Asia Retail Update - Fung Group

Asia Retail Update - Fung Group

Asia Retail Update - Fung Group

Issue 2 | October 2014 4 11 19 25 Issue 2 | October 2014 4 11 19 25 Issue 2 | October 2014 4 11 19 25

Asia Retail Update - Fung Group
Asia Retail Update - Fung Group

In this issue Asia Market Update  Issue 2  October 2014  p1 Taiwan Overview p4 In the news p6  Statistics p6 Real GDP growth registers 3.8 % yoy in 2Q14 CPI hits 18-month high in August 2014 Consumer confidence index goes up in September 2014 Retail sales grow by 4.5% yoy in August 2014  E-commerce p7 Fubon Multimedia establishes JV with TVD Momo launches Momomall PChome Online scales up PChomePay PChome teams up with Xiaomi Books’ self pick up services reach 7-Eleven Hong Kong TAITRA, Amazon ink MOU on partnership Yahoo! Taiwan overtakes Facebook as Taiwan’s top website Rakuten set to issue credit card in Taiwan New draft bill on regulating online payment services passed  Department stores p8 Eslite Spectrum to add more stores in Taiwan and China Pacific Department Store to expand in Taiwan and China Shin Kong ramps up China presence  Convenience stores p8 7-Eleven to reach over 5,000 outlets by end 2014 Sinopec to run 300 CVSs with Ruentex FamilyMart teams up with EasyCard  Accessories p9 Radley makes Asian debut in Taiwan Coccinelle adds stores in Taiwan  Apparel p9 Fast Retailing takes GU to Taiwan E-Land debuts in Taiwan  Beauty and personal care p9 Chlitina to reach a network of 5,000 outlets in China MedFirst adds six stores in 1Q14 Watson’s Taiwan launches online store Cosmed plans 10 new stores in 2014 Poya plans 25 new stores in 2015 Innisfree hits Taiwan  Consumer electronics p10 Asustek rolls out online store in Singapore Acer ties up with Gome Telkom enters Taiwan Foxconn to buy a stake in Asia Pacific Telecom  Food and beverage p10 CoCo makes debut in South Korea Tim Ho Wan debuts in Taiwan Quiznos debuts in Taiwan  Home products p10 Iittala debuts in Taiwan Thailand Overview p11 In the news p13  Statistics p13 GDP growth rebounds to positive in 2Q14 CPI further slides in August 2014 Consumer confidence index reaches a 13-month high in August 2014 Retail sales down by 6.2% yoy in June 2014  Retail in general p14 Thailand freezes prices of selected consumer goods for six months  E-commerce p14 Saha debuts on Tmall King Power opens on Tmall Priceza expands in Southeast Asia Berli Jucker to go online  Home shopping p14 TV Direct sets sights on Malaysia  Department stores p14 Robins enters Vietnam Robins plans six new stores in Thailand  Shopping malls p15 Platinum Group considers an IPO Siam Retail to add new malls and renovate existing malls  Supermarkets p15 Big C opens new DC for CVS business Foodland further expands in Thailand  Convenience stores p15 7-Eleven scales up in Thailand FamilyMart in rapid expansion Tesco launches CVS chain Berli Juker to add more CVS outlets in Vietnam In this issue Asia Market Update  Issue 2  October 2014  p1 Taiwan Overview p4 In the news p6  Statistics p6 Real GDP growth registers 3.8 % yoy in 2Q14 CPI hits 18-month high in August 2014 Consumer confidence index goes up in September 2014 Retail sales grow by 4.5% yoy in August 2014  E-commerce p7 Fubon Multimedia establishes JV with TVD Momo launches Momomall PChome Online scales up PChomePay PChome teams up with Xiaomi Books’ self pick up services reach 7-Eleven Hong Kong TAITRA, Amazon ink MOU on partnership Yahoo! Taiwan overtakes Facebook as Taiwan’s top website Rakuten set to issue credit card in Taiwan New draft bill on regulating online payment services passed  Department stores p8 Eslite Spectrum to add more stores in Taiwan and China Pacific Department Store to expand in Taiwan and China Shin Kong ramps up China presence  Convenience stores p8 7-Eleven to reach over 5,000 outlets by end 2014 Sinopec to run 300 CVSs with Ruentex FamilyMart teams up with EasyCard  Accessories p9 Radley makes Asian debut in Taiwan Coccinelle adds stores in Taiwan  Apparel p9 Fast Retailing takes GU to Taiwan E-Land debuts in Taiwan  Beauty and personal care p9 Chlitina to reach a network of 5,000 outlets in China MedFirst adds six stores in 1Q14 Watson’s Taiwan launches online store Cosmed plans 10 new stores in 2014 Poya plans 25 new stores in 2015 Innisfree hits Taiwan  Consumer electronics p10 Asustek rolls out online store in Singapore Acer ties up with Gome Telkom enters Taiwan Foxconn to buy a stake in Asia Pacific Telecom  Food and beverage p10 CoCo makes debut in South Korea Tim Ho Wan debuts in Taiwan Quiznos debuts in Taiwan  Home products p10 Iittala debuts in Taiwan Thailand Overview p11 In the news p13  Statistics p13 GDP growth rebounds to positive in 2Q14 CPI further slides in August 2014 Consumer confidence index reaches a 13-month high in August 2014 Retail sales down by 6.2% yoy in June 2014  Retail in general p14 Thailand freezes prices of selected consumer goods for six months  E-commerce p14 Saha debuts on Tmall King Power opens on Tmall Priceza expands in Southeast Asia Berli Jucker to go online  Home shopping p14 TV Direct sets sights on Malaysia  Department stores p14 Robins enters Vietnam Robins plans six new stores in Thailand  Shopping malls p15 Platinum Group considers an IPO Siam Retail to add new malls and renovate existing malls  Supermarkets p15 Big C opens new DC for CVS business Foodland further expands in Thailand  Convenience stores p15 7-Eleven scales up in Thailand FamilyMart in rapid expansion Tesco launches CVS chain Berli Juker to add more CVS outlets in Vietnam In this issue Asia Market Update  Issue 2  October 2014  p1 Taiwan Overview p4 In the news p6  Statistics p6 Real GDP growth registers 3.8 % yoy in 2Q14 CPI hits 18-month high in August 2014 Consumer confidence index goes up in September 2014 Retail sales grow by 4.5% yoy in August 2014  E-commerce p7 Fubon Multimedia establishes JV with TVD Momo launches Momomall PChome Online scales up PChomePay PChome teams up with Xiaomi Books’ self pick up services reach 7-Eleven Hong Kong TAITRA, Amazon ink MOU on partnership Yahoo! Taiwan overtakes Facebook as Taiwan’s top website Rakuten set to issue credit card in Taiwan New draft bill on regulating online payment services passed  Department stores p8 Eslite Spectrum to add more stores in Taiwan and China Pacific Department Store to expand in Taiwan and China Shin Kong ramps up China presence  Convenience stores p8 7-Eleven to reach over 5,000 outlets by end 2014 Sinopec to run 300 CVSs with Ruentex FamilyMart teams up with EasyCard  Accessories p9 Radley makes Asian debut in Taiwan Coccinelle adds stores in Taiwan  Apparel p9 Fast Retailing takes GU to Taiwan E-Land debuts in Taiwan  Beauty and personal care p9 Chlitina to reach a network of 5,000 outlets in China MedFirst adds six stores in 1Q14 Watson’s Taiwan launches online store Cosmed plans 10 new stores in 2014 Poya plans 25 new stores in 2015 Innisfree hits Taiwan  Consumer electronics p10 Asustek rolls out online store in Singapore Acer ties up with Gome Telkom enters Taiwan Foxconn to buy a stake in Asia Pacific Telecom  Food and beverage p10 CoCo makes debut in South Korea Tim Ho Wan debuts in Taiwan Quiznos debuts in Taiwan  Home products p10 Iittala debuts in Taiwan Thailand Overview p11 In the news p13  Statistics p13 GDP growth rebounds to positive in 2Q14 CPI further slides in August 2014 Consumer confidence index reaches a 13-month high in August 2014 Retail sales down by 6.2% yoy in June 2014  Retail in general p14 Thailand freezes prices of selected consumer goods for six months  E-commerce p14 Saha debuts on Tmall King Power opens on Tmall Priceza expands in Southeast Asia Berli Jucker to go online  Home shopping p14 TV Direct sets sights on Malaysia  Department stores p14 Robins enters Vietnam Robins plans six new stores in Thailand  Shopping malls p15 Platinum Group considers an IPO Siam Retail to add new malls and renovate existing malls  Supermarkets p15 Big C opens new DC for CVS business Foodland further expands in Thailand  Convenience stores p15 7-Eleven scales up in Thailand FamilyMart in rapid expansion Tesco launches CVS chain Berli Juker to add more CVS outlets in Vietnam

In this issue Asia Market Update  Issue 2  October 2014  p2  Cash and carry p16 Marko sets for expansion spree Berli Juker acquires Metro Cash & Carry Vietnam  Accessories p16 Crumpler enters Thailand  Apparel p16 Antony Morato to expand in Thailand Toms makes debut in Thailand market  Beauty and personal care p16 Sephora to establish online presence in Thailand through ZALORA Watson’s to add new stores and new products The Face Shop sells Thai business Beauty Community further expands in Thailand Pena House taps cosmetics sector Bangkok Dusit Medical to take over Save Drug Center  Consumer electronics p17 PowerBuy further expands in Thailand  Food and beverage p17 Coffee Bean & Tea Leaf to further expand in Thailand Mister Donut scales up in Thailand Starbucks to double store count by 2018 Sub Sri Thai acquires Greyhound BreadTalk partners with Minor International for expansion Central Restaurants to add 75 new restaurants in 2014 MK Restaurant to reach 650 outlets by 2016 CP Foods marches into Australia market CP Foods ties up with Itochu True Coffee eyes Southeast Asian markets Teddy’s Bigger Burgers to enter Thailand TUF to acquire King Oscar and MerAlliance Ichitan to set up new plant in Indonesia Café Amazon plans Asean expansion  Home products p18 Chic Republic expands in Thailand Ikea strengthens presence in Thailand Malaysia Overview p19 In the news p21  Statistics p21 GDP growth registers 6.4% yoy in 2Q14 Retail sales up by 4.9% yoy in 1Q14 CPI climbs to 110.5 in August 2014 CSI rises to 100.1 in 2Q14  E-commerce p22 Malaysians are keen to shop online Huawei opens an online store Uniqlo goes online in Malaysia  Home shopping p22 TV Direct sets sights on Malaysia Astro to launch home shopping channel  Department stores p22 Parkson to buy 60% stake in Giftmate  Supermarkets p22 Mydin to open another 25 hypermarkets by 2018  Convenience stores p22 7-Eleven Malaysia lists in Malaysia 7-Eleven plans rapid rollout 7-Eleven launches new generation of CVS  Apparel p23 Parkson to buy 50% stake in Valino Monki makes Malaysian debut Padini further expands in Malaysia Bonia steps up overseas expansion  Consumer electronics p23 Courts plans expansion Challenger exits Malaysia Huawei in rapid expansion  Food and beverage p23 Asahi acquires Etika Dairies Parkson to acquire 60% stake in AUM MBG Fruits to double store count by 2017 Pie Face to hit Malaysia SugarBun enters Indonesia Fatburger debuts in Malaysia Marrybrown to scale up in India Starbucks sells its Malaysian business F&N to acquire Yoke Food Agrobazaar debuts in Singapore PastaMania sets foot in Malaysia  Home products p24 Spotlight opens in Malaysia Singapore Overview p25 In the news p27  Statistics p27 GDP growth registers 2.4% in 2Q14

In this issue Asia Market Update  Issue 2  October 2014  p3 Retail sales rise by 5.5% yoy in July 2014 CPI goes up by 0.9% yoy in August 2014 Consumer confidence index drops slightly in 2Q14  E-commerce p28 Alibaba buy 10.35% stake in Singapore Post  Supermarkets p28 Sheng Siong to tap China market NTUC FairPrice scales up online services NTUC Fairprice to build logistics center  Accessories p28 Ulysse Nardin opens largest Asian store in Singapore  Apparel p28 Tom Ford debuts in Singapore George to ramp up Singapore footprint Uniqlo rolls out e-commerce platforms in Singapore  Consumer electronics p28 Challenger exits Malaysia Asustek rolls out online store in Singapore Courts Asia to build 10-12 megastores in Indonesia in next five years  Food and beverage p29 Temasek invests in The Cocoa Trees LVMH acquires Crystal Jade PastaMania to expand China presence PastaMania sets foot in Malaysia Pie Face to hit Singapore Fatburger to enter Singapore Ya Kun hits Hong Kong Putien sets foot in Hong Kong Peninsula Boutique debuts in Singapore BreadTalk to further expand in Thailand Panasonic develops first indoor farm in Singapore Global Food acquires Wendys Agrobazaar debuts in Singapore F&N to acquire Yoke Food F&N to increase stake in Vietnam’s dairy giant Appendix – Asia Data Snapshots p31 References p32 Previous issue Issue 1 Asia at a Glance, China, Japan & South Korea (http://www.funggroup.com/eng/knowledge/ research/AsiaDistributionRetail_july14.pdf)

Taiwan Overview Asia Market Update  Issue 2  October 2014  p4 According to the Economist Intelligence Unit, Taiwan’s GDP amounted to US$489.1 billion in 2013, with a real growth rate of 2.1% year-on- year (yoy). Amid the developed economies’ moderate economic recovery, as in the U.S., Taiwan’s GDP is set to grow at an average rate of about 3% and reach US$595.1 billion by 20181. The Taiwanese are relatively affluent in terms of spending power when compared to other Asian markets. The spending power of Taiwanese consumers is expected to increase from US$324.1 billion in 2013 to US$370.0 billion in 2018, posting a compound annual growth rate (CAGR) of 2.2%2.

However, the government plans to increase the top rate of income tax from 40% to 45% early next year. This might impact wealthy individuals’ incentive to consume.

Taiwan’s retail sales stood at US$92.2 billion (NT$2,749.1 billion) in 2013, up by 2.7% yoy. According to Euromonitor International, retail sales will increase to US$98.3 billion (NT$2,938.5 billion) by 2018, with a CAGR of 1.3%3. One of the major drivers is the increase in numbers of visitors from the Chinese mainland since the Economic Cooperation Framework Agreement (ECFA) was signed in 2010, with travel restrictions eased for mainland visitors4. Major beneficiary segments in the retail sector include luxury goods, hotel and hospitality, and food and beverages.

Grocery retailers in Taiwan (such as convenience stores, hypermarkets and supermarkets) accounted for 41.3% of store- based retail sales in 2013, up by 1.3% yoy.

Among the grocery retailers, convenience stores (CVSs) performed strongly compared to others, with a yoy sales growth rate of 6.8%. By contrast, hypermarkets recorded a sales drop of 3.0%. Challenges from small-sized stores (including CVSs) and retailers like retail warehouse clubs offering bulk purchases at low prices are believed to have substantially hit supermarket sales5. Non-grocery retailers (such as department stores and specialist retailers) performed slightly better than their grocery sector counterparts, posting a yoy sales increase of 2.3%. Electronics and appliance specialist retailers were the top performer, growing at a rate of 7.0% yoy in 20136.

Retail warehouse club, a format accounting for a small fraction of Taiwan’s total retail sales, shows growing appeal. Costco, the only such retail warehouse club operator in Taiwan, is popular among Taiwanese consumers, offering low prices, exclusive imported products and a more appealing shopping environment. Broadband Internet penetration is high in Taiwan, supported by its excellent telecommunications infrastructure, availability of the latest technologies and an affluent and tech- savvy population. Euromonitor International reports the broadband Internet penetration rate at 68.0% in 2013; that is expected to climb to over 90% by 20307.

