Retail News CRM

Tag: Singapore

  • Singapore retail sector’s weakness continues in 3Q

    Singapore retail sector’s weakness continues in 3Q

    Prime retail rents fell faster in Q3

    Orchard rents fell 0.9% to $39.86 per sq ft.

    Leasing activity slowed and the rental decline quickened in Q3 2016 due to continued headwinds from poor overall retail sales and online competition.

    Based on rental records captured by the Urban Redevelopment Authority’s Real Estate Information System (URA REALIS) as at 18 October 2016, there were a total of 2,460 leasing deals in Q3 2016, down 12.5% quarter on quarter (QOQ) and 14.7% year on year (YOY). This was a sharp contrast to the 41.4% QOQ jump in leasing volume in Q2 2016.

    According to Colliers International, the fall in leasing transactions in Q3 2016 reflected the weak sentiment in the retail sector which continued to face numerous challenges including Singapore’s weak economy, cost concerns, manpower shortages and intensifying competition from online retailers.

    Moreover, although the latest available figures showed tourist arrivals stayed on the uptrend and rose 6.7% YOY in July, the retail sales index (excluding motor vehicles) contracted by 3.1% YOY and 6.5% YOY in July and August, respectively.

    In light of the above, the decline in prime retail rents accelerated in Q3 2016, after slowing down in the second quarter.

    In the Orchard Road sub-market, the average monthly gross rent for prime ground floor shopping mall space contracted by 0.9% QOQ from SGD40.21 per sq ft in Q2 2016 to SGD39.86 per sq ft in Q3 2016. This is faster than the 0.5% QOQ slide in Q2 2016.

    Likewise, the rate of rental decline picked up pace in the Regional Centres.

    The average monthly gross rent for prime ground floor shopping mall space reached SGD33.38 per sq ft, after falling by 0.8% QOQ in Q3 2016. In comparison, rents fell by 0.3% QOQ in Q2 2016.

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  • Singapore commercial property faces a gloomy outlook. Here’s why

    Singapore commercial property faces a gloomy outlook. Here’s why

    The outlook for Singapore’s commercial property, including retail, office and industrial space, may have turned grim, according to forecasts from real-estate services provider Colliers.

    Singapore’s retail landlords and tenants face “challenging times,” Colliers said in a note dated Monday, forecasting demand for retail space to lag behind supply this year, with a rise in new space pushing up island-wide vacancy rates.

    Colliers said leasing activity slowed and rental declines accelerated in the third quarter amid poor retail sales and online competition.

    Singapore’s retail sales fell 1 percent in August on year overall and excluding the 30 percent jump in car sales, fell 6.5 percent, with drops in categories including jewellery, restaurants and recreational goods, according to official data.

    “In the near term, the uncertain economic outlook and heightened unemployment risk will probably be dampening factors on consumer spending,” Colliers said, although it expected the year-end holiday shopping season would mitigate the hit to retail sales.

    It forecast ground-level shopping-mall rents in 2016 would fall by 2.0-2.5 percent in regional centers and by 2.5-3.0 percent in the prime Orchard Road shopping belt.

    Singapore’s office segment may not fare much better.

    “Overall office rentals across Singapore continue to slide under pressure of oversupply and lacklustre demand as the market saw the fifth consecutive quarter-on-quarter rental decline in the third quarter,” Colliers said.

    “Underpinned by gloomier economic outlook from potential U.S. rate hikes, an uncertain Chinese economy and concerns on the repercussions of Brexit, business sentiments and overall office space expansion remain restrained,” it added.

    Colliers noted that Singapore’s preliminary gross domestic product estimate for the third quarter showed a 4.1 percent on-quarter contraction, with some economists saying a technical recession was a possibility.

    When it comes to office rents, grade-B office buildings were taking a bigger hit as tenants fled to better quality space, it said.

    “We expect competition among landlords to fill the backfill spaces, especially in older office buildings, to intensify over the next few quarters,” it said.

