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Tag: Retailers

  • Singapore Reconsiders Economic Reopening

    Singapore Reconsiders Economic Reopening

    A growing cluster of infections threatens to derail Singapore’s economic reopening, while expats in the country are growing restless from being cooped up on the island with no end in sight.

    Singapore’s Multi-Ministry Task Force is closely monitoring the growing number of community cases, particularly the expanding cluster of cases that now numbers 56, which originated from a neighborhood market.

    Day by day, we are seeing the number of unlinked cases – the cryptic cases in the community – is likely to be rising too. Given these developments, we are evaluating the timing and scope of the next stage of reopening, Finance Minister Lawrence Wong said in a video recording posted on Facebook and Instagram on Wednesday.

    The country is set for further relaxation of «heightened alert» restrictions from Monday, following a month of heightened Covid-19 related restrictions, during which community cases fell sharply, a and a week-long first stage of reopening.

    Singapore’s borders have been effectively shut for more than a year now, and many expats are getting restless, particularly as the U.S. and Europe return to normalcy.

    Many feel the country is too slow in reopening its borders, and may depart in the next six months if vaccinations and travel re-opening do not go as planned. Currently, returning residents face three weeks of quarantine – if they are allowed back into the country.

    Singapore said any ease in travel curbs will depend on the pace of vaccinations, which it has targeted for half of its population bu the end of August and 75 percent by October. Currently, about 35 percent of the population is vaccinated.

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  • Shinsegae, Naver win bidding battle for EBay South Korea

    Shinsegae, Naver win bidding battle for EBay South Korea

    South Korean retail giants Lotte Shopping and Shinsegae Group have submitted separate letters of intent for online marketplace eBay Korea, the retailers’ spokesmen confirmed on Monday.

    It is a deal that will almost certainly shake up the country’s e-commerce retail segment, potentially propelling one of the country’s largest retailers into becoming the leading omnichannel operator in South Korea.

    SK Telecom, South Korea’s biggest mobile carrier, and private equity firm MBK Partners, the largest shareholder of discount store chain Homeplus, reportedly dropped out of the race to acquire eBay Korea, which has been up for sale since last year.

    This week’s formal bidding marks the second attempt to divest its interests by eBay Korea – which represents about 11% of global sales within the U.S.-based eBay corporation – and it wants at least $4.43 billion, a price that is looking increasingly attainable.

    South Korea’s total e-commerce transactions jumped 25% last year according to Trade Ministry estimates and eBay Korea represents about 12.8% of South Korea’s e-commerce market, just trailing Coupang at 13% and market leader Naver with 18%. Its revenue is estimated at $1.17 billion, with an operating income of $76 million.

    Coupang listed on the New York Stock Exchange in March, becoming the largest Asian company since Alibaba to go public in New York and raising $4.6 billion. Founded by billionaire Bom Kim, a Harvard business school dropout, Coupang is now the country’s most valuable start-up with a market capitalization of more than $60 billion, backed by Softbank’s Vision Fund.

    By contrast, Lotte and Shinsegae’s market shares in the country’s e-commerce sector are estimated at just 5% and 3% respectively and the takeover of eBay Korea by either could reshape the country’s online retail segment and fast-track the winning bidder into a market-leading position. Both have struggled to catch up with the major online competitors, especially after the impact of the Covid-19 pandemic.

    However, the picture is complicated. Naver could be one of the biggest beneficiaries if Shinsegae is successful as it is believed to be offering support in financing any acquisition. The retailer and portal established a strategic alliance in March and Shinsegae could switch to Naver Pay as the payment platform for three e-commerce websites operated by eBay Korea: Gmarket, Auction and G9. At present, eBay Korea uses its own online payment system called Smile Pay.

    Top South Korean cellphone carrier SK Telecom and retail group E-Mart were still among the remaining suitors as the preliminary round of bids sought by the U.S. parent closed 16 March.

    Indeed, SK Telecom had been the leading candidate. The group also operates the online platform 11Street through a subsidiary, making SK Telecom the fourth-biggest e-commerce provider. But 11Street has struggled to grow, leading SK Telecom to partner with Amazon AMZN 0.0% in November in a collaboration initially limited to 11Street hosting Amazon products, but likely to expand in scope.

