Chinese retail market entering new era
In addition to basic daily-life requirements, consumers are seeking to realise personal tastes as the Chinese retail market enters a new era, footwear company Le Saunda Holdings says in releasing its trading figures for the year ended February 29.
While the pace of growth slowed down for both online and offline spending, consumer demand for high-quality products increased, says the company, which designs, develops, manufactures and retails men’s and women’s footwear, bags and fashion accessories in China, Hong Kong and Macau.
Affected by the sluggish retail markets of Mainland China and Hong Kong as well as an abnormal warm winter, the group’s total revenue eased by 3.7 per cent year-on-year to RMB1621.4 million (US$247.68 million), from the previous year’s RMB1683 million.
Its gross profit of RMB1069.8 million was 5.4 per cent below the previous year’s RMB1131 million.
The group’s retail sales in China eased 0.9 per cent to RMB1510.7 million (RMB1524 million the previous year), while sales in Hong Kong and Macau fell 29.2 per cent to RMB110.7 million (RMB156.4 million) – a switch from being profitable to making a loss.
In recognition of the group’s contributions to local economic development and the creation of job opportunities, increased local government incentives helped boost other income for the group by 41 per cent to RMB38.8 million (RMB27.5 million the previous year).
Le Saunda says it noted significant changes in consumer shopping habits, with buyers becoming more focused on the shopping experience and personalised fashion.
Mainland China is still the group’s key retail market. At year-end, it had 896 stores in China, Hong Kong and Macau – eight fewer than at the same time last year. An increase in the number of self-owned stores was offset by the decrease in the number of franchised stores. The new stores were mainly high-end Linea Rosa outlets and CNE O2O stores.
There were 663 core brand Le Saunda stores and 61 Le Saunda men’s stores, representing reductions of 36 and 10 stores respectively. There was a “moderate” 16 new-store openings for Linea Rosa, taking the total to 68, while CNE O2O stores grew by eight to 25.
The group believes that once Hong Kong shop rentals are back to normal, there will a chance to open new stores again.
In view of the rapidly increasing ratio of online shopping via mobile terminals, the company’s eCommerce team focused on mobile shopping, and redesigned web pages to target specific marketing groups. For the year, eCommerce revenue grew by about 25 per cent.
“With further improvements in living standards, the new generation of consumers emerging in recent
years has shown more care for society,” says the company. In parallel, Le Saunda has increased its input into social charity campaigns, including an initiative to gather books for children in under-developed areas, and supporting the Hong Kong Hereditary Breast Cancer Family Registry.
* Photo credit: Louis Allen.