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Tag: China

  • China will drive massive global e-commerce transaction growth by 2024

    China will drive massive global e-commerce transaction growth by 2024

    Chinese growth will drive e-commerce transaction values up 43 per cent to US$4.8 trillion by 2024, according to new reporting by Juniper Research.

    The research showed Chinese e-commerce undergoing 62 per cent value growth over the next four years, bolstering global e-commerce value along with emerging markets in Latin America, Africa and the Middle East, among others.

    The report found that improvements in connectivity will enable the rise of e-commerce in new markets, thus urging payment providers to seek fresh revenue streams in emerging regions to offset slow growth in developed markets – with a particular emphasis on the potential of mobile payments that do not require a linked bank account, as mobile handset penetration is rising faster than banking penetration in young markets.

    “The popularity of mobile wallets is having a disruptive effect,” read material released by the firm, “with physical cards becoming less important to the payments market.”

    Accordingly, the research suggests that card networks must be proactive, by looking beyond the card, becoming involved in open banking initiatives and delivering omnichannel experiences for users.

    “Card networks must leverage their ability to invest in, and forge partnerships with, key players to gain scale in new areas, or they will fail to diversify their revenue streams and will be vulnerable to future disruption,” said research author Susannah Hampton.

    Juniper’s findings are published as Strategies for Payment Providers: Industry Trends, Opportunities & Recommendations 2020-2024.

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  • Anta Sports hits sales and profit record

    Anta Sports hits sales and profit record

    Chinese sports shoe retailer Anta Sports has delivered its sixth consecutive year of sales growth, reaching a record US$4.8 billion in 2019, 40 percent up on the prior period.

    Hong Kong-listed Anta Group owns many Chinese and international sports brands, including Anta, Fila, Descente and Kolon Sport.

    Sales of the Anta brand surged 21.8 percent, and for Fila by 73.9 percent.

    Profit attributable to shareholders was a record $757 million, up 30.3 percent, marking the third consecutive year of 30-per-cent-plus growth for the company.

    Anta ended last year with 12,943 stores, 10,516 of those across Mainland China bearing the Anta or Anta Kids banners. Another 1951 Fila stores are located on the mainland and in Hong Kong, Macau, and Singapore and there are 136 Descente stores in China.

    The company said a policy of pursuing “high-quality growth, organic operation, and strong cost management” over recent years had laid a solid foundation for the group to cope with market uncertainties especially in times of challenges posed by the global Covid-19 outbreak.

    “Prior to the outbreak, brands under the group have already realized strategic plans of both online and offline development,” the company said in a statement.

    “In the early stage of the outbreak, the group has also reacted promptly to offset the blow from coronavirus – implementing strict cost management, exercising community marketing, building more flexible supply chains, maintaining on-time logistics and deliveries, and promoting e-commerce innovation are all among concrete moves that Anta Group has made.”

    The company is predicting a “low double-digit” decline in sales for the first half of the current year as a result of the coronavirus crisis impacting retail, but anticipates a return to growth in the second half given the rebounding Chinese economy.

    “Therefore, the group is confident to achieve positive annual growth by the end of 2020.

    “From a long-term perspective, the Covid-19 outbreak will not last for an indefinite period of time and consumers’ needs for health and fitness products will definitely be heightened, which will contribute to the group’s swift recovery after the crisis.”

  • Yum China reopens most stores, reports recovering footfall

    Yum China reopens most stores, reports recovering footfall

    Yum China says it is witnessing “early signs of recovery” in Mainland China as business gradually resumes and people return to work.

    However, the company, which operates KFC, Pizza Hut and Little Sheep chains, said in an update to shareholders that restaurant traffic remains “heavily impacted” as people continue to implement social-distancing measures.

    Store closures peaked in mid-February when about 35 percent of the company’s network was closed, the remainder offering only delivery and takeaway services. However, trade for those still trading significantly declined. Same-store sales for Yum China were down by between 40 percent and 50 percent year on year during the Chinese New Year holiday period.

