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Alison Horner, CEO of Tesco Asia, shared the region’s plan to maximise the mix in a meeting for investors and analysts at its head office in the UK.

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Tesco announces positive first quarter results with Asian sales rising 2.6% quarter on quarter at constant rates.

Increase in market share in Thailand

Dave Lewis, CEO of Tesco, shared that the increase in Asia is supported by significant growth in the Bangkok area. The Asian business returned to like-for-like sales growth, up 0.1% to GBP1.2bn (US$1.5bn). It is helped by a stronger customer offer contributing to a better performance across all formats and categories.

Group outperformed subdued UK market

Tesco grew faster than the market in the UK on both volume and value by 0.2% and 1.3%. He added, “our customer offer is more competitive than ever, with a wider choice of our ‘Exclusively at Tesco’ products available in more stores, helping to drive more than 10% growth across the range.”

 

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Berli Jucker, operator of Big C, reports revenue of THB30.9bn (US$979m), gaining THB1.6bn (US$50.5m) over the same period last year.

Solid growth due to expansion

The revenue growth is driven by continued store network expansion with 27 Mini Big C in the quarter. 13 convenience stores were closed. By the end of March 2019, the retailer has 147 hypermarkets, 61 supermarkets, 797 Mini Big C and 140 Pure drugstores. Like for like sales grew 1% year on year while other income including rental increased 4.7% over the same period.

Net profit declined

Gross profit margin decreased from 16.3% to 15.9% due to lower B2B sales contribution. Net profit registered a slight decline of 2.3% due to higher staff cost from store expansion and yearly bonuses, increased store opening and closing expenses and rising utility expenses.

 

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 JD.com plans to invest CNY6.5bn (US$965.1m) in Thailand over the next three years to strengthen its fresh food business.

Offering shoppers more choices

In partnership with Yonghui, JD.com plans to import large quantities of durian, mangosteens, coconuts and other fruits from Thailand worth CNY5bn (US$742.4m). JD.com itself will also source an additional CNY1.5bn (US$222.7m) worth of fruits through Thai trading companies and agents.

Available offline and online

JD.com will sell the produce at its 7Fresh supermarkets and as it continues to expand its store network, storage of fresh food for the retailer and access to products for customers will improve.

The retailer will also sell the new products on its website, overcoming some of the challenges of selling perishable products by a supply chain that it has developed. Its cold chain keeps products at low temperatures and covers 300 cities across China.

Want to know more?

IGD Asia subscribers can download our 7Fresh report here.

Japanese cosmetics company Shiseido and A.S. Watson have partnered to launch an exclusive derma skincare range under the “D Program” brand.

A.S. Watson working closely with brands

A.S. Watson partners brands to drive innovation. Last month, we outlined how it is partnering L'Oréal's AI and AR firm ModiFace have launched a virtual makeup service.

The retailer's latest initiative is to launch a new derma skincare range in Thailand, Taiwan and China. Masahiko Uotani, Shiseido's President and CEO, said, "A.S. Watson is the largest health and beauty retailer in the world that acts with speed, innovation and vision making them the perfect retailer to bring Urban Damage Care to the high street.”

The two businesses have co-created a range that maximises their respective strengths, A.S. Watson’s strong distribution network and customer insight and Shiseido’s expertise in R&D and innovation. The project started with a customer survey on a selected panel of Watsons members 18 months ago.

1,300 new stores this year...

A.S. Watson continues to expand its store network across the world. Like in 2017 and 2018, this year it has committed to opening more than a 1,000 stores. Sales growth remains higher than store network growth, with the retailer performing strongly in 2018. The retailer also has a strong and growing base of returning customers, with approx. 135 million members worldwide. Dominic Lai, A.S. Watson's Managing Director, said, "Continuing this momentum, we will be expanding at the speed of one store every seven hours. In 2019. we target to open over 1,300 stores, around one-third will be in China."

To drive offline and online integration, it has been investing in digital transformation in order to connect its customers through different channels. Click and collect, which links 13,000 stores to the respective localised ecommerce sites plays an important role in the retailer's O2O strategy. It allows customers, for example, to browse online and pick up in any of the stores the next morning. This helps drive more purchases when customers visit the store. Malina Ngai, A.S. Watson’s COO, said, “So on average, 20 to 30% of the shoppers will buy something else [...] in some markets, like Taiwan, that rate grows as high as 52%."

Want to know more?

Subscribers can read the latest news and insight on A.S. Watson here.

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