Tag: trend

  • Tourists drag down Hong Kong retail sales

    Tourists drag down Hong Kong retail sales

    Official Hong Kong retail sales figures for March show a 2.9 per cent year-on-year fall, blamed on shrinking in-bound tourist numbers.

    According to data released by the Census and Statistics Department the fall follows a two per cent drop in January and February combined.

    A government spokesman blamed the sluggish sales on a slowdown in inbound tourism.

    “Most types of retail outlets recorded year-on-year declines in sales… Retail outlets selling certain consumer durable goods saw some notable increases in sales, mainly helped by the launch of certain smartphone models,” the spokesman said.

    Weakened tourism is likely to continue to constrain growth, he said, “although the stable labour market conditions should still render support to local consumer sentiment”.

  • ‘Cardless credit card’ launched in Korea

    ‘Cardless credit card’ launched in Korea

    Financial services business BC Card is set to launch Korea’s first mobile credit card service that does not involve the use of a real plastic card.

    BC Card has conducted a series of pre-launch tests for its new ‘cardless credit card’ over four days, and concluded that there weren’t any problems in terms of subscription, registration, issue, payment, payment and membership cancelation.

    BC Card provides third party payment processing services to Korean banks and a rnage of debit and credit card products.

    Following the Financial Services Commission’s recent decision to lift a regulation that obliged companies to release actual plastic cards when they launched mobile services, BC Card will be first company to launch a mobile-only credit card in Korea.

    The company is planning to launch various types of mobile credit cards, using USIM, eSE (embedded SE), HCE (Host Card Emulation) and NFC (Near field communication) technology.

    BC Card’s mobile-only credit card will be accepted at large retailers, department stores, convenience stores and gas stations.

    A BC Card official said that the company would be able to save costs associated with issuing plastic cards, and invest more money to provide benefits for its customers.

  • Japan’s convenience stores catering more to elderly as demographics shift

    Japan’s convenience stores catering more to elderly as demographics shift

    The nation’s convenience stores are changing with the times, shedding their image as places for young shoppers keen on fast food, concert tickets and comic books, and increasingly catering to older clientele.

    As the population grays and people live longer, the small, near-ubiquitous stores are revising their offerings to suit the tastes and needs of seniors by introducing home delivery, healthy bento boxed meals and a one-stop shop where pharmacies share floor space.

    Some are setting up elderly care support counters, and in a stab at becoming social meeting spots, are offering seating and even karaoke boxes.

    In a move symbolizing the change, second-ranking Lawson Inc. on April 3 opened its first outlet with a nursing care consultation desk in Kawaguchi, Saitama Prefecture. The outlet will have managers and advisers available for consultation all day, every day of the week. The company plans to launch another one in the prefecture by summer.

    In fiscal 1989, people aged 29 and younger at 7-Eleven convenience stores accounted for 63 percent of daily customers. That declined to about 29 percent in fiscal 2013, according to recent statistics from Seven & i Holdings Co.

    Customers 50 or older, who previously represented only 9 percent of all customers, rose to 30 percent in the same period, representing the age bracket with the largest share, according to the statistics.

    FamilyMart Co. says people 50 and older account for about 30 percent of its customers, too.

    Convenience stores specifically targeting the elderly are changing the image of the sector as a testing ground for marketing to teenagers. And while the Lawson outlet may be an extreme example and experimental in nature, others in the industry, while not going that far, have quietly shifted their marketing tack in recent years to focus further on seniors.

    Operators are increasingly changing their food lineups to appeal to older shoppers. They seek, for example, quality, known-to-be-safe products, including higher-end foodstuffs, rather than the cheap, filling bento meals preferred by young shoppers.

    A notable change is their bento and other ready-to eat foods offered under their respective house brands, where the companies are competing with each other to offer healthy ingredients and those that are either locally sourced or from a renowned region.

    Leading the way in this area is Seven-Eleven Japan Co., the top industry player with more than 17,000 outlets and sales totaling ¥4.82 trillion for the year ended in February. The Seven & i Holdings subsidiary’s Seven Premium product lineup generated ¥800 billion in revenue that year, featuring foods consumed at home.

    While its self-service coffee and doughnuts, fried chicken and other fast food offerings remain a key sales driver, the shift is slowly underway. The company aims to boost sales of the products to ¥1 trillion this year.

    Masayuki Kubota, chief strategist at Rakuten Securities Economic Research Institute, said the main focus of convenience stores is not the elderly per se, but the overall shift from young to older shoppers, which is reflected in the food on offer.

    “Until maybe a decade ago, the image of convenience stores was of a place where young people away from home could pick up food of their preference, like fast food restaurants,” said Kubota.

    “At that point, strategies targeting males in their 20s was important. . . . But now female customers in their 40s and 50s are increasing.”

    More conspicuous changes toward a higher customer age range, too, are underway. The top three players — including third-ranking FamilyMart and Lawson — all have introduced home delivery services, stocking meals and cooking ingredients aimed at meeting the demands of health- and quality-conscious seniors who prefer to eat at home.