    This week, about 95 percent of Yum China’s stores had reopened either fully or partially and about 15 percent of those continued to offer only takeaway or delivery services.

    In its update, Yum China said that while customer volumes were slowly building, they remained well down on pre-outbreak levels.

    “The pace of recovery varies by region and is slower during weekends as people avoid going out. In recent days, same-store sales were down approximately 20 percent. Sales performance fluctuates as the recovery is uneven, and the situation continues to evolve,” the company said.

    Yum China launched contactless delivery in late January, which proved popular and supported the delivery business during a period of lower dine-in traffic. “Delivery sales grew year over year, and its mix as a percentage of company sales approximately doubled.”

    Yum China also launched contactless pick-up and corporate catering services as highly sanitary options for consumers and corporate customers.

    Now that the coronavirus crisis appears to have passed its peak in Mainland China, the company is considering resuming its network expansion program. Currently paused – largely due to a shortage of construction workers and traffic restrictions – the company says it will “continue to monitor the situation and work with local authorities, resuming new store openings when conditions allow”.

    “Despite a challenging start to the year, Yum China is here for the long run, and will ensure that it remains well-positioned for the long-term growth opportunities in China.”

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  • JD to issue US$212 million in coupons to boost post-coronavirus economy

    JD to issue US$212 million in coupons to boost post-coronavirus economy

    JD is collaborating with various brands to provide RMB1.5 billion (US$212 million) in promotional coupons to stimulate sales across Mainland China.

    Starting Thursday, the Chinese e-commerce company will start sending out the coupons which cover key online retail categories such as electronics and FMCG.

    The coupons are being issued to stimulate flagging demand caused by the Covid-19 epidemic. The program aims to support brands and merchants in working towards recovering their former sales and operations levels and signals a change in tack in the coronavirus recovery period to focus on restoring economic activity.

    Since the outbreak, JD has leveraged its supply chain, logistics and technology strengths partnering with a variety of stakeholders to fight against the epidemic. The firm has also launched a series of initiatives to support brands and merchants.

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  • Wirecard Expands E-commerce For Chinese Shoppers

    Wirecard Expands E-commerce For Chinese Shoppers

    Wirecard is expanding its e-commerce offer for Chinese online shoppers by helping European merchants integrate the popular payment method WeChat Pay into their online shop in just a few minutes.

    Chinese customers can now shop online or in the app of these merchants and check out via WeChat Pay, said Wirecard in a statement on Monday. This solution is ideal for European merchants seeking to enter the competitive and growing Chinese e-commerce marketplace. The end-to-end offering also includes logistics and customs support, thanks to SwissPost, as well as consulting and training so that merchants can get up and running as quickly and effectively as possible.

    As e-commerce continues to boom around the world, it is essential for merchants with global aspirations to offer localized payment methods. Our long-standing experience with Chinese payment methods enables us to support merchants that seek to break into the lucrative Chinese e-commerce market, said Christian Reindl, EVP Sales Retail at Wirecard.

    Online merchants that capitalize on this offering will see WeChat Pay integrated into their in-app checkout page. When a user chooses to pay via WeChat Pay, they are redirected to the app or mobile website, where they can easily and quickly carry out the payment.

    The digital financial technology company said the new offering can drive up conversion rates and customer satisfaction for customers in China, where digital payments are commonplace. Wirecard will process all payments and support merchants with the integration, as well as offer virtual workshops and marketing support.

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  • Xiaomi reopens its 1,800 stores across China

    Xiaomi reopens its 1,800 stores across China

    As Mainland China registered no new cases of coronavirus for the first day since the disease emerged late last year, Chinese tech retailer Xiaomi says it has reopened more than 1800 retail stores across the mainland.

    The company also says the majority of its component suppliers – about 80 percent – had resumed operations.

