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Tag: Retail

  • Amway China in online push

    Amway China in online push

    US direct selling retailer Amway is planning a major push in China where it sees potential with younger consumers.

    Globally, Amway sold US$10.8 billion worth of household goods last year, down eight per cent on 2013.

    In China it has spent a year testing online sales models, creating 10 WeChat accounts and 12 apps through which its sellers can interact with customers. Online already accounts for 30 per cent of its China sales – with mobile sales about one fifth of that and expected to grow to half within 10 years.

    Last week Amway held a digital strategy launch in Guangzhou where it revealed plans to allow consumers to shop through its online platforms and apps with Amway taking responsibilities for delivering the goods to purchasers. That marks a significant variation from its traditional model of having its sellers deliver goods personally.

    Chief marketing officer Frances Yu said the company knows its strength lies in a solid offline relationship it has with customers. “The same will be upgraded further when we move online.”

    Mobile eCommerce will potentially cut costs for Amway’s direct selling staff as they won’t have to rent physical store space, have capital tied up in inventory or cover delivery charges. Amway will assume responsibility for storage and distribution.

    “Our entrepreneurs will be able to spend more time with their clients,” said Yu.

    Amway has opened 10 ‘experience’ stores in China to link online with offline, display products to prospective customers and build brand awareness. Eight more are planned.

    Amway also wants to double its sales distributor network from 60,000 currently to 120,000 by 2025.

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  • Amazon India launches Beauty Store

    Amazon India launches Beauty Store

    Amazon India has launched a luxury Beauty Store on its eCommerce portal.

    “We are excited to offer a wide selection of handpicked luxury beauty products. Customers can now order their favorite luxury beauty brands from the comfort of their homes with Amazon.in,” said Samir Kumar, director of category management with Amazon India.

    The store will offer products from 17 luxury brands covering hair, skin and body treatments.

    The brands include L’Occitane, Crabtree & Evelyn, Kama Ayurveda, Forest Essentials, Davidoff, Calvin Klein, Dermalogica, Ren, Temple Spa, Leighton Denny, Jo Hansford, Shaze, Dr. Lipp, Eve Snow, Pangea Organics and The Camel Soap Factory.

    It targets both men and women.

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  • Prada Japan flourishes

    Prada Japan flourishes

    Prada Japan has posted a strong sales lift in the first half thanks to a burgeoning number of inbound tourists.

    Sales in the Japanese market grew by 12 per cent year on year current exchange rates and by five per cent on constant exchange rates. Tellingly, growth was stronger in the second quarter than in the first.

    In its half year results issued Friday, Prada reported net revenue for the six months to July 31 of euro 1.823 billion, a four per cent increase over the corresponding period in 2014. Wholesale sales fell 14 per cent, reflecting Prada’s strategy of rationalising its network of retail partners in favour of selling from its own stores.

    While Japan was a standout market, sales in Asia Pacific fell, offset by a positive rate exchange effect.

    “Hong Kong and Macau remain the main drivers affecting the performance in this geographical area,” Prada said.

    At current exchange rates, sales increased 15 per cent in both the Americas and in the Middle East.

    The European market has continued to grow with revenues up at both current exchange rates up 12 per cent and constant exchange rates up 11 per cent, thanks to a steady flow of tourists together with a recovery in consumption by domestic customers.

    By brand, Prada recorded five per cent growth at current exchange rates which is entirely attributable to the exchange rate effect, mainly because of the adverse economic situation in the Asian market.

    Miu Miu continues to grow with revenues up at both current exchange rates up 19 per cent and constant exchange rates up six per cent, showing an acceleration in the second quarter of the year. Church’s achieved sales growth of 19 per cent, with the volumes trend also remaining largely positive. Car Shoe has performed broadly in line with prior year.

    Prada Group CEO Patrizio Bertelli said sales in the first half of 2015 reflect an economic and exchange rate landscape that remains “rather volatile with the continuing weakness of important markets like Hong Kong and Macau and the uncertainty that is looming on other Asian markets”.

