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  • Singapore’s retail recovery remains to be seen

    Singapore’s retail recovery remains to be seen

    Shortly after the outbreak, e-commerce sales surged in many countries as consumers avoided crowded places and social distancing measures kicked in.

    In Singapore, a surge in online grocery sales overwhelmed booking systems. Demand for online food delivery soared, requiring operators to expand their workforce. Retailers, ranging from home furnishings to healthcare products and electronics, also saw a rise in online sales.

    Many shoppers, staying at home, buying online for the first time, and discovering the ease of online shopping, could form new digital habits, which may become permanent. This could propel the surge in online shopping to the next level, especially in Singapore, where the internet penetration rate is high and the online market share of retail sales is still low (8.5% in March 2020, according to SingStats), compared to developed countries.

    Amid rapid structural changes, retailers accelerated the adoption of e-commerce strategies. Some outsourced their online businesses by partnering with large established e-commerce marketplaces that offer integrated services, ranging from hosting product listings to sales, payment, inventory management, delivery and tracking. This minimises their capital commitment and administrative burden in the face of a liquidity crunch amid the pandemic. Robinsons partnered with Lazada to expand its e-commerce reach, for example.

    Many F&B players partnered with food logistics operators, including GrabFood and FoodPanda, or logistics providers, Lalamove and Zeek, while others looking to establish a stronger online presence built their own e-commerce platform. A new digital platform offered by DBS Bank built a branded e-menu with an integrated shopping cart, order management and payment platform within three business days. The service includes connecting merchants with logistics partners to offer food delivery services.

    Nevertheless, post-pandemic, consumers will return to physical stores for real-life shopping experiences. Frustrated shoppers without a grocery delivery slot may return to the supermarket.

    According to SingStat, the online market share of grocery sales in Singapore for March 2020 has fallen to 7.5%, from 7.8% and 8.5% in January and February 2020, respectively. The surge in food delivery may ease as some consumers prefer to enjoy the full dining experience in a restaurant ― when safe ― rather than eating out of takeaway boxes. Shoppers generally desire the “look, touch and feel” experience of buying.

    However, concern about pandemic safety is set to continue. Restoring shoppers’ confidence regarding their safety is key to driving foot traffic back into physical stores. Industry players need to enforce safe distancing and hygiene rules and step up efforts on contactless buying initiatives such as self-checkout and cashless payment options.

    Shoppers will also have reduced spending power amid the economic downturn. Industry players need to revamp their offerings at accessible pricing to widen the consumer base and target promotions towards visiting stores upon their reopening.

    Incorporating in-store strategies for pent-up demand, alongside an omnichannel strategy for the medium-term, could drive a post-pandemic recovery of the retail market in Singapore.

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  • Pinduoduo sales beat expectations

    Pinduoduo sales beat expectations

    Pinduoduo, China’s largest e-commerce platform for agricultural products, has expanded its online grocery ordering service to most provinces since introducing it in the cities of Wuhan and Nanchang in August.

    Duo Duo Maicai, as the grocery feature is called, was introduced in response to the surging demand for buying groceries online following the onset of Covid-19 in the first quarter. The pandemic-related lockdowns forced many households to seek alternative ways to buy their food and essential supplies as brick-and-mortar shops were closed and movements severely restricted.

    But even after the coronavirus was brought under control and restrictions were lifted, a survey by GlobalData found that 56% of Chinese consumers were buying food and groceries online more frequently than before the lockdowns.

    By 2025, nearly half of China’s grocery shopping is expected to take place online, up from 20% currently, according to Goldman Sachs. The online grocery market is projected to reach 7 trillion yuan in five years, the bank said.

    “We are seeing sustained consumer behavior post-pandemic and expect a further shifting from wet markets to structured retail, together with multiple models and build-out of cold-chain logistics to drive ongoing online share gains in” the fresh and FMCG categories, Goldman Sachs said in a report.