Internet sales in Taiwan were US$6.5 billion (NT$193.3 billion) in 20138 and sales are expected to increase to US$8.3 billion (NT$248.9 billion) in 20189. Market leaders include Yahoo!, PayEasy, PChome Online and Books. Convenience stores – the dominant retail format Taiwanese consumers prefer the CVS channel thanks to their relatively high disposable incomes, preferences for convenient shopping, as well as their recognition of CVSs’ competitive pricing strategies, innovative services and product offerings. In 2013, sales through CVSs reached Lying off the southeastern coast of China across the Taiwan Strait, Taiwan is an island on the western edge of the Pacific Ocean.

It comprises a population of 23 million in an area of about 36,000 square kilometres. Taiwan Overview Asia Market Update  Issue 2  October 2014  p4 According to the Economist Intelligence Unit, Taiwan’s GDP amounted to US$489.1 billion in 2013, with a real growth rate of 2.1% year-on- year (yoy). Amid the developed economies’ moderate economic recovery, as in the U.S., Taiwan’s GDP is set to grow at an average rate of about 3% and reach US$595.1 billion by 20181. The Taiwanese are relatively affluent in terms of spending power when compared to other Asian markets. The spending power of Taiwanese consumers is expected to increase from US$324.1 billion in 2013 to US$370.0 billion in 2018, posting a compound annual growth rate (CAGR) of 2.2%2.

However, the government plans to increase the top rate of income tax from 40% to 45% early next year. This might impact wealthy individuals’ incentive to consume.

Taiwan’s retail sales stood at US$92.2 billion (NT$2,749.1 billion) in 2013, up by 2.7% yoy. According to Euromonitor International, retail sales will increase to US$98.3 billion (NT$2,938.5 billion) by 2018, with a CAGR of 1.3%3. One of the major drivers is the increase in numbers of visitors from the Chinese mainland since the Economic Cooperation Framework Agreement (ECFA) was signed in 2010, with travel restrictions eased for mainland visitors4. Major beneficiary segments in the retail sector include luxury goods, hotel and hospitality, and food and beverages.

Grocery retailers in Taiwan (such as convenience stores, hypermarkets and supermarkets) accounted for 41.3% of store- based retail sales in 2013, up by 1.3% yoy.

Among the grocery retailers, convenience stores (CVSs) performed strongly compared to others, with a yoy sales growth rate of 6.8%. By contrast, hypermarkets recorded a sales drop of 3.0%. Challenges from small-sized stores (including CVSs) and retailers like retail warehouse clubs offering bulk purchases at low prices are believed to have substantially hit supermarket sales5. Non-grocery retailers (such as department stores and specialist retailers) performed slightly better than their grocery sector counterparts, posting a yoy sales increase of 2.3%. Electronics and appliance specialist retailers were the top performer, growing at a rate of 7.0% yoy in 20136.

Retail warehouse club, a format accounting for a small fraction of Taiwan’s total retail sales, shows growing appeal. Costco, the only such retail warehouse club operator in Taiwan, is popular among Taiwanese consumers, offering low prices, exclusive imported products and a more appealing shopping environment. Broadband Internet penetration is high in Taiwan, supported by its excellent telecommunications infrastructure, availability of the latest technologies and an affluent and tech- savvy population. Euromonitor International reports the broadband Internet penetration rate at 68.0% in 2013; that is expected to climb to over 90% by 20307.

Internet sales in Taiwan were US$6.5 billion (NT$193.3 billion) in 20138 and sales are expected to increase to US$8.3 billion (NT$248.9 billion) in 20189. Market leaders include Yahoo!, PayEasy, PChome Online and Books. Convenience stores – the dominant retail format Taiwanese consumers prefer the CVS channel thanks to their relatively high disposable incomes, preferences for convenient shopping, as well as their recognition of CVSs’ competitive pricing strategies, innovative services and product offerings. In 2013, sales through CVSs reached Lying off the southeastern coast of China across the Taiwan Strait, Taiwan is an island on the western edge of the Pacific Ocean.

It comprises a population of 23 million in an area of about 36,000 square kilometres. Taiwan Overview Asia Market Update  Issue 2  October 2014  p4 According to the Economist Intelligence Unit, Taiwan’s GDP amounted to US$489.1 billion in 2013, with a real growth rate of 2.1% year-on- year (yoy). Amid the developed economies’ moderate economic recovery, as in the U.S., Taiwan’s GDP is set to grow at an average rate of about 3% and reach US$595.1 billion by 20181. The Taiwanese are relatively affluent in terms of spending power when compared to other Asian markets. The spending power of Taiwanese consumers is expected to increase from US$324.1 billion in 2013 to US$370.0 billion in 2018, posting a compound annual growth rate (CAGR) of 2.2%2.

However, the government plans to increase the top rate of income tax from 40% to 45% early next year. This might impact wealthy individuals’ incentive to consume.

Taiwan’s retail sales stood at US$92.2 billion (NT$2,749.1 billion) in 2013, up by 2.7% yoy. According to Euromonitor International, retail sales will increase to US$98.3 billion (NT$2,938.5 billion) by 2018, with a CAGR of 1.3%3. One of the major drivers is the increase in numbers of visitors from the Chinese mainland since the Economic Cooperation Framework Agreement (ECFA) was signed in 2010, with travel restrictions eased for mainland visitors4. Major beneficiary segments in the retail sector include luxury goods, hotel and hospitality, and food and beverages.

Grocery retailers in Taiwan (such as convenience stores, hypermarkets and supermarkets) accounted for 41.3% of store- based retail sales in 2013, up by 1.3% yoy.

Among the grocery retailers, convenience stores (CVSs) performed strongly compared to others, with a yoy sales growth rate of 6.8%. By contrast, hypermarkets recorded a sales drop of 3.0%. Challenges from small-sized stores (including CVSs) and retailers like retail warehouse clubs offering bulk purchases at low prices are believed to have substantially hit supermarket sales5. Non-grocery retailers (such as department stores and specialist retailers) performed slightly better than their grocery sector counterparts, posting a yoy sales increase of 2.3%. Electronics and appliance specialist retailers were the top performer, growing at a rate of 7.0% yoy in 20136.

Retail warehouse club, a format accounting for a small fraction of Taiwan’s total retail sales, shows growing appeal. Costco, the only such retail warehouse club operator in Taiwan, is popular among Taiwanese consumers, offering low prices, exclusive imported products and a more appealing shopping environment. Broadband Internet penetration is high in Taiwan, supported by its excellent telecommunications infrastructure, availability of the latest technologies and an affluent and tech- savvy population. Euromonitor International reports the broadband Internet penetration rate at 68.0% in 2013; that is expected to climb to over 90% by 20307.

Internet sales in Taiwan were US$6.5 billion (NT$193.3 billion) in 20138 and sales are expected to increase to US$8.3 billion (NT$248.9 billion) in 20189. Market leaders include Yahoo!, PayEasy, PChome Online and Books. Convenience stores – the dominant retail format Taiwanese consumers prefer the CVS channel thanks to their relatively high disposable incomes, preferences for convenient shopping, as well as their recognition of CVSs’ competitive pricing strategies, innovative services and product offerings. In 2013, sales through CVSs reached Lying off the southeastern coast of China across the Taiwan Strait, Taiwan is an island on the western edge of the Pacific Ocean.

It comprises a population of 23 million in an area of about 36,000 square kilometres.

Taiwan Overview Asia Retail Update  Issue 2  October 2014  p5 US$7.3 billion (NT$219.5 billion), up by 6.8% yoy. CVS outlets numbered 10,030 in 2013, up slightly by 1.3% yoy. Euromonitor International forecasts that sales revenues and numbers of outlets will increase to US$8.2 billion (NT$244.5 billion) and 10,438, respectively, by 201810. Today, competition between CVSs and other retail formats goes beyond price. Indeed, CVSs focus increasingly on changing lifestyles and the evolving needs of consumers. Tellingly, photocopying/ faxing and ATM machines can all be found in a CVS. There are also indoor and outdoor seating and public toilet facilities.

In terms of products, CVS operators now offer more ready-to-eat choices; examples include freshly brewed coffee and bakeries. With the rapid development of e-commerce in Taiwan, some CVSs offer pick up services as well. 7-Eleven, FamilyMart, Hi Life and OK Mart are the leading chains in Taiwan.

7-Eleven, operated by President Chain Store, is the most significant player in terms of store network, market share and innovative business strategies. As at the end of 2013, 7-Eleven operated 4,900 CVS outlets, accounting for 48.9% of the national total. The chain recorded US$4.6 billion (NT$138.7 billion) in sales revenue in 2013, representing 63.2% of the industry total11. Additionally, 7-Eleven is well known for its innovative strategies in terms of marketing, product and services offerings. To provide customers with a more convenient shopping environment, 7-Eleven was the first to offer freshly brewed coffee, introduce new ranges of ready-to-eat foods and provide on-site catering in many of its outlets.

Some rivals are following suit in view of its success12. 7-Eleven’s loyalty programme is also very popular. Points earned can be redeemed through 7-Eleven’s product purchases, but also by buying products offered through President Chain Store’s affiliated brands, such as Starbucks.

While traditional retailers have been hit hard by rising online retailing, 7-Eleven actually makes the most of it. It takes commissions if buyers and sellers pick up or deliver orders to its stores13. Thanks to its unrivalled network, 7-Eleven is invariably the first point of reference for buyers and sellers and the chain’s commissions have been rising rapidly with the growth of Internet sales.

Taiwan In the news Asia Market Update  Issue 2  October 2014  p6 Statistics Real GDP growth registers 3.8% yoy in 2Q14 Taiwan’s real GDP growth was 3.8% yoy in 2Q14, the highest level since the 4Q12, owing to the moderate growth of exports and private consumption14  See Exhibit 1.

Exhibit 1 | Real GDP growth of Taiwan, 2Q13-2Q14 Source: National Statistics of Taiwan CPI hits 18-month high in August 2014 The consumer price index in Taiwan grew by 2.07% yoy in August 201415, an 18-month record high, due mainly to higher food prices16.  See Exhibit 2.

Exhibit 2 | Consumer price index growth in Taiwan, Sep 2013 - Aug 2014 Source: Directorate General of Budget, Accounting & Statistics of Taiwan Consumer confidence index goes up in September 2014 Taiwan’s consumer confidence index climbed to 83.16 in September 2014 from 83.06 in August 201417, showing that the economy continues to recover18.  See Exhibit 3. Exhibit 3 | Consumer confidence index in Taiwan, Oct 2013 – Sep 2014 Source: Research Center for Taiwan Economic Development 2.7% 1.3% 2.9% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% 2Q13 3Q 4Q 1Q14 Taiwan In the news Asia Market Update  Issue 2  October 2014  p6 Statistics Real GDP growth registers 3.8% yoy in 2Q14 Taiwan’s real GDP growth was 3.8% yoy in 2Q14, the highest level since the 4Q12, owing to the moderate growth of exports and private consumption14  See Exhibit 1.

Exhibit 1 | Real GDP growth of Taiwan, 2Q13-2Q14 Source: National Statistics of Taiwan CPI hits 18-month high in August 2014 The consumer price index in Taiwan grew by 2.07% yoy in August 201415, an 18-month record high, due mainly to higher food prices16.  See Exhibit 2.

Exhibit 2 | Consumer price index growth in Taiwan, Sep 2013 - Aug 2014 Source: Directorate General of Budget, Accounting & Statistics of Taiwan Consumer confidence index goes up in September 2014 Taiwan’s consumer confidence index climbed to 83.16 in September 2014 from 83.06 in August 201417, showing that the economy continues to recover18.  See Exhibit 3. Exhibit 3 | Consumer confidence index in Taiwan, Oct 2013 – Sep 2014 Source: Research Center for Taiwan Economic Development 3.1% 3.8% 1Q14 2Q 0.84% 0.64% 0.68% 0.34% 0.83% -0.5% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 78.47 78.4378.22 80.83 82.93 80.96 83.73 72.0 74.0 76.0 78.0 80.0 82.0 84.0 86.0 88.0 90.0 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Taiwan In the news Asia Market Update  Issue 2  October 2014  p6 Statistics Real GDP growth registers 3.8% yoy in 2Q14 Taiwan’s real GDP growth was 3.8% yoy in 2Q14, the highest level since the 4Q12, owing to the moderate growth of exports and private consumption14  See Exhibit 1.

Exhibit 1 | Real GDP growth of Taiwan, 2Q13-2Q14 Source: National Statistics of Taiwan CPI hits 18-month high in August 2014 The consumer price index in Taiwan grew by 2.07% yoy in August 201415, an 18-month record high, due mainly to higher food prices16.  See Exhibit 2.

Exhibit 2 | Consumer price index growth in Taiwan, Sep 2013 - Aug 2014 Source: Directorate General of Budget, Accounting & Statistics of Taiwan Consumer confidence index goes up in September 2014 Taiwan’s consumer confidence index climbed to 83.16 in September 2014 from 83.06 in August 201417, showing that the economy continues to recover18.  See Exhibit 3. Exhibit 3 | Consumer confidence index in Taiwan, Oct 2013 – Sep 2014 Source: Research Center for Taiwan Economic Development 0.34% 0.83% -0.04% 1.61% 1.66% 1.62% 1.64% 1.75% 2.07% Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 80.96 83.73 85.59 87.58 88.17 83.06 83.16 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14

Taiwan In the news Asia Market Update  Issue 2  October 2014  p7 Retail sales grow by 4.5% yoy in August 2014 Taiwan’s retail sales rose by 4.5% yoy to NT$330.8 billion in August 201419, as consumers increased spending during the 3-day Mid-Autumn Festival20.  See Exhibit 4. E-commerce Fubon Multimedia establishes JV with TVD Fubon Multimedia, a Taiwanese company offering TV shopping and catalogue shopping services, set up a joint-venture company (JV)21 with TV Direct (TVD), a Thailand-based company distributing products and services via multichannel marketing, in March 2014. The JV kicked start TV shopping business in June 2014 in Thailand22 .

Momo launches Momomall Momo, an affiliate of Fubon Multimedia, introduced a new B2B2C online shopping platform “Momomall” in July 2014. Momomall currently pairs up with over 1,200 retailers to offer about 100,000 items. Almost 60% of the items are fashion products targeted at young people. Momo also filed for Taiwan IPO in February 2014 and is expected to go public in 201523 . PChome Online scales up PChomePay PChome Online, a leading web portal in Taiwan, plans to roll out its third party payment service PChomePay to PChomeStore, its shopping platform in Taiwan and PChome US24, its online marketplace in the U.S., in 3Q14.

It also hopes to introduce PChomePay to external online shopping platforms and third party payment companies to boost cross border trade25. PChome teams up with Xiaomi PChome Online paired up with Xiaomi, a fast growing Chinese budget smartphone maker, in June 2014 to sell Xiaomi handsets in Taiwan. PChome is Xiaomi’s first overseas official e- commerce partner to promote its handsets26. The debut batch of 10,000 enhanced version of the Redmi Note handsets were sold out in Taiwan via PChome Online in one single second27. Books’ self pick up services reach 7- Eleven Hong Kong Books, Taiwan’s largest online book store, announced the expansion of its self pick up services to 7-Eleven Hong Kong in April 2014.

The expansion of self pick up services marks Books’ first foray into overseas markets. Offering up to 1.5 million copies of books in over 250,000 categories, Books aims to become Hong Kong’s largest online book store28 .

Exhibit 4 | Total retail sales in Taiwan, Sep 2013 – Aug 2014 Source: Ministry of Economic Affairs of Taiwan 4.6% 4.3% 5.9% 2.8% 7.6% -2.8% 4.3% 4.1% 4.4% 5.5% 5.5% 4.5% -4.0% -2.0% 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 260.0 270.0 280.0 290.0 300.0 310.0 320.0 330.0 340.0 350.0 360.0 370.0 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Retail sales (NT$ billion) yoy change (%)

Taiwan In the news Asia Market Update  Issue 2  October 2014  p8 TAITRA, Amazon ink MOU on partnership The Taiwan External Trade Development Council (TAITRA), Taiwan’s major trade promotion organisation, has signed a memorandum of understanding (MOU) with Amazon, the world’s largest online retailer, to promote Taiwan-made products in overseas markets.