    In a telephone conference call yesterday, Xiaomi president Wang Xiang said the company was working with its suppliers and service providers both upstream and downstream to achieve a stable supply line of products during the coronavirus crisis.

    Many other retail groups are steadily reopening stores across China. Some, including Apple and Lego, have closed their entire global store networks until at least late this month, with the exception of China.

  • TransferWise Partners Alipay in China

    TransferWise Partners Alipay in China

    The London-headquartered online money transfer service is teaming up with Chinese payments and lifestyle services platform Alipay to expand remittance options for its users.

    TransferWise is making more inroads into Asia with a tie-up with mobile payments giant Alipay, which will enable instant transfers to China for 17 currencies, the firm announced in a statement on Tuesday.

    With Alipay serving more than 1.2 billion people worldwide together with its local e-wallet partners, TransferWise, which has 7 million customers worldwide, called the partnership a «major expansion.»

    Co-founder and CEO Kristo Käärmann said money transfers to China has been one of the most requested features among TransferWise users since its expansion in Asia.

    China is projected to be one of the top remittance recipient countries in the world, with £54 billion ($65.4 billion) expected to be sent back home by Chinese expats and migrants living abroad, TransferWise said in the announcement, citing a 2019 report.

    In 2019, TransferWise rolled out a debit Mastercard in Singapore, which also included a TransferWise Borderless multicurrency account. It also began processing international payments into digital wallets in Indonesia and the Philippines last year.

    Founded in 2011, TransferWise is valued at $3.5 billion, following its last funding round of $292 million in May 2019. It has raised a total of $772.7 million in funding in 10 rounds to date. According to the firm, it processes $6 billion in transfers monthly.

     

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  • Dire retail sales in Mainland China a harbinger for rest of the world

    Dire retail sales in Mainland China a harbinger for rest of the world

    Retail sales in Mainland China slumped by 20.5 percent in the first two months of this year according to government figures – providing a glimpse of what lies ahead for retailers in other countries where the coronavirus is now having an impact on community behavior.

    For most of January and February hundreds of millions of Chinese were subject to lockdown in their homes, and retail stores and shopping malls were closed. Most consumers moved online to purchase goods with e-commerce giants like JD and Alibaba developing safe delivery protocols to ensure distancing between delivery riders and customers.

    Combining the first two months of retail sales figures provide an accurate comparison with previous years as it eliminates any impact from the changing timing of Lunar New Year, traditionally a busy season for retailers.

    By comparison, retail sales in Mainland China grew by 8 percent in December.

    Analysts had expected sales to fall by 5 percent in January and February, a dramatic understatement of the eventual figures.

    On a more positive note, many major retail chains have reopened stores across Mainland China this month as the spread of the virus has abated. March data will be eagerly awaited to see if there is any indication of consumers spending on luxury goods and other unnecessary purchases as they celebrate the gradual return to normal life and indulge to reward themselves for enduring the lockdowns.

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  • Starbucks China to open Coffee Innovation Park

    Starbucks China to open Coffee Innovation Park

    Starbucks China will invest US$130 million in a new roasting facility in 2022 as part of its upcoming Coffee Innovation Park in Kunshan.
    The park will be Starbucks’ largest manufacturing investment outside of the US and its first in Asia, incorporating a roasting plant, warehouse and distribution centre. The firm has committed to strengthening the specialty coffee industry in China, aiming to operate 6000 stores in China within two years.

    “Starbucks has spent the past 20 years sharing its passion for coffee across China and helping to build a leading industry that makes us all proud,” said Starbucks China chairman and CEO Belinda Wong.

    “The roasting facilities at the Coffee Innovation Park will set a blueprint for the future of coffee roasting and supply chain management, and further elevate China’s coffee industry, while supporting Starbucks’ growth in China.”

    The Coffee Innovation Park will incorporate advancements in sustainable manufacturing, smart supply chain innovation, and technology to help deliver the most energy- and water-efficient roasting operations for Starbucks in the world, while minimizing waste.