    Meanwhile, Lotte will no doubt view the purchase of eBay Korea as a springboard for rebuilding the group’s online business. In April 2020, the group merged the e-commerce sites of its department stores, supermarkets, electronics shops and other physical retail affiliates under one shopping platform called LotteON but it has failed to make much headway.

    While all the potential suitors have refused to give much away, Kang Hee-tae, CEO of Lotte Shopping, admitted during a spring shareholder meeting: “We’re certainly interested.”

    Launching in 2000, eBay Korea quickly grew and last year earned around $75 million in operating profit. But eBay Korea has been squeezed by rivals in recent years, while activist investors like Elliott Management have urged eBay to shed assets with poor growth prospects.

    The U.S. parent’s hope of securing a lucrative deal initially looked ambitious but then Coupang went public successfully, boosting its hopes.

    Whoever wins the battle for eBay Korea, the fact that the rivals are both major retail players should heat up the market and could lead to an array of collaborations and partnerships to fight scale with scale. South Korea is on the brink of the biggest online shake-up since eBay announced its arrival over two decades ago.

  • Temples inspire design of Uniqlo’s latest Tokyo retail store

    Temples inspire design of Uniqlo’s latest Tokyo retail store

    Uniqlo opened the doors of its newest large-format store on Friday, in the historic and culturally significant neighborhood of Asakusa. The store follows the concept of “our neighborhood” and aims to support the area’s local businesses, residents, and artisans.

    With a selling area of more than 21,000 square feet, Uniqlo Asakusa also boasts one of the longest continuous store windows of any Uniqlo store. It is located in the heart of Asakusa, which prior to the COVID-19 pandemic was bustling with international tourists on any day of the week. The area is known for its historic pedestrian lanes lined with souvenir stores and leading up to Senso-ji, Tokyo’s oldest Buddhist temple and one of its most significant. It is also a district that hosts the workshops and stores of many traditional craftspeople, some of whom Uniqlo featured in various ways inside the store.

    The double-level main entrance to the store is dominated by a giant paper and wooden lantern, which was created by a local workshop and hand-painted with the Uniqlo logo. At nearly six feet per side, it was both the largest lantern the shop had ever created, as well as the first cubic one. In addition, signage used throughout the store was inspired by “senjafuda” votive strips that are a common sight at temples and shrines across Japan.

    Uniqlo also collaborated with local businesses on various products to mark the opening of the store. For example, small ceramic plates designed with traditional snack-maker Asakusa Tokiwado will be available for sale in limited quantities, while original teacups will be given to the first 3,000 customers to spend 5,000 yen or more during the opening weekend. There are also original UTme! stamps that are only available at the Asakusa store to use in customizing T-shirts and tote bags.

    Throughout the store, Uniqlo has highlighted products from local shops, from stationery to skateboards, encouraging customers to explore the neighborhood in order to purchase such items and discover others. Other features of the store include a larger than usual space where customers can try on and order tailor-made items, areas highlighting sustainability and fitting rooms that feature artworks by a local artist, and photographs of Asakusa from the past and present.

  • South Korean retail firms Lotte and Shinsegae bid for EBay Korea

    South Korean retail firms Lotte and Shinsegae bid for EBay Korea

    South Korean retailers Lotte Shopping and Shinsegae Group entered separate binding bids for eBay’s South Korean business, the retailers’ spokesmen said on Monday.

    eBay Korea – South Korea’s third-largest e-commerce firm with a 12.8% market share in 2020, according to Euromonitor – is on sale for what eBay hopes could be up to 5 trillion won ($4.5 billion), analysts said.

    The retailers’ spokesmen declined to comment on the terms of their bids. An eBay Korea spokeswoman also declined to comment.

    Local retail giants Lotte and Shinsegae have struggled to catch up to leading competitors like South Korea’s No. 1 e-commerce firm Coupang in the fast-growing online shopping sector, especially after the onset of COVID-19.

    South Korea’s online shopping transactions were worth 161 trillion won in 2020, accounting for a record 27.2% of total retail transactions, up from 21.4% in 2019.