TAITRA will screen potential sellers and quality made-in-Taiwan products will be available on Amazon website later29. Yahoo! Taiwan overtakes Facebook as Taiwan’s top website Yahoo! Taiwan, known for its search engine and web portal, came first in Taiwan’s top 100 websites in 2014, followed by Facebook, a U.S.- based online social media network, and YouTube, a video sharing website based in the U.S. This is the eighth annual survey conducted by Business Next Publishing, which Facebook ranked the first in the previous three years30 .

Rakuten set to issue credit card in Taiwan Rakuten Card Co, a subsidiary of Japan’s leading online retailer Rakuten, has gained approval from the Taiwan government authorities to issue credit cards in Taiwan. The credit card issuance is part of Rakuten’s plans to raise the proportion of revenue generated in Taiwan31. New draft bill on regulating online payment services passed The Taiwan government passed a new draft bill in September 2014 on regulating online third party payment services. The draft bill allows service providers to offer virtual accounts in which customers can store a maximum of NT$30,000 for online transactions.

The minimum capital required for every third party payment service provider is NT$300 million32.

Department stores Eslite Spectrum to add more stores in Taiwan and China Eslite Spectrum, a chain department store operator in Taiwan, will add two new stores in Taoyuan and Tainan in late 2014. The company is also working on the Jingji Lake project in Suzhou and the Shanghai Center in China, both of which will commence operation in 201533 . Pacific Department Store to expand in Taiwan and China Pacific Department Store, a chain department store in Taiwan, is set to add a new store in Taiwan and another one in Beijing, China. The operator currently operates two stores in Taiwan and one store in Beijing, China34.

Shin Kong ramps up China presence Shin Kong, a leading department store chain in Taiwan, plans to increase its footprint in China. The retailer will add a store in Suzhou in Jiangsu in 1Q15, another in Chengdu in Sichuan in 2Q15 and another in Chongqing in 3Q16. The retailer has realised US$1.5 billion sales in Taiwan for the first eight months of 201435.

Convenience stores 7-Eleven to reach over 5,000 outlets by end 2014 7-Eleven added 46 stores in Taiwan in 1Q14, making the total number of stores to 4,966. It plans to create a network of over 5,000 outlets by the end of this year. 7-Eleven, operated by the President Chain Store, is now the largest CVS chain in Taiwan36 . Sinopec to run 300 CVSs with Ruentex Sinopec, China’s state-owned oil giant who also owns a CVS chain Easy Joy, has reached an agreement with Ruentex, Taiwan’s conglomerate who operates hypermarket chain RT-Mart, to jointly operate 300 of its Easy Joy stores in China37 . The two parties seek to lower sourcing costs by joint procurement as well as explore e- commerce and online-to-offline business opportunities together38 .

FamilyMart teams up with EasyCard FamilyMart, the second largest CVS chain in Taiwan, has teamed up with EasyCard, a smart card system operator based in Taiwan, to develop a reward point system to boost shoppers’ loyalty.

Taiwan In the news Asia Market Update  Issue 2  October 2014  p9 FamilyMart currently operates some 3,000 CVSs in Taiwan39 . Accessories Radley makes Asian debut in Taiwan Radley, a British handbag brand, opened its first Asian outlet in Taiwan in June 2014. The brand, planning to expand overseas, will open a total of ten stores in Asia, Australia and the Middle East by 201540.

Coccinelle adds stores in Taiwan Coccinelle, an Italian accessories brand, added four new stores in Taiwan in 3Q14. Together with the new store openings in the Philippines in 3Q14, the brand has built a stronger foothold in Asia41. Apparel Fast Retailing takes GU to Taiwan Fast Retailing, the fourth largest apparel retailer in the world, took one of its brands, GU, to Taiwan in September 201442. Taiwan will be GU’s second overseas market, after the debut in China in 2013. The Japanese retailer regards Taiwan as a springboard to expand to other Asian countries in future. The brand also plans to enter the U.S.

and Europe within several years43.

E-Land debuts in Taiwan E-Land, a leading fashion retail group in South Korea, opened its first store in Taiwan in September 201444. The group will open the second store in 2015. The company expects the turnover in Taiwan to reach NT$15 billion by 202045. Beauty and personal care Chlitina to reach a network of 5,000 outlets in China Chlitina, a cosmetics brand under Kelti International, a cosmetics manufacturer and distributor based in Taiwan, aims to increase its store number in China to 5,000 over the next few years. The company currently operates 3,100 stores across 334 cities in China, on top of 127 stores in Taiwan46.

MedFirst adds six stores in 1Q14 MedFirst, a chain retailer specialising in medical and health care products in Taiwan, opened six new stores in 1Q14. The firm is expected to add a total of 10 new stores in Taiwan by the end of 201447, with expansion plans focusing on hospitals and their nearby commercial areas. MedFirst currently operates almost 200 stores in Taiwan. It has also established a presence in China48. Watson’s Taiwan launches online store Watson’s Personal Care Stores, the largest beauty and personal care chain in Asia, rolled out its online store in Taiwan in April 2014. The company is the first cosmetics and drugstore operator to set up a self-operated online shop in Taiwan.

It expects the online sales to rise 200% over the next three years. Watson’s operated a total of 471 physical outlets in Taiwan as of end 2013 and the store count will increase to 500 by end 201449.

Cosmed plans 10 new stores in 2014 Cosmed, the second largest drugstore chain in Taiwan, will add 10 stores in Taiwan in 2014, bringing its total number of outlets to 372 by end 2014. The firm said it currently has no plans to launch a self-operated online shop50. Poya plans 25 new stores in 2015 Poya, the largest specialty chain specialising in accessories and FMCG products in Taiwan, plans to add 25 new stores in 2015. According to the management, Poya plans to increase the number of stores to 185 by 2017, 275 by 2020 and 400 by 202351. As of 2Q14, Poya operated 97 stores in Taiwan52.

Innisfree hits Taiwan Amore Pacific, a cosmetics giant in South Korea, opened the first outlet of its organic cosmetics brand, Innisfree, in April 201453.

The second outlet was launched in May 2014 and the third one will likely commerce operation by the end of this year. Amore Pacific looks to grow Innisfree to

Taiwan In the news Asia Market Update  Issue 2  October 2014  p10 the biggest South Korean skin care and cosmetics brand in Taiwan in terms of market share54. Consumer electronics Asustek rolls out online store in Singapore Asustek, a leading PC vendor in Taiwan, debuted its official online store in Singapore in July 201455. The online store in Singapore merely sells smartphone products for the time being. The PC vendor also plans to open online stores in other Southeast Asian markets by end 2014, including Hong Kong, Malaysia, Thailand, Indonesia, Vietnam and the Philippines56. Acer ties up with Gome Acer, a leading PC and notebook computer producer in Taiwan, has teamed up with Gome, a consumer electronics retailer in China, to sell Acer desktops, notebooks, tablets, all-in-one PCs and projectors in Gome retail stores.

Both companies have set a three-year revenues target of 6 billion yuan (US$974 million)57. Telkom enters Taiwan PT Telekomunikasi Indonesia (Telkom), Indonesia’s state-owned telecommunications service provider, has recently opened a branch in Taiwan in cooperation with Far EasTone Telecommunications and Taiwan Mobile, two leading telecommunications companies in Taiwan. The Taiwan branch focuses on retail businesses such as international remittance business. Telkom has already branched out into Hong Kong, East Timor, Australia, Myanmar, Malaysia, Singapore and the U.S.58 Foxconn to buy a stake in Asia Pacific Telecom Foxconn, the world’s largest electronics components maker, agreed to acquire shares worth NT$11.6 billion (US$390 million) from Taiwan’s mobile telecom operator Asia Pacific Telecom in May 2014.

The deal bodes well for Foxconn’s plans to tap the 4G telecom market in Taiwan59.

Food and beverage CoCo makes debut in South Korea CoCo, a beverage brand in Taiwan, opened its first outlet in South Korea in May 201460. The company is expected to increase its outlet number to 50 over the next two years. The company also plans to expand its global network to 2,000 stores within this year by adding 500 new outlets61. Tim Ho Wan debuts in Taiwan Tim Ho Wan, a Hong Kong-based dim sum restaurant chain, opened its first outlet in Taipei, Taiwan in July 2014. The dim sum chain plans to set up 10 outlets in Taiwan within five years. Taiwan is the third overseas market, after Singapore and the Philippines62.

Quiznos debuts in Taiwan Quiznos, an American sandwich brand, opened its first outlet in Taiwan in September 2014. The brand plans to open 100 outlets across Taiwan by 202463. The restaurant chain currently operates in over 30 countries worldwide64. Home products Iittala debuts in Taiwan Iittala, a Finnish home décor brand specialising in tableware and cookware, opened its debut store in Taiwan in June 201465. Fiskars, Iittala’s parent company, considers bringing Iittala to South Korea in the near future66.

Thailand Overview Asia Market Update  Issue 2  October 2014  p11 Thailand is the second largest economy in Southeast Asia, behind Indonesia. The country’s GDP stood at US$387.3 billion in 201367, with a real year-on-year (yoy) growth rate of 2.9%, down by 3.6 percentage points when compared to 201268. The decline was largely attributed to a weakened economy brought about by political unrest69 since late 201370. According to Siam Commercial Bank’s Economic Intelligence Center, the Thai economy will expand by just 1.6% in 2014 due to the country’s prolonged political impasse. With signs of economic recovery seen over the past few months, the economy is set to stabilise and grow at around 3.5%-4% over the next five years (2015-2019)71.

The political unrest since late 2013 has taken its toll on the country’s economy and on all industries, including the retail sector. According to the Bank of Thailand, retail sales have experienced sharp negative yoy growth (lower than -5%) since September 201372. Euromonitor International predicts that Thailand’s retail sales will pick up over the coming few years and rise to US$96.8 billion (3,140.2 billion baht) in 2018 from US$80.8 billion (2,644.1 billion baht) in 2013, with a compound annual growth rate (CAGR) of 3.5%73. Thailand’s grocery retailing accounted for 62.3% of total sales in 2013.

In particular, store- based grocery retailers (such as convenience stores, hypermarkets and supermarkets) recorded sales of US$51.8 billion (1,678.8 billion baht), up by 5.6% yoy74. The supermarket sector was the best performer, posting a yoy sales growth rate of 13.5%75.

Non-grocery retailers (such as department stores and specialist retailers) performed better than the grocery sector in terms of growth - a yoy increase of 6.3%. Home and garden specialist retailers constituted the top performer, advancing at a rate of 7.0% yoy in 201376. The broadband Internet penetration rate in Thailand stood at 14.6% in 2013. This is relatively low compared to other ASEAN countries such as Singapore (88.1%) and Malaysia (61.1%)77. According to Euromonitor International, the rate is expected to increase to 37.6% by 203078. The total value of Internet sales in Thailand amounted to US$0.8 billion (27.3 billion baht) in 2013.

By category, consumer electronics and video game hardware was the most popular, accounting for 33.2% of the total. Internet sales are set to increase to US$1.5 billion (49.9 billion baht) by 2018, with a CAGR of 12.8%79. Thailand is one of the most popular tourist destinations in the world and tourism is a major contributor to economic growth. In 2013, travel and tourism directly contributed 9.0% of the nation’s GDP and supported 6.6% of national employment80. However, tourism, especially for Bangkok, has been adversely affected by the ongoing political turbulence. According to the Ministry of Tourism and Sports of Thailand, international arrivals in the country from January to August 2014 stood at 15,703,373, demonstrating a yoy decrease of 10.7%81.

Political unrest to bottom out? The political unrest since last November82 has resulted in considerable economic losses. GDP growth in 1Q14 dropped below zero, recording a rate of -0.5% yoy83. Domestic consumption slowed and fewer tourists have been travelling to the country, especially to Bangkok. Total retail sales have experienced yoy decreases since September 201384.

Set in the middle of mainland Southeast Asia, Thailand borders the Gulf of Thailand in the east and the Andaman Sea in the west. With a land mass of about 514,000 square kilometres, the country has a population of over 67 million. Thailand Overview Asia Market Update  Issue 2  October 2014  p11 Thailand is the second largest economy in Southeast Asia, behind Indonesia. The country’s GDP stood at US$387.3 billion in 201367, with a real year-on-year (yoy) growth rate of 2.9%, down by 3.6 percentage points when compared to 201268. The decline was largely attributed to a weakened economy brought about by political unrest69 since late 201370.

According to Siam Commercial Bank’s Economic Intelligence Center, the Thai economy will expand by just 1.6% in 2014 due to the country’s prolonged political impasse. With signs of economic recovery seen over the past few months, the economy is set to stabilise and grow at around 3.5%-4% over the next five years (2015-2019)71. The political unrest since late 2013 has taken its toll on the country’s economy and on all industries, including the retail sector. According to the Bank of Thailand, retail sales have experienced sharp negative yoy growth (lower than -5%) since September 201372. Euromonitor International predicts that Thailand’s retail sales will pick up over the coming few years and rise to US$96.8 billion (3,140.2 billion baht) in 2018 from US$80.8 billion (2,644.1 billion baht) in 2013, with a compound annual growth rate (CAGR) of 3.5%73.

Thailand’s grocery retailing accounted for 62.3% of total sales in 2013. In particular, store- based grocery retailers (such as convenience stores, hypermarkets and supermarkets) recorded sales of US$51.8 billion (1,678.8 billion baht), up by 5.6% yoy74. The supermarket sector was the best performer, posting a yoy sales growth rate of 13.5%75.

Non-grocery retailers (such as department stores and specialist retailers) performed better than the grocery sector in terms of growth - a yoy increase of 6.3%. Home and garden specialist retailers constituted the top performer, advancing at a rate of 7.0% yoy in 201376. The broadband Internet penetration rate in Thailand stood at 14.6% in 2013. This is relatively low compared to other ASEAN countries such as Singapore (88.1%) and Malaysia (61.1%)77. According to Euromonitor International, the rate is expected to increase to 37.6% by 203078. The total value of Internet sales in Thailand amounted to US$0.8 billion (27.3 billion baht) in 2013.

By category, consumer electronics and video game hardware was the most popular, accounting for 33.2% of the total. Internet sales are set to increase to US$1.5 billion (49.9 billion baht) by 2018, with a CAGR of 12.8%79. Thailand is one of the most popular tourist destinations in the world and tourism is a major contributor to economic growth. In 2013, travel and tourism directly contributed 9.0% of the nation’s GDP and supported 6.6% of national employment80. However, tourism, especially for Bangkok, has been adversely affected by the ongoing political turbulence. According to the Ministry of Tourism and Sports of Thailand, international arrivals in the country from January to August 2014 stood at 15,703,373, demonstrating a yoy decrease of 10.7%81.

Political unrest to bottom out? The political unrest since last November82 has resulted in considerable economic losses. GDP growth in 1Q14 dropped below zero, recording a rate of -0.5% yoy83. Domestic consumption slowed and fewer tourists have been travelling to the country, especially to Bangkok. Total retail sales have experienced yoy decreases since September 201384.

Set in the middle of mainland Southeast Asia, Thailand borders the Gulf of Thailand in the east and the Andaman Sea in the west. With a land mass of about 514,000 square kilometres, the country has a population of over 67 million. Thailand Overview Asia Market Update  Issue 2  October 2014  p11 Thailand is the second largest economy in Southeast Asia, behind Indonesia. The country’s GDP stood at US$387.3 billion in 201367, with a real year-on-year (yoy) growth rate of 2.9%, down by 3.6 percentage points when compared to 201268. The decline was largely attributed to a weakened economy brought about by political unrest69 since late 201370.

