the country. By the end of fiscal 2020, the online shoppers will likely to grow to 700 million. Alibaba saw its revenue rise from $1.8 billion in 3Q13 to $3.5 billion in 3Q15.

    Amazon is part of the iShares U.S. Consumer Services ETF (IYC) and the First Trust Dow Jones Internet IndexSM Fund (FDN). It accounts for 6.80% and 11% of the ETFs, respectively.

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  • China’s Retail Sales Rose in October

    China’s Retail Sales Rose in October

    China’s total retail sales of consumer goods rose 11.0% year-over-year (or YoY) to 2.8 trillion yuan in October. The data indicated better-than-expected growth in retail sales and a slight improvement from September’s rise of 10.9%.On a year-to-date (or YTD) basis from January to October, the total retail sales of consumer goods reached 24.4 trillion yuan, up by 10.6% YoY.

    The sale of mobile phones, building materials, and household products led to the strong growth in retail sales.

    Chinas Retail Sales Continue to Rise 2015-11-17Enlarge Graph

    A rise in retail sales is a step toward the transition of the Chinese economy from an export-oriented to a consumer-driven economy. This is highly recommended because export orders are falling due to weak global demand. This is the aim of Chinese authorities as well. However, with the slowdown in Chinese local and foreign sales, an increase in retail sales comes as a surprise and a bright spot in the Chinese economy.

    E-commerce played a major role in driving up retail sales. From January to September, the national online retail sales of goods and services grew 34.6% YoY to 3.0 billion yuan, according to the National Bureau of Statistics of China.

    Some of the leading players in China’s e-commerce segment are Alibaba Group Holding, Baidu, JD.com, NetEase, and 58.com.
    Urban retail sales of consumer goods rose 10.8% YoY to 2.4 trillion yuan in October. On a YTD basis, urban retail sales rose 10.4% YoY to 21.0 trillion yuan.
    Rural areas have become a major source of retail sales growth. Retailers are focusing on rural China to increase the penetration of e-commerce. In October, rural retail sales rose 12.2% YoY to 0.38 trillion yuan. On a YTD basis, they rose 11.8% to 3.4 trillion yuan.

    The Clough China Class A ETF (CHNAX), the Guinness Atkinson China & Hong Kong ETF, and the Eaton Vance Greater China Growth Class A ETF (EVCGX) have more than 10% exposure to the consumer discretionary sector. So a rise in retail sales would benefit them the most.

    However, the John Hancock Greater China Opportunities Class A ETF (JCOAX) had only 6.4% of its assets invested in the consumer discretionary sector. So a rise in retail sales will have a lesser impact on the performance of that fund.

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  • Garuda, Lion Air to Add Bali-China Routes Next Year

    Garuda, Lion Air to Add Bali-China Routes Next Year

    Flagship airline Garuda Indonesia and Lion Mentari Airlines are adding direct flights to more Chinese cities from Bali next year in a move that would boost tourism for both countries.

    Garuda will launch the Guangzou-Denpasar and Shanghai-Denpasar routes in January, the company’s president director Arief Wibowo said in recent interview.

    “We will deploy our wide-body Airbus A330-300, which previously served hajj pilgrims,” Arief said, adding that the aforementioned flights will be available three times a week.

    Garuda now serves passengers traveling from Jakarta to Beijing, Shanghai and Guangzou.

    Lion is currently applying for a license from China authorities to fly into eight of its cities, including Shanghai, Guangzhou, and Nanning.

    “We are optimistic because the number of tourists coming from China is growing and the demand [for flights to Bali] is quite big,” said Lion Air director Edward Sirait.

    The number of Chinese tourists visiting the archipelago almost tripled to 926,000 last year, from 337,000 in 2008.

  • Giordano Hong Kong sales rise in soft market

    Giordano Hong Kong sales rise in soft market

    Giordano Hong Kong sales increased by four per cent in the last quarter, with same store sales up a staggering 12 per cent in a stagnant retail market.

    The company says with the decline in Mainland China visitors to Hong Kong and Macau, the company has repositioned its product range to focus on more basic essential products. “This resulted in strong volume growth compared to the same period last year.”