    Starbucks opened its Yunnan Farmer Support Centre eight years ago to provide open-source agronomy resources to coffee farmers throughout the region. Its new Coffee Innovation Park will source coffees from China and around the world directly from the origin for processing, roasting, packaging and distribution, for the first time in China.

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  • City Super supermarket chain sale sparks strong interest

    City Super supermarket chain sale sparks strong interest

    Investment groups China Resources and Yonghui Superstores, as well as some private individuals, are among potential buyers of Hong Kong’s City’Super high-end grocery chain.

    Current owner The Fenix Group is intending to sell a majority stake in the business in a deal that could attract US$300–400 million. The firm is likely to call for bids later this month or otherwise in early April, depending on the coronavirus outbreak situation at the time.

    Billionaire Peter Woo, who owns a minority stake in the business, is expected to hold on to his shares. Talks, however, remain at early stages and the deal may not eventually go ahead.

    City Super Group currently operates 21 Hong Kong City’Superstores, with an additional seven in Shanghai and another seven in Taiwan under different brand names. The stores are located in prime properties such as Hong Kong’s IFC Mall.

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  • Gome launching on JD.com

    Gome launching on JD.com

    A Gome flagship store has launched on JD, giving the Chinese home appliance retailer access to JD’s more than 360 million active annual customers.

    “JD.com is pleased to launch Gome’s third-party flagship store on our platform, making home appliances from Gome’s offline store available to more Chinese consumers online,” said a spokesperson from JD. “JD’s third-party platform welcomes all qualified merchants with high-quality products and services to launch stores on our platform. Gome will also use JD’s supply chain to introduce consumer goods to its online platform gome.com.”

    The cooperative agreement reflects an emerging dynamic in Chinese retail where businesses that would normally tend to compete are instead leveraging each other’s strengths to take advantage of the scale of China’s online reach.

    For the time being, Gome will use its own warehouse and logistics facilities for the third-party store. JD will provide data, technology and customer service-related support to Gome.

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  • The virus outbreak is Asia’s call for digital business

    The virus outbreak is Asia’s call for digital business

    Coronavirus has significantly overwhelmed the world. The outbreak of Covid-19 caused the death of over 4,000 people and infected over 119,000. Some countries, including China, Italy, and Iran, have adopted restrictive measures, quarantining most of its citizens and canceling public events.

    The virus has had a negative impact on trading and markets, as most of the European markets suffered significant slumps. It also disrupted the working process, and several banks have advised its staff to work from home.

    This has become a problem for Asian countries and companies because most of their income depends on the physical presence of workers. It becomes impossible as most workers are currently in quarantine.

    China to think more about switching to digital business

    Most workers in China earn income from physical labor. They work in factories, which are the primary source of revenue for China. Yet, the emergence of Covid-19 has severely damaged the working process.

    China should probably learn from its European counterparts to focus more on digital business, as it does not require the physical presence of workers and is perfectly available for employees to work remotely.

    This trend has become very prevalent in European industries, especially online gaming. For instance, Armas Hämäläinen, who is the representative of online casino Spinia Finland has declared that the casino does not request its employees to come to work due to the fear over coronavirus. The company allows them to work from home, which helps keep employees safe and at the same time, keep the company active and functional.

    In contrast, China’s gambling industry is pretty much locked in. While Europe makes a lot of money from gambling. It has a legal framework, but in China, it is considered illegal and one of the weirdest facts about gambling in China is that they allow citizens to gamble in Macau which is technically their territory, but they cannot gamble inside mainland China.

    We can say the same about top European banks such as Credit Suisse and Deutsche Bank. Both banks strongly encouraged some of its employees to stay home and work remotely, to contain the spread of coronavirus.

    Therefore it is very convenient and useful for China if it switches to digital business more, as it will not only help to contain the virus but will create a wide range of possibilities as well.