    The services also target orders for daily necessities ranging from toilet paper and detergent to light bulbs.

    FamilyMart acquired Senior Life Create Co. and launched a home delivery service in December 2012, taking advantage of the latter’s Takuhai Cook 123 bento meal delivery for aged residents. The service is offered in seven districts, including two in Tokyo.

    “A key area that convenience store operators like us need to address is how to close the so-called ‘last mile,’ ” to reach out to residents at home, said Shinsuke Otsuki, manager of FamilyMart’s corporate planning division.

    A Seven-Eleven Japan spokesman said the company’s Seven Meal delivery service is the result of “trying to offer a broad range of services to meet the needs of an aging society.” Of the service, which is offered at some 13,200 outlets nationwide, about 60 percent of the users are over 60, he said.

    Because of the nature of the shift, taking place slowly as customer profiles change to higher age ranges, the changes in marketing remain inconspicuous, at least for now.

    But examples abound. FamilyMart’s Otsuki said the increase in larger bathrooms with grab rails at its outlets are targeted at older customers in general, not only the disabled.

    The company has also set eat-in areas as a standard feature for new outlets — floor space permitting — providing a place for the elderly to gather to chat, especially in rural areas where there are few such facilities.

    FamilyMart is experimenting with over 30 combination outlets that share space with drug stores through a tie-up with Saitama Prefecture-based Drug Ace and Osaka’s Higuchi Yakkyoku drug store chains.

    “We’ve even opened a combination store with a karaoke box in the Kamata district” of Tokyo, said Otsuki. “This may prove a senior-targeting outlet because many senior customers come here in the daytime to practice singing.”

    “I think convenience stores will continue to change as the nation’s demography changes, rather than under management initiatives,” said Rakuten’s Kubota.

    “Currently, food is the main merchandise, but the customer profile is changing to a higher age group, and so I would think demand for food will decline and they may begin to sell more products other than food.”

    He added, convenience stores’ main offerings may shift from goods to services, “because in an economic structural change, there’s the tendency for services to increase. Convenience stores in the future could be centered on services rather than goods.”

  • Consumption’s ‘sleeping giants’ about to wake up

    Consumption’s ‘sleeping giants’ about to wake up

    Consumers in Southeast Asia are “sleeping giants” who will wake up to their full potential over the next 5-10 years, recent reports show.

    Robust consumption fueled by rising income levels and urbanization are expected to generate an additional $770 billion as 60 million people join the region’s consuming class or move into more affluent consumer segments by 2020, according to a study this month by Accenture involving more than 1,800 people in the region.

    The formation of the Asean Economic Community (AEC), scheduled to take effect this year, will also enhance the attractiveness of Southeast Asia’s consumer markets by making it easier for companies to do business across borders. By 2020, the region could become a $3 trillion economy, making its mark as the world’s sixth biggest, Accenture noted.

    “The spectacular growth of the Southeast Asian economy represents one of the biggest opportunities for consumer goods companies today,” said Dwight Hutchins, managing director in Accenture Strategy, Asia-Pacific.

    Emerging hotspots

    While the region’s “megacities” like Singapore are set to grow further, smaller emerging cities and rural areas are where the potential lie, according to a report released Monday by marketing research firm Nielsen.

    Describing Southeast Asia’s consumers as “sleeping giants of the next decade,” Nielsen said the fastest growth is set to occur in mixed-density cities that have 1-5 million people, like Malaysia’s Johor Bahru and Cebu in the Philippines. Population in these cities are forecast to skyrocket 51 percent by 2025 to a combined 52.6 million people, compared with the 32 percent growth to 69 million expected in megacities.

    Industrial cities, defined as areas with population of 500,000, are also forecast to be consumption hotspots. The size of the already-large cluster could increase 18 percent to 231.8 million over the next decade, accounting for nearly 63 percent of Southeast Asia’s total population, Nielsen said.

    “As costs in bigger cities like Bangkok and Jakarta rise, businesses are going into second-tier cities with cheaper land and labor. This move has created clusters of industrial estates, especially in the smaller provinces of Philippines, like Lipa and Yogyakarta, which has a knock-on effect of stimulating local economies,” Regan Leggett, Southeast Asia, North Asia and Pacific regional director of client services at Nielsen, told CNBC.

    The development of Southeast Asia’s smaller cities drive healthy demographic growth and a rising middle class, which transform consumer spending and offer “considerable rewards,” Nielsen added.

    Challenges

    Wooing Southeast Asian consumers, however, can be a challenge. According to Accenture, the region’s highly-connected consumers have minimal brand loyalty, with almost two-thirds of respondents open to switching brands. Meanwhile, a physically and culturally-fragmented landscape make Southeast Asia difficult to navigate.

    Still, it’s not impossible for businesses to map out strategies applicable across the region.

    For one, many rural consumers in the region are “at the very beginning of their relationships with packaged and branding goods,” and “finding commonalities across cities can be done,” Legget said.

    Businesses must be ready to offer affordable pricing, smaller product sizes or single-use portions for these first-time consumers, he added.