    The boom in online grocery shopping in China is a marked change for a society where going to the local market is woven into the fabric of daily life for many households. But with an increasingly fast pace of life, especially in the bigger cities, more and more consumers are availing themselves of the option to buy their groceries online and picking them up the following day.

    Sensing a seismic shift in consumer preference, internet companies have poured resources into catering to this growing need. Other companies that have gone into the online grocery business include Alibaba, Meituan and Didi, the ride-hailing giant.

    “We believe that grocery shopping in China is undergoing similar structural changes in consumer behavior that we saw in other sectors a few years ago,” Chen Lei, Chief Executive Officer of Pinduoduo, said in the company’s post-results conference call on Thursday. “The presumption that most consumers still prefer to go to the wet markets or supermarkets for their daily essentials has been challenged over the past few months.”

    Pinduoduo reported its first quarterly profit since its IPO in 2018. The company has garnered 731.3 million active buyers in the space of five years, an unprecedented feat for an e-commerce company.

    With Duo Duo Maicai, consumers can place their orders before 11 pm each day and pick up their agriculture products the next day from 4 pm onwards at designated pick-up points. Duo Duo Maicai is available as a mini-program and on the main Pinduoduo app.

    This trend of “planned consumption” is driving a surge in agricultural sales, which are estimated to double this year to at least 250 billion yuan in GMV on Pinduoduo. The company said earlier this year that GMV from agriculture could surpass 1 trillion yuan in five years.

    Logistics

    To ensure that supply can keep up with this increased online demand requires a sophisticated supply chain. China’s agricultural supply chain is characterized by small farms, multiple distribution layers, and wastage at various stages. As a result, distribution costs for agricultural products typically account for 40% of the total cost (60% for fresh produce), compared with about 10% in developed economies.

    To improve the supply chain efficiency, Pinduoduo has invested in optimizing key areas including logistics, warehousing and delivery. The company has developed a nationwide and regional agricultural logistics system to cater to the different needs of consumers.

    In the fast-changing consumer and e-commerce industries in China, companies must stay nimble and cater to their users to survive.

    Comparing the shift in grocery shopping habits to the apparel industry five to seven years ago, Chen said: “No one could have imagined then that a significant number of consumers would use online shopping to choose, try out, and return clothes.”

    “But that’s exactly what we are seeing today.”

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  • Dairy Farm announced difficult third quarter

    Dairy Farm announced difficult third quarter

    Dairy Farm International Holdings Limited today issues its Interim Management Statement for the third quarter of 2020. The Group’s overall performance in the third quarter improved relative to the first half.  While the Group’s results continued to be affected by the COVID-19 pandemic, the impact was partially offset by the receipt of government support.  Grocery Retail performance continued to be supported by operational improvements as part of the Group’s multi-year transformation program, as well as changing customer behaviors as a result of the pandemic. Reduced sales and profit in Health and Beauty and Maxim’s, however, continued to impact the Group’s overall performance.

    The Group’s Grocery Retail businesses reported strong like-for-like sales growth, which led to strong profit growth.  In Southeast Asia, changing customer behaviors, as well as the ongoing execution of the Group’s multi-year transformation plan, supported strong profit growth in Singapore and Malaysia.  Performance in Indonesia, however, was impacted in the period by government restrictions on movement and significantly reduced traffic into hypermarkets and malls.

    The Group’s Convenience businesses reported improved like-for-like sales performance compared to the first half of the year.  However, 7-Eleven Singapore continued to be impacted by reduced footfall.  Better sales performance drove higher profitability compared to the first half.

    The performance of the Group’s Health and Beauty businesses were significantly impacted by the effects of the measures taken by governments to counter the pandemic, as well as the continuing lack of custom from overseas tourists in Hong Kong.  In North Asia, whilst like-for-like sales performance improved compared to the first half, the profitability of Mannings continued to be materially impacted by the lack of tourists.  In Southeast Asia, like-for-like sales were affected by reduced footfall in malls which, in turn, impacted profitability.

