Tag: Retail

  • Foodpanda Malaysia expands

    Foodpanda Malaysia expands

    Foodpanda, Malaysia’s monopoly food delivery business, has relaunched its operations in Johor Bahru, in the nation’s south.

    Foodpanda Malaysia says it is “already a household name” in other major Malaysian cities – Kuala Lumpur, Ipoh, Melaka and Penang.

    “We are happy to be back in Johor Bahru. I think this service would add convenience to the residents in Johor Bahru,” said Uffe Jordan, MD of Foodpanda Malaysia.

    The relaunched service will start by offering online ordering and delivery of wellknown quick service restaurant brands such as Kenny Rogers Roasters, Nando’s, and Sakae Sushi.

    “We will be launching in the city centre and are looking forward to expand our delivery areas soon. We are also working on bringing in more local favorite restaurants in Johor Bahru,” said Uffe.

    Rocket Internet owned Foodpanda Group operates in 39 countries on five continents under its own name and the additional brand hellofood.

  • Lacoste India targets flyers

    Lacoste India targets flyers

    French apparel brand Lacoste hopes to score more impulse sales by opening stores in Indian airport terminals.

    Lacoste India plans to open three new stores this year in Mumbai and Hyderabad airports and another five in shopping centres as it gradually builds its footprint in tier one cities.

    “We will be opening one outlet at the Hyderabad domestic terminal and at Mumbai airport,” Lacoste India director & CEO Rajesh Jain told PTI in an interview.

    “The new retail stores at airports would start contributing up to seven per cent of our total sales from next financial year.”

    Lacoste already operates a store inside Bangalore Airport. It is eyeing Kochi and Delhi as well.

    The company currently operates 46 stores in 18 Indian cities.

  • Korea set to woo back Chinese tourists

    Korea set to woo back Chinese tourists

    South Korea’s retail and tourism industries are preparing a slew of promotional and cultural events to woo back Chinese tourists during a long-haul holiday season, pinning their hopes on making up for a summer slump in the wake of a viral respiratory illness, sources say.

    Since the first outbreak in late May, Middle East Respiratory Syndrome (MERS) made a big dent on domestic spending as foreign tourists canceled their planned trips during the peak summer season, while South Koreans avoided shopping centers and other crowded places in June and July.

    While the viral disease hit the tourism and retail industry hard, Chinese tourists have started to return to the once-empty streets of Myeongdong, one of the capital’s most popular shopping districts, over the past month.

    The number of Chinese travellers has increasingly recovered to the previous year’s level since late August and marked an on-year rise since mid-September, the state-run Korea Tourism Organization (KTO) said.

    About 303,000 tourists with Chinese nationality entered the nation in the first two weeks of September, rising 4.8 per cent compared with the same period a year ago, it said.

    “The number of Chinese travelers has sharply risen this month, and the number is expected to completely recover during the Chinese holiday season,” Han Hwa-joon, who oversees the KTO’s Shanghai branch, said. “The recovery pace is faster than expected.”

    Chinese Thanksgiving falls on September 26-27, and together with the Chinese National Holiday running from October 1-7, the holiday season can be extended up to 12 days.

    As the Chinese holiday season draws near, major shopping centers and duty-free operators are making all-out efforts to draw Chinese tourists to make up for a shortfall in sales amid dormant domestic spending.

    According to the KTO, 164,000 Chinese travelers visited the nation during last year’s autumn holiday season and spent 2.4 million won on average, which amounts to about 400 billion won (US$341.5 million) in total.

    During this year’s Chinese National Holiday, the tourism agency expected some 210,000 Chinese will visit the nation, up 30 per cent from a year ago, considering the pace of growth over the past three years.

    “We will host a variety of events even after the Chinese holiday to make up for the fall in tourists during the peak season from June to August,” said Seo Young-chung, a KTO official in charge of Chinese tourism.

    Lotte Department Store plans to host a variety of promotional events targeting Chinese travelers during the golden weeks, providing discounts on payments made through UnionPay, China’s largest credit card issuer, and Alipay, China’s No. 1 mobile payment application.

    Shinsegae, the nation’s leading department chain, said it will give special discounts to Chinese customers, while Hyundai Department Store also started the regular sale season earlier than usual to attract the deep-pocketed travelers.

    Operators of duty-free shops have also stepped up efforts to bring back Chinese travelers, the largest consumer group, which accounted for about 70 per cent of downtown duty-free spending last year, up from around 15 per cent in 2011.

    Lotte Duty Free, the world’s fourth-largest duty-free operator, held a travel fair in Shanghai on September 9, in which senior company officials reached out to Chinese tourism officials to attract Chinese travelers.