According to Siam Commercial Bank’s Economic Intelligence Center, the Thai economy will expand by just 1.6% in 2014 due to the country’s prolonged political impasse. With signs of economic recovery seen over the past few months, the economy is set to stabilise and grow at around 3.5%-4% over the next five years (2015-2019)71. The political unrest since late 2013 has taken its toll on the country’s economy and on all industries, including the retail sector. According to the Bank of Thailand, retail sales have experienced sharp negative yoy growth (lower than -5%) since September 201372. Euromonitor International predicts that Thailand’s retail sales will pick up over the coming few years and rise to US$96.8 billion (3,140.2 billion baht) in 2018 from US$80.8 billion (2,644.1 billion baht) in 2013, with a compound annual growth rate (CAGR) of 3.5%73.

Thailand’s grocery retailing accounted for 62.3% of total sales in 2013. In particular, store- based grocery retailers (such as convenience stores, hypermarkets and supermarkets) recorded sales of US$51.8 billion (1,678.8 billion baht), up by 5.6% yoy74. The supermarket sector was the best performer, posting a yoy sales growth rate of 13.5%75.

Non-grocery retailers (such as department stores and specialist retailers) performed better than the grocery sector in terms of growth - a yoy increase of 6.3%. Home and garden specialist retailers constituted the top performer, advancing at a rate of 7.0% yoy in 201376. The broadband Internet penetration rate in Thailand stood at 14.6% in 2013. This is relatively low compared to other ASEAN countries such as Singapore (88.1%) and Malaysia (61.1%)77. According to Euromonitor International, the rate is expected to increase to 37.6% by 203078. The total value of Internet sales in Thailand amounted to US$0.8 billion (27.3 billion baht) in 2013.

By category, consumer electronics and video game hardware was the most popular, accounting for 33.2% of the total. Internet sales are set to increase to US$1.5 billion (49.9 billion baht) by 2018, with a CAGR of 12.8%79. Thailand is one of the most popular tourist destinations in the world and tourism is a major contributor to economic growth. In 2013, travel and tourism directly contributed 9.0% of the nation’s GDP and supported 6.6% of national employment80. However, tourism, especially for Bangkok, has been adversely affected by the ongoing political turbulence. According to the Ministry of Tourism and Sports of Thailand, international arrivals in the country from January to August 2014 stood at 15,703,373, demonstrating a yoy decrease of 10.7%81.

Political unrest to bottom out? The political unrest since last November82 has resulted in considerable economic losses. GDP growth in 1Q14 dropped below zero, recording a rate of -0.5% yoy83. Domestic consumption slowed and fewer tourists have been travelling to the country, especially to Bangkok. Total retail sales have experienced yoy decreases since September 201384.

Set in the middle of mainland Southeast Asia, Thailand borders the Gulf of Thailand in the east and the Andaman Sea in the west. With a land mass of about 514,000 square kilometres, the country has a population of over 67 million.

Thailand Overview Asia Market Update  Issue 2  October 2014  p12 Facing political turbulence, retailers operating in the country have taken counter measures in several ways. Internally, their focus is on enhancing operational efficiencies, such as cost control, building new distribution centres for better supply chain operation or engaging in e- commerce.

For instance, Big C, the country’s leading grocery retailer, launched an e-commerce website in early 201485. Externally, some retailers have expanded overseas in search of new opportunities. For instance, Robins Department Store, one of the leading department store operators in Thailand, entered Hanoi in Vietnam this April and will likely open another store in Ho Chi Minh City by the end of 201486.

The military finally stepped in and took over the government in May 2014. The National Council for Peace and Order87 subsequently announced an administrative roadmap to calm the country’s political turmoil. Major initiatives have included releasing subsidies to rice farmers, offering financial aid to small- and medium-sized enterprises and speeding up approvals for infrastructure and foreign direct investment projects88. The political unrest is indeed easing, and the economy – including the consumption component – is expected to recover in 2H1489. However, any renewed political unrest could pull the country back into another crisis.

Thailand In the news Asia Market Update  Issue 2  October 2014  p13 Statistics GDP growth rebounds to positive in 2Q14 Thailand’s GDP growth increased by 0.4% in 2Q1490, rising from minus 0.5% in 1Q14 due to improving domestic and external demand.  See Exhibit 5. Exhibit 5 | Real GDP growth of Thailand, 2Q13-2Q14 Source: Office of the National Economic and Social Development Board of Thailand CPI further slides in August 2014 Thailand’s CPI rose by 2.1% yoy in August 201491, the lowest since May 201492, as a result of the ease in political unrest93.  See Exhibit 6. Exhibit 6 | Consumer price index in Thailand, Sep 2013 - Aug 2014 Source: Ministry of Commerce of Thailand Consumer confidence index reaches a 13-month high in August 2014 Thailand’s consumer confidence index rose to 80.1 in August 201494, reaching a 13-month peak, owing to the improving political condition95.

 See Exhibit 7.

Exhibit 7 | Consumer confidence index in Thailand, Sep 2013- Aug 2014 Source: Trading Economics 2.9 2.7 0.6 -1.0 -0.5 0.0 0.5 1.0 1.5 2.0 2.5 3.0 3.5 2Q13 3Q 4Q 1Q14 Thailand In the news Asia Market Update  Issue 2  October 2014  p13 Statistics GDP growth rebounds to positive in 2Q14 Thailand’s GDP growth increased by 0.4% in 2Q1490, rising from minus 0.5% in 1Q14 due to improving domestic and external demand.  See Exhibit 5. Exhibit 5 | Real GDP growth of Thailand, 2Q13-2Q14 Source: Office of the National Economic and Social Development Board of Thailand CPI further slides in August 2014 Thailand’s CPI rose by 2.1% yoy in August 201491, the lowest since May 201492, as a result of the ease in political unrest93.

 See Exhibit 6. Exhibit 6 | Consumer price index in Thailand, Sep 2013 - Aug 2014 Source: Ministry of Commerce of Thailand Consumer confidence index reaches a 13-month high in August 2014 Thailand’s consumer confidence index rose to 80.1 in August 201494, reaching a 13-month peak, owing to the improving political condition95.  See Exhibit 7.

Exhibit 7 | Consumer confidence index in Thailand, Sep 2013- Aug 2014 Source: Trading Economics -0.5 0.4 1Q14 2Q 1.4% 1.5% 1.9% 1.7% 1.9% 2.0% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 77.9 76.6 75 73.4 71.5 69.9 60.0 62.0 64.0 66.0 68.0 70.0 72.0 74.0 76.0 78.0 80.0 82.0 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Thailand In the news Asia Market Update  Issue 2  October 2014  p13 Statistics GDP growth rebounds to positive in 2Q14 Thailand’s GDP growth increased by 0.4% in 2Q1490, rising from minus 0.5% in 1Q14 due to improving domestic and external demand.

 See Exhibit 5.

Exhibit 5 | Real GDP growth of Thailand, 2Q13-2Q14 Source: Office of the National Economic and Social Development Board of Thailand CPI further slides in August 2014 Thailand’s CPI rose by 2.1% yoy in August 201491, the lowest since May 201492, as a result of the ease in political unrest93.  See Exhibit 6. Exhibit 6 | Consumer price index in Thailand, Sep 2013 - Aug 2014 Source: Ministry of Commerce of Thailand Consumer confidence index reaches a 13-month high in August 2014 Thailand’s consumer confidence index rose to 80.1 in August 201494, reaching a 13-month peak, owing to the improving political condition95.

 See Exhibit 7.

Exhibit 7 | Consumer confidence index in Thailand, Sep 2013- Aug 2014 Source: Trading Economics 1.9% 2.0% 2.1% 2.4% 2.6% 2.4% 2.2% 2.1% Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 71.5 69.9 68.8 67.8 70.7 75.1 78.2 80.1 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14

Thailand In the news Asia Market Update  Issue 2  October 2014  p14 Retail sales down by 6.2% yoy in June 2014 Thailand’s retail sales index fell by 6.2% yoy in June 201496, due to months of political uncertainty since late 2013 which dented consumer spending appetite.  See Exhibit 8.

Exhibit 8 | Thailand retail sales index, Jul 2013- Jun 2014 Source: Trading Economics Retail in general Thailand freezes prices of selected consumer goods for six months Thailand's Commerce Ministry announced in June 2014 that prices of over 200 categories of consumer goods would be frozen for six months until November 2014 to ease people’s lives and boost the economy following the political impasse. The consumer goods include beverages, rice, palm oil, instant foods, dairy products, household products, animal feed and fertilizer97. E-commerce Saha debuts on Tmall Saha Group, one of Thailand’s largest consumer products companies, has recently opened an online store on Tmall, the leading e-commerce platform in China, hopefully to offset the slumping domestic consumption in Thailand due to the political unrest98.

Food, beauty and personal care and other products can be found at the online store99.

King Power opens on Tmall King Power, the largest duty free retailer in Thailand, opened its online store on Tmall in June 2014. Currently, products such as food, cosmetics, apparel, fashion accessories can be found at King Power’s Tmall store. The retailer plans to sell travel packages later100. Priceza expands in Southeast Asia Priceza.com, a leading price comparison website in Thailand, will expand into Malaysia, Singapore, Vietnam and the Philippines in 2015 to 2016. Currently, Priceza.com accounts for over 90% of Thailand’s price comparison websites market101. Thais visit the website and compare prices of various products, such as smart devices, apparel, accessories, books and flight tickets102.

Berli Jucker to go online Berli Jucker, the operator running FamilyMart in Thailand, plans to invest up to 100 million baht to set up an e-commerce platform. The platform, due to open in 2014, will offer consumer products and books103.

Home shopping TV Direct sets sights on Malaysia TV Direct, a leading TV shopping operator in Thailand, in partnership with Telekom Malaysia, a Malaysian telecommunications operator, launched its first home shopping channel in Malaysia in June 2014. The channel runs 24 hours a day, broadcasting via Internet Protocol TV system operated by Telekom Malaysia. The operator expects the new channel to reach 5 million people in future104. Department stores Robins enters Vietnam Central Retail Corporation, Thailand’s largest retail conglomerate, opened its first Robins in Hanoi in April 2014105. The department store spans 10,000 square metres in area and accommodates international brands such as -4.3%-4.3% -7.6% -8.9% -9.6% -5.6% -10.0% -8.4% -8.7% -6.9% -9.5% -6.2% -12.0% -10.0% -8.0% -6.0% -4.0% -2.0% 0.0% Jul-13 Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14

Thailand In the news Asia Market Update  Issue 2  October 2014  p15 Clinique, The Body Shop, Lancome, Samsonite, Mc Jeans and F&F106. The operator will likely open another store in Ho Chi Minh City by end 2014107. Robins plans six new stores in Thailand Robins Department Store plans to add six new branches across Thailand in 2H14. The retailer also plans to allocate 400 million baht for its marketing campaign in 2014. The department store’s sales stood at 11.4 billion baht in 1H14108. Shopping malls Platinum Group considers an IPO The Platinum Group, a Thai shopping mall operator, is planning an IPO to raise 5 to 6 billion baht in late 2014 or early 2015.

The Group plans to use the proceeds to finance its projects, including The Market by Platinum, a 70,000-sqm retail plaza comprising offices and a 400-room hotel109.

Siam Retail to add new malls and renovate existing malls Siam Retail, a shopping mall operator in Thailand, has committed 20 billion baht to open new shopping malls and renovate existing malls in Thailand. The company will open three new malls by 2020110. It will also spend around 2.7 billion baht to refresh its existing malls over the next three years. The company currently manages four mall brands, namely Fashion Island, Terminal 21, The Promenade and Life Center, in Thailand111. Supermarkets Big C opens new DC for CVS business Big C, a leading grocery retailer in Thailand, opened a brand new distribution centre for its convenience store (CVS) chain Mini Big C in May 2014 to boost supply chain efficiencies.

The group also plans to open a new fresh food distribution centre in 1Q15112.

Foodland further expands in Thailand Foodland, a premium supermarket operator in Thailand, aims to open four new outlets each year starting from 2015. As competition in prime cities like Bangkok is tough, the supermarket chain will focus more on young families in suburban areas113. Convenience stores 7-Eleven scales up in Thailand CP All, the sole operator of 7-Eleven in Thailand, has earmarked 8 to 9 billion baht to ramp up the presence of the CVS chain in Thailand. The fund will be allocated to add 600 new stores and maintain the existing stores. The company projects sales of 2014 to lift by 10 to 15%114.

FamilyMart in rapid expansion Japan-based FamilyMart, the second largest CVS chain in the Asia Pacific region, plans to rapidly roll out new outlets in Thailand. FamilyMart will open 500 new outlets annually from this year so as to reach a total of 3,000 stores by 2017. The company will also renovate its existing stores115. Tesco launches CVS chain The U.K.’s retail giant Tesco has recently tapped into the Thai CVS sector. The company has recently set up its first pilot CVS outlet under the name 365 in Thailand. It will add five more stores by the end of 2014116. Thailand is the second country for Tesco to launch the 365 CVS chain, after South Korea117.

Berli Juker to add more CVS outlets in Vietnam Berli Juker, the operator running FamilyMart in Thailand, will add 205 new CVS outlets in Vietnam by 2018 with an investment of 1 billion baht, bringing the total number of CVS outlets to 300 by then. The company also predicts the Vietnamese CVS operation will break even in 2018 due to increasing economies of scale118.

Thailand In the news Asia Market Update  Issue 2  October 2014  p16 Cash & Carry Marko sets for expansion spree Marko, the leading cash & carry chain operator in Thailand, has earmarked 8 billion baht for expansion of new stores and upgrading of existing business.

5 billion baht will be allocated to the opening of 12 new stores while the remaining will go to upgrading the computer system as well as the equipment of the existing stores119. Berli Juker acquires Metro Cash & Carry Vietnam Berli Juker signed a deal in August 2014 to buy Metro Cash & Carry operation in Vietnam. The acquisition marks Berli Juker’s aggressive plan to tap the emerging Vietnam market120.

Accessories Crumpler enters Thailand Australian accessories brand Crumpler opened its first store in Thailand in July 2014121. Backpacks, laptop bags, messenger bags, camera bags and travel bags are the major merchandizes found at the shop. Already established in Singapore, the brand plans to enter China, Japan and South Korea in future122. Apparel Antony Morato to expand in Thailand Italian fashion brand Antony Morato plans to open 15 stores in Thailand by 2017. The brand is considering entering South Korea, Indonesia and India in future123. Its sales network currently covers over 50 countries124.

Toms makes debut in Thailand market Toms, an American shoe brand, rolled out its first store in Thailand in July 2014. Toms has established presence in 35 countries worldwide. Thailand is the brand’s fourth Asian markets after Japan, Hong Kong and the Philippines125. Beauty and personal care Sephora to establish online presence in Thailand through ZALORA Sephora, a French cosmetics brand, has partnered with ZALORA, an online fashion retailer, to distribute beauty products in Southeast Asia. The products will be available on ZALORA Thailand in 2014126.

Watson’s to add new stores and new products Watson’s, one of the major beauty and personal care chains in Asia and Thailand, plans to add up to 50 new outlets, bringing the total number of stores to 345 by end of this year.

Meanwhile, the retailer will seek to introduce 100 new Watson’s- branded products as well as increasing the number of exclusive brands by 10% to 15% this year127. The Face Shop sells Thai business The leading South Korean skin care brand The Face Shop has sold its Thai business to three executives. They have taken over TFS (Thailand), which owns the distribution rights of The Face Shop in Thailand128. The new owners will add 10 new stores in Thailand within this year and plans to boost the total number of outlets to 70 in three years’ time129.

Beauty Community further expands in Thailand Beauty Community, a Thai cosmetics retailer and distributor, plans to ramp up the retail footprints of its three cosmetics brands, Beauty Buffet, Beauty Cottage and Beauty Market. It targets to open 31 Beauty Buffet, 20 Beauty Cottage and 15 Beauty Market outlets in 2014, making the total number of outlets to 210, 70 and 18, respectively. The firm expects to open at least 15 outlets per year over the next three to five years130. Pena House taps cosmetics sector Pena House, a fashion retailer and outlet mall operator in Thailand, has entered cosmetics sector by introducing skin care products under the label Luce.