    Sales in the Home Furnishings business were higher than the equivalent period last year and like-for-like sales improved compared to the first half.  Strong e-commerce growth and the annualization impact of new stores opened in the prior year more than compensated for the impact of pandemic-related measures on customer visits.  Profitability also improved compared to the equivalent period last year, as a result of lower pre-opening expenses and improved gross margins resulting from the lower cost of goods sold.

    The Group’s 50%-owned associate, Maxim’s, continued to be impacted by government restrictions on movement, as well as a reduction in the number of restaurant customers.  However, mooncake sales performance during the Mid-Autumn Festival was encouraging.  Yonghui’s underlying performance in the third quarter was impacted by reduced sales, while Robinsons Retail’s underlying performance was affected by government lockdown restrictions on its discretionary retail formats.

    The launch of Yuu Rewards, Hong Kong’s largest loyalty program, at the end of July was a significant milestone in driving the Group’s digital transformation.  The popularity of the program has exceeded the Group’s own expectations, with two million members joining in the first month.  High membership engagement has supported the performance of the program sponsors.

    On 16th October 2020, the Group announced it had signed an agreement to deepen its partnership with Philippines-listed multi-format retail group Robinsons Retail Holdings Inc. (‘RRHI’) and to build a leading pharmacy business in the Philippines by combining the Group’s interest in wholly-owned Rose Pharmacy Inc. with RRHI subsidiary South Star Drug Inc.  This transaction, which included the sale of Dairy Farm’s direct interest in Rose Pharmacy Inc, completed on 30th October 2020.

    The well-being of our employees and customers remains a top priority, and the Group continues to take a number of measures to mitigate the impact of the pandemic, including the adoption of a range of health and safety measures.  Given the extraordinary circumstances, we would like to express our deep gratitude for the continuing dedication and resolve of team members in putting customers first during these difficult times. 

    Dairy Farm remains committed to its multi-year transformation which is delivering sustainable improvements to the business over time and continues to pursue the strategic initiatives which will drive medium- to long-term growth.

    Dairy Farm is a leading pan-Asian retailer.  The Group, together with its associates and joint ventures, operates over 10,000 outlets – including grocery retail, convenience stores, health and beauty stores, home furnishings stores, and restaurants – employing some 240,000 people, and had total sales in 2019 exceeding US$27 billion.  Dairy Farm International Holdings Limited is incorporated in Bermuda and has a standard listing on the London Stock Exchange, with secondary listings in Bermuda and Singapore.  It is a member of the Jardine Matheson Group.

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  • Tax evasion remains rife among online sellers

    Tax evasion remains rife among online sellers

    Many people earning huge incomes from online commercial activities do not pay tax until discovered by tax authorities. There were more than 1,100 individuals working as a software and online game developers in the capital, a study done by the Hanoi Department of Taxation in June found. They earned a combined VND4.8 trillion ($206 million) between 2017 and 2019, with one person earning VND140 billion ($6 million). No one paid any taxes until authorities discovered the extent of their earnings.

    Sellers on Facebook and e-commerce platforms are also doing well thanks to a growing trend of online shopping. Recently authorities found a warehouse selling smuggled goods via Livestream with a turnover of VND650 billion ($27.8 million) in the last two years. The owner had not paid a single dong in taxes prior.

    Tax officials said many businesses selling online have huge revenues but do not declare them or pay taxes. They include artists and celebrities, who, some claim have revenues of billions of dong.

    According to the Ministry of Finance’s regulation, businesses or individuals with an annual income of VND100 million ($4,300) or more must pay value-added tax (VAT) and income tax.

    But officials said assessing their incomes and collecting taxes from them is not easy. But things might be changing. New tax regulations that took effect in July gives the tax department the authority to ask banks for financial information about people who have income from online commercial activities.

    Vu Manh Cuong, director of the General Department of Taxation’s inspection agency, said 45 commercial banks have been asked to provide information. “Tax evaders cannot escape forever and must pay up sooner or later once we obtain data from the banks.”