    Hotel Shilla, part of Samsung Group and the world’s No. 6 duty-free operator, also presented various sales promotions and tour packages during the fair along with other Samsung units, with the attendance of senior officials.

    “The Korean tourism industry has mostly recovered after the Mers outbreak came under control, and it will make a full recovery in September,” Hotel Shilla CEO Lee Bu-jin told reporters during her visit to Shanghai.

  • Korea’s Churro 101 Singapore date

    Korean dessert concept Churro 101 is to open its first store in Singapore on October 3.

    Churro 101 Singapore will debut at Bugis Plus on Victoria St, serving up churros – a fried-dough pastry snack popular in Spain, France, the Philippines, Portugal, and the Southwestern US.

    It will be the four year old brand’s first store opening outside South Korea and a likely prelude to expansion into other Asian markets.

    The Singapore store will make fresh churros daily in an open kitchen, using raw materials imported from Korea.

    The 441 sqft store features European styling and will seat up to 20 customers as well as serving takeaway orders. It will trade from 10am to 10pm daily.

    While the churro concept is not new to Singapore, Churro 101 offers a unique take on the dessert, including flavours made with the brand’s own secret recipes, filled churros and a signature dark chocolate churro.

    Prices will range from $3.30 to $5.40.

  • Singapore Retail Productivity plan launched

    Singapore Retail Productivity plan launched

    Singapore’s government has unveiled ‘part 2’ of a Retail Productivity Plan for the city state.

    In a speech to the 24th Singapore Retail Industry Conference, Senior Minister of State for Trade and Industry Lee Yi Shyan said while the original Retail Productivity Plan launched in 2011 had helped retailers improve operational efficiency, more needs to be done.

    “We need to deepen the transformation of leading players, and also bring on board a large number of retailers that may be slower to adapt to fast-changing consumer preferences and consumption patterns,” he said.

    The Retail Productivity Plan 1.0 included focuses on adopting technology, upgrading human resources and introducing more customer-centric initiatives. “I am happy to note that the plan has benefited over 1900 retailers,” said the minister.

    “The retail sector is an important part of Singapore’s economy. It generated about S$35 billion in annual operating receipts and accounted for about 125,000 jobs in 2014.

    “Given that the retail sector hires many workers, we identified it as one of the priority sectors for productivity improvement. Higher productivity would lead to higher profitability for firms, higher wages for workers and a more competitive industry as a whole.”

    Lee Yi Shyan said Retail Productivity Plan 2.0 aims to improve both top-line growth and operational efficiency.

    He said it was only a matter of time before online retailing “becomes commonplace in Singapore”.

    “Some may argue that … smaller economies like Singapore may still rely on bricks-and-mortar stores for a long time to come. Do you subscribe to this argument? I personally believe… consumer preferences are changing. A study by Euromonitor International shows online spending in Singapore grew from S$1.08 billion in 2014 to S$1.22 billion in 2015. This is growth of 13 per cent over a year.”

    He said the choices are clear for Singapore retailers.

    “If we only play defensively, we would see our retail sector growing very slowly, or perhaps not at all. Our strategy therefore cannot be limited to cost-cutting and efficiency improvement. Our strategy has to be offensive, to include selling beyond the limitation of store-fronts and serving markets in the region and beyond.

    “This is why we will place great emphasis on internationalisation and helping retailers sell online in RPP 2.0. We will help companies acquire the relevant capabilities to sell online, such as investing in product development, brand-building, e-infrastructure, digital advertising, and channel fulfilment.

    “We will encourage collaborations between our retailers and experienced logistics players such as SingPost to better perform order fulfilment in Singapore and the region. We will also encourage our e-retailers to explore partnering global platforms, such as eBay, Amazon and Alibaba.com to market their products worldwide. For example, we worked with Google this year in February to organise the Great Online Shopping Festival.”

    The minister said Singapore’s bricks and mortar stores will not vanish overnight.

    “However, they will have to compete much harder for a shrinking pie by offering better and more immersive in-store experiences. This can make a difference. For example,Tangs has revamped itself to offer its shopping experience as a one-stop lifestyle destination. They extended their offerings beyond retail to include spa services and food offerings, and jazzed up their store with an area set aside for pop-up showcases for new brands.”

    He said as well as helping companies lift top-line growth, RPP 2.0 will continue to reach out to many more retailers that can benefit from efficiency improvements.

    “The use of RFID (Radio Frequency Identification) for inventory management, automated retail services and cashier-less stores are proven ways to help retailers improve efficiency and save costs. Experience in the past suggests that such technologies could save more than 20 per cent in manpower costs.

    “An interesting example of automated retail is SingVita – a fully automated store which sells health supplements. Beyond allowing for substantial manpower cost savings, the cloud-connected machines used in SingVitaalso enable the company to manage inventory and prices in real time.