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  • Industry ministry seeks Covid vaccination priority for retail workers

    Industry ministry seeks Covid vaccination priority for retail workers

    The Ministry of Industry and Trade wants employees at retailers selling essential goods to be prioritized for Covid-19 vaccination, saying they face a high risk of infection.

    It has made the proposal to the Government following demands from large retail chains and the Association of Vietnam Retailers.

    It said workers at supermarkets, convenience stores, traditional markets, and grocery stores come in contact with large numbers of customers on a daily basis. Vaccinating them would also ensure supply chains of essential goods are not disrupted.

    It also urged the Ministry of Health to assist retail businesses with sourcing vaccines and immunizing their workers.

    Some retailers have said they will pay for the vaccines.

    Enterprises in some other sectors like textile and garment, footwear, fisheries, and electronics have also called for prioritizing their workers since most work in industrial zones and face great risk.

    Le Tien Truong, chairman of the Vietnam National Textile and Garment Group (Vinatex), said delayed deliveries could result in contract cancellations and penalties running into billions of dollars, and so textile and garment workers should be prioritized for vaccination, especially in pandemic-hit areas like Bac Ninh and Bac Giang Provinces, HCMC and Hanoi.

    “Vinatex is willing to pay for the vaccines.” He said it is prepared to spend VND100-200 billion ($4.3-8.6 million) for the vaccinations.

    The Private Economic Development Research Board has recommended that the government should allow enterprises to directly buy vaccines from suppliers for their employees.

    Vietnam has had 5,008 Covid cases as of Friday morning in 37 cities and provinces since the new wave began on April 27.

  • Le Saunda sales continue to fall

    Le Saunda sales continue to fall

    Hong Kong-headquartered shoe retailer Le Saunda shut down 52 stores during the year to February as it worked to mitigate falling sales in the wake of the Covid-19 pandemic.

    The embattled shoe retailer recorded a profit for the full year of US$16.6 million, although this was entirely due to material gains on the return of its former manufacturing plant at Shunde in Guangdong for which Le Saunda booked a material gain of $25.4 million. Local government grants to mitigate the impact of the pandemic added around $1.4 million to income.

    Total revenue for the year fell by 19.3 percent to US$97.2 million due to store closures and trading restrictions related to government measures to slow the spread of Covid.

    Efforts to reduce overheads across the business resulted in selling and distribution expenses falling 28.5 percent to $37.4 million. The company also managed to cut inventory by 44.1 percent year on year, some of that relating to fewer raw materials after the Shunde plant was closed.

    In a stock exchange filing, chairman James Ngai said the pandemic led to a “severe winter” for greater China’s retail industry.

    Le Saunda responded by outsourcing manufacturing, closing unviable stores, tapping into social commerce, and expanding online sales channels through the “livestream shopping” model. It launched the Le Saunda Y collection online, aimed at catering to the preferences and buying behavior of younger female consumers, and upgraded its loyalty scheme to a WeChat Mini Program.

    “During the pandemic, the group was determined to innovate, grasp the pulse of the market and introduce new elements to its brands, so as to maintain the competitive edge of its brands and its leading position in the female footwear market,” he said.

    As at the end of February Le Saunda had 297 stores (down 34) under its core branding, and 40 Linea Rosa stores (down 12).

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  • Central Retail sales rebound to 90 per cent of pre-Covid levels

    Central Retail sales rebound to 90 per cent of pre-Covid levels

    Thai group Central Retail says it achieved 90 percent of its pre-Covid sales performance in the March quarter, the result of what CEO Yol Phokasub described as “thriving on steadily regaining balance” during a time of challenges and uncertainties”.

    First-quarter sales were down 9.7 percent to US$1.56 billion, however, net profit was down 48.4 percent to $14.65 million.

    In a statement, the company said that considering the semi-lockdown situation resulting from the second and third waves of the pandemic – when most businesses stopped trading – the impact on the retail market was more severe than the previous year.

    Phokasub said the company was able to take advantage of a broad portfolio of retail brands which enabled business agility during the Covid crisis, including synergy between the Central and Robinson department stores. It also benefited from the expansion of the Tops Market both within Thailand and in Vietnam, its Go! Malls concept in Vietnam and the recent acquisition of the B2B omnichannel books and stationery business.