    Those who do not declare and pay taxes also have to pay a fine of 0.03 percent per day for late payment.

    According to the data provided by banks, in Hanoi alone, there are more than 18,300 organizations and individuals engaged in online sales with a total income of more than VND1.46 trillion ($62.66 million) from Google, Facebook, YouTube, and other platforms.

    The tax agency has asked them to pay nearly VND14 billion in taxes. It was also able to identify many businesses offering rental services like Booking, Agoda and Airbnb with revenues of more than VND5 trillion in the first eight months of this year and collected taxes of VND93 billion.

    Cuong added that the State Bank of Vietnam’s banking supervision and inspection agency has identified 23 cases with suspicious transactions, including those where account holders receive money for advertising online or from Google, Facebook, and YouTube on behalf of others.

    On September 28 the inspection agency reported to the tax department about these suspicious bank transactions, and an investigation is ongoing.

    The census, which is due to be completed next July, will also help take a step toward making it easier for tax authorities to identify individuals who evade taxes.

    But experts remain apprehensive it would be difficult to collect tax from online sellers, especially since many consumers prefer to pay cash.

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  • Pomelo roams from fashion label to multi-brand environment

    Pomelo roams from fashion label to multi-brand environment

    Thai-based omnichannel fashion platform Pomelo has launched a redesigned version of its online platform which features multiple brands.

    Besides offering in-app exclusive live streaming, the new app houses more than 100 brands on its Thai version, including Vans, Converse, L’Occitane, and local brands such as Rally Movement and Matter Makers.

    But the company told Inside Retail Asia it will continue to design and release its own Pomelo range as well.

    Pomelo, which is building a footprint across Southeast Asia, plans to expand its expanded multibrand selection into other markets next year.

    The new app has a feature called Tap Try Buy, previously called Pomelo Pick Up, which allows customers to order items online through the app or website, select a store or partner location to try on their selected items, and only pay for only what they choose to keep. Tap Try Buy orders already make up almost half of the retailer’s online orders, a percentage that has grown during the Covid-19 crisis.

    Overseeing the new multi-brand direction is Alexandra Schonfrucht, newly appointed former Zalando and JD Sports executive, who is now Pomelo’s global head of third party brands.

    “We’re thrilled to welcome Alexandra to the Pomelo team as we enter this next phase of growth as a multi-brand platform,” said David Jou, CEO, and founder of Pomelo. “We’re continuing to build a diverse brand portfolio to provide the best omnichannel experience for our users.”

    The new app also incorporates Pomelo’s new branding elements including a refreshed logo.

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  • I.T flags big loss as Covid-19 impacts shoppers’ enthusiasm

    I.T flags big loss as Covid-19 impacts shoppers’ enthusiasm

    Multibrand Hong Kong fashion retailer I.T Limited has warned shareholders it will likely post a loss of at least US$38.7 million for the six months to August, such has been the impact of the Covid-19 on sales.

    Chairman Sham Kar Wai said in a letter to shareholders that the Covid-19 pandemic had led to a decline in consumer-spending enthusiasm across the world. While it has offered extra discounts to boost sales volume amid “an incredibly difficult trading environment” sales were down substantially.

    This is the third profit warning the company has issued this calendar year, following earlier announcements in July and August. It is based on initial figures and subjects to change before final results are reported tomorrow, (October 29).

    “Although during the period ended 31 August, the group took rapid and decisive action to reduce costs considerably, the savings in operating costs were not sufficient to offset the decline in sales and gross margin,” he said.

    August’s likely half-year loss follows a deficit of $9.2 million in the same period last year.

    I.T Group operates its own brands, including Chocolate and 5cm, concept stores Izzue and Double-Park; international brands it has local licenses for including Kurt Geiger and Camper; and A Bathing Ape, which the company rescued from Japanese owners in 2011.