    “We will also support retailers that embark on projects to analyse and improve their existing business operations. Companies can, for instance, embark on time motion studies to optimise the time that workers spend on various tasks.”

    Another example he cited was Noel Gifts, an online floral and gift retailer, which embarked on such a project with SPC to identify and reduce wastages in processes such as hamper wrapping and flower arrangement. This, in turn, enabled it to deploy its manpower to more value-adding services.

    “Singapore is an open economy, and our retail sector [will] have to compete regionally and globally. Our retailers can sell to regional and international consumers if we have unique products and services to offer. To survive, we cannot remain defensive. We need to have growth strategies that tap on markets outside of Singapore.

    “While a good majority of our retailers could improve their productivity by improving operational efficiency, at least in the short term, I believe a vast number of our retailers will have to transform to become e-retailers quickly. The trend of shopping online is unlikely to reverse, and we have to be prepared for this.

    “Let us work together to retain and enhance the vibrancy of our retail sector.”

  • Chinese millennials: the new big spenders

    Chinese millennials: the new big spenders

    Chinese millennials – China’s new rich – are looking to spend double the Asia-Pacific average on luxury items in the next year.

    The millennials – those aged 18 to 29 – are already China’s biggest spenders on luxury goods in Asia Pacific, followed by those in South Korea and Hong Kong.

    According to research from MasterCard, the most popular luxury items are high-end tech gadgets, with 25 per cent of millennials in Asia Pacific planning to buy an item such as a smartphone or tablet computer in the next year. This is followed by designer clothes and leather goods (17 per cent) and jewellery (17 per cent).

    Overall, most millennials in the region take approximately a month to consider and research their luxury purchases. More millennials in Asia Pacific (a quarter) buy on impulse than those aged over 30 (a fifth).

    Meanwhile, over a third of millennials in the region prefer Western brands over regional or local, however there is a marked difference across the region. While more than half of millennial shoppers in China, Vietnam, South Korea and Hong Kong prefer Western brands, the majority in India and Indonesia would rather buy local. The top three reasons for preferring Western brands were reliability of quality, followed by value for money and brand loyalty.

    When choosing where to buy luxury goods from, the majority of millennials still prefer purchasing from local brick and mortar stores (64 per cent), instead of local eCommerce sites (nine per cent). Meanwhile a fifth prefer to buy luxury items in-store when travelling overseas, this is especially true of Chinese millennials, 51 per cent of whom are most likely to buy a luxury item in-store while travelling.

    The results are based on interviews that took place between May and June 2015 with 2272 millennials across 14 Asia Pacific markets.

    More findings:

    • Millennials from China intend to spend on average US$4362 on luxury goods over the next year, nearly double that of the Asia Pacific average of US$2584. South Korea (US$2638) and Hong Kong (US$2584) round off the top three.
    • Overall, the majority of millennials in the region will take under a month to research and consider a luxury item before buying it (44 per cent), led by those in India (64 per cent), China (51 per cent), South Korea (48 per cent) and Taiwan (48 per cent).
    • Thai (60 per cent) and Indonesian (50 per cent) millennials are the most impulsive shoppers in the region with at least half buying luxury goods on impulse, above the regional average of 26 per cent.
    • The most careful millennial shoppers are from Vietnam – the majority will only buy a luxury item after two to six months of extensive research (45 per cent), more than the regional average of 20 per cent.
    • Over one-third of millennials across the region prefer western brands to local and Asian brands. More than one in two millennials in China (66 per cent), Vietnam (60 per cent), South Korea (59 per cent) and Hong Kong (52 per cent) would pick a western luxury brand over a local or Asian luxury brand. However, in Indonesia (61 per cent) and India (50 per cent), a large majority of millennials would rather buy luxury goods from a local brand.
    • Most millennials in the region purchase luxury goods in-store rather than online – this is especially so when they are on sale locally (43 per cent) compared to when they are at full price (23 per cent). Only a small percentage of millennials in the region shop for luxury goods on local (nine per cent) and overseas sites (four per cent).
    • Chinese millennials are the most likely to buy luxury goods in-store when travelling overseas (51 per cent), whereas the majority of consumers in India (81 per cent) and Indonesia (50 per cent) buy luxury goods locally in-store at full price.
    • Millennials in Indonesia are the most likely to spend more on luxury goods in the next year than the year before (47 per cent). Across Asia Pacific, most consumers (40 per cent) intend to spend the same amount as they did the year before, 22 per cent plan to spend less while 19 per cent plan to spend more.
  • Denim brand joins Global Brands portfolio

    Denim brand joins Global Brands portfolio

    Hong Kong-based Global Brands Group has signed a 10 year licensing agreement covering two North American denim brands.