    He said that during the year ahead Central Retail plans to increase work efficiency and productivity through technological development and strong cash flow while looking for new business ventures to diversify its portfolio.

    “Central Retail’s long-term vision and business plan before the Covid-19 pandemic remain unchanged, and that is to achieve sustainable and profitable growth.”

  • Singapore retail sales growth eased up in March

    Singapore retail sales growth eased up in March

    Retail sales continued to recover in March as the Singapore economy rebounded, though the figures were boosted by the comparison with the situation a year ago when Covid-19 safe distancing measures began and border restrictions were in place.

    Takings at the till grew by 6.2 percent in March on a year-on-year basis, compared with the revised 5.3 percent increase recorded in February, according to data out on Wednesday (May 5).

    This made for a second consecutive month of retail sales growth after a 24-month-long year-on-year slide. Excluding motor vehicles, sales increased 4.4 percent in March. Almost all segments registered jumps in turnover, with the sales of watches and jewelry jumping the most, by 60.2 percent. This was followed by the sales of apparel and footwear, which increased by 35.6 percent. This was due to the lower base in March 2020 when there were low tourism receipts arising from tightened border restrictions, said the Department of Statistics (SingStat).

    Sales of recreational goods grew by 28.3 percent, while takings by retailers of computer and telecommunications equipment increased by 19.9 percent.

    Petrol service stations registered an increase of 18.6 percent, while vehicle sales went up by 15.6 percent.

    But sales at supermarkets and hypermarkets reversed their growth streak from last year and dropped by 14 percent.

    This was in comparison with March 2020 when there were higher sales as more people stayed home after safe distancing measures were introduced, SingStat noted.

    Sales of cosmetics, toiletries, and medical goods also fell, by 13.2 percent.

    On a seasonally adjusted month-on-month basis, SingStat observed that most retail industries recorded growths in sales.

    “Discretionary industries such as motor vehicles, watches, and jewelry, wearing apparel and footwear and department stores recorded growths in sales of between 5.2 percent and 7.8 percent, attributed to higher domestic spending given overseas travel restrictions,” it said.

    But sales of furniture and household equipment declined during this period, as demand for furniture slowed down, with more people returning to the workplace, it added.

    Meanwhile, sales of food and beverage services grew by 8 percent year on year in March, a reversal from the 3.4 percent decline in February.

    This growth was mainly attributed to the lower sales in March 2020 when safe distancing measures were first introduced to contain the Covid-19 outbreak, SingStat said.

    Restaurant sales grew by 17.9 percent, while cafes, food courts, and other eating places saw takings rise by 5.6 percent. But food caterers continued to suffer a slide in sales, of 25 percent. The total sales value of food and beverage services in March was estimated at $730 million, with online sales making up an estimated 23.5 percent. The estimated total retail sales value in March was about $3.5 billion. Of this, online retail sales made up an estimated 11.8 percent.

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  • Hongkongers return to stores – but sales still well down over two years

    Hongkongers return to stores – but sales still well down over two years

    The local consumer retail demand is projected to get worse in the new year, most especially those that are riding on the tourism sector, which is also expected to be sourer at the same time. In a survey by the Hong Kong Retail Management Association (HKRMA), 97% of the respondents have posted losses starting mid-2019. About 30% of this figure said that they will resort to laying off 10% of their staff, whilst 43% stated that they will have to close down in the next six months.

    The respondents of the survey involves 176 companies, which have more than 4,000 stores and 89,700 employees.

    However, a Bloomberg report stated that this equated to around 5,600 employees that are set to lose their jobs and the retail sector will not be saved by usual holiday rush. David Ji, describes this as the worst-case scenario for the sector.

    “Retailers who used to have stores concentrated in major shopping areas may consider dispersing their stores to the neighborhood areas. As people have avoided going to crowded areas, sales in community malls, neighborhood malls and suburban malls, which offer daily necessities to locals, were relatively more resilient and saw solid sales even amid Hong Kong’s social unrest,” Ji added.

    In a study by PwC in 2017, the total retail sales in Hong Kong was likely to relive its 2013 peak of $494.4b (US$63.3b) in 2020, whilst jewellery and watch sales may also return to a high of $118.3b recorded in the same year.