Luce products are developed with the help of a leading Japanese skin care

Thailand In the news Asia Market Update  Issue 2  October 2014  p17 manufacturer. The products are available online and on TV shopping channel131. Bangkok Dusit Medical to take over Save Drug Center Bangkok Dusit Medical, the largest medical service provider in Thailand, has agreed to acquire Save Drug Centre, a drugstore chain Thailand, for up to 380 million baht (US$11 million). The deal will be closed by end October 2014132. Save Drug Center currently runs a total of 107 drug stores in Thailand133. Consumer electronics PowerBuy further expands in Thailand Thai consumer electronics retailer PowerBuy, owned by Central Retail Corporation, has allocated 1.2 billion baht to the opening of 12 new outlets across Thailand in 2014.

Despite the sluggish economy in Thailand, the company believes that the hot weather in the country is boosting demand for air conditioners while Thai’s transition from analogue to digital TV would underpin flat screen demand. The retailer also estimates sales of 2014 to jump by 10.5% to 21 billion baht134.

Food and beverage Coffee Bean & Tea Leaf to further expand in Thailand American café brand Coffee Bean & Tea Leaf plans to add up to 12 outlets every year to reach a total of 75 outlets in Thailand by 2018. It currently runs 16 cafés in Thailand. The company is also considering other store formats such as mobile coffee units or kiosks in future135. Mister Donut scales up in Thailand Mister Donut, one of the major restaurant chains in Thailand, will add 30 new stores, bringing the total number of the stores to 350 by end of 2014. It plans to increase the number of stores to 1,000 by 2022. The company expects the sales of its restaurants to go up by 16% this year136.

Starbucks to double store count by 2018 American coffee chain giant Starbucks will double its store count to 400 in Thailand by 2018. It plans to add at least 30 new stores every year from now on. According to the company, on average, 1.8 million cups of coffee were sold every month over the past 16 years. The coffee chain expects the sales to register a double-digit growth this year137.

Sub Sri Thai acquires Greyhound Sub Sri Thai, the franchisee of Dunkin’ Donut in Thailand, acquired Greyhound, a Thai fashion brand and café chain operator for 1.85 billion baht. Greyhound currently runs 17 fashion stores in Thailand and sells its clothes in South Korea, Singapore and Indonesia138. It also operates 10 cafés in Thailand and another seven outlets in overseas markets139. BreadTalk partners with Minor International for expansion BreadTalk, a Singaporean bakery chain, entered into an agreement in July 2014 with Minor Food Group (MFG), a chain restaurant operator in Thailand to set up a 50:50 joint venture company (JV), BTM Thailand, to run bakery business under the name BreadTalk in Thailand140.

BreakTalk will leverage on MFG’s infrastructure in Thailand and increase the store count from 23 to 100 in five years141.

Central Restaurants to add 75 new restaurants in 2014 Central Restaurants, an affiliate of Thailand’s leading hospitality company Central Plaza Hotel, aims to add 75 new restaurants by the end of 2014. The company currently owns 767 restaurants in Thailand142. MK Restaurant to reach 650 outlets by 2016 MK Restaurant, Thailand’s leading operator of chain restaurants, plans to ramp up its outlet network from 504 in 2013 to 650 by 2016. As of end 1Q14, the company ran 389 MK restaurants, 117 Yayoi restaurants and 13 other restaurants in Thailand. It also owns 32 MK restaurants in Japan, four in Vietnam and one in Indonesia143.

Thailand In the news Asia Market Update  Issue 2  October 2014  p18 CP Foods marches into Australia market In July 2014, CP Foods, an affiliate of Thailand’s leading conglomerate CP Group, opened its first restaurant “1000Wat” in Australia serving modern Thai dishes. The company plans to expand 1000Wat to 500 outlets in Australia in two years. It also sees Australia as a stepping stone to tap other mature markets like the U.S.144 CP Foods ties up with Itochu CP Foods is going to sell 23.75% stake of its food processing subsidiary CP Pokphand (CPP) to Itochu, Japan’s third largest trading company145.

Itochu’s distribution network in China and Vietnam is expected to assist in CPP’s future expansion146.

True Coffee eyes Southeast Asian markets True Coffee, a leading coffee chain in Thailand, plans to roll out 100 new stores per annum starting from 2014, aiming at a total of 500 new stores. The coffee specialist currently operates 109 stores, including franchises, mainly in Bangkok147. It also plans to open 300 to 400 stores in China, Singapore, Myanmar and Malaysia within five years148. Teddy’s Bigger Burgers to enter Thailand Teddy’s Bigger Burgers, a Hawaii-based burger chain, will set up its first store in Thailand in late 2014. It plans to open a second outlet in early 2015. Thailand is the second Asian entry for Teddy’s Bigger Burgers, after the Philippines149.

TUF to acquire King Oscar and MerAlliance Thai Union Frozen Products (TUF), a leading seafood processor based in Thailand, agreed to acquire King Oscar, the world’s leading sardine brand from Norway150, and MerAlliance, a leading French smoked salmon producer151, in September 2014. The acquisitions are expected to reinforce TUF’s global leading position in the seafood sector.

Ichitan to set up new plant in Indonesia Ichitan, the largest green tea maker in Thailand, will form a joint venture (JV) with PT Atri Pasifix, an Indonesian retailer operating convenience stores nationwide, to build a new plant in Indonesia. The move marks the first international expansion for Ichitan and its efforts to tap Indonesian market where demand for green tea is projected to grow at an average rate of 15% a year. The JV will be set up in 4Q14152. Café Amazon plans Asean expansion Café Amazon, a café chain owned by Thailand’s oil and gas giant PTT, plans to add 100 new branches in other Southeast Asian countries over the next four years.

The café chain plans to enter Myanmar this year. The chain currently has a total of 1,056 outlets in Thailand and 15 in Cambodia, Laos and the Philippines153. Home products Chic Republic expands in Thailand Chic Republic, a Thai home products retailer, plans to add three new stores in 2014. It expects sales to surge 40% to 700 billion baht in 2014. The company is also considering entering the Philippines and Malaysia in future154. Ikea strengthens presence in Thailand Ikea, the world’s leading home furniture company, will allow customers to order at physical store and receive orders at home next year in Thailand.

Thailand is the third country to offer such service, after Greece and Spain. The company plans to add two full scale stores in Bangkok in five to six years. Meanwhile, it is considering opening an online store in future155.

Malaysia Overview Asia Market Update  Issue 2  October 2014  p19 Malaysia is the third largest economy in Southeast Asia after Indonesia and Thailand156. Economic growth remained robust in 2013, registering a GDP real growth rate of 4.7%. The OECD Development Centre predicts that this will continue to grow at an annual rate of 5.1% in 2014-2018157. To elevate the country to developed-nation status by 2020, the Malaysian government launched the Government Transformation Programme (GTP) and the Economic Transformation Programme (ETP) in 2010. GTP focuses on structural issues such as improving urban transportation, building rural infrastructure and fighting corruption, while ETP addresses economic fundamentals.

Under ETP, a total of 12 sectors, such as wholesale and retail, tourism, communications content and infrastructure, business services and health care are selected as national key economic areas (NKEAs). Economic activities categorised as NKEAs will be prioritised in government planning and fund allocation. It is noteworthy that the majority of activities are initiated and led by the private sector158. To improve public finances, subsidies on gasoline, sugar and electricity rates were cut159. A 6% goods and services tax (GST) will be introduced in April 2015 for the same purpose. These measures might dampen Malaysian consumers’ purchasing power in the short term.

However, income growth in the longer run is expected to continue due to the implementation of the minimum wage in January 2014160, as well as individual income tax and corporate tax reductions161 in 2015 and 2016, respectively162. In 2013, the country’s retail sales reached US$51.5 billion (168.7 billion ringgit), up by 3.8% year-on-year (yoy). According to Euromonitor International, retail sales will climb to US$57.5 billion (184.6 billion ringgit) by 2018, with a compound annual growth rate (CAGR) of 1.8%163. Non-grocery retailing accounted for 59.7% of Malaysia’s total retail sales in 2013.

In particular, store-based, non-grocery retailers (such as department stores and specialist retailers) recorded sales of US$31.5 billion (101.3 billion ringgit), up by 2.3% yoy. Health and beauty specialist retailers were the top performer, growing at a rate of 5.0% yoy in 2013164. Grocery retailers (such as convenience stores, hypermarkets and supermarkets) performed better than non-grocery retailers in terms of growth rate. Sales realised rose by 6.0% yoy165. Convenience stores turned out to be the best performer, posting a yoy sales growth rate of 11.3%166.

Travel and tourism is a major contributor to the Malaysian economy. It directly contributed 7.2% of national GDP and supported 6.7% of Malaysia’s employment in 2013167. According to the Malaysia Tourism Board, the number of tourists visiting Malaysia hit a record high of 25.7 million in 2013, up by 2.8%168. Although the missing Malaysia Airlines Flight MH370 in March 2014 and the downed Flight MH17 over Ukrainian territory in July 2014 have provided a dampener for Malaysians and the world, tourist arrivals remain resilient. Such arrivals from January to May 2014 totalled 11.5 million, posting a yoy growth of 10.1%169.

Located in Southeast Asia, Malaysia consists of two geographical regions divided by the South China Sea – West Malaysia or Peninsular Malaysia lying at the southern tip of the Asian mainland, and East Malaysia situating on the island of Borneo. Malaysia Overview Asia Market Update  Issue 2  October 2014  p19 Malaysia is the third largest economy in Southeast Asia after Indonesia and Thailand156. Economic growth remained robust in 2013, registering a GDP real growth rate of 4.7%. The OECD Development Centre predicts that this will continue to grow at an annual rate of 5.1% in 2014-2018157.

To elevate the country to developed-nation status by 2020, the Malaysian government launched the Government Transformation Programme (GTP) and the Economic Transformation Programme (ETP) in 2010.

GTP focuses on structural issues such as improving urban transportation, building rural infrastructure and fighting corruption, while ETP addresses economic fundamentals. Under ETP, a total of 12 sectors, such as wholesale and retail, tourism, communications content and infrastructure, business services and health care are selected as national key economic areas (NKEAs). Economic activities categorised as NKEAs will be prioritised in government planning and fund allocation. It is noteworthy that the majority of activities are initiated and led by the private sector158.

To improve public finances, subsidies on gasoline, sugar and electricity rates were cut159. A 6% goods and services tax (GST) will be introduced in April 2015 for the same purpose. These measures might dampen Malaysian consumers’ purchasing power in the short term. However, income growth in the longer run is expected to continue due to the implementation of the minimum wage in January 2014160, as well as individual income tax and corporate tax reductions161 in 2015 and 2016, respectively162. In 2013, the country’s retail sales reached US$51.5 billion (168.7 billion ringgit), up by 3.8% year-on-year (yoy).

According to Euromonitor International, retail sales will climb to US$57.5 billion (184.6 billion ringgit) by 2018, with a compound annual growth rate (CAGR) of 1.8%163. Non-grocery retailing accounted for 59.7% of Malaysia’s total retail sales in 2013. In particular, store-based, non-grocery retailers (such as department stores and specialist retailers) recorded sales of US$31.5 billion (101.3 billion ringgit), up by 2.3% yoy. Health and beauty specialist retailers were the top performer, growing at a rate of 5.0% yoy in 2013164. Grocery retailers (such as convenience stores, hypermarkets and supermarkets) performed better than non-grocery retailers in terms of growth rate.

Sales realised rose by 6.0% yoy165. Convenience stores turned out to be the best performer, posting a yoy sales growth rate of 11.3%166.

Travel and tourism is a major contributor to the Malaysian economy. It directly contributed 7.2% of national GDP and supported 6.7% of Malaysia’s employment in 2013167. According to the Malaysia Tourism Board, the number of tourists visiting Malaysia hit a record high of 25.7 million in 2013, up by 2.8%168. Although the missing Malaysia Airlines Flight MH370 in March 2014 and the downed Flight MH17 over Ukrainian territory in July 2014 have provided a dampener for Malaysians and the world, tourist arrivals remain resilient. Such arrivals from January to May 2014 totalled 11.5 million, posting a yoy growth of 10.1%169.

Located in Southeast Asia, Malaysia consists of two geographical regions divided by the South China Sea – West Malaysia or Peninsular Malaysia lying at the southern tip of the Asian mainland, and East Malaysia situating on the island of Borneo. Malaysia Overview Asia Market Update  Issue 2  October 2014  p19 Malaysia is the third largest economy in Southeast Asia after Indonesia and Thailand156. Economic growth remained robust in 2013, registering a GDP real growth rate of 4.7%. The OECD Development Centre predicts that this will continue to grow at an annual rate of 5.1% in 2014-2018157.

To elevate the country to developed-nation status by 2020, the Malaysian government launched the Government Transformation Programme (GTP) and the Economic Transformation Programme (ETP) in 2010.

GTP focuses on structural issues such as improving urban transportation, building rural infrastructure and fighting corruption, while ETP addresses economic fundamentals. Under ETP, a total of 12 sectors, such as wholesale and retail, tourism, communications content and infrastructure, business services and health care are selected as national key economic areas (NKEAs). Economic activities categorised as NKEAs will be prioritised in government planning and fund allocation. It is noteworthy that the majority of activities are initiated and led by the private sector158.

To improve public finances, subsidies on gasoline, sugar and electricity rates were cut159. A 6% goods and services tax (GST) will be introduced in April 2015 for the same purpose. These measures might dampen Malaysian consumers’ purchasing power in the short term. However, income growth in the longer run is expected to continue due to the implementation of the minimum wage in January 2014160, as well as individual income tax and corporate tax reductions161 in 2015 and 2016, respectively162. In 2013, the country’s retail sales reached US$51.5 billion (168.7 billion ringgit), up by 3.8% year-on-year (yoy).

According to Euromonitor International, retail sales will climb to US$57.5 billion (184.6 billion ringgit) by 2018, with a compound annual growth rate (CAGR) of 1.8%163. Non-grocery retailing accounted for 59.7% of Malaysia’s total retail sales in 2013. In particular, store-based, non-grocery retailers (such as department stores and specialist retailers) recorded sales of US$31.5 billion (101.3 billion ringgit), up by 2.3% yoy. Health and beauty specialist retailers were the top performer, growing at a rate of 5.0% yoy in 2013164. Grocery retailers (such as convenience stores, hypermarkets and supermarkets) performed better than non-grocery retailers in terms of growth rate.

Sales realised rose by 6.0% yoy165. Convenience stores turned out to be the best performer, posting a yoy sales growth rate of 11.3%166.

Travel and tourism is a major contributor to the Malaysian economy. It directly contributed 7.2% of national GDP and supported 6.7% of Malaysia’s employment in 2013167. According to the Malaysia Tourism Board, the number of tourists visiting Malaysia hit a record high of 25.7 million in 2013, up by 2.8%168. Although the missing Malaysia Airlines Flight MH370 in March 2014 and the downed Flight MH17 over Ukrainian territory in July 2014 have provided a dampener for Malaysians and the world, tourist arrivals remain resilient. Such arrivals from January to May 2014 totalled 11.5 million, posting a yoy growth of 10.1%169.

Located in Southeast Asia, Malaysia consists of two geographical regions divided by the South China Sea – West Malaysia or Peninsular Malaysia lying at the southern tip of the Asian mainland, and East Malaysia situating on the island of Borneo.

Malaysia Overview Asia Market Update  Issue 2  October 2014  p20 Internet retailing – the most dynamic retail channel Malaysia’s broadband Internet penetration rate was 61.1% in 2012170. The Malaysian government hopes this can reach 75% by 2015; it has set up the National Broadband Initiative171 to achieve this goal172.