    In a joint venture between Iconix Brand Group and Buffalo International Global for the Buffalo David Bitton and i Jeans by Buffalo labels.

    Under the agreement, Buffalo David Bitton and i Jeans by Buffalo will join Global Brands’ portfolio of fashion and lifestyle brands, with Global Brands to design, produce and distribute products across both brands’ core categories.

    Global Brands CEO and vice chairman Bruce Rockowitz said with the addition of the Buffalo brands, “we have taken another significant step to establish Global Brands as a leader in the denim category”.

    “We are focused on categories where we want to be a key player and achieve scale.  Denim is one such category which we are excited about and where we see excellent potential for growth. We’re seeing a revival of denim as a fashion essential and believe that it will continue to trend strongly,” he said.

    Founded in Montreal, Canada and with a 30-year heritage, the Buffalo brands are known for a long-standing tradition of trend right, quality clothing and accessories. The brands are leaders in their respective channels of distribution, offering multiple denim styles and a full fashion collection that spans a range of men’s, women’s and children’s products, including denim jeans, pants, shirts, sweaters, jackets, dresses and other apparel, as well as accessories, suits, bags, sleepwear and small leather goods. The products are distributed through multiple channels, including better department stores, as well as fine specialty stores throughout North America.

    Gaby Bitton, chairman, Buffalo International, said: “This long term strategic partnership with Global Brands will strengthen the Buffalo David Bitton and i Jeans brands around the world. The JV will continue its extensive marketing support that have helped make the brands leaders in the category.”

    This is the second long-term licensing agreement signed by Global Brands in the denim space, following a similar agreement with the Joe’s brand this month.

  • End near for HMV Singapore?

    End near for HMV Singapore?

    In Hong Kong, HMV is enjoying a renaissance. But HMV Singapore appears about to become extinct.

    The last surviving store bearing the brand in the city state will close on September 30 after the company decided not to renew its lease on the Marina Square shopping mall.

    On its website the company says it plans to “re-open a new store in the near future”, but retail commentators aren’t so certain the brand will survive offline.

    The Straits Times newspaper reports the company held discussions with centre management for several months on renewal terms but has now confirmed terms to vacate the premises.

    HMV was once Singapore’s largest music retailer but has become a victim of the digital age and high retail rents which made it uneconomic to continue selling music CDs and movie DVDs.

    HMV Singapore GM Michele Tan told the Straits Times she was not authorised to reveal the location and opening date of the new store.

    The Singapore business is operated by Hong Kong-based AID Partners which is enjoying success reinventing the brand in Hong Kong. New concept stores there include cafes and an expanded product range including a focus on headphones, DJ equipment, apparel and gifts – along with a more curated offer of music and DVDs.

    HMV opened its first store in Singapore in 1997, a 25,000 sqft two-level superstore at The Heeren. That store relocated to a smaller space at 313@Somerset, which was replaced by a Sony store in 2013. At its peak there were at least three stores in the city.

  • Bellabox expands to China

    Bellabox expands to China

    Australian beauty subscription service and e-commerce platform, Bellabox, has confirmed its expansion into China in partnership with Australia Post’s Tmall store-front platform.

    The move is part of the beauty company’s growth strategy to become the dominant beauty e-commerce platform across Asia.

    Supporting its push into China, Bellabox will be moving away from its subscription-based model and introducing limited edition themed beauty boxes exclusively for the Chinese market.

    According to the company these will feature “the best of Australian beauty and cosmetic brands” to provide discerning and brand aware Chinese shoppers with more choice and variety.

    “Chinese consumers are sophisticated shoppers who are selective about the brands they use and buy. We are seeing strong demand for Australian brands as they are perceived to be higher quality and environmentally friendly, for this reason the market represents a huge opportunity for our business,” said Bellabox, CEO and co-founder, Sarah Hamilton.

    Hamilton adds that China is a key market in the company’s continued expansion across the region.

    “The market potential is huge with analysts[1] predicting the cosmetic market will become a US$113.9 billion industry by 2017, of which 25 per cent coming from online sales fuelled by tech savvy millennial. China has a high adoption rate of smartphones and online shopping, it provides the perfect platform for growth and we look forward to working with Australia Post to build our position in the market. ”

    Australia Post’s Tmall service opens the door for local e-commerce players to access China’s traditionally challenging market by crossing language and cultural barriers, and cutting through red tape to sell on a unique marketplace.

    With an audience of more than 300 million estimated Chinese consumers who, in 2014, spent more than half a trillion US dollars online, Tmall presents a strong opportunity for Australian e-commerce businesses.