    Colliers forecast the office vacancy rate would surge, with premium and grade-A supply in the central business district (CBD) set to rise 5.6 percent this year and another 12.1 percent next year as more buildings were completed.

    It expected rents in that segment would decline by up to 3.0 percent in the fourth quarter, for a full-year decline of 7.0-12 percent.

    When it came to industrial property, Colliers advised it was an “opportune time” for tenants to evaluate their needs.

    “Given the tentative economic outlook, we expect industrial rents to remain soft over the next three to six months,” it said. “Coupled with the ample space options available, there will be opportunities for industrialists to secure choice business premises at competitive rents. ”

    It expected 20 million square feet of new industrial space to be added this year, pushing up vacancy rates island-wide.

    Colliers forecast that rents for prime multi-user conventional industrial space would fall 7.0-14.0 percent this year.

    Amid tough competition for tenants, it expected rents at independent high-specification industrial buildings located outside the science and business parks would fall further in the fourth quarter, for a full-year decline of 9.0 percent.

    But in business parks, it expected rents would rise a modest 1.0-2.0 percent for the year as higher rents were attainable at newer developments.

    Colliers noted, however, in the third quarter, landlords didn’t cut rents by much across industrial properties.

    Most landlords weren’t willing to cut rents by large margins in the period after sharp cuts in the first half of the year and were instead giving tenants more incentives, such as longer rent-free and fitting-out periods, covering alteration works and subsidizing repairs, it said.

    –Leslie Shaffer

  • Sa Sa profit drop looms

    Sa Sa profit drop looms

    Sa Sa profit is expected to fall 35 to 45 per cent for the six months ended September 30.

    The Hong Kong-based cosmetics retailer has issued a profit warning, citing a drop in both sales and gross profit margin of its Hong Kong and Macau business, weaknesses in some overseas stores and decline in online profits.

    Meanwhile, the group has recorded a 2.3 per cent decrease in retail and wholesale turnover to HK$1910.9 million (US$246.3 million) for its second quarter.

    In other markets, including China, Malaysia, Singapore, Taiwan and Sasa.com), the group’s turnover fell 2.9 per cent. For Hong Kong and Macau, turnover was down 2.2 per cent to HK$1552 million, total sales easing by 2 per cent while same-store sales were 2.5 per cent down on a year-on-year basis.

    However, there was a 3.9 per cent rise in the number of transactions because of increased traffic growth. The number of transactions of Hong Kong and mainland customers rose by increased by 1.8 and 5.9 per cent respectively, while the average sales per transaction fell by 5.5 and 6.9 per cent respectively.

    Improved sales performances, says the group, were a result of its efforts to adjust product offerings to meet market demand. The resulting change in product mix intensified downward pressure on gross profit margin for the quarter.

    For the National Day Golden Week holiday from October 1 to 7, the group’s retail sales in Hong Kong and Macau had positive growth of 13.8 per cent, with same-store sales growing by 12.4 per cent.

    As at September 30, the group had a total 283 stores/counters, down from 288 at June 30. Hong Kong and Macau has 113 outlets (up one), China 53 (down two), Malaysia 68 (down one), Taiwan 26 (down five). Singapore was steady at 23 outlets.

  • Tokyu Hands opening third Singapore store

    Tokyu Hands opening third Singapore store

    Japanese department store Tokyu Hands plans to boost its overseas sales, which now contribute 1 per cent of overall sales.

    Overseas income for its latest year totalled about 800 million yen (US$7.69 million).

    A third store is opening next month in Singapore, where Tokyo Hands has had managed stores for two years, and next year the group plans to start trading in Malaysia.

    tokyu-hands-artist

    Tokyu Hands opened its first overseas branch in Taiwan in 2000 and now has 15 franchised stores on the island.