    “Our distribution structure, which has achieved an appropriate global presence, together with our awareness of the specific needs of the various markets, has enabled us to compensate for the drop in sales in Asia Pacific thanks to growth on markets which are currently more dynamic like Europe and Japan. We will continue to prioritise measures intended to sustain long-term growth focusing on our manufacturing tradition and innovation, as again confirmed recently by the success of our latest collections.”

  • German giant buys Classic Fine Foods

    German giant buys Classic Fine Foods

    German retailer Metro AG has paid $290 million to buy Singapore restaurant supplier Classic Fine Foods Group from private equity owned EQT.

    CFF operates in 25 cities, including Singapore, Dubai, Hong Kong, Bangkok, Kuala Lumpur, London, Ho Chi Minh City and Jakarta. The deal will expand Metro Cash & Carry’s presence from 26 countries to 36.

    Metro said in a statement the acquisition would strengthen its wholesale subsidiary Metro Cash & Carry by bolting on an experienced food service distribution arm.

    “It provides access to growth and value creation potential in the attractive premium foodservice distribution markets. The transaction covers the operations and all fixed assets of CFF for an enterprise value of $290 million plus an earn-out of up to $38 million depending on the EBITDA performance in 2015 to 2017,” the company said.

    “Metro Cash & Carry aims to strongly expand its FSD operations. With the acquisition of CFF we strengthen our value proposition and enlarge our wholesale market presence fuelling future sales and earnings growth“, said Olaf Koch, chairman of Metro AG’s management board.

    Pieter Boone, CEO of Metro Cash & Carry, added: “With Classic Fine Foods, we found the perfect partner to expand in high growth Asian FSD markets. CFF has a strong market position and a unique exposure to Asian mega cities and Middle East. CFF partners with some of the world’s most sought after fine food producers and has excellent customer relationships in the high margin premium Hotels, Restaurants and Caterers (HoReCa) segment. The acquisition boosts our FSD capabilities widening the services for our HoReCa customers.”

    CFF, founded in 1999, has its own distribution and warehousing network in the cities in which it operates. Metro says post- acquisition, CFF will remain largely independent, maintaining its own sourcing base and distribution network.

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  • Ffan: Wanda’s online store goes live

    Ffan: Wanda’s online store goes live

    Nearly a year after three giant Chinese companies teamed up to take on Alibaba, the newly-mintedeCommerce store finally and quietly launched this week.

    The site, Ffan, is the result of a billion-dollar joint venture between Tencent, Baidu, and Wanda Group, a conglomerate best known for its chain of movie theatres and malls.

    The joint venture started with US$814 million in its pocket in August 2014, with Wanda holding a 70 per cent stake, and Tencent and Baidu splitting the remainder evenly. In January, it secured venture capital funding to the tune of US$161 million.

    Local commerce

    The new estore is designed to take on Alibaba’s eCommerce dominance, with a focus on helping people buy local products and services. That’s why visitors to Ffan can choose their city to see local deals.

    Baidu declined to comment on today’s launch and Tencent has yet to reply to Tech in Asia’s inquiry.

    At first glance, Ffan looks odd and rather bare. The only two product categories on the top navigation bar are “food” and “movie tickets.” Browsing through the city-specific food section reveals that most of the products are from retailers at Wanda’s shopping malls across the country. Indeed, users can browse through the Ffan site or accompanying mobile app according to their nearest mall.

    Wanda – a private company which boasted assets of RMB 534.1 billion yuan (US$85.6 billion) in 2014 – has reportedly been plotting a leap from offline retail to ecommerce for several years, but today’s launch doesn’t reveal much that should worry Alibaba or arch-rival JD right now. It’s not a general ecommerce store like Alibaba’s Tmall or JD, and the offerings are slim.

    Sill, Wanda has the reach – across malls, cinemas, hotels, resorts, theme parks, and several other areas – to challenge Alibaba in terms of the fast-growing interest on the web for local, on-demand products and services.

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  • Hysan thrives in subdued market

    Hysan thrives in subdued market

    Hysan Development Co chairman Irene Yun Lien Lee says retail locations with proven shoppers’ traffic that have a bustling and unique surrounding atmosphere have become more sought after as retailers compete in an increasingly challenging market.