    South Korea urges local communities to take part in social distancing

    Coronavirus took its toll in South Korea as well, killing over 50 people and infecting 7,700. South Korea is known in the world for its digital innovations and services, and unlike China, it did not have so many problems with working remotely, because a lot of people work in firms, where it is not necessary to be physically present at work. For instance, financial, insurance, IT, electronic companies – all of them are in favor of working from home.

    Conclusion

    It is hard to remember any virus, that caused so much disruption in the world, like coronavirus. No one would expect the damages to be so colossal, let alone the fact it distorted the working of companies, resulting in huge losses. As most countries in Asia, obtain revenues from the physical labor of workers, they should somehow find a way to adapt to digital services. Otherwise, it would further harm the workers and catalyze the spread of Covid-19.

     

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  • Increased digital traffic in China attracts unwanted guests

    Increased digital traffic in China attracts unwanted guests

    The past decade has ended up with leaving the New Year gift under the New Year Tree. And who said that the gifts can always be pleasant and good. The new decade took the start which is very far from the good.

    Coronavirus, also known as the Covid-19 is the virus, which was first discovered in Wuhan, China on the 31st of December 2019. The local virus, which has spread to almost every single country in the world, has already infected over 180,000 people, across the world in a matter of only three months.

    Coronavirus has killed almost 7000 people and many people have been still infected and located in quarantine. The ones who are not in the hospitals, or in any specifically designated places, are self-isolated at homes. Many countries have moved to the emergency regime and have announced massive lockdowns.

    The first country to suffer from the massive virus outbreak was China. Then several European countries followed, and now it is all over the world, across the oceans and deserts. The World Health Organisation announced the epidemic as the pandemic, meaning that the massive lockdowns in every country should be expected sooner or later.

    While being in a state of isolation and not being able to do anything with it, there is not much left you can do. When every facility is closed and you are barely able to leave the house, all you can do is spend your days in front of the TV or surf the Internet. This is perhaps the best scenario for sparing your time.

    One of the major industries in China is gambling. While gambling in the country is not legal, it is only legalized in Macau. This is the only province in the whole of China, where visitors can gamble and participate in any type of gambling-related event. The city is basically designed for gambling and there is nothing else to do rather than a gamble.

    The city of Macau generates over 80% of the revenue via casino performance. Millions of people visit the Chinese gambling paradise annually and spend a lot of money on gambling. This is one of the reasons why the city is very lucrative and attracts many people. Not only international visitors but also Chinese people from the mainlands of China visit the city monthly. Macau is the Asian capital of the gambling industry.

    The most lucrative period for Macau and gambling in China was supposed to be the Chinese New Year, by the end of January month. The best period for casinos to operate was literally nothing else but the great disappointment. Due to the virus and the massive outbreak, many cities in China were isolated by that period. People were limited to transportation and were not recommended to move anywhere, but the rooms in their houses.

    Once Chinese New Year passed, and Macau had already experienced almost $300 million loss, while it was supposed to generate over $700 million, the authorities decided to shut down all 42 casinos. The shut down was an extremely difficult decision to make. 42 casinos have been closed for a two week period. This was the longest casino shut down period in the whole history of Macau.

    The closure of the casinos caused a massive loss in revenue. The employers are no longer able to maintain the employees and to pay the salaries. The Asian capital of gambling is not left with many options for this period. Considering the fact that online gambling is prohibited in China, there is no industry, which can compensate for the losses.

    According to gambling experts and some of the authorities in the field, this would be the perfect moment for China to reconsider online gambling. The online gambling industry is one of the most efficient industries and people all over the world are involved in online gambling. While the classic brick and mortar casinos are on the shutdown mode, online gambling could reduce the loss and somehow compensate for the closure period.