    Total sales for the quarter to September 30 were HK$1.240 billion, three per cent lower than the same period last year. On a constant currency basis, sales increased by two per cent.

    Despite encouraging results in its home market, Giordano reported the depreciation of local currencies against the US dollar in Southeast Asia, Taiwan and Australia is depressing reported sales growth at the group level, and pushing costs up in those markets.

    In the first half of 2015, the company completed the acquisition of its franchisees’ operations in Kuwait and Qatar. Excluding these transactions, sales would have decreased by four per cent and on a constant currency basis, sales would have increased by one per cent

    Brand sales for the quarter were flat compared to the same period last year. Comparable store sales for the quarter increased by four per cent, mainly due to improving performance in Mainland China, Hong Kong and Singapore.

    The total number of stores in the group declined by 19 to 2359 primarily due to the closure of unprofitable stores in Mainland China.

    Gross margin for the quarter grew by 0.1 percentage point to 58 per cent, despite higher purchase costs due to weak overseas currencies, which reduced gross margin by 1.4 percentage points.

    Gross profit for the quarter was HK$719 million, a decline of three per cent over the same period last year.

    Sales in Southeast Asia declined by seven per cent, reflecting the impact of weak local currencies which on average depreciated by 16 per cent against the Hong Kong dollar in the last 12 months. However, on a constant currency basis, sales grew by nine per cent. Comparative store sales grew by eight per cent in the quarter with strong recovery from last year in Singapore and Thailand in particular.

    Sales in the Middle East have climbed by 11 per cent with strong growth in the UAE.

    Giordano’s new budget brand “Beau Monde” is still under development.

    “At the end of the period we had 14 shops and we expect to increase this to 25 shops by the end of the year. As we improve the merchandise for this new brand, we expect to reach break even profitability in the fourth quarter of 2015 or the first quarter of 2016. This will enable us to develop this brand faster in 2016,” the company said in its stock exchange filing.

    “As we reposition our brands through the exit of non-performing shops and poor quality locations, we are also investing in store upgrades, and by December we expect to have upgraded two thirds of our store portfolio in the past two years. During the third quarter, we upgraded/opened 39 self-managed stores and 51 of our franchisees’ stores. By the end of 2015, we expect to have upgraded/opened 200 shops in the year. This compares with 397 shops renovated in 2014.”

  • New Apple Store Opens in Chengdu on November 21

    New Apple Store Opens in Chengdu on November 21

    Apple, continuing its aggressive retail expansion in China, has announced that it will be opening its 22nd retail store in the country in Chengdu, a major city in Sichuan Province, on Saturday, November 21 at 10:00 AM local time. The new store is slated to open less than a month after the grand opening of the 21st Apple Store in China in the major port city of Dalian on October 24.The new Chengdu store will be located in the upscale Taikoo Li shopping plaza at 8 Middle Shamao Street in the Jinjiang District, where several high-end retailers such as Gucci, Omega and Zara are located. The store will be open 10 AM-10 PM local time everyday and offer traditional Apple Store services, including the Genius Bar, Workshops, JointVenture, events and seminars.

    Apple has also posted new job listings for its first retail store in Singapore, which is rumored to open in late 2016 at the Knightsbridge four-story luxury shopping center. The company is looking for Specialists, Geniuses, Creatives, Business Specialists and other traditional Apple Store positions.

    Apple does not currently have an official retail presence in Singapore, a large city-state and country south of Malaysia in Southeast Asia, but the Apple Online Store and dozens of Apple Authorized Resellers operate in the region. The closest physical Apple Stores are located several hours away by plane in Australia and Hong Kong.

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  • Xiaomi Brand Dominates Singles Day In China

    Xiaomi Brand Dominates Singles Day In China

    Celebrated every Nov. 11, Singles Day is a tradition that dates back to 1993 which initially involved bachelors from Nanjing University who would like to go out, meet, and party with others. The celebration soon included single women and became a huge holiday in China where single individuals go out in massive meet-and-greet events.