    That’s the core of the reason Hysan has thrived in the first half year while street-front shops have struggled and for lease signs have appeared in even the most popular shopping destinations, like Causeway Bay.

    “Hysan has always strived to work closely with and provide support as well as add value to our tenants, especially when shop owners are weathering market uncertainty,” said Lee in a half year report.

    “At Hysan’s portfolio in the first half of 2015, we hosted a number of high-profile customer engagement activities and experiences, including a successful dining programme in May in partnership with our food and beverage tenants and shoppers with HSBC credit cards. We also unveiled Leeisure rewards for shoppers, complemented by the inaugural Leeisure electronic and print magazines.”

    The company this week reported group turnover of HK$1.714 billion, up 7.4 per cent on the same period in 2014. And at the end of June, Hysan’s retail portfolio occupancy was 98 per cent, the office portfolio full, and residential portfolio at 95 per cent.

    Contrast that growth with the 2.1 per cent expansion of Hong Kong’s overall economy in the first quarter and the forecast for the year of between one and three per cent, and a drop in retail sales for the first half of 1.6 per cent.

    Lee said Hysan’s strategy in recent years has been to cluster its Lee Gardens portfolio of retail and office space in Causeway Bay.

    “Our iconic, well-recognised and quality Lee Gardens brand is powered by our ownership cluster. This area concentration magnifies our ability to extract synergies amongst our retail, food and beverage and office tenant mix. It also supports our active marketing and events programs to reinforce our brand, build our customer loyalty program, create a sense of community and ensure awareness as a must-visit destination,” said Lee.

    “This long-term vision has helped maintain a strong tenancy demand, an improved and broadened tenancy mix, active stakeholder engagement, and most of all, a well-regarded and sustainable brand.”

    To further emphasise the brand and highlight Lee Gardens’ heritage and distinct character, all buildings on the eastern half of Hysan’s property portfolio in Causeway Bay have been renamed under the Lee Gardens brand name from June 1.

    “We are proud of our long history and we understand our tenants also wish to be more closely associated with this brand,” said Lee.

    Hysan believes the retail market remains underpinned by “solid local support and demand”.

    “Furthermore, as retailers and landlords adapt to the changes in the shopping patterns, including that of the rising prominence of eCommerce, we are confident that the retail sector will be able to weather the market volatility,” Lee said.

    The group’s retail portfolio turnover grew 6.4 per cent to HK$950 million, including turnover rent of HK$50 million, (down $10 million).

    “Our results reflected positive rental reversions in rental renewals, reviews and new lettings across the portfolio, with an average rental increase of around 35 per cent. They also highlighted our strategy to increase the base rent while shifting the focus away from turnover rent. Around 80 per cent of retail leases expiring in 2015 have already been committed.

    The portfolio was 98 per cent occupied as at 30 June 2015, (down two percentage points from December 31st’s ‘no vacancy’ status).

    Hysan Place, a hub for the younger, fashion-forward crowd, achieved around 80 per cent growth in estimated tenant sales. Hysan says this reflects its attractive retail offerings, including some popular digital products.

    “We have been further refining our tenant mix and focusing on more unisex sports and leisure offerings, which match Hong Kong’s growing demand for a healthier lifestyle. Lululemon, the trend-setting yoga apparel brand, for example, is opening its largest Hong Kong store on the first floor. Another popular sector is cosmetics, and DFS T-Galleria has revamped an entire floor to showcase its beauty offerings with a brand new experiential format and expanded product categories, including popular Korean brands.”

    The premium Lee Gardens hub experienced a drop in estimated tenant sales when compared to the first half of last year. The sales there were inevitably affected by the slowing down in tourist spending, but they were also partially attributable to the life cycle and distribution strategy of certain brands.

    Newcomers including Roger Vivier and Dolce and Gabbana Junior helped reinforce both our adult and children’s offerings, and reflected the ongoing demand for quality space by major brands at the Lee Gardens, the company said. The hub’s food and beverage outlets, from traditional Chinese to trendy Asian and Michelin-starred French cuisines, experienced double-digit percentage growth in sales.