Internet sales in Malaysia reached US$0.4 billion (1.2 billion ringgit) in 2013, enjoying a strong yoy growth rate of 14.4%. Sales are expected to reach US$0.6 billion (1.9 billion ringgit) in 2018, with a CAGR of 9.5%173. For Malaysian online shoppers, reasons for shopping online over physical stores are essentially to save time and money174.

Although Internet sales currently account for less than 1% of Malaysia’s total retail sales, online retailing represents a fast growing channel. According to a survey conducted by TNS Research for Google, 43% of Malaysian respondents who have never purchased online said they would give it a try over the next 12 months175. International brands such as Dell and Amazon have established a strong foothold in the Malaysian online market for some years. Huawei, a leading phone maker in China has launched an online store in Malaysia this year176. Local retail giants, such as Parkson, the largest local department store operator, have also established online stores to capture more consumers.

As more entrants are expected, competition will intensify.

According to the 2014 budget announced by the Malaysian government in last October, US$0.5 billion (1.5 billion ringgit) will be earmarked to increase Internet coverage in rural areas across the country over the next three years. About US$264.7 million (850 million ringgit) will be spent on laying underwater cables (across the South China Sea) to increase Internet coverage to Sabah and Sarawak177. With improving telecommunications infrastructure and higher Internet penetration rate, the Internet retailing market is set to surge over the coming years.

Malaysia In the news Asia Market Update  Issue 2  October 2014  p21 Statistics GDP growth registers 6.4% yoy in 2Q14 Malaysia’s GDP growth rose to 6.4% in 2Q14 from 6.2% 1Q14 due to improving external demand178.

 See Exhibit 9. Exhibit 9 | Real GDP growth of Malaysia, 2Q13-2Q14 Source: Department of Statistics of Malaysia Retail sales up by 4.9% yoy in 1Q14 According to Retail Group Malaysia, retail sales rose by 4.9% in 1Q14. The growth momentum will likely sustain in 2Q14 due to the boost by the World Cup in June 2014179.  See Exhibit 10. Exhibit 10 | Retail sales growth in Malaysia, 1Q13 – 1Q14 Source: Retail Group Malaysia CPI climbs to 110.5 in August 2014 Malaysia’s consumer price index (CPI) rose 3.3% yoy to 110.5 in August 2014, mainly due to increase in food prices and utility rates180.

 See Exhibit 11.

Exhibit 11 | Consumer price index in Malaysia, Sep 2013 – Aug 2014 Source: Department of Statistics of Malaysia CSI rises to 100.1 in 2Q14 Consumer sentiments index (CSI) went up by 3.3 points to 100.1 in 2Q14 from the previous quarter181. The rise is believed to be associated with the better income expectation of the Malaysians182. See Exhibit 12. Exhibit 12 | Consumer sentiments index in Malaysia, 2Q13 – 2Q14 Source: Malaysian Institute of Economic Research 4.3% 5.0% 5.1% 6.2% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 2Q13 3Q 4Q 1Q14 7.5% 4.6% 3.1% 0.0% 2.0% 4.0% 6.0% 8.0% 1Q13 2Q 3Q 4Q Malaysia In the news Asia Market Update  Issue 2  October 2014  p21 Statistics GDP growth registers 6.4% yoy in 2Q14 Malaysia’s GDP growth rose to 6.4% in 2Q14 from 6.2% 1Q14 due to improving external demand178.

 See Exhibit 9.

Exhibit 9 | Real GDP growth of Malaysia, 2Q13-2Q14 Source: Department of Statistics of Malaysia Retail sales up by 4.9% yoy in 1Q14 According to Retail Group Malaysia, retail sales rose by 4.9% in 1Q14. The growth momentum will likely sustain in 2Q14 due to the boost by the World Cup in June 2014179.  See Exhibit 10. Exhibit 10 | Retail sales growth in Malaysia, 1Q13 – 1Q14 Source: Retail Group Malaysia CPI climbs to 110.5 in August 2014 Malaysia’s consumer price index (CPI) rose 3.3% yoy to 110.5 in August 2014, mainly due to increase in food prices and utility rates180.  See Exhibit 11.

Exhibit 11 | Consumer price index in Malaysia, Sep 2013 – Aug 2014 Source: Department of Statistics of Malaysia CSI rises to 100.1 in 2Q14 Consumer sentiments index (CSI) went up by 3.3 points to 100.1 in 2Q14 from the previous quarter181.

The rise is believed to be associated with the better income expectation of the Malaysians182. See Exhibit 12. Exhibit 12 | Consumer sentiments index in Malaysia, 2Q13 – 2Q14 Source: Malaysian Institute of Economic Research 6.2% 6.4% 1Q14 2Q 3.1% 4.5% 4.9% 4Q 1Q14 107.9 108.3 108.6 108.9 109.5 109.8 106.5 107.0 107.5 108.0 108.5 109.0 109.5 110.0 110.5 111.0 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 109.7 102.0 0.0 20.0 40.0 60.0 80.0 100.0 120.0 2Q13 3Q 4Q Malaysia In the news Asia Market Update  Issue 2  October 2014  p21 Statistics GDP growth registers 6.4% yoy in 2Q14 Malaysia’s GDP growth rose to 6.4% in 2Q14 from 6.2% 1Q14 due to improving external demand178.

 See Exhibit 9.

Exhibit 9 | Real GDP growth of Malaysia, 2Q13-2Q14 Source: Department of Statistics of Malaysia Retail sales up by 4.9% yoy in 1Q14 According to Retail Group Malaysia, retail sales rose by 4.9% in 1Q14. The growth momentum will likely sustain in 2Q14 due to the boost by the World Cup in June 2014179.  See Exhibit 10. Exhibit 10 | Retail sales growth in Malaysia, 1Q13 – 1Q14 Source: Retail Group Malaysia CPI climbs to 110.5 in August 2014 Malaysia’s consumer price index (CPI) rose 3.3% yoy to 110.5 in August 2014, mainly due to increase in food prices and utility rates180.  See Exhibit 11.

Exhibit 11 | Consumer price index in Malaysia, Sep 2013 – Aug 2014 Source: Department of Statistics of Malaysia CSI rises to 100.1 in 2Q14 Consumer sentiments index (CSI) went up by 3.3 points to 100.1 in 2Q14 from the previous quarter181.

The rise is believed to be associated with the better income expectation of the Malaysians182. See Exhibit 12. Exhibit 12 | Consumer sentiments index in Malaysia, 2Q13 – 2Q14 Source: Malaysian Institute of Economic Research 108.9 109.5 109.8 109.9 109.9 110.0 110.2 110.3 110.5 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 82.4 96.8 100.1 4Q 1Q14 2Q

Malaysia In the news Asia Market Update  Issue 2  October 2014  p22 E-commerce Malaysians are keen to shop online According to a survey conducted by TNS Research for Google, 43% of the Malaysian respondents who have never purchased online said they would give it a try over the next 12 months. Half of these respondents indicated that they would choose apparel items as their first online purchase183. When asked about the most important factor for online shopping, saving time and money are the mostly mentioned184.

Huawei opens an online store Chinese phone maker Huawei has launched an online store in Malaysia, Vmall.my, exclusively for Malaysians.

The store sells Huawei smart phones, wireless Internet access devices, tablets and accessories. Products will be delivered in three to five working days after placing orders185. Uniqlo goes online in Malaysia Uniqlo, the leading fast fashion retailer in Japan, launched its online store in Malaysia in September 2014. The brand will offer exclusive promotions at the online store. Uniqlo currently runs 21 physical stores in Malaysia186. Home shopping TV Direct sets sights on Malaysia TV Direct, a leading TV shopping operator in Thailand, in partnership with Telekom Malaysia, a Malaysian telecommunications operator, launched its first home shopping channel in Malaysia in June 2014.

The channel runs 24 hours a day, broadcasting via Internet Protocol TV system operated by Telekom Malaysia. The operator expects the new channel to reach 5 million people in future187.

Astro to launch home shopping channel Astro Malaysia, a dominant pay-TV company in Malaysia, will launch a new home shopping channel in late 2014 or early 2015. The new channel plans to sell lifestyle and home products at the initial stage. The channel will be available on the Internet as well188. Department stores Parkson to buy 60% stake in Giftmate Parkson, a retail giant in Malaysia, is venturing into the gift sector. The company is buying a 60% stake in Giftmate for 8 million ringgit. Giftmate produces premium gift related products such as gold plated gift items189. The retailer believes the acquisition will enrich the product portfolio of the group's shopping mall and online shopping operations190.

Supermarkets Mydin to open another 25 hypermarkets by 2018 Mydin, one of the major retail operators in Malaysia, plans to add another 25 hypermarkets in Malaysia over the next four years191. Mydin currently operates more than 90 retail outlets nationwide including 17 hypermarkets, 16 shopping malls, three bazaars, 48 minimarkets and eight convenience shops192. Convenience stores 7-Eleven Malaysia lists in Malaysia 7-Eleven Malaysia listed on Bursa Malaysia, the stock exchange in Malaysia, in June 2014. The company plans to invest 40 million ringgit to construct a new distribution centre, which will commence operation by end 2015193.

7-Eleven plans rapid rollout 7-Eleven Malaysia plans to invest 520 million ringgit to accelerate expansion in Malaysia. It will add around 600 new stores by 2016. As of March 2014, 7-Eleven ran a total of about 1,600 stores across Malaysia, accounting for about 82% of the market share194.

7-Eleven launches new generation of CVS 7-Eleven rolled out a new generation of CVS outlet in Malaysia in June 2014. This new lifestyle concept store has a built-in café and seating area with free Wifi service. Food and beverage

Malaysia In the news Asia Market Update  Issue 2  October 2014  p23 products can be found in the store. The CVS chain plans to open 200 new concept stores in Malaysia over the next three to four years.195. Apparel Parkson to buy 50% stake in Valino Parkson is acquiring a 50% stake in Valino for 3 million ringgit. Valino specialises in menswear and leisure clothing.

Parkson expects the deal to enhance its fashion brand portfolio and the development of the company’s private label business196. Monki makes Malaysian debut Monki, a Scandinavian fashion retailer owned by H&M, opened its first store in Malaysia in April 2014197. Monki currently operates more than 80 stores in countries such as Sweden, Italy, France, Germany, the U.K., Japan and China198. Padini further expands in Malaysia Padini, a Malaysia-based fashion company, plans to add 14 new stores by end of 2015, including seven Padini Concept Stores and seven Brand’s Outlets199. Padini currently manages over 300 stores under nine labels in Malaysia and around the world200.

Bonia steps up overseas expansion Bonia, a Malaysia-based fashion retailer, plans to step up the pace of its overseas expansion, targeting new markets such as China, Thailand and the Philippines to mitigate slower growth at home and Singapore. The company plans to open a total of 10 to 15 stores within its financial year ending 30 June, 2015201. Consumer electronics Courts plans expansion Courts, a Singapore-based consumer electronics and furniture retailer, plans to add six new stores in Malaysia 2014. As of end 2013, the retailer operated a total of 64 stores in Malaysia202. Challenger exits Malaysia Challenger, a Singapore-based consumer electronics retailer, ceased its Malaysian retail operations in June 2014203.

Challenger will focus on its local market, which the company owns a network of over 40 stores204.

Huawei in rapid expansion Huawei has recently announced its expansion plan in Malaysia. It will open new stores to reach a network of 1,000 outlets by end of this year. The company currently operates 271 stores in Malaysia205. Food and beverage Asahi acquires Etika Dairies Asahi, Japan’s leading brewery and soft drink company, has recently acquired Malaysia's Etika Dairies, Malaysia's second largest dairy company, for US$329 million206. Asahi intends to develop dairy-based products as it expects the growth of such products in Malaysia and other Southeast Asian countries to be stable over the coming years.

Asahi will also tap the sales channels of Etika Dairies to boost sales of soft drinks in such markets as Vietnam and Indonesia207. Parkson to acquire 60% stake in AUM Parkson is buying a 60% stake in AUM, a food service operator, for 48 million ringgit208. AUM currently operates a total of 12 brands including Quiznos and The Library Restaurant & Bar. Parkson believes the new food and beverage operations could boost foot traffic in the Parkson department store chains209.

MBG Fruits to double store count by 2017 MBG Fruits, a Malaysia-based fruit retail chain, aims to increase its store counts from 25 to 60 by 2017. The company expects to increase its turnover to 123 million ringgit over the next three years. The company also considers entering new markets such as Indonesia, China and Bangladesh in future210. Pie Face to hit Malaysia Pie Face, an Australian bakery café chain, plans to open at least 50 stores in Singapore and Malaysia over the next five years. Pie Face currently

Malaysia In the news Asia Market Update  Issue 2  October 2014  p24 operates stores in Australia, New Zealand and the U.S.211 SugarBun enters Indonesia SugarBun, a Malaysian fast food chain, opened its first restaurant in Indonesia in July 2014.

The company is expected to open a total of 20 SugarBun outlets in Indonesia by 2018212. Fatburger debuts in Malaysia American fast food chain Fatburger has recently opened its first store in Malaysia213. It is their first stop in Southeast Asia. The company currently operates over 100 outlets in over 20 countries214. Marrybrown to scale up in India Marrybrown, a Malaysia-based fast food chain, has recently unveiled its expansion plan in India. The company plans to increase the number of its outlets from 48 to 75 by the end of this fiscal year. Most of the new stores will be located in tier two and tier three cities in the southern states of India215.

Starbucks sells its Malaysian business Berjaya Food, a leading food and beverage company in Malaysia, is buying a 50% stake of Starbucks’s Malaysian operation from Starbucks Coffee International to make it a wholly-owned operation216. The chain operated a total of 173 outlets as of end April 2014. Berjaya Food plans to add 25 new outlets by April 2015217. F&N to acquire Yoke Food Fraser and Neave (F&N), a Singapore-based food and beverage company, is acquiring Yoke Food, a Malaysian beverage company. Yoke Food sells beverage brands such as Day Day, So Soy and Juice Secret in Malaysia as well as exports its products to other Southeast Asian countries.

F&N expects the acquisition to help strengthen its presence in Indonesia and Cambodia218. Agrobazaar debuts in Singapore Agrobazaar, a Malaysian government funded initiative to promote Malaysian agricultural produce overseas, opened its first store in Singapore in August 2014219. Malaysian Prime Minister Najib Razak and Singapore Prime Minister Lee Hsien Loong officiated at the opening of the store. The store comprises a grocery store, a café and a rooftop restaurant220. PastaMania sets foot in Malaysia PastaMania, the largest Italian restaurant chain in Singapore, opened its first restaurant in Malaysia in September 2014.

The second restaurant is expected to launch in 2Q15221. PastaMania operates about 50 restaurants around the world including Singapore, Malaysia, Brunei, China, Egypt, Kuwait and the U.A.E.222 Home products Spotlight opens in Malaysia Spotlight, an Australian home products store chain, opened its first shop in Malaysia in July 2014. Beddings, curtains, kitchenware and many other home products can be found in the superstore. Spotlight now operates over 100 stores in Australia, New Zealand and Asia223.

Singapore Overview Asia Market Update  Issue 2  October 2014  p25 Singapore is a gateway to Southeast Asia and a preferred destination for foreign investors – it tops the global rankings for ease of doing business224 and best business environment225. With political stability, rule of law, a transparent and clean government, Singapore provides an open and favourable environment for investors. Recovering from the global downturn, Singapore’s GDP is expected to rise from US$297.9 billion226 in 2013 to US$407.9 billion by 2017, with an average real growth rate of 4%227. The nation’s GDP per capita in 2013 recorded US$55,182, registering a year-on-year (yoy) growth rate of 2.2%.

This is the third highest in the Asia Pacific region, after Macau and Australia228.