    Takenori Tsuji, who heads Tokyu Hands’ international business, says the Taiwan stores are mainly in Taipei with management entrusted to the franchisees, “but we consult on the selection of merchandise and store layout”.

    He says trends in Japan, such as aging consumers, have made it hard for the store to grow domestically.

    Tokyu Hands’ first directly managed store overseas opened in China in 2012, but closed it in January this year. Tsuji says this was a result of management difficulties.

    “It took more time and effort than expected to clear customs when we brought in products from Japan, making it hard for us to sell new products quickly.

    “Some sales people quit soon after being hired, and it was hard to train Japanese employees in the local area.”
    Six months after launching, the store had a temporary sharp drop in sales when relations between China and Japan worsened over the disputed Senkaku Islands. However, full-year sales were “reasonably good”.

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  • Hokkaido Baked Cheese Tart heads to Australia

    Hokkaido Baked Cheese Tart heads to Australia

    Food enterprise ST Group has launched Japanese-style Hokkaido Baked Cheese Tart outlets in Australia.

    Using a traditional recipe involving three cheeses from Japan’s dairy heartland of Hokkaido, the tarts have already been introduced in Brunei, Indonesia, Malaysia, Shanghai and Singapore. Six outlets are planned for Australia, three in Melbourne to be followed by three in Sydney next year.

    The first Hokkaido Baked Cheese Tart stores launched in Malaysia this year, selling up to 20,000 units a day.

    Designed by Eat Architects, Hokkaido Baked Cheese Tart kiosks are compact with a luxury aesthetic, featuring marble benchtop displays and low-slung designer lighting. The tarts are displayed like precious gems.

    ST Group MD Tatt Ghee Saw says Australia’s multicultural society is continually evolving, along with its palate and cuisine preferences. “At ST Group we are passionate about sharing the foods we love in Southeast Asia. ”

    Tatt Ghee Saw

    He established the group in 2011, recognising the need for comforting cultural eateries, much like the hawker’s markets and corner laksa stores of his native Kuala Lumpur.

    His first venture was PappaRich in Melbourne, which attracted long queues. It is now a major franchise enterprise with 26 stores throughout Australia and New Zealand. The group’s other brands are NeNe Chicken, Gong Cha (New Zealand only) and iDarts Australia.

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  • Samsung to roll out Blue Coral Galaxy S7 edge 4G+ in Singapore, US

    Samsung to roll out Blue Coral Galaxy S7 edge 4G+ in Singapore, US

    We’re taking a break from the Note 7 fiasco. Samsung seems to be refocusing its energies in other products and services because really, the damage has been done already. We know the company is already doing a lot of security and extra measures like considering maybe tapping LG for the next flagship’s battery, offering cash discounts, and launching only one flagship annually.

    This time, Samsung has just announced that it’s releasing a Blue Coral version of the Galaxy S7 edge 4G+. The phone will be available soon in a new color variant, giving people another alternative to the problematic Note 7. You see, the S7 edge has always been another option within the premium flagship category even before the Note 7 was launched. The smartphone was introduced in four color options namely Pink Gold, Silver Titanium, Gold Platinum, and Black Onyx and now, it’s getting the stunning Blue Coral.

    The Blue Coral Samsung Galaxy S7 edge 4G+ will roll out starting November 5 with 32GB onboard storage. Don’t be surprised but the listed retail price is a staggering $1,098.

    Samsung announced this color option together with the 2016 version of the Galaxy Tab A 10.1 with S Pen 4G. The two should be available from most retailers and mobile carriers in Singapore initially and then in the United States very soon.

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  • Can’t do without your mobile device? You’re not alone

    Can’t do without your mobile device? You’re not alone

     

    Market research agency Nielsen on Monday says that some 54% of Singaporeans cannot imagine life without their mobile devices and 48% feel anxious without them.

    In addition, Nielsen found that 73% of Singaporeans enjoyed the freedom of being connected anywhere, anytime, while 66% strongly or somewhat agreed that their mobile device had bettered their lives.