    Its healthy growth pace continued throughout 2018 and started off positively in 2019, according to a report by Cushman & Wakefield. It was well-supported by the new transportation links to mainland China as it fueled an increase in visitor arrivals to Hong Kong. Over the first two months of the year, mainland arrivals saw the largest growth in five years, growing by 19% YoY and by 21% YoY for same-day visitors.

    It went on through June and provided a boost to foot traffic and retail sales in some sectors such as cosmetics and non-discretionary retail.

    Then by July, Hong Kong’s retail market has struggled amidst the growing social unrest and resulting disruption to retailers’ businesses throughout the city. Mainland tourist arrivals plummeted as the unrest escalated and in October, the number of visitors from the Mainland dropped by 45.9% YoY, the steepest decline ever in a single month. Retail sales naturally followed, dropping by 24.3% YoY in the same month, after a drop of 18.2% YoY in September.

    The decline was led by jewelry and watches which recorded a fall in sales of 42.9% YoY, followed by medicines & cosmetics (down 33.5%). These two used to lead Hong Kong’s retail sector two years ago.

    It wasn’t just the social unrest that kept the retail market at bay. “The continuation of social unrest is obviously the key challenge followed but the further deterioration of the Chinese economy, which is key for HK’s growth,” said Alicia Garcia-Herrero, chief economist at Natixis.

    A note by DBS Group Research also noted that exports of travel services (down 32.2%) was dampened by a weaker Chinese yuan. Tourist’s hot picks such as clothing, jewelry, and cosmetics/medicines fell by 20%-40% and will be a big slap for retail sales where tourist spending accounts for 40% of the sector’s performance.

    In addition, the unemployment rate of consumption and tourism-related sectors (16.5% of labor force) already leapfrogged from 3.9% in June to 5.0% in October, lifting the headline 3 months moving the average jobless rate from its 20-year low of 2.8% to 3.1%.

    “Looking ahead, the retail sector will stay weak due to subdued local demand. Hopefully, the temporary rental adjustments for tenants could contain the risks of large-scale closure of businesses and laid-off,” DBS said in the report.

    Across the retail property scene, rents continue to go down which will endanger Hong Kong’s status as the most expensive retail street. Cushman & Wakefield stated that in Q4 2019, the decline in rentals across all submarkets has become even steeper, falling to its lowest level in more than five years.

    Landlords are struggling to retain their tenants, Lawrence Wan, senior director for advisory & transaction services– retail at CBRE Hong Kong added that local pharmacies and larger F&B outlets have abandoned leases over the past few months.

    “Landlords and high street shop owners are considering to provide short-term lease discounts to retain tenants, to alleviate the impact of the social unrest on retailers’ performance. Retailers are consolidating their operations and looking to upgrade their products and service offerings with enhanced customer experience to encourage spending,” Wan said.

    He also added that the rent levels will continue to drop in the short run. But in the long run, this might as well be the “new normal” that retailers have to adjust to. Such will be largely dependent on any government policies and measures that will help the market recover.

    “[W]e can expect a rental adjustment which will allow the retail market to  become more sustainable than what we had experienced in the past few years whereby rents were at very high levels. It will be difficult to predict the timeframe but retailers should get prepared and review their business strategies to cater to the “new normal,” Wan noted.

    Even though there are a number of retailers looking to leave Hong Kong, the region still saw some new openings during the events of the social unrest. Charles Chan, senior Asia retail analyst at IGD, cited the re-launch of beauty retailer Sephora, who have left the market ten years ago. It promised to bring 40 brands in their stores.

    “The re-launch of Sephora provides an indication of how Hong Kong’s retail landscape has shifted. Shoppers expect exciting digital store engagements and touch points rather than just a range of products presented to them. We have also seen Lush, for example, launch its first Asia Naked concept store in Hong Kong, whilst Don Don Donki opened its first store in Hong Kong in July earlier this year,” Chan shared.

    On the digital front, ecommerce platforms may not be as affected as they are still grabbing a larger market share, according to Ji. “In view of this, more physical retailers have already set up online sales channel to catch up the trend. On the other hand, some have leveraged the latest technology such as AR to enhance in-store shopping experience for customers,” Ji added.

    However, Chan still warned that brands and retailers need to be articularly careful on inadvertently choosing a political side in their marketing and messaging.