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  • Online boom sees South Korean retail sales surge in September

    Online boom sees South Korean retail sales surge in September

    South Korean retail sales rose by 8.5 percent year on year in September as online stores enjoyed brisk sales amid the new coronavirus pandemic, government data shows.

    The combined sales of 26 major offline and online retailers reached US$10 billion last month, up from $9.87 billion won in September last year, according to the data compiled by the Ministry of Trade, Industry, and Energy.

    Online platforms led the overall growth, with their revenue advancing 20 percent over the period, the data showed, apparently as people purchased more goods through such stores amid the country’s social distancing scheme.

    Sales of foodstuffs from online stores jumped 60.2 percent, while those of electronic goods and daily products advanced 26 percent and 14.7 percent, respectively.

    Due to the Covid-19 pandemic, however, sales of tour packages and concert tickets dipped 12.3 percent, while those of fashion items also moved down 1.6 percent.

    Sales from offline stores edged up 1 percent as people purchased more gifts to celebrate the Chuseok holiday, which ran from late September to early this month.

    Convenience stores saw their sales improve 2.3 percent, due to higher sales of tobacco products and alcohol.

    Sales from supermarkets also climbed 5.3 percent on the back of gift sales.

    Department stores, on the other hand, saw their sales drop 6.2 percent due to sluggish demand for fashion goods.

    In the first six months of the year, the combined retail sales reached $59.1 billion, up 3.7 percent from the previous year. Shipments by online stores advanced 17.5 percent, while those of offline stores dipped 6 percent.

    Last year, South Korean retail sales rose by 4.8 percent year-on-year, with online shopping up 14.2 percent, and offline down 0.9 percent.

  • Singapore retail rents tipped to slide up to 15 percent

    Singapore retail rents tipped to slide up to 15 percent

    The increased activity in Singapore’s retail sector hints at a bottoming out of rents by the end of this year or early next year, Knight Frank’s research team said in a report published on Friday (Oct 16).

    Overall retail rents are expected to fall by 10-15 percent for the whole of this year due to recessionary pressures and safe-distancing restrictions, according to the real estate consultancy.

    That being said, in the suburban region, rents of retailers will likely decline by just 7.5 percent or less.

    “As physical retail stores resumed operations, shopper traffic also returned to a greater extent in the suburban malls compared to the centrally located ones that are more reliant on the tourist dollar,” Knight Frank analysts wrote.

    Thus, the rental gap between suburban malls and those in Orchard will likely continue to narrow, given that the inflow of tourists into Singapore is still impeded by travel restrictions. Suburban retail rents are expected to recover sooner because they are supported by the domestic catchment resident population.

    In the third quarter this year, prime retail rents islandwide decreased by 10.3 percent year on year to average $27.40 per square foot (psf) per month, as safe-distancing measures and border controls remained in place.

    This drop was largely led by the 11 percent fall in gross rents for prime retail spaces along the Orchard Road shopping belt, as stores there continued to struggle with the absence of international tourists, Knight Frank noted.

    Prime spaces refer to rental-yielding units between 350 and 1,500 square feet with the best frontage, connectivity, footfall and accessibility in a mall. Such spaces are typically located on the ground level of a mall or the basement level of a mall that is linked to an MRT station or bus interchange.

    In the Marina Centre, City Hall and Bugis region, gross rents of prime retail spaces tumbled by 13.5 percent year on year to $25.40 psf per month on average for the third quarter.

    The city fringe, meanwhile, posted an 8.6 percent decline from a year ago, to $23.40 psf per month.

    Propping up the retail market was the suburban areas, where rents started to stabilize during the July-September period.

    “As more employees work from home, the malls located within residential population centers were visited by many for daily necessities and household sundries,” the analysts wrote.

    The suburban region recorded the smallest drop in gross prime retail rents during the quarter, slipping 6.9 percent on the year to average $26.60 psf per month.

    Quarter on quarter, rents of prime retail spaces in suburban areas also inched down by just 1.4 percent, compared to the bigger declines of 6.4 percent in Orchard, 7 percent in Marina Centre, City Hall, and Bugis, and 4.5 percent in the city fringe.