    The findings were from a poll of more than 30,000 online respondents in 63 countries, in Nielsen’s latest Mobile Shopping, Banking and Payment Survey. This included 493 respondents from Singapore.

    Nielsen says the proliferation of technology and need for connectivity in their lives has revolutionised the world of retail, and changed the way consumers shop and buy online, as well as perform banking transactions.

    “Mobile devices… are shaping and defining the consumer’s approach to retail and banking, empowering them to demand a more custom tailored experience according to their taste and preferences,” says Joan Koh, managing director, Nielsen Singapore and Malaysia.

    “The need for connectivity and value of convenience has never been greater among Singaporeans,” she adds.

    Some 62% of Singaporeans have used their mobile devices to look up product information when shopping and 54% have used their mobile devices to compare prices.

    Close to half, or 49% of consumers, have used their mobile device to research on a product or service within the last six months.

    In addition, some 32% have used their mobile devices to purchase a product or service, and 31% have booked movie tickets, flight tickets or hotel stays through them.

    “The adoption of mobile devices has disrupted the path to purchase of traditional retail channels,” says Koh. “Businesses need to continue to leverage on digital and social media platforms to supplement traditional formats such as television and print media to drive consumer engagement.”

    Growth in access to cashless payments is estimated to lead to US$10 trillion in additional consumer spending over the next decade, according to estimates from The Demand Institute, which is jointly operated by Nielsen and The Conference Board.

    Nielsen says consumers are also adopting digital tools to monitor their spending and manage their finances.

    “We are seeing an uptrend in the adoption of mobile-banking activities,” says Anil Antony, executive director of consumer insights at Nielsen Singapore. “This is further girded by the fact that retail banks are increasingly going digital with their processes and driving automation.”

    Some 41% of Singaporeans say they had checked a bank account balance or a recent transaction in the past six months, while 37% have paid a bill using their mobile device.

    In addition, 36% of respondents have transferred money between bank accounts, and 26% have transferred money using their mobile device directly to another person.

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  • Aruba rethinks network procurement with NaaS

    Aruba rethinks network procurement with NaaS

    At the Aruba APAC Atmosphere 2016 conference held late last month in Singapore, Aruba Networks President Dominic Orr announced the launch of network-as-a-service, which supports the delivery of the company’s new Mobile First Platform.

    Core applications for Gen-Mobile era

    The core applications on Aruba Networks’ new Mobile First Platform are supported by its existing network infrastructure, including Wi-Fi, Bluetooth low energy (BLE), wired and WAN. The platform comprises network controls, network management, policy management, cloud networking, network analytics and location services. These applications supports the delivery of third-party IT services and business applications that form a mobile apps ecosystem.

    Examples of the IT services that are available on Aruba’s Mobile First Platform include Citrix, MobileIron (MDM and enterprise mobility services), splunk (operational intelligence), ArcSight (an HP company that provides cyber security), Okta (identity management and single sign-on), Check Point, Intel Security, Juniper, and Palo Alto Networks.

    As for business applications, the Platform also supports Skype for Business, AT&T, Aislelabs (enterprise mobile wallet marketing platform), kasada (cryptographic data firewall and our password-less authentication), RetailNext (in-store analytics), Envoy (visitor registration) and eventboard (visitor and room management).

    “The Gen-mobile has given rise to rapid IT forces like the internet of things (IoT) and mobility. This is not just about the use of next-generation devices, like the Wi-Fi-connected TV boxes like the Apple TV, but the applications on top,” said Anthony Wai, sales engineering director of Asia Pacific, Aruba Networks (a HPE company), in an exclusive interview.

    In a typical workplace environment, an organization needs to refresh the network infrastructure once every three to seven years. For example, they would need new routers and new switches to conform to new standards of the wireless network. In the past, when IT procurement was largely driven by IT, addressing user experience tended to be an afterthought. The situation today is reversed, however. “Many of the IT procurement decisions today are now user-driven. For example, the line of businesses (LoB) would first provide to their banking customers a banking application. They would then instruct IT to handle the infrastructure matters,” Wai said.