    A survey by YouGov showed which brands have been the most negatively affected in terms of consumer spending, where most cases are correlated to controversies around the protests. Chinese electronics firm Xiaomi’s brand metric score dropped 40.5 points to -4.1 from a score of 36.4 last August. Its decline started when it released a new smart TV carrying a slogan that is said to mimic chants in the gathering.

    “Despite the uncertain economic and political circumstances, we have seen businesses continue to innovate to stay relevant. The re-launch of Sephora provides an indication of how Hong Kong’s retail landscape has shifted. Shoppers expect exciting digital store engagements and touch points rather than just a range of products presented to them. We have also seen Lush, for example, launch its first Asia Naked concept store in Hong Kong, whilst Don Don Donki opened its first store in Hong Kong in July earlier this year.”

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  • What Can Retailers Learn from the Online Casino Industry?

    What Can Retailers Learn from the Online Casino Industry?

    Since the start of the 2010s, in-person retail has been steadily eclipsed by online shopping. The comparison graph paints a damning picture for in-person retailers and shows just how quickly the internet overlapped them. Moving online isn’t specific to the retail industry, however. Other industries, such as the casino one, have also managed to thrive online. What can the online casino industry show retail about its inevitable move online?

    Niche Nature of the Internet

    One of the main benefits of shopping online was that more niche retailers could thrive. Those offering something that appeals to large groups who are spread out across the country found their target audience. If they existed in one city, they may not gain the footfall necessary to remain viable. Spreading out online opens the potential customer base and allows niche retailers to survive.

    The online casino industry itself reflects the niche nature of internet retailers. Most sites offer a selection of slot games. Some of these are appealing and popular, such as those based on franchises. Others are more esoteric, so would appeal to a smaller group of people. But as the games are inexpensive to create and can be marketed to a wide range of people, it is worthwhile to offer something niche. Niche customers are often willing to spend more and be more loyal than those who can find what they want anywhere they go.

    Source: Pexels

    Convenience of the Internet

    The internet also makes shopping far more convenient. No matter how retailers square it, it’s easier to order something online while sitting on the bus or waiting for dinner to cook than it is to visit a multitude of stores.

    The online casino industry has similarly embraced convenience for its customers. Being able to engage on mobile devices as one would on a desktop device means that there are a wider range of customers to use the online casino sites. In an age where everyone is time-poor, anything that purports to save users’ time is considered a plus.

    The Bargains of the Internet

    The internet has a wider range of retailers and therefore they are more competitive with one another. The customer ends up benefitting as their custom is fought over. This usually looks like a slew of bargains, special offers, and retailers attempting to price each other out. The reason the internet allows this better than physical retailers is simply because it’s easier to compare prices when you can just flick to another tab. Plodding to another store to see if you could save marginal amounts just isn’t done.

    The online casino industry uses a similar tactic to appeal to increasingly savvy customers. As we can see with the welcome bonus offered by Royal Panda, for instance, customers are enticed to use the site. With a bonus of no deposit cash and free spins on certain slot games, those who are wanting to play anyway would be swayed by the generosity. The site will then develop goodwill with the customer which can be leveraged into a strong relationship.

    The Future of Retail

    Retail doesn’t have to just throw its hands in the air and give in to the overwhelming surge of the internet. Some things cannot be purchased online, and people do still enjoy physical experiences. In the UK, discount retailer Primark doesn’t offer online sales, so its stores are always busy. It has no closer rivals so can do so. Wedding clothes and things that provide a tactile experience, such as shoes, are also better bought in person. So, retail should consider excelling where the internet can’t, so all aspects of the industry are fulfilled.

    The internet makes shopping easier and online casino continues to thrive. The latter can give the former influence in how it has transformed a physical industry into one that does best online. Retailers should look to a hybrid approach of the two to succeed in the future

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  • Causeway Bay deposed as Asia’s most-expensive retail strip

    Causeway Bay deposed as Asia’s most-expensive retail strip

    Two-thirds of retail strips in Asia Pacific saw rental declines in 2020, with Causeway Bay in Hong Kong experiencing the steepest decline at 43%, according to Cushman & Wakefield’s latest Asia Pacific Main Streets Report. Causeway Bay had been #1 across the globe in retail rental value in the last 2 years. Yet, its position was taken over by Tsim Sha Tsui in 2020. Retail rental dropped by 42% and 35% year-on-year for Central and Tsim Sha Tsui respectively. On average, retail space rental value citywide has fell by 38% in Hong Kong over the course of 2020.