    Ben Franzi, GM global e-commerce platforms and digital at Australia Post said, “We’re focused on delivering e-commerce solutions that make it easier for Australian retailers to grow, compete and succeed online.

    “Australia Post’s Tmall storefront (auspost.tmall.hk) is helping home grown businesses, like bellabox, sell into China – one of the world’s largest consumer markets.”

    “Bellabox has a tremendous opportunity to benefit from the trust, broad reach and revenue opportunities that comes with Tmall’s reputation and high visitor traffic. We’re excited to partner with bellabox to launch this exclusive offer that ticks the boxes against China’s growing consumer demand for authentic, quality, Australian-made beauty products,” said Ben.

    Bellabox is now one of 36 Australian brands with a virtual storefront on Australia Post’s Tmall store, which this month celebrated its first birthday.

    Bellabox is headquartered Melbourne and works with more than 900 beauty brands to create monthly-customised boxes for 40,000 subscribers.

  • 3 Hong Kong to sell iPhone 6s, iPhone 6s Plus for HKD 0

    3 Hong Kong to sell iPhone 6s, iPhone 6s Plus for HKD 0

    3 Hong Kong will launch Apple’s iPhone 6sand iPhone 6s Plus smartphones on the local market. Stating 25 September, 3 Hong Kong will offer the iPhone 6s 16GB and the iPhone 6s Plus 16GB for HKD 0 with a refundable deposit on the iPhone monthly plan.

    Customers will be able to acquire the iPhone 6s 16GB for HKD 0 for HKD 408 or above iPhone monthly plans. The iPhone 6s Plus 16GB will also be available for HKD 0 for HKD 498 or above iPhone monthly plans. The iPhone 6, iPhone 6 Plus and iPhone 5s will also be available.

    Customers who acquire the iPhone 6s and iPhone 6s Plus from 3 Hong Kong will be able to connect to the operator’s LTE network with VoLTE HD voice functionality. Users will also have internet access at 3 Hong Kong’s over 16,000 Wi-Fi hotspots.

    Customers can buy the iPhone 6s and iPhone 6s Plus at 3 Hong Kong’s retail shops and online at the iphone.three website.

  • The Apple-IBM MobileFirst Program Set to Launch in China

    The Apple-IBM MobileFirst Program Set to Launch in China

    In July 2014 the Apple and IBM global partnership was formed to transform enterprise mobility via the iPhone and iPad. The alliance formed MobileFirst. By mid-November the MobileFirst website was launched and began promoting the new apps that were being custom designed for key segments of business including Banking/Finance, Travel/Transportation, Retail, Telco, Insurance and Government. It has since expanded to Healthcare, Industrial Products, Law Enforcement, Energy/Utilities and Social Programs.

    It’s being reported today by Guanzhou’s 21st Century Business Herald that the Apple-IBM MobileFirst Enterprise program will be officially coming to China in the coming weeks. The program will reportedly begin with 10 apps aimed at the retail, insurance, financial, telecom and aviation sectors, as well as the government, and events will be held in Beijing and Shanghai to showcase the new products.

    The goal of the Apple-IBM MobileFirst was to have 100 apps finished by the end of this year. Thus far 32 of them are completed with more on the way. Guo Jijun, president for strategy at IBM Greater China, who is also in charge of MobileFirst in the country, noted that “IBM has also formed partnerships with companies, including Twitter, Tencent, SAP, Facebook and China Telecom, so the MobileFirst platform can integrate the strength of these businesses.

    Apple introduced the new iPad Pro on September 9 that now adds the ability to work with a new Smart Keyboard and a digital smartpen called the Apple Pencil to support  professional markets.

    2AF 55 APPLE IPAD PRO, APPLE PENCIL, SMART KEYBOARD

  • Chinese shoppers still spending on luxury goods

    Chinese shoppers still spending on luxury goods

    China’s share market plunge and currency devaluation have not resulted in Chinese shoppers cutting back their spending on luxury goods as had been feared, a top-ranked HSBC analyst said this week.

    Mr Erwan Rambourg, HSBC Global’s co-head of consumer and retail, said the declines in stock prices and in the yuan need to be put in context.

    “The Shanghai composite index has been down roughly 40 per cent since its peak. On a 12-month view, if you had invested 12 months ago, you would still be up about 30 per cent,” he said.

    And while the yuan’s devaluation of about 2 per cent last month instantly made everything more expensive for travelling Chinese shoppers, the currency is still up in value relative to the euro compared with last year, he noted.

    “Purchasing power of the Chinese in Europe is still a lot stronger today than it was just 12 months ago,” said the Hong Kong-based Mr Rambourg, who has been covering the luxury and sporting goods sectors for 10 years.