    Singles Day is China’s version of USA’s Black Friday, where Chinese businesses spur sales by offering attractive deals and huge price cuts on their products. Xiaomi, already a popular smartphone brand that offers cheap smartphones and other mobile devices, initiated its Singles Day strategy from Nov. 1, offering daily promos and sweet deals and ultimately culminated its run on the big day itself, according to Digital Trends.

    During the build-up, Xiaomi even provided a teaser on a new smartphone. The strategy proved to be successful, as the smartphone maker immediately raked in $16 million by 12:12 am on Nov. 11. Thirteen minutes later, sales reached $31 million. Two minutes before 1:30 am, Xiaomi already has $63 million in the bank. By the end of Singles Day, Xiaomi’s sales reached a whopping $188 million.

    According to a statement by the China-based smartphone manufacturer, the $125 Redmi Note 2 was their bestselling smartphone. Xiaomi’s smartwatch, the Mi Band Pulse, was the company’s most popular device, which did not come as a surprise, given its $16 price tag.

    Xiaomi’s success is based on its strategy of providing cheap smartphones with high-end features, and China is its biggest market. Recently, top competitor Huawei has overtaken Xiaomi as China’s top smartphone vendor in the last quarter, CNBC reports.

    Meanwhile, China-based online market company Alibaba also broke its own record on Singles Day. The e- ommerce giant clocked in $14.3 billion in sales via its online payment service. On last year’s Singles Day, Alibaba registered $9.3 billion in sales. This year’s figure represents a 60 percent jump from the previous year, indicating the company’s continued growth in a crowded Chinese market.

     

  • Genting adds premium cruise brand solely for Asia

    Genting adds premium cruise brand solely for Asia

    Malaysia-listed leisure and hospitality group, Genting, best known for its resorts and casinos, is setting up Asia’s first regionally-based premium cruise brand.

    Within its Genting Hong Kong operation [one of five public companies] which was formerly called Star Cruises, the company has announced the launch of Dream Cruises for Asia, which is one of the fastest growing markets in the world according to cruise association CLIA.

    The region also delivers strong duty free and travel retail spending says analyst CiR. According to its Asian Cruise Travellers report, 73% of Asian cruisers make DF&TR purchases, with almost half (46%) buying fashion/accessories.

    Genting – valued by market capitalisation at over MYR94bn ($22bn) at 31 August – is expected to take full advantage of the high-spending nature of Asian passengers – particularly the Chinese – with a large shopping offer on board Dream Cruises’ first vessel, Genting Dream when it sets sail in November 2016. It will carry 3,400 guests and 2,000 crew, a very high crew-to-guest ratio.

    A sister ship World Dream will follow in November 2017. Both were ordered by Genting Hong Kong and are under construction.

    THATCHER BROWN NAMED PRESIDENT

    The company has appointed cruise veteran, Thatcher Brown as President of Dream Cruises. Brown had been with Crystal Cruise Lines – which Genting bought in May 2015 – since its formation in 1988.

    “The launch of Dream Cruises completes the company’s mission of having a brand for each of the three major cruise market segments: Crystal Cruises for the luxury market, Dream Cruises for the premium market, and Star Cruises for the contemporary market.”At the launch event aboard SuperStar Virgo, a Star Cruises vessel, Genting Chairman and CEO, Tan Sri Lim Kok Thay, said: “Being the first company to offer cruises in China over 20 years ago with Star Cruises, we conceived Genting Dream three years ago to be the only purpose-built premium category new build for the Asian, and specifically Chinese, market.

    THREE CHINESE HOMEPORTS

    Genting Dream will have two exclusive floors of Dream Suites from 32sq m to 183sq m in size with butler services. Around 70% of Genting Dream’s staterooms will have private balconies.

    From next November, Genting Dream’s homeports will be in Guangzhou (Nansha Port), Hong Kong and Sanya and the ship will serve a bih catchment in the Pearl River Delta and Hainan. It will also cater to international guests flying into the airports of Guangzhou, Shenzhen, Zhuhai, Macau, Hong Kong and Sanya.

    Itineraries from Guangzhou will offer a year-round, two-night weekend cruise that calls at Hong Kong and a five-night weekday cruise calling at Halong Bay, Danang and Sanya.