    Lee Theatre hub, the urban fashion and lifestyle destination, achieved around 10 per cent growth in estimated tenant sales. The flagship stores at the lower levels of Lee Theatre Plaza, including Uniqlo, Muji and Aland, have proven popular with shopping families, and these shoppers also make good use of the food and beverage outlets on the upper floors of this Causeway Bay landmark.

    “Our curation of the Leighton Centre ground level as a “sports-themed street” has also been successful in creating a new home for sporty apparel and footwear, such as adidas Originals, Asics and Onitsuka Tiger.”

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  • E-Mart calls time on closures

    E-Mart calls time on closures

    South Korea’s largest discount supermarket operator E-mart says it is recommitting to the China market and will stop closing stores there.

    E-Mart once operated 27 discount grocery stores in the mainland, but for the last five years has been constantly returning its model and shutting down underperforming outlets.

    However this week, an E-mart executive signalled a change of course.

    “After the August 3 closure of a branch in Shanghai, there will be no additional shutdowns of the remaining eight branches in east China,” a media spokesperson said.

    E-Mart, part of the Shinsegae corporation, says the restructuring and closures will reduce its net loss by 35 per cent this year and a greater focus on eCommerce will help it approach a hitherto elusive profitability.

    “The region continues to be one of the most profitable regions and some of our branches there are even posting a profit. China is a market that we cannot give up,” the spokesperson said.

    In 2011, E-Mart lost US$95 million on its China operations. It has not made a profit there since and in the first three months of 2015 it reported a $10.4 million loss.

    Despite the company’s poor fortunes in China, E-Mart is planning to open its first store in Vietnam in December and is also targeting Mongolia.

  • Shinsegae opens luxury bike shop

    Shinsegae opens luxury bike shop

    Shinsegae Department Store has opened a bicycle shop at its main store in Chungmuro, being the first department store in Korea that is home to a bicycle shop.

    The shop features classic models from Pedersen Bicycles, often called ‘the Bentley of Bicycles,’ multi-purposed ‘Cargo and Cruiser’ bikes from Johnny Loco, and stylish E-bikes from Mando Footloose.

    The shop’s wide range of bikes from classical to electric will satisfy the needs of many bike lovers. Several models featured in the shop are also of rarities hardly seen on the Korean streets. The shop is located on the first basement level of the Chungmuro store.

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  • Mers outbreak dents Korea retail sales

    Mers outbreak dents Korea retail sales

    South Korea retail sales slipped in June – a predictable result of the outbreak of Middle East Respiratory Syndrome (Mers).

    As South Korea’s shunned larger retail outlets to reduce the risk of potential exposure to the illness, discretionary spending fell. Some spending on essential goods moved online.

    South Korea’s government agency Statistics Korea says retail sales in June were worth 29.34 trillion won, about US$25.15 billion, which was 0.6 per cent lower than in the same month last year. It was more than 2 trillion won less than May’s spending.

    “The Mers outbreak caused shoppers to shy away from large markets where people converge, which effectively hurt overall sales,” a Statistics Korea spokesman said.

    However, last week the government officially declared May’s outbreak to be over, after 186 infections and 36 fatalities.

    A breakdown of the figures shows the fall in sales affected mostly categories where shopping could be postponed – appliances and computers were down 5.7 per cent year on year and clothing down nearly 10 per cent.

    Department store sales fell 12.4 per cent and discount department store sales down 9.5 per cent.

    Online spending rose 26.6 per cent in May, while convenience store sales soared 34.6 per cent and supermarket sales rose 4.4 per cent.

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  • Malaysian GST hammers retail sales

    Malaysian GST hammers retail sales

    Grocery retailers in Malaysia have reported a slump in retail sales of up to 20 per cent in the second quarter of this year – the three months after the introduction of Malaysian GST.

    Malaysian GST of a modest six per cent was imposed on April 1. Prior to that there was evidence of consumers stockpiling products – especially fast moving consumer goods – many of which the new tax was not applied to anyway.