    “The reason we look at euro-yuan and not (the US) dollar-yuan is because Chinese consumption abroad is mostly taking place in continental Europe, places like France and Italy. So obviously I don’t see that as a big negative.”

    It is the appreciation of the euro that could be a bigger issue than the decline in Chinese equity markets, Mr Rambourg said.

    He said the recent correction of the equity markets in Asia “has had a much bigger impact on Hong Kong than it has had on mainland China”.

    Reuters reported last month that Hong Kong retail turnover fell for the fifth straight month in July, as a slowdown in tourist arrivals further battered sales of big-ticket items such as jewellery and watches, while a plunge in the stock market hurt consumer sentiment.

    Mr Rambourg believes that luxury sales fell in Hong Kong because Chinese spenders have moved to more “fashionable” destinations such as Japan, South Korea and Taiwan.

    HSBC Global Research’s latest report estimated about 70 per cent of luxury revenue in Hong Kong comes from Chinese consumers.

    One of the issues in Hong Kong and Macau is the lack of diversity – Hong Kong is all about shopping, Macau is all about gaming, and there is not a lot that is offered beyond that, said Mr Rambourg.

    But when Chinese tourists go to Japan, they return home to tell people about the culture, creating a snowball effect which goes beyond just the price arbitrage, where some destinations become fashionable and other destinations become less fashionable.

    About 10 per cent of luxury revenue in Japan now comes from Chinese tourists and Mr Rambourg believes this figure will rise as it did in South Korea, which saw an increase from 10 per cent to 30 per cent.

    About 25 per cent of luxury revenue in Singapore comes from Chinese tourists.

    Mr Rambourg suggested that Singapore should look at providing more diversity in terms of the brands represented here in order to draw in more Chinese shoppers.

    While there will be ups and downs, he foresees Chinese consumers becoming dominant over the next decade.

    About 35 per cent of today’s luxury consumers come from China and the figure could double over the next 10 years, he said.

  • China’s fake Apple Stores alive and well, look to profit on iPhone 6s launch

    China’s fake Apple Stores alive and well, look to profit on iPhone 6s launch

     Thanks to lax copyright enforcement policies, growing demand for all things Apple and a lack of official retail channels, China’s fake Apple Stores are experiencing a resurgence on the back of iPhone 6s preorders.

    In electronics manufacturing mecca Shenzhen, a major cog in Foxconn’s iPhone and iPad production machine, a multitude of counterfeit Apple stores are popping up to take advantage of Friday’s iPhone 6s release, reports Reuters. According to publication estimates, more than 30 storefronts bear Apple’s iconic logo, with some unauthorized outlets kitting out personnel with Apple Store-style blue t-shirts and lanyard name tags.

    As they have in the past, these counterfeit stores are taking advantage of China’s seemingly insatiable iPhone demand. Just hours after iPhone 6s preorders went live last week, Apple’s allotment for the Chinese market sold out, pushing buyers loathe to wait an extra two to three weeks toward unauthorized stores that buy stock from official resellers and flip them for a hefty profit.

    With iPhone viewed as a status symbol in China, many consumers are willing to pay more than double retail prices to get their hands on one the day it comes out. For some buyers the high costs are apparently worth the added cachet that comes with nabbing a copy on day one. Consumers in other markets are also keen to get their hands on Apple’s latest smartphone, but Chinese customers are especially zealous.

    The benefits are more concrete for resellers, who risk minimal retail overhead and an upfront investment by smuggling iPhones in from Hong Kong, the U.S. and other far-flung markets. If successful, however, they stand to haul in huge returns.

    Apple has for years dealt with counterfeit stores, an issue that gained media attention in 2011. While Chinese officials ultimately ordered a handful of operators to shut down, the unauthorized resale industry was never completely wiped out. Now with iPhone 6s, resellers are back in business.

    Part of the problem stems from an inadequate official retail presence in the region. Apple only had 22 stores serving all of China as of June. By comparison, there are 53 Apple Stores in California alone. The disparity is stands in contrast to China’s market potential, which is widely viewed as vital to Apple’s growth and sales sustainability. The company has plans to expand its retail footprint to 40 stores by 2016, however, the most recent being a second Hangzhou location in April.

  • Hard Passage to India for China’s Phone Makers

    Hard Passage to India for China’s Phone Makers

    For Chinese smartphone and mobile phone manufacturers, the crowded Karol Bagh market district in Delhi, India, is a key outpost for an exciting business frontier. Vendors in cramped shops peddle handheld devices from India and around the world. Most shops feature budget phones, although in recent years expensive smartphones have been added in increasing numbers to store shelves.

