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A.S. Watson has expanded its Watsons One Pass loyalty program to cover over 660 stores in China’s Greater Bay Area.

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Alibaba Group announced financial results for the quarter ended 31st March 2019.

Strong performance with growing user base

The group reported strong performance for the quarter. Daniel Zhang, Chief Executive Officer of Alibaba Group commented that “Alibaba is becoming synonymous with everyday consumption in China, growing our base to 654 million annual active consumers and extending our penetration in less-developed cities. Our cloud and data technology and tremendous traction in New Retail have enabled us to continuously transform the way businesses operate in China and other emerging markets, which will contribute to our long-term growth.”

Top line figures for the quarter ended 31st March 2019 are:

  • Revenue: Up by +51%YoY, reaching CYN93.5bn (US$13.9bn)
  • Core commerce (Taobao & Tmall): sales reached CYN78.9bn (US$11.8bn) in 2019 Q1, up by +54%YoY
  • Annual active users: reached 654 million, an increase of 18 million from the 12-month period ended 31st December 2018
  • Mobile monthly active users (MAUs): increased by 22 million over December 2018, reaching 721 million in March 2019

Highlights of the group’s business and strategic updates are summarised below.

Taobao offers new shopping experience

  • A new Taobao app interface was launched in fiscal year 2019, which segments shoppers based on their shopping behaviour and then provides them with personalised recommendations
  • The new interface includes curated posts, videos and live broadcasts. The overall result is better user engagement, higher purchase conversion and more annual active users

Tmall establishes itself as a platform of choice for brands

  • Tmall paid physical goods gross merchandise value (GMV) up 33% YoY, driven by strong performance of fast-moving consumer goods (FMCG), apparel, electronics and home furnishing categories by identifying new consumption tends
  • Making use of its large data set and wide customer reach, the retailer provides brands with marketing solutions such as pre-launch campaign along the full purchase journey from discovery to purchase

New Retail transforming brick-and-mortar retailing

  • Digitised 470 Sun Art stores by end of March 2019, allowing customers to shop via the Taobao app and get goods delivered through on-demand delivery platform
  • Freshippo (Hema) continued to achieve robust same-store sales growth and expand network, reaching 135 stores in China

Gaining market share in lower tier cities

  • Acquired on-demand delivery platform and integrated it with service guide platform Koubei in 2018 to provide local services
  •  The local services are integrated with the Alibaba ecosystem, allowing it penetrating into less developed cities. Around 30% platform’s total orders are from Alipay and Taobao apps

Building foundation for long-term international growth

  • Cross-boarder and international retail business continue to grow. Up to date, Lazada and AliExpress have a total of more than 120 million annual active users
  • In 2018, Lazada scaled back direct sales of low margin categories such as electronics to be better positioned for less capital-intensive long-term growth
  • Lazada continues to invest in logistics as delivery speed and convenience are key competitive advantages in the Southeast Asian market



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Phoenix Petroleum, owned by Dennis Uy, is acquiring Circle K in the Philippines.

Acquisition through Philippines FamilyMart

Phoenix Petroleum’s subsidiary Philippine FamilyMart CVS Inc. is in the process of acquiring Circle K in the Philippines. The acquisition aims to help FamilyMart drive future growth, with Circle K stores set to be rebranded to the FamilyMart banner over the next few months.

To establish a stronger presence, the retailer is launching FamilyMart stores at Phoenix retail stations as well as greenfield sites. Circle K in the Philippines is currently operated by Suy Sing Corp’s Super 8 Retail Systems.

More about Phoenix Petroleum

Phoenix Petroleum acquired FamilyMart Philippines in late 2017. Last year, it launched Generation 2 concept stores, offering customers a wider selection of food items and an upgraded shopping environment. FamilyMart ended FY2018 with 69 stores in the Philippines.

Alibaba and Bailian Group are planning to open 500 Ego convenience stores in China this year.

New Retail convenience stores

The first store, which has opened in Shanghai, operates around 500 sq m and has six key areas: coffee, bakery, foodservice, fresh, grocery retail and leisure/dining.

About two-thirds of the store area is dedicated to fresh or foodservice, including coffee, bakery and hot meals. It features three self-checkout machines in addition to Alipay checkout and Bailian wallet.

With the store almost five times larger than a typical Japanese CVS, it is able provide a greater range of products and services and meet different shopper missions. The store will also double up as a ‘fulfilment centre’ for distributing products to even smaller stores that Alibaba and Bailian plans to launch.

Two Ego formats

Media reports suggest that Alibaba and Bailian have leased space between 20 to 30 stores in Shanghai for the Ego banner. They also planning to launch two formats: larger central outlets operating between 300 and 500 s qm, and smaller stores of about 100 sq m.

Alibaba and Bailian’s strategic agreement

Alibaba and Bailian signed a strategic cooperation in February 2017 and committed to working together on using big data and new technologies to develop New Retail concept stores. It also aimed to maximise Alibaba’s deep understanding of customers and Bailian’s bricks-and-mortar experience.

SM Retail has announced Q1 results for the period ending 31 March 2019, with total revenue up 13% to PHP79.0bn.

Food revenue up 17% to PHP41.8bn

The food side of the business continued to see strong growth during the period, driven by positive like-for like sales in existing stores, as well as the opening of 1 SM Supermarket, 1 Savemore and 52 Alfamart stores. Although the retailer didn't open as many new stores in the quarter as it has done historically, it still plans to open 2 SM Supermarkets, 13 Savemore stores, 1 SM Hypermarket, 8 WalterMart stores and approximately 150 additional Alfamart stores throughout the rest of 2019.

Alfamart expansion an area of focus

The food side of the business at the end of Q1 operated 57 SM Supermarkets, 194 Savemore stores, 53 SM Hypermarkets, 52 WalterMart stores and 578 Alfamart's. Alfamart's rapidly expanding footprint is of particular interest, with sales from the format resulting in PHP2.8bn of revenue during Q1. The retailer is actively searching for new sights around the perimeter of Metro Manila, looking to build scale and market concentration in this area as a priority.

Get up to speed on all of the latest retailer results, the insight into what is driving growth and IGD's five big trends to watch in Asia in 2019.

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