    While traditional retailers such as Topshop at VivoCity and Robinsons at Jem closed during the latest quarter, there were also newcomers to the scene. For instance, 100-year-old Hong Kong bakery Hang Heung opened its first Singapore outlet at Ion Orchard, Knight Frank noted.

    Other notable retail openings in the three months include store expansions such as Foot Locker at Orchard Gateway @ Emerald and Decathlon at The Centrepoint.

    In August, retail sales – excluding motor vehicles – fell by 8.4 percent year on year, according to figures released by the Department of Statistics last week.

    On a seasonally-adjusted month-on-month basis, total retail sales were higher by 1.4 percent in August. Excluding motor vehicles, sales edged up 0.1 percent on the month.

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  • Japan, Vietnam boast thriving economic partnership

    Japan, Vietnam boast thriving economic partnership

    Japan has for years been one of Vietnam’s four largest economic partners, with their bilateral trade rising to nearly $40 billion last year.

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  • Singapore retail sales slip further down in August

    Singapore retail sales slip further down in August

    SINGAPORE retail sales dropped 5.7 percent on the year in August, an improvement from the 8.5 percent year-on-year decline recorded in July, according to the Singapore Department of Statistics (SingStat) on Monday.

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  • Hong Kong retail sales fall again in August

    Hong Kong retail sales fall again in August

    Hong Kong retail sales plunged 13.1 percent year on year in August, as the coronavirus pandemic continued to batter the struggling sector, marking a 19th consecutive month of contraction. Consumer spending dropped to HK$25.6 billion (US$3.2 billion) in August, contributing to sales for the first eight months of the year falling 30 percent from the same stretch in 2019, according to provisional figures released by the Census and Statistics Department on Wednesday.

    The monthly year-on-year decline was not as steep as recorded recently, but that was mainly attributed to the data comparison with last August when the city was gripped by anti-government protests.

    “I hope everyone can understand that and won’t be misled by the figure,” said Annie Tse Yau On-yee, chairwoman of the Hong Kong Retail Management Association, adding this August’s slump reflected a serious situation for the industry.

    The total value of retail sales in the city between January and August this year was HK$213 billion, compared with HK$305 billion for the same period last year.

    Most retailers continued to suffer a contraction in sales in August, with supermarkets once again among the exceptions, a trend Tse linked with residents staying in to cook during the city’s third wave of Covid-19.

    All eyes are on how retail businesses perform between October 1 and October 4, which is traditionally a peak period for sales because of the National Day holidays, popularly known as “golden week”.

    Previously, millions of mainland Chinese would travel domestically and overseas during the break but would be kept away from Hong Kong this year by the city’s travel restrictions for the pandemic.

    Tse noted that sales might improve for those selling goods relating to people’s daily lives, such as furniture and food, due to the long weekend in Hong Kong overlapping with the Mid-Autumn Festival.

    “But everyone predicts it will help boost the footfall rather than sales. Maybe due to the ease of pandemic, then the foot traffic, in general, will be better… the sales will still remain weak,” she said.

    “The help for sectors which had continued to record a decline in sales would be minimal.”

    A government spokesman said as economic conditions remained under pressure and inbound tourism was unlikely to recover in the short term, the business environment would continue to be difficult.

    “Nonetheless, local consumption sentiment may further improve if the recent stabilization of the local epidemic situation sustains,” he said.

    After the third wave of infections intensified in July, evening dine-in services were banned in Hong Kong restaurants for nearly 1½ months, only reopening in late August. Most entertainment premises such as bars and karaoke lounges also remained closed in August, dampening consumer sentiment across the city.

    The ongoing global lockdown also played a role in subdued consumption, as tourist arrivals to the city collapsed 99.9 percent, with fewer than 4,500 people in August.