In 2013, the nation’s retail sales stood at US$24.6 billion (S$31.0 billion), up by 4.7% yoy. According to Euromonitor International, total retail sales will reach US$27.8 billion (S$34.7 billion) by 2018, with a compound annual growth rate (CAGR) of 2.2%229. A very significant presence by foreign retailers reflects the favourable business environment that Singapore offers. Yet, challenges remain. High rental costs due to limited prime retail space have driven some retailers to consider sites in other districts outside central business districts. Increasing labour costs have also prompted some retailers to shorten operating hours or adopt automation strategies230.

The most prominent shopping district in Singapore is Orchard Road. A full range of luxury and international brands have established their presence in shopping malls, such as Paragon, Ion Orchard, Wisma Atria, Mandarin Gallery and Knightsbridge, all along Orchard Road. City Hall, Bugis and Sentosa are some emerging areas providing new retail space. As more residential projects have been completed in suburbs that include Jurong, Paya Lebar, Yishun and Punggol, some retailers such as Robinsons Department Store and H&M have started venturing into these areas to target the mass market231.

Grocery retailers (such as convenience stores, hypermarkets and supermarkets) accounted for 37.0% of the nation’s retail sales in 2013, up by 1.5% yoy232.

Non-grocery retailers (such as department stores and specialist retailers) went well beyond, registering a yoy sales growth of 5.5%. Among the non-grocery retailers, electronics and appliance specialist retailers outperformed the rest, posting a yoy sales growth rate of 7.0%233. Supported by an excellent telecommunications infrastructure and an affluent and tech-savvy citizenry, broadband Internet penetration is high in Singapore: 88.1% in 2013. According to Euromonitor International, the rate will increase to 95.2% by 2030234.

The total value of Internet sales in Singapore amounted to US$0.8 billion (S$960.3 million) in 2013. By category, apparel and footwear was the most popular, accounting for 27.9% of the total. Internet sales are set to increase to US$1.3 billion (S$1,617.6 million) by 2018, with a CAGR of 11.0%235. Market leaders include Amazon, eBay, Rakuten, Zalora and Qoo10. Tourism – a significant boost for the retail sector Tourism is beyond doubt one of the pillar industries of the Singaporean economy. The city ranked second, after Hong Kong, for the Top City Destinations Ranking in 2012236. Travel and tourism directly contributed to 5.3% of the nation’s GDP and supported 4.3% of national Lying off the southern tip of the Malay Peninsula, Singapore is the smallest country in Southeast Asia with a population of about 5.4 million in 2013.

Singapore Overview Asia Market Update  Issue 2  October 2014  p25 Singapore is a gateway to Southeast Asia and a preferred destination for foreign investors – it tops the global rankings for ease of doing business224 and best business environment225. With political stability, rule of law, a transparent and clean government, Singapore provides an open and favourable environment for investors. Recovering from the global downturn, Singapore’s GDP is expected to rise from US$297.9 billion226 in 2013 to US$407.9 billion by 2017, with an average real growth rate of 4%227. The nation’s GDP per capita in 2013 recorded US$55,182, registering a year-on-year (yoy) growth rate of 2.2%.

This is the third highest in the Asia Pacific region, after Macau and Australia228.

In 2013, the nation’s retail sales stood at US$24.6 billion (S$31.0 billion), up by 4.7% yoy. According to Euromonitor International, total retail sales will reach US$27.8 billion (S$34.7 billion) by 2018, with a compound annual growth rate (CAGR) of 2.2%229. A very significant presence by foreign retailers reflects the favourable business environment that Singapore offers. Yet, challenges remain. High rental costs due to limited prime retail space have driven some retailers to consider sites in other districts outside central business districts. Increasing labour costs have also prompted some retailers to shorten operating hours or adopt automation strategies230.

The most prominent shopping district in Singapore is Orchard Road. A full range of luxury and international brands have established their presence in shopping malls, such as Paragon, Ion Orchard, Wisma Atria, Mandarin Gallery and Knightsbridge, all along Orchard Road. City Hall, Bugis and Sentosa are some emerging areas providing new retail space. As more residential projects have been completed in suburbs that include Jurong, Paya Lebar, Yishun and Punggol, some retailers such as Robinsons Department Store and H&M have started venturing into these areas to target the mass market231.

Grocery retailers (such as convenience stores, hypermarkets and supermarkets) accounted for 37.0% of the nation’s retail sales in 2013, up by 1.5% yoy232.

Non-grocery retailers (such as department stores and specialist retailers) went well beyond, registering a yoy sales growth of 5.5%. Among the non-grocery retailers, electronics and appliance specialist retailers outperformed the rest, posting a yoy sales growth rate of 7.0%233. Supported by an excellent telecommunications infrastructure and an affluent and tech-savvy citizenry, broadband Internet penetration is high in Singapore: 88.1% in 2013. According to Euromonitor International, the rate will increase to 95.2% by 2030234.

The total value of Internet sales in Singapore amounted to US$0.8 billion (S$960.3 million) in 2013. By category, apparel and footwear was the most popular, accounting for 27.9% of the total. Internet sales are set to increase to US$1.3 billion (S$1,617.6 million) by 2018, with a CAGR of 11.0%235. Market leaders include Amazon, eBay, Rakuten, Zalora and Qoo10. Tourism – a significant boost for the retail sector Tourism is beyond doubt one of the pillar industries of the Singaporean economy. The city ranked second, after Hong Kong, for the Top City Destinations Ranking in 2012236. Travel and tourism directly contributed to 5.3% of the nation’s GDP and supported 4.3% of national Lying off the southern tip of the Malay Peninsula, Singapore is the smallest country in Southeast Asia with a population of about 5.4 million in 2013.

Singapore Overview Asia Market Update  Issue 2  October 2014  p25 Singapore is a gateway to Southeast Asia and a preferred destination for foreign investors – it tops the global rankings for ease of doing business224 and best business environment225. With political stability, rule of law, a transparent and clean government, Singapore provides an open and favourable environment for investors. Recovering from the global downturn, Singapore’s GDP is expected to rise from US$297.9 billion226 in 2013 to US$407.9 billion by 2017, with an average real growth rate of 4%227. The nation’s GDP per capita in 2013 recorded US$55,182, registering a year-on-year (yoy) growth rate of 2.2%.

This is the third highest in the Asia Pacific region, after Macau and Australia228.

In 2013, the nation’s retail sales stood at US$24.6 billion (S$31.0 billion), up by 4.7% yoy. According to Euromonitor International, total retail sales will reach US$27.8 billion (S$34.7 billion) by 2018, with a compound annual growth rate (CAGR) of 2.2%229. A very significant presence by foreign retailers reflects the favourable business environment that Singapore offers. Yet, challenges remain. High rental costs due to limited prime retail space have driven some retailers to consider sites in other districts outside central business districts. Increasing labour costs have also prompted some retailers to shorten operating hours or adopt automation strategies230.

The most prominent shopping district in Singapore is Orchard Road. A full range of luxury and international brands have established their presence in shopping malls, such as Paragon, Ion Orchard, Wisma Atria, Mandarin Gallery and Knightsbridge, all along Orchard Road. City Hall, Bugis and Sentosa are some emerging areas providing new retail space. As more residential projects have been completed in suburbs that include Jurong, Paya Lebar, Yishun and Punggol, some retailers such as Robinsons Department Store and H&M have started venturing into these areas to target the mass market231.

Grocery retailers (such as convenience stores, hypermarkets and supermarkets) accounted for 37.0% of the nation’s retail sales in 2013, up by 1.5% yoy232.

Non-grocery retailers (such as department stores and specialist retailers) went well beyond, registering a yoy sales growth of 5.5%. Among the non-grocery retailers, electronics and appliance specialist retailers outperformed the rest, posting a yoy sales growth rate of 7.0%233. Supported by an excellent telecommunications infrastructure and an affluent and tech-savvy citizenry, broadband Internet penetration is high in Singapore: 88.1% in 2013. According to Euromonitor International, the rate will increase to 95.2% by 2030234.

The total value of Internet sales in Singapore amounted to US$0.8 billion (S$960.3 million) in 2013. By category, apparel and footwear was the most popular, accounting for 27.9% of the total. Internet sales are set to increase to US$1.3 billion (S$1,617.6 million) by 2018, with a CAGR of 11.0%235. Market leaders include Amazon, eBay, Rakuten, Zalora and Qoo10. Tourism – a significant boost for the retail sector Tourism is beyond doubt one of the pillar industries of the Singaporean economy. The city ranked second, after Hong Kong, for the Top City Destinations Ranking in 2012236. Travel and tourism directly contributed to 5.3% of the nation’s GDP and supported 4.3% of national Lying off the southern tip of the Malay Peninsula, Singapore is the smallest country in Southeast Asia with a population of about 5.4 million in 2013.

Singapore Overview Asia Market Update  Issue 2  October 2014  p26 employment in 2013237. For retailers, tourists comprise a key group of consumers since Singapore has a population of just 5.4 million238. According to the Singapore Tourism Board, a total of 15.6 million international visitor arrivals were recorded in 2013, up by 7% yoy. Tourism receipts totalled US$18.9 billion (S$23.5 billion) in 2013, with a yoy growth rate of 2%239. Indonesia was the largest source of tourists, with over three million Indonesians visiting Singapore in 2013. China followed, with 2.3 million visits. However, China overtakes Indonesia marginally in terms of tourism receipts.

Chinese tourists spent a total of US$2,391.3 million (S$2,981 million) in Singapore in 2013, slightly higher than Indonesians at US$2,388.9 million (S$2,978 million)240. The Singaporean government has launched a variety of measures to enhance its destination appeal, given that tourism has a significant impact on the retail sector, especially the hotel and hospitality segment, food and beverages and other grocery and non-grocery retailing segments. It already provides excellent transport infrastructure, as well as a clean and safe environment appealling to families with kids. But Singapore frequently adds new features to its list of tourist attractions: Singapore Flyer in 2008; Universal Studio in 2010; Marina Bay Sands and Resorts World Sentosa in 2010 (both with gaming facilities) and Gardens by the Bay in 2011.

Singapore also holds international events such as the Singapore Grand Prix (Formula 1 motor racing) and the WTA Finals of tennis to successfully draw high income tourists.

Singapore In the news Asia Market Update  Issue 2  October 2014  p27 Statistics GDP growth registers 2.4% in 2Q14 Singapore’s economy grew by 2.4% yoy in 2Q14, retreating from the rate of 4.8% in the previous quarter241. The drop is attributed to a decline in manufacturing activity242.  See Exhibit 13. Exhibit 13 | Real GDP growth of Singapore, 2Q13-2Q14 Source: Ministry of Trade and Industry of Singapore Retail sales rise by 5.5% yoy in July 2014 Retail sales went up by 5.5% yoy in July 2014, thanks to a jump in sales in motor vehicles243.  See Exhibit 14.

Exhibit 14 | Singapore retail sales index, Aug 2013- Jul 2014 Source: Department of Statistics of Singapore CPI goes up by 0.9% yoy in August 2014 Singapore’s consumer prices growth eased to 0.9% yoy in Aug 2014244, owing to a decline in car prices and the softening housing costs245.

 See Exhibit 15. Exhibit 15 | Consumer price index in Singapore, Sep 2013 - Aug 2014 Source: Department of Statistics of Singapore Consumer confidence index drops slightly in 2Q14 Consumer confidence index in Singapore was 98 in 2Q14, 1 point lower than that of the previous quarter246. The slight dip is likely caused by consumers’ concerns over their job prospects247.  See Exhibit 16.

Exhibit 16 | Nielsen Consumer Confidence Index, Singapore, 2Q13-2Q14 Source: The Nielsen Global Survey 4.0% 5.0% 4.9% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 2Q13 3Q 4Q 1Q14 -7.7% -6.0% -9.7% -8.7% -5.5% 0.1% -9.7% -3.8% -12.0% -10.0% -8.0% -6.0% -4.0% -2.0% 0.0% 2.0% 4.0% 6.0% 8.0% Aug-13 Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 Mar-14 Singapore In the news Asia Market Update  Issue 2  October 2014  p27 Statistics GDP growth registers 2.4% in 2Q14 Singapore’s economy grew by 2.4% yoy in 2Q14, retreating from the rate of 4.8% in the previous quarter241. The drop is attributed to a decline in manufacturing activity242.

 See Exhibit 13. Exhibit 13 | Real GDP growth of Singapore, 2Q13-2Q14 Source: Ministry of Trade and Industry of Singapore Retail sales rise by 5.5% yoy in July 2014 Retail sales went up by 5.5% yoy in July 2014, thanks to a jump in sales in motor vehicles243.  See Exhibit 14.

Exhibit 14 | Singapore retail sales index, Aug 2013- Jul 2014 Source: Department of Statistics of Singapore CPI goes up by 0.9% yoy in August 2014 Singapore’s consumer prices growth eased to 0.9% yoy in Aug 2014244, owing to a decline in car prices and the softening housing costs245.  See Exhibit 15. Exhibit 15 | Consumer price index in Singapore, Sep 2013 - Aug 2014 Source: Department of Statistics of Singapore Consumer confidence index drops slightly in 2Q14 Consumer confidence index in Singapore was 98 in 2Q14, 1 point lower than that of the previous quarter246. The slight dip is likely caused by consumers’ concerns over their job prospects247.

 See Exhibit 16.

Exhibit 16 | Nielsen Consumer Confidence Index, Singapore, 2Q13-2Q14 Source: The Nielsen Global Survey 4.8% 2.4% 1Q14 2Q -9.7% -3.8% -9.0% -5.9% 0.4% 5.5% Mar-14 Apr-14 May-14 Jun-14 Jul-14 1.6% 2.0% 2.6% 1.5% 1.4% 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% Sep-13 Oct-13 Nov-13 Dec-13 Jan-14 Feb-14 95 98 93 94 95 96 97 98 99 100 2Q13 3Q 4Q Singapore In the news Asia Market Update  Issue 2  October 2014  p27 Statistics GDP growth registers 2.4% in 2Q14 Singapore’s economy grew by 2.4% yoy in 2Q14, retreating from the rate of 4.8% in the previous quarter241. The drop is attributed to a decline in manufacturing activity242.

 See Exhibit 13. Exhibit 13 | Real GDP growth of Singapore, 2Q13-2Q14 Source: Ministry of Trade and Industry of Singapore Retail sales rise by 5.5% yoy in July 2014 Retail sales went up by 5.5% yoy in July 2014, thanks to a jump in sales in motor vehicles243.  See Exhibit 14.

Exhibit 14 | Singapore retail sales index, Aug 2013- Jul 2014 Source: Department of Statistics of Singapore CPI goes up by 0.9% yoy in August 2014 Singapore’s consumer prices growth eased to 0.9% yoy in Aug 2014244, owing to a decline in car prices and the softening housing costs245.  See Exhibit 15. Exhibit 15 | Consumer price index in Singapore, Sep 2013 - Aug 2014 Source: Department of Statistics of Singapore Consumer confidence index drops slightly in 2Q14 Consumer confidence index in Singapore was 98 in 2Q14, 1 point lower than that of the previous quarter246. The slight dip is likely caused by consumers’ concerns over their job prospects247.

 See Exhibit 16.

Exhibit 16 | Nielsen Consumer Confidence Index, Singapore, 2Q13-2Q14 Source: The Nielsen Global Survey 1.4% 0.4% 1.2% 2.5% 2.7% 1.8% 1.2% 0.9% Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 97 99 98 4Q 1Q14 2Q

Singapore In the news Asia Market Update  Issue 2  October 2014  p28 E-commerce Alibaba buy 10.35% stake in Singapore Post Singapore Post (SingPost), Singapore’s major postal service provider, and Alibaba, the China- based e-commerce giant, have entered into an agreement in May 2014. Alibaba will buy a 10.35% stake in SingPost for US$249 million.