    The nation’s largest convenience store operator, 7-Eleven, says the scale of the downturn took many retailers by surprise.

    “I think all retailers anticipated a slowdown in sales as a result of GST, but they probably did not anticipate the weak consumer sentiment and low consumer confidence at the same time,” 7-Eleven CEO Gary Brown told The Malaysian Reserve.

    With 1840 stores across Malaysia and 80 per cent of the c-store market, 7-Eleven is well placed to gauge the national spending mood.

    It plans to respond to the downturn in sales by broadening the range of services it offers customers and expanding the in-store experience beyond mere convenience.

    “We will continue to expand our innovative promotion activities and campaigns to reward our existing shoppers and to attract new shoppers.

    “This includes expanding our in-store services such as mobile phone reloads, bill payment, Touch n Go reloads and eCommerce.”

    The 7-Eleven CEO’s comments come just weeks after the Malaysia Retailers Association (MRA) lowered its growth projections for retail sales growth this year for the third time – down nearly one per cent to four per cent.

    While the tax has had an arguably short term effect, the local currency, the Ringgit has weakened substantially during the last six months, causing price increases on imported goods and raising transport costs. The arrival of GST weakened consumer sentiment.

    According to the MRA, retail sales overall declined three per cent in the second quarter after a 4.6 per cent increase in the first quarter, partly due to consumers stockpiling or buying big ticket items before April 1.

    The MRA expects third quarter growth of 4.8 per cent and fourth quarter growth of 6.9 per cent.

    “Malaysian consumers will get used to the GST by the last quarter of 2015. Retail spending will return to normal again by this period. This industry is expected to recover strongly with a 6.9% growth rate,” it said.

    But anecdotal feedback from retailers Inside Retail Asia has spoken with suggests those projections may well be overly optimistic.

    Malaysian retailers say consumers have been slow to resume spending even after recognising the overall impact of GST is lower than they feared.

  • Daiso wins Manila court battle

    Daiso wins Manila court battle

    Japanese discount retailer Daiso has won the right to use its name in the Philippines after a hearing in the Supreme Court.

    In a final ruling just issued, the court has blocked Filipino company Japan Home Center from using the trademark Daiso, confirming an earlier ruling by the Court of Appeals.

    The judges ruled that Japan Home Center had registered the name in “bad faith” in 2005 – largely to prevent the Japanese Daiso or its local franchisee from using it.

    Daiso Industries of Japan first filed a complaint with the Intellectual Property Office back in 2009 after it appointed Robinsons Retail Holdings as its local distributor and retail partner. Daiso Industries owns the brand name.

    This week’s Supreme Court decision thus ends a six year long legal battle to give Daiso and Robinson the legal right to use the brand.

    Robinsons currently operates 38 Daison stores in the Philippines.

    In another case in January this year, the Intellectual Property Office blocked MySmart One-Shop Daiso from using the brand name.

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  • Tuk tuk centre stage in Jimmy Choo Bangkok concept store

    Tuk tuk centre stage in Jimmy Choo Bangkok concept store

    Luxury shoe brand Jimmy Choo has marked the opening of its newest Bangkok store with the release of a ‘Candy bag’ featuring a tuk tuk.

    “Like the London Taxi, the tuk tuk is an icon of the city. It has a unique warmth and eccentric charm all of its own,” Jimmy Choo creative director Sandra Choi observed at the opening of the new store in the new EmQuartier upmarket shopping mall on Sukhumvit Rd.

    Jimmy Choo is releasing limited editions of the Candy bag to mark openings of a number of new stores around the globe – the Bangkok edition is the seventh, following Hawaii, Los Angeles, Dallas, Las Vegas, London and Toronto.

    Choi worked alongside David Collins Studio to design the new EmQuartier shop which features soft colour tones and contrasting shimmering surfaces.

    “I wanted our new space to be a luxurious environment that would combine the refined detail of a haute couture salon with the intimacy of a fantasy closet,” Choi said in an interview with The Nationnewspaper.