    “Ownership diversity is the key differentiator between Tsim Sha Tsui and Causeway Bay retail rental performance. Ownership of Canton Road in Tsim Sha Tsui, the main shopping area, is more centralized when compared with Russell Street of Causeway Bay. In times of crisis, centralized ownership allows for more flexible measures to retain tenants, thus maintaining a more stable trade mix with a cluster of renowned brands with optimal brand impact,” said Mr. Kevin Lam, Cushman & Wakefield’s Executive Director, Head of Retail Services, Hong Kong. “Looking ahead, with international travel made possible again towards the later part of 2021, together with a stable trade mix, we would expect retail rental performance to recover first in Tsim Sha Tsui district for the same reason,” Mr. Lam continued.

    However, the retail sector in Mainland China had the least disruption amongst all the markets in the region, with average rental declines of 5%. In contrast to the Beijing Central Business District (CBD) which had a 14% decrease in rental in 2020, the Luohu district in Shenzhen saw the largest rental growth of 5%.

    Mr. Keith Chan, Cushman & Wakefield’s Director, Head of Research, Hong Kong, commented, “Hong Kong remained in the top position regardless of the average retail rental drop of 38% in 2020. Tsim Sha Tsui still sits 31% above the second place, Ginza of Tokyo. This reflects the exceptionally high retail rentals in Hong Kong regardless of the pandemic outbreak and economic downturn.”

    “The key market drivers in operation due to COVID-19, namely international border closures, lockdowns and work-from-home practices have been universally felt across the region. As a result, we see little change in Asia Pacific rent cost rankings, at least for the top 10 cities, with Hong Kong, Tokyo, Sydney, Seoul and Osaka maintaining their dominance at the top of the list,” noted Dr. Dominic Brown, Head of Insight & Analysis, Asia Pacific at Cushman & Wakefield.

  • Alibaba fined US$2.75bn for anti-monopoly violations by Chinese regulators

    Alibaba fined US$2.75bn for anti-monopoly violations by Chinese regulators

    Chinese regulators have fined Alibaba 18 billion yuan ($2.75 billion) – around 4 percent of its revenues in 2019 – for violating anti-monopoly rules and abusing its dominant market position.

    The State Administration for Market Regulation (SAMR) said that after an investigation launched in December, it had determined that Alibaba Group had been “abusing market dominance” since 2015 by preventing its merchants from using other online e-commerce platforms.

    It said the practice violates China’s anti-monopoly law by hindering the free circulation of goods and infringing on the business interests of merchants.

    The SAMR ordered Alibaba to make “thorough rectifications” to strengthen internal compliance and protect consumer rights.

    The company said in a statement posted on its official Weibo account that it “accepted” the decision and would resolutely implement SAMR’s rulings. It said it would also work to improve corporate compliance.

    The practice of preventing merchants from listing on rival platforms is a long-standing one. The market regulator spelled out in rules issued on February that it was illegal.

    Alibaba has also been under heavy scrutiny since its founder Jack Ma criticized China’s regulatory system in October.

    Ant Group, Alibaba’s fintech arm, also saw its $37 billion listing plans dramatically suspended by authorities in November.

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  • Papa John’s launches in Cambodia

    Papa John’s launches in Cambodia

    US pizza chain Papa John’s is launching in Cambodia with 15 restaurants scheduled to open during the next three years. The company opened its flagship store in Phnom Penh last month.

    “Papa John’s Cambodia team is truly passionate about pizza,” said Peter Xu, Papa John’s Cambodia franchisee.

    “With our ‘Better ingredients – Better pizza’ promise, we look forward to providing local pizza lovers with quality products and outstanding services.”

    Xu also owns a Papa John’s franchise in New York and other business ventures in Cambodia.

    Jack Swaysland, Papa John’s COO, international, said that following a record year of sales and growth, Papa John’s is well-positioned to accelerate international development, a key pillar for the brand’s long-term growth.