    The Hong Kong homeport will feature a seven-night itinerary calling at Guangzhou, Halong Bay, Danang, Sanya and either Shenzhen or Zhuhai using Nansha Port. The Sanya homeport will also feature a seven-night itinerary calling at Guangzhou, Hong Kong, Shenzhen or Zhuhai using Nansha Port, Halong Bay and Danang.

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  • Alibaba smashes Singles’ Day records, so why did shares dip?

    Alibaba smashes Singles’ Day records, so why did shares dip?

    November 11 is a day of sombre reflection across much of the West, with Commonwealth nations observing Remembrance Day while Veterans’ Day is an official public holiday in the US.

    It’s a world away in China, though, where it’s Singles’ Day – an idea begun in 1993 by four lonely Chinese students who reckoned the 11th day of the 11th month (note the four single ‘one’ digits) would make a great day to celebrate being unattached.

    It became a sort of anti-Valentine event, where those without partners bought themselves gifts and – as you do in China – enjoyed lots of karaoke.

    Enter e-commerce giant Alibaba – owned by Jack Ma, up until February China’s richest man – which swooped on the event to offer discounts on its goods.

    November 11 in China has since morphed into an orgy of online spending. More and more firms have jumped on the bandwagon to make it the world’s biggest day of internet shopping.

    On Wednesday, Singles’ Day smashed sales records by midday. Shoppers were out in droves, racking up $5 billion of sales in the first 90 minutes on Alibaba, roughly double last year’s haul in the same period, reports the Financial Times. Alibaba also netted nearly twice the entire take of last year’s Cyber Monday – the day the US, fresh from feasting on Thanksgiving turkey, feasts on shopping deals – itself a record.

    Alibaba’s sales on the day rose 60% from last year to $14.3 billion. Another online retailer, JD.com, reported record transactions of more than 20 million.

    But despite beating records, Alibaba shares dipped nearly 2%. Why weren’t investors impressed?

    It’s because those concerns about China’s slowing growth still won’t go away – a point that Jack Ma himself highlighted on Thursday. Although he believes the government’s 7% GDP target for this year is achievable, he told CNBC: “I believe the next five to 15 months will be a tough time for China for various reasons, of course, one, the anti-corruption will definitely have some effect.”

    Jasper Lawler, a market analyst at CMC Markets, adds that Alibaba continues to be used as a US proxy for Chinese economic health “so shares dropped alongside industrial production figures”.

    Another batch of mixed data from China on Wednesday did little to allay concerns that the world’s second largest economy is slowing.

    “Industrial production growth matches its weakest since 2008, although retail sales improved,” wrote Mike van Dulken and Augustin Eden at Accendo Markets. Coupled with Alibaba’s new Singles’ Day record “we have further evidence of the nation’s shift from export-led to consumer economy”.

    Michael Hewson, chief market analyst at CMC Markets UK, remains concerned about retail sales in China.

    “The latest October retail sales numbers did improve to 11%, from 10.9% in September, which is still below the levels we were seeing at the end of last year of 11.8%,” he writes.

    “Furthermore this modest improvement doesn’t really chime with the stories circulating out of China at the beginning of October during Golden Week about surging sales in the restaurant, cinema and travel sales sector.

    “According to some reports, turnover at restaurants and retailers totalled more than one trillion yuan during the seven days, which equates to over $156 billion, so for retail sales to only improve 0.1% does seem rather at odds with the early October optimism.”

    Alibaba shares closed on the New York Stock Exchange at $79.85 on Wednesday, down more than 20% in the year to date. However, they’ve recovered from a yearly low on September 28 of $57.39 to trade currently at $80.00.

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  • Drone maker DJI plans retail outlet in Shenzhen

    Drone maker DJI plans retail outlet in Shenzhen

    Chinese drone maker DJI Technology Co is opening its largest retail store in Shenzhen, Guangdong province, later next month.

    The 800-square-meter store will give DJI, which claims to control about 70 percent of the global drone market, a boost in the retail sector and help ward off competition from overseas players.

    DJI said in a statement that the store has floor space larger than the passenger cabin of an A380 aircraft. It will be located in a busy shopping district named OCT Harbor, and will open for business later next month.