    Chinese smartphone makers such as Xiaomi Inc. and Huawei Technologies Co. Ltd. are working hard to unlock what they see as enormous sales potential at Karol Bagh and similar markets around India. Analysts think Indian sales of Chinese-made phones could explode very soon.

    Contributing to these expectations are figures from researchers such as Gartner Inc., which found only 115 million of India’s 1.2 billion people owned a smartphone at the end of 2014. It also found the country is home to about 610 million mobile phone users.

    Anshul Gupta, a researcher at Gartner, said he expects the Indian smartphone market to expand by 40 percent annually over the next two years.

    Kiranjeet Kaur, Asia-Pacific division director for the market research firm International Data Corp. (IDC), said Chinese phone makers have accelerated efforts to expand in India in order to offset a sales slowdown at home tied to the cooling economy.

    Officials at Chinese smartphone manufacturers echo those sentiments.

    “Today’s mobile phone market in India is just like China’s four or five years ago, with golden opportunities everywhere,” said a source at a mobile phone maker who asked not to be named.

    Chinese brands account for about one-quarter of mobile phone sales in India, said Gupta. But the Chinese market share is rapidly increasing, according to an IDC report. Brands including Lenovo, Xiaomi, Gionee and Huawei cornered a combined 12 percent of the market in the second quarter of this year, the report said, up from 6 percent during the same period last year.

    Although store sales are important in India, the role played by Internet shopping is growing. According to IDC, online sales accounted for 27 percent of all smartphone sales in India in the second quarter, rising from 10 percent in the same period 2014.

    Survival Tactics

    Chinese companies that are now growing their sales in India survived an assault that began a few years ago when competitors flooded the market with cheap knock-off brands. That attack dented business and the reputations of legitimate phone makers, including the first Chinese players in India, Gionee and Coolpad. Today, some Chinese phone brands are still plagued by a negative image.

    Chinese companies bounced back by investing in brand-building ads and retail sales networks. Another tactic, used by companies such as the relatively young phone maker Xiaomi, involved building Internet sales channels and social media promotions aimed at India’s diverse market.

    Another Internet-savvy smartphone manufacturer is Meizu Technology Co. Ltd., which in August became the latest Indian market player by premiering its MX5 model at a press conference in New Delhi. Meizu is selling devices online through Amazon and the Indian e-commerce website Snapdeal, foregoing the costly task of building on-the-ground sales networks.

    “Chinese companies want to take advantage of the opportunities presented by India’s market boom,” said the manufacturing source. “But building sales networks takes time and resources in the face of challenges from domestic brands in India. So using e-commerce channels is much safer for Chinese phone makers.”

    Xiaomi is relying on the Internet for sales and has opened an Indian operations headquarters in Bangalore, an e-commerce hub in India.

    Xiaomi’s strategy in India mimics its successful strategy China: “flash sales” through which consumers are offered a limited number of products during a single marketing event. Most flash sales are promoted through social media.

    Xiaomi’s first online sales event targeting Indian shoppers came in 2014 through a partnership with India’s largest e-commerce site, Flipkart.

    Manu Jain, the chief executive of Xiaomi’s India division, said 10,000 Xiaomi phones were sold through the Flipkart website in just two seconds in July last year. By early December, he said, Xiaomi has sold 1 million phones in India, making it India’s fifth-largest phone supplier.

    Xiaomi has hit some bumps on its fast road to success. The company’s sales surge in India caught the attention of its Swedish competitor Ericsson, which in December filed a complaint in the Delhi High Court claiming Xiaomi broke the law by using Ericsson-patented parts in its phones without paying royalties.

    The court agreed with Ericcson and barred Xiaomi from selling phones in India that are equipped with chips made by its parts supplier MediaTek. Devices equipped with Qualcomm-made parts were not covered by the ban.

    Indian courts are still considering the case, Jain said. And Xiaomi is still expanding in India through partnerships with retailers and e-commerce firms.

    Some Chinese phone makers have paid an even higher price in India. Shenzhen-based Coolpad has been in India since 2007, but has had a hard time competing against the Samsung, Nokia and Blackberry brands. The company is hoping its recently launched partnership with Amazon will, after years of lukewarm sales through Indian telecom tie-ups, boost online sales.

    Brand Building

    Coolpad’s plan for enhancing its image in India is to launch a new model every month and then sell the phones through e-commerce websites.

    “Unless we start building up the brand now, there will be no future opportunities” said Syed Taj, head of the company’s India division. “Coolpad has to catch up.”

    Not every smartphone manufacturer has switched to e-commerce sales. Some companies, such as Shenzhen-based Gionee, continue to rely on brick-and-mortar retailing for most sales in India.