    The interior design includes satin gold, rose gold pink marble and mink velvets which blend with “oyster stone and mother of pearl chevron floor”.  Rounded glass pendants hanging from the ceiling add to the luxury feel.

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  • Affluent Asians spending on status

    Affluent Asians spending on status

    Goods and experiences which provide “a sense of status, exclusivity and uniqueness” are key considerations when shopping for luxury items for Asia Pacific’s elite, according to the Visa Affluent Study 2015.

    In other words, affluent Asians are prepared to spend on status.

    According to the study, a significant percentage of Asia Pacific affluents describe themselves as “status seekers”, with more than one third of the affluent in China (38 per cent), Hong Kong (36 per cent) and Korea and Japan (31 per cent each) are motivated to purchase luxury goods to display their social standing. Affluent in India (29 per cent) and in Singapore (27 per cent) also report taking pleasure in the attention that luxury goods attract.

    “What drives Asia Pacific’s affluent in making luxury purchase decisions varies across the region, but the common factor is the search for unique products and services that give a sense of status and exclusivity,” said Ruben Salazar, VP, products with Visa Asia Pacific.

    “While quality remains important for most consumers, Asia Pacific’s affluent are continuously looking to go beyond quality guarantee to find that special product or experience that stands out from the crowd and that gives a sense of self-satisfaction.”

    Only the affluent from Indonesia and Australia described themselves as being more driven by other considerations, with almost a quarter of Indonesian affluent (23 per cent) surveyed also valuing quality alongside social status (24 per cent) and exclusivity (28 per cent).

    Some 500 respondents from each of Australia, China, Hong Kong, India, Indonesia, Japan, Singapore and South Korea were interviewed online and in face-to-face surveys for the study. Respondents have an average household income of US$73,000 per annum and are aged between 18 and 55 years old.

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  • Matahari has strong half

    Matahari has strong half

    Indonesia’s PT Matahari Putra Prima (MPPA) says its first half year sales rose 6.6 per cent on the back of new stores.

    Like for like sales rose 2.1 per cent in a period of softening economic conditions and when several stores were closed for renovation.

    Matahari has continued with a strong focus on upgrading its store formats, rolling out its new G7 format with brighter, more upmarket store designs and increased range. It also opened the first of its new Foodmart Primo format stores during the half year.

    In the next six months Matahari will open the first of another new concept – a SmartClub wholesale store.

    Operating profit surged 29.4 per cent in the half (excluding extraordinary items) as the retailer continued to improve its infrastructure, boosting internal efficiencies and developing a solid platform for future growth.

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  • CapitaLand posts healthy quarter

    CapitaLand posts healthy quarter

    CapitaLand Limited has today announced a second half after tax group profit of S$464 million – 5.8 per cent up on the same period last year.

    The property giant, which derives 80 per cent of its revenue from Singapore and China, has a portfolio including shopping malls, serviced apartments, office blocks and hotels trading under a variety of banners.

    In a statement, CapitaLand said its operating profit was 87.6 per cent higher than the same quarter last year on account of gains from the change in the use of development properties for sale in China, namely The Paragon (Tower 5 & 6) and Raffles City Changning (Tower 3). These projects are at prime locations in Shanghai and the group has changed its business plans for these projects from strata-sale to leasing as investment properties.

    The result was impacted by an impairment for a development project in China.

    Revenue increased by 17.8 per cent on the back of higher contribution from development projects in China, partially offset by lower revenue from development projects in Singapore and Vietnam.

    The group says it recorded higher rental revenue from its shopping mall and serviced residence businesses during the quarter.

    Lim Ming Yan, president & group CEO, said CapitaLand’s well-balanced portfolio of investment properties and residential projects will continue to generate recurring income and trading profits for the group.

    “While CapitaLand remains focused on Singapore and China as core markets, it is exploring opportunities to expand in growth markets such as Vietnam, Indonesia and Malaysia. CapitaLand has built a significant scale across diversified asset classes and strong expertise in integrated developments, shopping malls, serviced residences and capital management. Coupled with its technology efforts, CapitaLand continues to strengthen its position for growth,” he said.

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