    She Shuanglin, a researcher who tracks the drone market at research firm Analysys International, expects the new store to spark demand for drones.

    “DJI plans to open similar stores in other cities like Beijing and Shanghai so that customers can see and experience their entire range of products,” She said. “But it will need big stores to display the entire range of products.”

    Drone maker DJI plans retail outlet in Shenzhen

    Wang Tao, founder and CEO of DJI Innovation Technology Co, operates a drone in Shenzhen, Guangdong province. The turnover of China’s civil-use drone market is on track to soar to 2.3 billion yuan this year, according to an Analysys International estimate.

    Retail prices for the company’s drones start at around 4,000 yuan ($630), with high-end products priced above 20,000 yuan.

    The company has indicated it will not go in for a sizable expansion and will stick to just one or two outlets in each city, She said.

    DJI already has several authorized and small-sized stores in major cities.

    Turnover of the civil-use drone market in the country is set to reach 2.3 billion yuan this year, a 55 percent jump from a year earlier, according to an Analysys International estimate. Demand for drones in the country is likely to exceed 11 billion yuan by 2018, it said.

    Overseas drone makers are also eyeing the rapidly growing market in China.

    Nicolas Halftermeyer, chief marketing officer of France-based Parrot SA, told China Daily in an earlier interview that the company sees China as a key market for its inexpensive drones designed as kids’ toys.

    Parrot’s drone business generated 44.4 million euros ($47 million) in revenue in the third quarter of this year, a 60 percent surge over a year earlier.

    DJI, however, is planning a slew of measures, like ramping up hiring, to counter competition.

    It is also building a development center in Silicon Valley in the United States and has hired top engineers from companies like Apple Inc and Tesla Motors Inc.

    Darren Liccardo, former head of Tesla’s autopilot project, joined DJI in August to head its engineering, systems and application development.

    Rob Schlub, a former antenna expert from Apple, joined DJI’s research facility in Palo Alto, California, to oversee the entire development team.

    She from Analysys International said the cash-rich DJI is making aggressive investments in overseas recruitment to maintain a technology edge over its challengers.

    “DJI will remain focused on unmanned aviation and high-performance camera development in the coming years,” said She.

    DJI said it has a 1,500-member R&D team in Shenzhen. Its US facility will be responsible for advanced technology development.

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  • LeSportsac to expand China footprint

    LeSportsac to expand China footprint

    Japanese trading house Itochu has formed a joint venture with Hong Kong based Novo Fashion Retail Group to ramp up the LeSportsac retail presence in Mainland China.

    Itochu signed an exclusive distribution agreement with Novo back in 2007 to supply LeSportsacs to outlets in major department stores and other retailers.

    This month, the two companies will launch a joint venture, its name not yet revealed,

    to focus on the LeSportsac range of casual nylon bags. Standalone stores are a possibility, given the brand’s strong appeal and name recognition in China.

    Itochu distributes the US-founded LeSportsac brand in 35 countries and Novo specialises in marketing western brands in Greater China.

    Initial plans are to double the network of stores selling LeSportsac to about 100 over the next three years, with a concentration on larger cities, and to broaden the bags’ online availability.

    The new venture is also likely to work on expanding the range to include products designed specifically for the China market, based on customer feedback.

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  • Singles Day set to shatter records

    Singles Day set to shatter records

    Singles Day spending tomorrow will undoubtedly shatter last year’s record spend of US$9.3 billion, predicts KPMG.

    November 11 is known in China as Singles’ Day, an annual one day event which sees online retailers slash prices of products and China’s shoppers treat themselves to a wealth of discounted goods. Popularised by eCommerce giant Alibaba in 2009, Singles’ Day in China has now become the world’s biggest online retail sales day, eclipsing all other promotions days including Black Friday and Cyber Monday.

    Last year’s sales fell just short of $10 billion, but Jessie Qian, partner in charge, consumer markets with KPMG China, says that barrier will surely be broken tomorrow

    “We expect that China Singles’ Day spend this year will be bigger than ever, illustrating the buying power of the Chinese consumer and the increasing prominence of the date in the Chinese retail calendar.”