    Utility-like network procurement models

    To catch up with the fast pace of new mobile apps development and delivery, and the increasingly shortened cycle of network infrastructure upgrades, IT and the other LoBs would benefit from a flexible network services procurement model, such as network-as-a-service (NaaS), said Wai.

    “NaaS enables the subscription of network infrastructure services using an opex model instead of a capex model. By subscribing instead of acquiring these network services, customers can benefit from the latest technologies, and need not budget a sum of capex to invest in the next round of network technology upgrades,” Wai said.

  • ZALORA Brings See Now, Buy Now Model to Singapore Fashion Week

    ZALORA Brings See Now, Buy Now Model to Singapore Fashion Week

    ZALORA, Asia’s online fashion destination, today announced its partnership with Singapore Fashion Week as the Official E-Tail Partner. This is the second time the online fashion brand is taking part in one of the region’s biggest fashion events of the year. ZALORA will be presenting three Singapore designers and labels namely, Stolen, Aijek, and Max Tan in the Fashion Futures Showcase. Fashion fans in Singapore can purchase the collections on ZALORA from today onwards.

    As the Official E-Tail Partner, ZALORA will be hosting a shoppable Singapore Fashion Week microsite on ZALORA.com that will feature curated collections from Fashion Futures Showcase and Singapore Fashion Week Access, a dedicated show segment for Singapore designers. As part of ZALORA’s commitment to stay up-to-date with the latest trends within the industry, ZALORA is embracing the ‘see now, buy now’ model enabling fashion show goers to purchase their favourite looks immediately.

    Shop Max Tan Spring/Summer 2017, Stolen Spring/Summer 2017, and Aijek Fall/Winter 2016 collections at www.zalora.sg/fashion-week-singapore and on the ZALORA mobile app.

    “ZALORA is proud to be supporting local designer talent in one of the most anticipated fashion events of the year,” said Parker Gundersen, Chief Executive Officer of ZALORA Group. “We’re very passionate about supporting the local fashion industry across all of our markets in Asia, and Singapore Fashion Week provides a great opportunity for us to give the region’s top designers exposure to millions of new consumers on our online platform. It’s also an exciting way for our customers to discover new fashion and to buy product straight from the runway.”

    “Singapore Fashion Week is delighted to be working with ZALORA again this year, as we recognise the growing impact and importance of digital and social media, and connecting designers and labels

    with customers via e-commerce. With the growing trend of ‘See Now, Buy Now’ as well, I believe that online retailers like ZALORA will play an ever-growing role in partnerships with fashion weeks around the world,” commented Tjin Lee, Founder and Chairman of Singapore Fashion Week.

    ZALORA also strongly believes in making fashion more inclusive and accessible. To further engage fashion consumers, the Fashion Futures Showcase will be live-streamed on ZALORA where viewers at home can watch the shows and access exclusive content. Catch all the exciting happenings at Singapore Fashion Week Fashion Futures Showcase on social media at #ZALORAxSGFW.

  • Laziz Pizza to fast-track growth with 100 new stores

    Laziz Pizza to fast-track growth with 100 new stores

    Overwhelmed by response to its first 50 stores across India, local brand Laziz Pizza plans to double its outlets in the short term.

    Owned by Laziz Food and Beverages, the chain is primarily targeting tier-one, -two and -three cities.

    Founder/CEO Keirron Patil says the company started franchising in 2013, and as well as India now has its expansion sights set on Malaysia (it already has one store in Johor Bahru), Singapore, Sri Lanka, Bangladesh and Nepal.

    Laziz allows its franchisees to team its outlets with other brands so they can offer customers multiple products under one roof, including a vegetarian outlet. An unusual aspect of the Laziz business is that franchisees are not charged a royalty fee nor have to share profits with the franchisor.