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  • Amazon Prime Day 2020 finally has a start date

    Amazon Prime Day 2020 finally has a start date

    Everything was delayed due to the COVID-19 pandemic this year, including Amazon’s huge sale known as Prime Day. Typically, Amazon Prime Day takes place in July, but this year, due to obvious reasons, the sale was reportedly delayed for October.

    The initial reports dated early July claimed Amazon Prime Day will be scheduled for the week starting October 5, and that a definitive date will be announced later. However, a new report mentions another start date for Amazon Prime Day.

    Without further ado, Amazon’s Prime Day 2020 will start on October 13, at least according to four people familiar with Amazon’s plans. Although Amazon declined to comment on the date, it looks like the company has already “blacked out vacation for its full-time warehouse workers from October 13-20.”

    It’s important to mention that the sources of this crucial information don’t know how long the sale will last, just the start date. It’s hard to make any assumptions at this time since Amazon has already extended these huge sales in the last couple of years, so it won’t be a surprise to learn that this year we’ll have a 3-day Amazon Prime Day sale event.

    Last year, the annual deal event exclusively for Prime members lasted for two days, whereas the year before it was squeezed into a 36-hour sale event. If the information proves to be accurate, Amazon should make an official announcement in the next couple of weeks, so stay tuned.

  • China retail sales rise again after Covid-19 outbreak

    China retail sales rise again after Covid-19 outbreak

    Officially released data for retail sales in China show a rise for the first time this year as the economy recovers from the impact of the coronavirus.

    Figures for August showed a year-on-year increase of 0.5 percent in retail revenues. Dramatic increases were seen in sales of communication equipment (25.1 percent) and automobiles (11.8 percent).

    By contrast, figures for the months previous to August this year showed a drop of 8.6 percent, during which time online sales increased by 15.8 percent.

    China’s economic recovery has been fuelled by pent-up demand, government stimulus, and strong exports.

    “We think that China’s economic recovery is on a reasonably firm footing now and should continue through the fourth quarter and into 2021,” Oxford Economics head of Asia Louis Kuijs said, “with solid investment growth, gradually recovering consumption momentum and resilient exports.

    China’s industrial output also accelerated at the fastest rate this year during August, according to data from the National Statistics Bureau.

    “We expect a further, albeit gradual, recovery of the services sector, a steady improvement in retail sales and elevated fixed-asset investment growth, said Nomura’s chief China economist Ting Lu.

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  • Japan retail sales remain lacklustre last month

    Japan retail sales remain lacklustre last month

    Japan’s retail recovery continued to proceed slowly during August following the largest recorded single-quarter sales decline in the nation’s history.

    According to the country’s Cabinet Office, the national real gross domestic product for April to June fell by 28.1 percent year on year, performing worse than at the depths of the global financial crisis in 2009.

    WWD reported a poll of major retailers in the market, finding sales performance between the firms generally low. Uniqlo operator Fast Retailing was an exception, seeing a 29.8-pera-cent increase in same-store sales growth during August, with summer products selling fast in the midst of the current Japanese heatwave. About 90 Uniqlo stores are still operating below peak hours, however, two have been permanently shuttered and six remain closed due to the Coronavirus pandemic.

    In contrast, Isetan Mitsukoshi saw sales drop by 29.1 percent under last year’s results, especially hard hit at its Mitsukoshi store in an area traditionally popular with foreign travelers, where sales fell 47.8 percent. Takashimaya’s sales dropped 18.8 percent against August figures for last year across 13 department stores.

    “In addition to a drastic decline in tax-free sales, the effects of a heatwave and the continuing trend of people refraining from going out resulted in not being able to meet the sales levels of last year,” Takashimaya was quoted by WWD. “On the other hand, we did see the movement of items meant to make people’s time spent at home more comfortable, as well as of luxury brand goods.”

    Hankyu and Hanshin department store chains operator H2O Retailing saw a sales decline of 15 percent, with same-store sales down 26.9 percent. J. Front Retailing was hit with a sales drop of 29.4 percent year on year in August, commenting “Sales of volume fashions and food products in particular suffered”.