    KPMG recently survey 10,000 online Chinese luxury consumers – China’s Connected Consumers – also revealed that the maximum amount Chinese consumers felt comfortable paying online for a single item was RMB 4200 – more than double the RMB 1900 found in 2014.

    The study also found that Chinese luxury shoppers are increasingly open to buying luxury products online. For most categories, from jewellery to cosmetics, and wine to leather goods, respondents reported a willingness of 75-95 per cent to buy online.

    “Not only did we see a higher amount spent on average for popular categories such as bags, women’s apparel and cosmetics, but we also noted a significant increase in spending on watches and jewellery,” said Qian.

    “All these illustrate that online luxury shopping is set to grow as Chinese consumers are growing increasingly more comfortable with online purchasing.”

    Qian concluded: “With the speed of change around new channels in China, companies must develop the right strategies to survive and thrive in an increasingly disruptive environment. Formulating an effective online to offline (O2O) strategy will be essential for retailers to remain competitive in the digital age with the increasing smartphone technologies and the need to harness social media platform.

    “Meanwhile, using analytics to turn the transactional data into insights to improve products and user experience, as well as to unlock new opportunities, will be crucial for e-retailers to stand out in the increasingly competitive market.”

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  • Walmart’s Asia CEO predicts great things in Chinese retail

    Walmart’s Asia CEO predicts great things in Chinese retail

    US retail giant Walmart upholds a firm belief in the potential of Chinese economic growth, according to its Asia CEO Scott Price. 

    Speaking at the Asia-Pacific Economic Cooperation (APEC) CEO Summit, Price said that he expects that China will drive more than half of the world’s retail growth over the next decade.

    This is largely due to the emergence of the Chinese middle class, as well as the shift from a primarily manufacturing based economy to one based on services. Events like Singles Day, China’s biggest online shopping date, have shown that there is a huge demand in the country for good retail.

    Retail sales figures in the country were up by 10.9% year on year in September and 11% in October, and on Singles’ Day the ecommerce giant Alibaba earned a record $14.3bn in sales in just 24 hours: an increase of 60% on 2014.

    Walmart itself owns Yihaodian, a Shangai based e-commerce business, which according to Price had “a great Singles’ Day”, though he did not reveal sales figures.

    Price also referred to a “gamut of opportunities” that can be found in supposed O2O, or ‘Online to Offline’ retail, which sees customers paying over the internet and picking items up in a store.

    “We think online-to-offline is critical,” he said, as “customers look for convenience, and convenience is not just one mode.”

    Despite this enthusiasm, O2O is currently unprofitable in China, as retailers are more interested in getting as much of a market share as they can. However, a recent report from HSBC predicted that “profits should emerge as the market matures.”

    According to HSBC, the online portion of O2O revenues increased by 80% on year in the first half of 2015, reaching $47bn. In tangent, China’s retail sector is becoming less fragmented and consumers are purchasing more frequently, indicating that there may well be great promise for O2O in the future.

    Price also referred to the future potential of brick and mortar stores, a required component of O2O. A number of online retailers have invested in a physical presence recently, such as the Amazon book store which opened earlier this month.

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  • Dufry Asia aims to double business

    Dufry Asia aims to double business

    Dufry Asia sees huge growth opportunities in the Asia region despite the current softness in the Hong Kong, Macau and Singapore markets.

    In an interview with TRBusiness the CEO of Dufry Group, Julian Diaz, said the company plans to double its sales in Asia Pacific within five years. Currently, the region accounts for just nine per cent of its total business.

    “The situation right now in Asia and in other parts of the world is not going to stop Dufry from going ahead with development,” he told TRBusiness.

    “The reality of the passenger growth over the next 10 years in Asia is that it is going to grow more than any other region in the world.”

    Díaz said Asia presented challenges given it comprises different markets, but Dufry has overcome that in other regions, and is confident it can break through in Asia.

    “I think this is a challenge, but this was also a challenge when we started in the Americas, when we started in Europe, when we started in North America.

    “All these businesses presented their own challenges. I know one thing, we are going to pool resources and the team in order to really develop the company in Asia,” he said.

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