    Arvind Vohra, head of Gionee’s India operations, said the online sales strategy pursued by many Chinese companies has quick effects but lacks long-term brand-building efforts. “It’s hard to say how it will go,” he said.

    Gionee has taken the old-fashioned route by building up a retail sales network in India. According to Vohra, the company has maintained contracts with 10 dealers operating 35,000 shops across the country since 2007.

    And Gionee’s retail effort has paid off. The company sold about 4 million devices last year in India, or about half of all Chinese-made devices in that country, pocketing US$ 300 million in revenues. And since the Indian smartphone market is only about three years old, Vohr said, there’s plenty of room for growth.

    Still, building a retail sales network in India from scratch means competing against established players such as Samsung, one of several international brands that dominate the market. It also requires navigating a retail environment characterized by a large number of phone dealers and retailers spread over a wide area.

    It’s easier to switch to an online sales strategy from a retail environment than the other way around, Vohra said, because consumers in stores are more brand-focused while those shopping online pay more attention to price.

    Samsung shipped more phones to India – 6 million – than any competitor in the second quarter of 2014, according to IDC, giving the South Korean company 22.6 percent of the market. Indian mobile phone manufacturers Micromax, Intex and Lava were the second, third and fourth largest, underscoring the fact that Chinese firms face an uphill climb.

    Chinese phone makers Vivo Electronics Corp. and Oppo Electronics Corp. have each spent hundreds of millions of yuan in India on retail marketing campaigns since the beginning of the year, an industry source who asked not to be named said. Yet “the effects of this huge investment have been limited.”

    Lenovo is also trying to break into the Indian market through store sales. The company’s devices are sold by more than 7,000 retailers across India, a number that Ye Zhuliang, vice president of Lenovo Group Ltd., expects will rise to 15,000.

    “Sales networks are quite complicated in India, which has more cities and greater regional differences” than China, said Ye.

    Yet brand-building may be the most important task for Chinese device-makers in India. And different companies are taking on that task in different ways.

    To get people talking about its phones, Gionee sponsors Bollywood movies and cricket matches. According to Vohra, the company also buys newspaper and TV ads that say its high-tech products are built for high-end consumers. These ads often stress that a Gionee phone costs about 20 percent more than Indian-made brands.

    To give the Chinese device maker even more support, Vohra said, Gionee plans to step up newspaper and TV ad spending, and look into expanding online sales.

    Xiaomi is trying a different approach, targeting young consumers through online marketing campaigns. It’s using an online forum and social media to connect with younger Indians, mirroring the company’s online marketing efforts in China. The firm also modified its phone operating system and added user functions designed for Indian users.

    It’s also common for Xiaomi to pitch its phones by mentioning the price tag can be half of what other brands charge, said Jain.

    Chinese phone makers also see the Indian frontier as a future production base.

    Gionee plans to invest US$ 15 million over the next three years to build phone production facilities, Vohra said. Xiaomi, through a partnership with electronics supplier Foxconn Technology Group, has started assembling smartphones in India. And Coolpad hopes to open a research and development office in India within two years.

     

  • Singapore consumer prices post biggest drop in 5 years

    Singapore consumer prices post biggest drop in 5 years

    Consumer prices in the Republic fell 0.8 per cent in August, the biggest year-on-year drop since November 2009.

    The decline, which came after a 0.4 per cent fall in July, was mainly due to the lower cost of private road transport, according to a joint news release from the Ministry of Trade and Industry (MTI) and the Monetary Authority of Singapore (MAS) on Wednesday (Sep 23).

    The cost of private road transport fell by 2.9 per cent in August after a decline of 0.1 per cent in July, as a result of the high base a year ago when Certificate of Entitlement (COE) premiums for cars saw a sharp increase, as well as a one-year road tax rebates for petrol vehicles.

    Accommodation cost declined by 2.9 per cent following the 2.8 per cent drop in the previous month, reflecting the continued softening of the housing rental market, MTI and MAS said.

    Services inflation edged down to 0.5 per cent from 0.6 per cent in July, while the cost of retail items fell by 0.6 per cent, mainly due to lower clothing and footwear prices. Food inflation was 1.9 per cent, unchanged from the previous month.

    Core inflation, which excludes the cost of accommodation and private road transport, fell to 0.2 per cent from 0.4 per cent in July, reflecting lower services and retail goods inflation, the news release said.

    “MAS Core Inflation and CPI-All Items inflation could rise towards the end of the year and are expected to pick up further in 2016, as the effects of the budgetary measures and the drag from the past fall in global oil prices dissipate on a year-ago basis,” it said.

    For 2015 as a whole, core inflation and CPI are projected to come in at the lower half of the forecast range of 0.5 to 1.5 per cent and -0.5 to 0.5 per cent, respectively.