    Papa John’s has restaurants in 48 countries, with the latest new openings in France, Spain, Tunisia, Iraq, the Netherlands, Morocco, Kazakhstan, Kyrgyzstan, Poland, the Bahamas, Pakistan, and Portugal. The company is eyeing expansion in Brazil, Japan, and Southeast Asia.

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  • New Year fails to help retail sales in Singapore

    New Year fails to help retail sales in Singapore

    Retail sales grew by 5.2 percent year-on-year in February, a reversal from the 6.1 percent decline recorded in January. This improvement was mainly associated with Chinese New Year celebrations in February, said the Singapore Department of Statistics (SingStat) on Monday (Apr 5). Chinese New Year was in January last year.

    Comparing the performance for the January to February two-month period of the festivities, retail sales fell 1.2 percent in 2021 compared to 2020. Excluding motor vehicles, retail sales increased 7.7 percent in February, compared to the 8.4 percent decline in January. On a seasonally adjusted basis, retail sales decreased 1.6 percent in February compared to the previous month. Excluding motor vehicles, seasonally adjusted sales fell 1.2 percent.

    The estimated total retail sales value for February was about S$3.3 billion. Online retail sales made up about 10.1 percent of this, similar to the 10.2 percent recorded in January, said SingStat.

    Online retail sales made up 44.3 percent of total receipts in the computer and telecommunications equipment industry, 26 percent of sales in furniture and household equipment and 10.7 percent of sales in supermarkets and hypermarkets.

    While most retail industries recorded improved year-on-year sales in February due to the Chinese New Year boost, on a seasonally adjusted month-on-month basis, the watches and jewelry, petrol service stations, and computer and telecommunications equipment increased between 2.8 percent and 5.6 percent during this period.

    SALES OF FOOD AND BEVERAGE SERVICES REMAIN WEAK

    Sales of food and beverage services fell 3.5 percent in February on a year-on-year basis, a smaller contraction compared to the 24.6 percent decline in January 2021. This was again mainly attributed to Chinese New Year celebrations, SingStat said.

    Food and beverage sales remained weak due to capacity constraints arising from safe distancing measures, SingStat added.

    On a seasonally adjusted basis, sales of food and beverage services declined 1.1 percent in February over the previous month.

    The total sales value of food and beverage services in February was estimated at S$699 million.

    Of this, online sales made up about 22.2 percent, slightly higher than 22.1 percent in January.

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  • Japan’s retail sales fall for third straight month

    Japan’s retail sales fall for third straight month

    Japanese retail sales fell for the third straight month in February as households kept a lid on expenditure amid the coronavirus emergency, underscoring the fragile nature of the economy’s recovery from last year’s slump.

    Analysts expect Japan’s economy sharply contracted in the first quarter, as lacklustre consumer spending and weakening exports create challenges for policymakers who have already rolled out massive stimulus.

    Retail sales lost 1.5% in February from a year earlier, government data showed on Tuesday, a smaller fall than the median market forecast for a 2.8% drop.

    But it marked the third straight month of declines following January’s 2.4% fall and a 0.2% drop in December.

    “That the coronavirus isn’t subsiding is a major reason to worry about a delay of an economic recovery,” said Atsushi Takeda, chief economist at Itochu Economic Research Institute.

    “Clothes aren’t selling because people aren’t going out,” he said. “People are not really returning to commercial facilities, the trend is for them to go shopping at supermarkets in their neighbourhoods.”
    The broader decline in retail sales was driven by falls in spending on items such as clothing, toiletries and general merchandise, the data showed.

    Compared with the previous month, retail sales rose 3.1% on a seasonally adjusted basis.

    Separate data showed the nationwide seasonally adjusted unemployment rate was steady at 2.9%, lower than the median forecast of 3.0%.

    There were 1.09 jobs per applicant in February, down from the previous month’s 1.10, labour ministry data showed.

    The world’s third-largest economy is set to contract by an annualised 6.0% in the current quarter, which would be the first decline in three quarters partly due to sagging consumer spending, according to the latest Reuters poll data.

    Some analysts are worried that a longer contraction in household spending and weakening exports raise the prospect of a slower economic recovery than initially thought.

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