Hong Kong-based magnificence merchandise retailer Sa Sa has elevated gross sales regardless of the home market challenges.
The group’s complete turnover elevated by 2.7 per cent from HK$eight.756 billion to HK$eight.993 billion within the yr to March 31.
Retail gross sales in Hong Kong and Macau elevated by three.three per cent to HK$7.259 billion. However revenue slipped 10.three per cent to HK$838.eight million.
The high-profile chain added a internet seven shops through the yr taking its community to 287, including only one in Hong Kong.
In a telling signal of the problem dealing with Hong Kong retailers, because the demographic profile of Mainland Chinese language guests modifications, the variety of transactions in Hong Kong and Macau shops rose by 6.eight per cent, however the common ticket worth fell three.three per cent.
“To put these figures in context, the variety of transactions of Mainland China vacationers elevated by 17.four per cent, whereas common gross sales worth per ticket decreased by 11.three per cent,” Sa Sa stated in its annual outcome.
“The variety of transactions by native shoppers declined barely by 2.four per cent with a mean spending improve of four.three per cent. Briefly, gross sales progress for as soon as lagged behind the market.”
In 2014, Mainland vacationer arrivals rose by a gentle 16 per cent. Similar day customer arrivals have been nonetheless the main engine of progress with a rise of 19.1 per cent, elevating gross sales in non-tourist areas, notably within the New Territories close to the border with the remainder of China.
“Nevertheless, this was offset by an 11.three per cent drop within the common ticket gross sales of Mainland vacationer clients, which in flip was attributable to the weaker buying energy of vacationers originating from decrease tier cities and having much less spending functionality. One other issue was the growing demand for lower cost level merchandise, similar to Korean merchandise, which nonetheless diluted gross sales progress though driving retailer visitors.”
Sa Sa stated, as well as, there was a better gross sales combine from day trippers whose spending is usually decrease than in a single day vacationers.
“The change in consumption patterns was additional exacerbated by the rise of cross border eCommerce, which facilitated a lot quicker market penetration of cheaper and quick to market Korean merchandise with ideas which might be nicely appreciated by Asians, and particularly the more and more prosperous Chinese language shoppers.”
Whereas Sa Sa reported 10.2 per cent retail gross sales progress within the first half of the fiscal yr, gross sales have been dragged by weaker shopper sentiment within the second half. Gross sales progress slowed within the third quarter and additional deteriorated within the fourth quarter with March 2015 being particularly weak due to anti-parallel items merchants incidents in residential areas, turning an in any other case constructive January to February two months’ interval into destructive territory for the fourth quarter.
“As well as, the appreciation of the US greenback and the relative power of the Renminbi and Hong
Kong greenback inspired extra Mainland vacationers to journey to markets with weaker currencies resembling Europe and South Korea. The relief of visa insurance policies by different nations strengthened their
attractiveness to Mainland vacationers, whereas robust outbound travelling led to weaker native spending.”
Sa Sa stated the Occupy Motion and anti-parallel items merchants incidents in Hong Kong broken Hong Kong’s profile and discouraged vacationers whereas additionally inflicting a drop in gross sales to native clients.
Sa Sa’s general gross revenue margin dropped from 46.6 per cent to 44.eight per cent resulting from extra promotions being launched to drive gross sales in a slower market.