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  • Singapore, Manila rise in retail rent rankings

    Singapore, Manila rise in retail rent rankings

    The data may be a little dated, but Asian cities are holding their own in the retail rent rankings.

    New York’s Fifth Avenue still tops the list with an average rent of US$3500 per sqft per year. Hong Kong’s Causeway Bay is cemented in second place at $2399 and the Champs Elysee in Paris a distant third at $1372.

    (It should be noted, the list ranks the single most most expensive shopping strip in each country, not overall.)

    Data released by Cushman Wakefield this month – albeit more than a year out of date – shows the Philippines making the biggest gain: retail rental rates in Manila’s Bonifacio Global City High St were a mere US$56.40 per sqft per annum, but that is enough to make Manila 51st on the top 65 list – up eight places.

    Singapore’s Orchard Rd ranked 14th – up two places – at $336.80 and Taipei’s ZhongXiao East Rd 20th, up three places, at $273.20.

    The Ginza in Tokyo,  Japan, ranks a modest eighth at $881.90 in a virtual tie with Myeongdong in Seoul, Korea at $881.80.  The Ginza has fallen from sixth in last year’s survey, while Myeongdong has dropped from eighth.

    Cushman & Wakefield stresses that the global rankings focus on high street locations. This excludes mall rental rates – and in cities like Manila, Bangkok and Kuala Lumpur, malls dominate the premium retail landscape, not high street strips.

    Vietnam’s Ho Chi Minh City CBD retail rents are more expensive than in Bangkok at $150.50 for 32nd place, and $125.40 for 35th respectively. Bukit Bintang in Kuala Lumpur, Malaysia, ranked 40th (up one place) at $111.

  • Apple, Deloitte enter mobile business tie-up

    Apple, Deloitte enter mobile business tie-up

    Apple and Deloitte has entered into a partnership to help companies transform the way they work by taking advantage of the iOS platform.

    As part of the joint effort, Deloitte is creating a first-of-its-kind Apple practice with over 5,000 strategic advisors who are solely focused on helping businesses change the way they work across their entire enterprise.

    Apple and Deloitte will also collaborate on the development of a new service offering from Deloitte Consulting called EnterpriseNext, designed to help clients fully take advantage of the iOS ecosystem of hardware, software, and services in the workplace.

    The new offering will help customers discover the highest impact possibilities within their industries and quickly develop custom solutions through rapid prototyping.

    “We know that iOS is the best mobile platform for business because we’ve experienced the benefit ourselves with over 100,000 iOS devices in use by Deloitte’s workforce, running 75 custom apps,” said Punit Renjen, CEO of Deloitte Global.

    “Our dedicated Apple practice will give global businesses the expertise and resources they need to empower their mobile workforce to take advantage of the powerful ecosystem iOS, iPhone, and iPad offer, and help them achieve their ambitions, while driving efficiency and productivity.”

  • Singapore retail sales decline gains pace

    Singapore retail sales decline gains pace

    Real Singapore retail sales fell 6.5 year-on-year in August – twice the rate of decline of the previous month.

    Retail sales august 2

    While the headline figures were 1.1 per cent over July, and 1 per cent over August 2015, those figures included motor vehicle sales. Excluding motor vehicles, retail sales declined 2.1 per cent from July to August.

    According to Statistics Singapore, the retail sales value in August 2016 was estimated at S$3.6 billion, including vehicles.

    While sales in department stores and of computers and phones increased by up to 3.1 per cent month-on-month, sales of recreational goods, apparel & footwear, furniture & household goods, optical goods and books, medical goods & toiletries, supermarkets, mini-marts & convenience stores, watches & jewellery and food & beverages all decreased between 0.5 per cent and 8.9 per cent month-on-month.