    Many online casinos have been targeting the Asian market for quite some time already. It is evident that online casinos find the necessity of expanding to previously unknown markets. One of the leading casinos, such as Playamo, has made certain steps forward. It has been announced recently that the games from one of the leading developers, Red Tiger, have been added to the online casino website and the Playmo bonuses are available for the Asian customers as well. The international gambling brand will soon be marking the new standards and the countries, such as China will be the main target for the 2020 market. Especially considering the facilitating circumstances all across the world. Some

    While the experts say that China should change the approach and think of the possible alternatives in order to maintain the leading position in the market, the authorities and the government are not making any sudden moves for now. On the other hand, the ignorance of the problem and possible alternatives can soon face the country with additional problems.

    People who love to gamble and are having a hard time sitting at home in the isolations will sooner or later address some methods which will grant them the ability to gamble online. The activity might be considered illegal and most probably China will need to fight illicit activities. The worst scenarios are that the government could avoid the illegal issues if reconsidering their approach.

    One way or another, according to some experts’ predictions, China might soon experience the second wave of the virus outbreak. As bad as it may sound, people might be balanced in quarantine all over again and the facilities once again. And there it is, the second chance for China should be given, but will they use it? That is the question.

  • Lower-tier cities drive boom in online shopping in China

    Lower-tier cities drive boom in online shopping in China

    Online shopping in China is booming during the coronavirus outbreak.

    According to research house GFK, with twice the number of first-time users in lower-tier cities are moving online compared to the number living in top-tier cities.

    The findings were part of a Gfk China consumer sentiment study conducted last month, which showed that more than 40 percent of consumers have increased their frequency of buying online. Greater numbers of consumers are also shopping across multiple platforms, using third-party applications, brand websites and WeChat community shopping.

    The boom has caused significant operational and logistical challenges for retailers trying to keep up with the surge in demand, including delivery delays and out of stocks.

    “While China is already at the forefront of e-commerce and retail innovation, the current situation would further accelerate digital commerce adoption among consumers and will have a long-term impact on consumer purchase behavior,” said GfK China and India MD Vishal Bali.

    “Chinese consumers are likely to adopt more options to consume content and purchase products and services online, including e-learning, online healthcare consulting or buying products through social commerce and third-party apps. Therefore, brands need to also explore newer commerce platforms, payment methods, delivery options and loyalty programs to connect with consumers across all city tiers and create a seamless shopping experience for them,” he said.

    The research relating to online shopping in China showed many consumers intend to delay the purchase of big-ticket items such as consumer electronics until after the outbreak passes, preferring instead to buy products to protect their health and wellbeing.

    Most Chinese consumers are expecting the economy to recover before the third quarter of this year.

    After the epidemic, approximately 60 percent of consumers with high incomes plan to spend more to reward themselves, while 70 percent of consumers in the low- to middle-income groups intend to save money by reducing overall expenses and only spending on essential items.

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  • Chinese fast-food companies will recover soon from virus crisis

    Chinese fast-food companies will recover soon from virus crisis

    China’s fast-food sector will recover soon, according to analysts, as life in major mainland cities slowly begins to return to normal, the peak of the coronavirus crisis there now over.

    Anne Ling, an equity analyst at Jeffries, said strong growth in fast-food sales has boosted China’s delivery business during the crisis when many residents stayed at home rather than eat out to reduce the risk of virus transmission.

    “We believe that for fast-food chains like KFC, its business will recover soon. Consumers’ change in behavior is likely to benefit bigger chains like KFC,” said Ling.

    “For casual dining, like Pizza Hut or Haidilao, we believe it will take longer to recover depending on guidance from local governments on consumer safety.”

    Local governments have issued guidelines to restaurant operators, requiring consumers to be spaced out in restaurants.

    Ling says restaurants will need to reassure customers of the safety of eating on their premises. “There is a chance that operators might need to redesign the restaurant layout so there is more space between tables.”

    Major fast-food chains in Mainland China have developed effective contactless-delivery procedures, or consumers have been asking delivery riders to drop food at the front gate of their residential complex, which helps efficiency, she said.