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  • Singapore startup helps companies pivot to online marketplaces during virus outbreak

    Singapore startup helps companies pivot to online marketplaces during virus outbreak

    Techsembly, a Singapore technology startup, is securing clients worldwide after developing a Software-as-a-Service platform allowing businesses to replicate a curated and customized in-store shopping experience online.

    The three entrepreneurs who founded Techsembly have a background in e-commerce and online retailing and built their own Gifts Less Ordinary marketplace into a million-dollar business. They recognized a need among companies forced to pivot their business due to the Covid-19 pandemic to maintain sales at a time it may be impossible for customers to interact in person.

    “The retail industry is at an inflection point and we are increasingly seeing the emergence of new players who are changing the rules of the game,” explains Techsembly co-founder and CEO Amy Read.

    “Businesses, whether they are retailers, media or hotels, are all impacted by the Covid-19 crisis, and marketplaces have become the new normal – already accounting for more than 56 percent of all online sales. Some industry experts are predicting that will increase to 80 percent in the future.”

    But many businesses who know they have to move online are daunted by the cost and logistics of building their own marketplace and concerned how it might integrate with their existing online experience.

    That’s where Techsembly comes in – and the company has recently signed three significant clients as customer partners: Boutique Fairs Singapore (BFS), Anglo-American fashion platform Not Just a Label, and luxury accommodation provider The Peninsula Hotel Group.

    BFS is regarded as one of the leading calendar events in Singapore, taking place bi-annually at the F1 Pit Building, attracting more than 300 local designers and artisans and 37,000 visitors per event. With social-distancing requirements due to Covid-19 forcing the cancellation of the latest edition of the fair, the company recognized the need to pivot online quickly to serve both vendors and visitors.

    In a matter of weeks, BFS was able to launch an online marketplace featuring 200 local brands and 4000 products by partnering with Techsembly.

    Charlotte Cain, Founder of Boutique Fairs Singapore, said the company needed a solution that combined offline experiences with online shopping through the launch of an e-commerce marketplace immediately.

    Not Just A Label (NJAL), another Techsembly client, is a design platform based in California and a UK-based designer showcasing and nurturing today’s pioneers in contemporary fashion. NJAL needed to pivot its business from a B2B to B2C model at the height of the pandemic. Not Just A Label operates the largest global network of contemporary fashion designers, having access to 4 million styles designed by more than 40,000 independent and emerging creative designers.

    NJAL, like BFS, reacted quickly to the global crisis by adopting a new strategy to provide a capital-light and highly profitable sales channel, thus saving a generation of emerging designers and brands that were impacted by the downfall of the brick-and-mortar retail sector during the pandemic. Many designers on the NJAL platform are also now moving to ‘Made to Order’ to increase sustainability, with more than 60 percent of items on the marketplace now carrying a made to order label.

    NJAL founder Stefan Siegel said using Techsembly’s solution allows NJAL to have multiple localized storefronts through one centralized platform, ensuring each regional storefront can be tailored to the needs of the local audience.

    Amy Read says the experiences of these companies underline the importance of moving quickly to embrace online trends and implement solutions to stay competitive.

    “This shift is not just limited to the fashion and retail industry, but many other businesses, including hotels and media outlets, are also looking to pivot and find new innovative ways to support their customers and generate additional revenue streams and value, without investing in inventory or new builds.”

    The Peninsula Hotels, like many other hospitality providers, has suffered significant a decline in turnover as a result of the global pandemic closing borders and social-distancing requirements limiting events and dining out. The firm launched a marketplace solution that allows for global sales of gift cards and experiences. As a result, despite their hotels having to remain closed, they were able to generate supplementary revenue for those customers wishing to give and purchase ‘experiences’ they could look forward to.

    “Marketplaces allow businesses to innovate and grow without the risk of holding stock, to support their local suppliers and replicate the mall experience online. This omnichannel approach is the future of modern retailing,” explains Read.