    Year-on-year, sales of computers & phones, watches & jewellery, apparel & footwear and recreational goods decreased by between 11.1 per cent and 19.6 per cent. Similarly, sales at petrol service stations, of food & beverages, furniture & household equipment, optical goods & books, supermarkets, department stores, medical goods & toiletries and mini-marts & convenience stores declined between 0.4 per cent and 9.9 per cent.

    Food & beverage sales

    Retail sales FB

    Meanwhile, sales of food & beverage services decreased 1.6 per cent in August 2016 over July.

    Compared to August last year, sales of food & beverage services declined 2.5 per cent. Fast food retailers grew their sales by 3.9 per cent and caterers by 4.7 per cent, but restaurants were down 5.3 per cent.

    Year-on-year, turnover of restaurants fell 8.8 per cent in August 2016.

  • TWG Tea makes debut in Canada

    TWG Tea makes debut in Canada

    Singaporean brand TWG Tea has entered the North American market with a store in Vancouver.

    In its eight years, TWG Tea has opened 56 owned and franchised boutiques and salons in 17 cities including Dubai, London and Shanghai.

    In Canada, its franchise and distribution rights have been bought by Tom and Karinna James, who previously owned Urban Tea Merchants in Vancouver. The city is ideal for TWG’s North American debut because of its tea culture, large Asian population and local appreciation for niche and artisanal beverages.

    “Our Asian population are very sophisticated tea drinkers,” says Tom James, thanks to the introduction of tea concepts such as Davids Tea and Starbucks’ Teavana.

    Tea sales in Canada reached $1.3 billion last year, with 40 per cent growth by 2020 predicted.

    Tom and Karinna James opened luxury tea house Urban Tea Merchant in 2004. The shop has been closed and will reopen as TWG next month with a boutique, salon and small wholesale component focussing on hotels and gourmet stores.

    Tea will be served in 18-carat gold-plated teapots, says James, who plans to open several stores in Canada.

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  • Zurich Insurance has launched a solution in Hong Kong and Singapore

    Zurich Insurance has launched a solution in Hong Kong and Singapore

    Zurich Insurance has launched a solution in Hong Kong and Singapore which provides risk-assessment services and protects businesses against the risks associated with supply chain disruptions.

    Called Zurich Supply Chain Insurance, the product is the first-of-its-kind in the Asia-Pacific region and is now available to qualified customers based in the two markets.

    “Increasing globalisation, improved transport and logistics through to technological advancements have enabled companies to source materials from virtually anywhere in the world,” said Keith Thomas, chief executive officer of Zurich’s Global Corporate in Asia Pacific business unit. “While this provides increased flexibility and cost savings, it can also result in complex supply chains that are highly interconnected, more exposed and difficult to manage.”

    According to Zurich, the new solution helps reduce supply chain failures and provides cover if delayed or undelivered supplies result in a financial impact on a company’s operations. Supply Chain Insurance consists of two components. In the first phase, risk engineers carry out a risk assessment to identify and evaluate customers’ exposure to critical risks throughout their supply chain, and recommend prioritized mitigation actions. In the second phase, the risk assessment is combined with other sources of data to underwrite and price the risk.

    “Many organizations are not aware who their key suppliers are, especially in the lower levels of the supply chain, and very few have visibility over their entire supply chain,” said Hassan Karim, technical underwriting manager of Zurich Asia Pacific. “Half of supply chain disruptions occur beyond the preliminary supplier of goods, therefore making it extremely difficult to establish where an organization lies within its suppliers’ priorities.”

    Karim added that it is essential to take a holistic approach and to identify critical supplies when working with customers to manage their exposures.

    “Effective supply chain risk management can present significant benefits to businesses and is becoming an increasingly important driver of their profits,” he said. “Every customer’s supply chain is different so we work with them to shape the appropriate solution and offer an individually tailored policy to meet their specific needs.”

    The Supply Chain Insurance solution has been available in Europe and North America for the past six years, according to Zurich.

     

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