SingPost will be able to leverage on Alibaba's customer base to scale up its regional e-commerce logistics operations248. Supermarkets Sheng Siong to tap China market Sheng Siong, a leading supermarket operator in Singapore, entered into an agreement with Kunming LuChen Group, a Chinese sauce and condiment producer, on 21 August, 2014 to set up a joint venture company (JV) to operate supermarkets in China. Sheng Siong will hold a 60% stake in the JV, while LuChen Group and Sheng Siong’s executive directors will hold 30% and 10%, respectively249.

NTUC FairPrice scales up online services NTUC FairPrice, a leading retailer in Singapore, launched a new service in September 2014, which allows customers to order items online and collect the items at their preferred Fairprice store. Only two physical stores are available for such service for the time being. The number will grow to 20 by 3Q15. NTUC FairPrice is the first supermarket operator in Singapore to implement this service250. NTUC Fairprice to build logistics center NTUC Fairprice plans to allocate S$250 million and build a huge logistics center in Singapore for better supply chain efficiency amid rising operating costs.

The facility, featuring a sorting system, will finish by end 2014. The retailer currently operates more than 280 locations in Singapore, including supermarkets, convenience stores and hypermarkets251. Accessories Ulysse Nardin opens largest Asian store in Singapore Ulysse Nardin, a Swiss luxury watch manufacturer, opened its largest Asian store in Marina Bay Sands in Singapore in April 2014. The store, spanning 1,000 square feet, is operated in partnership with The Hour Glass, a leading luxury retail group based in Singapore252. Apparel Tom Ford debuts in Singapore Tom Ford, a fashion brand from the U.S., set up its first store in Marina Bay Sands in Singapore with FJ Benjamin, a leading apparel retailer in Singapore, in May 2014.

The debut store features a full range of Tom Ford products for both men and women, from apparel, leather goods to perfumes and eyewear253. FJ Benjamin also plans to expand Tom Ford to Indonesia in 2015254. George to ramp up Singapore footprint George, a budget fashion label owned by the British supermarket chain Asda, plans further expansion in Singapore. Having made its debut in Singapore in August 2013, George plans to open another two stores in Jurong Point and Tiong Bahru Plaza in Singapore in future255. Uniqlo rolls out e-commerce platforms in Singapore Uniqlo, the world’s leading fast fasion retailer from Japan, announced to launch its first Southeast Asian e-commerce and m-commerce platforms in Singapore in September 2014.

The brand considers Singapore as an ideal springboard to tap other Southeast Asian markets, such as Malaysia, Indonesia and Thailand, in future256.

Consumer electronics Challenger exits Malaysia

Singapore In the news Asia Market Update  Issue 2  October 2014  p29 Challenger, a Singapore-based consumer electronics retailer, ceased its Malaysian retail operations in June 2014257. Challenger will focus on its local market, which the company owns a network of over 40 stores258. Asustek rolls out online store in Singapore Asustek, a Taiwan-based PC vendor, debuted its official online store in Singapore in July 2014259. The online store in Singapore merely sells smartphone products for the time being.

The PC vendor also plans to open online stores in other Southeast Asian markets, including Hong Kong, Malaysia, Thailand, Indonesia, Vietnam and the Philippines by end 2014260.

Courts Asia to build 10-12 megastores in Indonesia in next five years PT Courts Retail Indonesia, an affilate of Courts Asia, a Singaporean electronics and furniture retailer, plans to build 10 to 12 megastores in Indonesia for the next five years. The retailer will open its first megastore in Bekasi, West Java in October 2014261. Food and beverage Temasek invests in The Cocoa Trees Temasek, the Singapore government-owned investment arm, has injected an undisclosed sum in The Cocoa Trees, a Singapore-based chocolate chain, to cash in on the prominent growth in Asia’s travel retail sector. The capital from Temask will fund The Cocoa Trees’s expansion of its retail network in railway stations, airports and cruise liners262.

LVMH acquires Crystal Jade L Capital Asia, a private equity firm under French luxury group LVMH, has agreed to acquire a 90% stake in Crystal Jade263, a Singapore-based Chinese restaurant group. The deal is estimated to cost about US$100 million. The takeover allows the resturant chain to capitalise on LVMH’s expertise in marketing and branding as well as its relationships with landlords worldwide to expedite overseas expansion264. PastaMania to expand China presence PastaMania, the largest Italian restaurant chain in Singapore, plans to increase its presence in China. The company will open its third store in Huangpu, Shanghai in 4Q14.

Furture openings are planned in other districts in Shanghai including Jingan, Changning and Wujiaochang265.

PastaMania sets foot in Malaysia PastaMania opened its first restaurant in Malaysia in September 2014. The second restaurant is expected to launch in 2Q15266. PastaMania operates about 50 restaurants around the world including Singapore, Malaysia, Brunei, China, Egypt, Kuwait and the U.A.E.267 Pie Face to hit Singapore Pie Face, an Australian bakery café chain, plans to open at least 50 stores in Singapore and Malaysia over the next five years. Pie Face currently operates stores in Australia, New Zealand and the U.S.268 Fatburger to enter Singapore America-based burger chain Fatburger and its sister brand Buffalo’s Café, have signed a deal with Eftech Lifestyle, a food and beverage, real estate, oil and gas conglomerate in Singapore, to bring 10 co-branded lcoations to Singapore.

Both the resturants will offer their diverse menu items at each of the location269.

Ya Kun hits Hong Kong Ya Kun, a café restaurant chain from Singapore, opened its debut store in Tsim Sha Tsui270, Hong Kong in June 2014271. Ya Kun plans to open about 30 outlets in Hong Kong within three to five years272. It also considers opening outlets in Thailand and Cambodia in future273. Putien sets foot in Hong Kong Putien, a Singapore-based restaurant specialised in Fujian Putian cuisine, set up its first store in Hong Kong in July 2014. The resturant plans to open two stores every year in the city in a long run. Putien currently operates nine branches in Singapore plus four overseas branches in Malaysia and Indonesia274.

Singapore In the news Asia Market Update  Issue 2  October 2014  p30 Peninsula Boutique debuts in Singapore The Peninsula Hotels, the world’s leading hotel chain, opened its first boutique in Singapore in July 2014275. The boutique offers the finest selection of delicacies (e.g. chocolates and cookies) and carry exclusive merchandise from the Peninsula Hotels. Besides Singapore, Peninsula Boutique has also established a presence in Hong Kong, Beijing, Japan and Taiwan276. BreadTalk to further expand in Thailand BreadTalk, a leading bakery chain in Singapore, entered into an agreement in July 2014 with Minor Food Group (MFG), a chain restaurant operator in Thailand to set up a 50:50 joint venture company (JV), BTM Thailand, to run bakery business under the name BreadTalk in Thailand277.

BreakTalk will leverage on MFG’s infrastructure in Thailand and increase the store count from 23 to 100 in five years278. Panasonic develops first indoor farm in Singapore Panasonic, Japan’s consumer electronics conglomerate, has developed its first indoor vegetable farm at its factory in Singapore. It is also the first licensed indoor vegetable farm in Singpaore. The company started selling the vegetable to a Japanese restaurant chain in Singapore in July 2014. It aims to grow over 30 crop varieties by March 2017 and take up around 5% of local vegetable production279. Global Food acquires Wendys Global Food, a subsidiary of Singapore-based multi-platform solutions company Global Yellow Pages280, has acquired an Australia-based ice cream chain Wendys at A$10 million.

Global Food looks to grow Wendys in Asia, especially China, in future281.

Agrobazaar debuts in Singapore Agrobazaar, a Malaysian government funded initiative to promote Malaysian agricultural produce overseas, opened its first store in Singapore in August 2014282. Singapore Prime Minister Lee Hsien Loong and Malaysian Prime Minister Najib Razak officiated at the opening of the store. The store comprises a grocery store, a café and a rooftop restaurant283. F&N to acquire Yoke Food Fraser and Neave (F&N), a Singapore-based food and beverage company, is acquiring Yoke Food, a Malaysian beverage company. Yoke Food sells beverage brands such as Day Day, So Soy and Juice Secret in Malaysia as well as exports its products to other Southeast Asian countries.

F&N expects the acquisition to help strengthen its presence in Indonesia and Cambodia284. F&N to increase stake in Vietnam’s dairy giant F&N announced in August 2014 that it will acquire an additional 15 million shares in Vietnam Dairy Products Joint Stock (Vinamilk), the largest dairy company in Vietnam, raising its stake to 11.04%285. Currently, Vinamilk exports its dairy products to countries such as Cambodia, the Philippines, Australia, Iraq and the U.S.286 F&N will leverage on Vinamilk’s worldwide network for its international expansion.

References Asia Market Update  Issue 2  October 2014  p31 Appendix – Asia Data Snapshots Appendix Exhibit 17 | Basic data of selected economies in the Asia Pacific region, 2013 Population (million) GDP (US$ billion) GDP per capita (US$) Real GDP growth (%) Consumer price inflation (av.%) China 1,357.4 9,240.3 6,807 7.7 2.6 Japan 127.3 4,901.5 38,492 1.5 0.4 South Korea 50.2 1,304.6 25,977 2.8 1.3 Taiwan 23.4 489.1 20,952 2.1 0.8 Thailand 67.0 387.3 5,779 2.9 2.2 Malaysia 29.7 312.4 10,514 4.7 2.1 Singapore 5.4 297.9 55,182 4.1 2.4 Source: Related government departments of respective economies, World Bank, Bank of Korea, Siam Commercial Bank, OECD Development Centre Exhibit 18 | Retail sales of selected economies in the Asia Pacific region, 2013 Retail sales (US$ billion) yoy growth (%) Internet sales (US$ billion) yoy growth (%) Share of Internet sales in retail sales (%) China 1,791.1 11.0 100.3 43.4 5.6 Japan 1,021.5 0.7 42.7 9.6 4.2 South Korea 222.7 3.3 28.8 10.0 12.9 Taiwan 92.2 2.7 6.5 11.0 7.0 Thailand 80.8 6.1 0.8 18.0 1.0 Malaysia 51.5 3.8 0.4 14.4 0.7 Singapore 24.6 4.7 0.8 12.3 3.1 Source: Euromonitor International

References Asia Market Update  Issue 2  October 2014  p32 References 1 “Taiwan country forecast.” July 2014. Economist Intelligence Unit. 2 “Taiwan country forecast.” July 2014. Economist Intelligence Unit. 3 “Retailing in Taiwan.” June 2014. Euromonitor International. 4 ECFA is a trade pact between Taiwan and China in 2010. Besides trade in goods liberalisation measures, travel restrictions on mainland tourists were also eased. 5 “Grocery retailers in Taiwan.” June 2014. Euromonitor International.

6 “Retailing in Taiwan.” June 2014. Euromonitor International. 7 “Technology, communications and media: Taiwan.” August 2014.

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12 “President Chain Store Corp in retailing (Taiwan).” June 2014. Euromonitor International. 13 “President Chain Store – Well positioned for e-commerce challenges.” 7 August, 2014. Barclays. 14 “GDP: Advance estimate of 2014Q2.” 31 July, 2014. National Statistics of Taiwan. http://eng.stat.gov.tw/ct.asp?xItem=36210&ctNode=3274. 15 “The price indices for August 2014.” 5 September, 2014. Directorate General of Budget, Accounting & Statistics of Taiwan.

http://eng.dgbas.gov.tw/ct.asp?xItem=36420&ctNode=3339 &mp=2. 16 “Taiwan’s CPI hits 18-month high in August.” 5 September, 2014. Focus Taiwan.

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22 “Fubon Multimedia Technology Co Ltd joint venture to begin business.” 26 June, 2014. Reuters. http://in.reuters.com/finance/stocks/8454.TWO/key- developments/article/3018262. 23 “Momo kick-starts Momomall, aiming at IPO next year.” 24 July, 2014. Momo website. http://www.fmt.com.tw/index.php?option=com_content&vi ew=article&id=405:07-24-14-momo-&catid=31:2010-03-22- 08-45-28&Itemid=107. 24 “PChome to expand third-party payment in 3Q2014.” 8 May, 2014. Business Next.

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32 “Draft bill passed regulating online payment services.” 5 September, 2014. The China Post. http://www.chinapost.com.tw/business/asia- taiwan/2014/09/05/416500/Draft-bill.htm.

33 “Eslite Spectrum (2926 TT): A relatively quiet year ahead.” 13 May, 2014. Fubon Research. 34 “Pacific Department Store plans expansion.” 18 August, 2014. Inside Retail Asia. http://insideretail.asia/2014/08/18/pacific-department- store-plans-expansion/. 35 “Shin Kong boosts China footprint.” 5 September, 2014. Inside Retail Asia.

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39 “Easycard partnership expected to boost FamilyMart: Morgan Stanley.” 26 August, 2014.

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47 “Report on MedFirst (4175 TT).” 23 April, 2014. JihSun Securities. 48 “MedFirst (4175 TT): Medical supplies channel, aging population concept stock.” 23 April, 2014. Fubon Research. 49 “Watson’s targets two-fold growth with online store.” 3 April, 2014. Taipei Times. http://www.taipeitimes.com/News/biz/archives/2014/04/ 03/2003587128. 50 “Watson’s targets two-fold growth with online store.” 3 April, 2014. Taipei Times. http://www.taipeitimes.com/News/biz/archives/2014/04/ 03/2003587128.

51 “Poya Co Ltd - Winning the fight for the retail $.” 28 July, 2014. CIMB. 52 “Poya (5904 TT) sale and profit to hit new highs on 4th- gen store growth.” 22 July, 2014.

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61 “CoCo plans to open 500 outlets this year.” 21 February, 2014. The China Times. http://www.chinatimes.com/newspapers/20140221000138 -260204. 62 “Tim Ho Wan plans to open 10 outlets.” 30 July, 2014. Taipei Times. http://www.taipeitimes.com/News/biz/archives/2014/07/ 30/2003596213. 63 “Quiznos targets 100 Taiwan stores.” 15 September, 2014. Inside Retail Asia. http://insideretail.asia/2014/09/15/quiznos-targets-100- taiwan-stores/. 64 “About us.” Quiznos website (accessed 22 September, 2014). http://global.quiznos.com/about-us/.

65 “Iittala’s first Taiwan store opens in June.” 16 April, 2014.

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106 “Thai Robins opens in Hanoi.” 23 April, 2014. Inside Retail Asia. http://www.insideretail.asia/2014/04/23/thai-robins- opens-in-hanoi/. 107 “Robins Department Store officially coming to HCMC.” 7 July, 2014. Vietnam Breaking News. http://www.vietnambreakingnews.com/2014/07/robins- department-store-officially-coming-to-hcmc/. 108 “Retailers restart expansion plans.” 3 September, 2014. Bangkok Post. http://www.bangkokpost.com/business/news/430180/reta ilers-restart-expansion-plans.

109 “Thailand's Platinum Group eyes up to 6B Thai baht IPO.” 4 August, 2014. World News Report. http://world.einnews.com/article/216910643/NsYF3brvgG ndTYv-.

110 “New malls planned for Thailand.” 6 April, 2014. Inside Retail Asia. http://www.insideretail.asia/2014/03/06/new- malls-planned-for-thailand/. 111 “Siam Retail keeps faith in Thailand with Bt20 bn stake over 6 years.” 6 March, 2014. Nationmultimedia.com. http://www.nationmultimedia.com/business/Siam-Retail- keeps-faith-in-Thailand-with-Bt20-bn-s-30228470.html. 112 “Big C’s strong Q2 performance shows 3.8% sales growth and net income 1,889 million baht or 20.4% growth.” 28 July, 2014. Tivarati.com.

http://www.tivarati.com/stock/154648/. 113 “Foodland seeks faster growth.” 4 September, 2014. Planet Retail. 114 “7-Eleven Thailand set to expand.” 5 March, 2014. Inside Retail Asia. http://www.insideretail.asia/2014/03/05/7-eleven- thailand-set-to-expand/. 115 “FamilyMart to boost expansion in Thailand.” 1 March, 2014. Inside Retail Asia. http://insideretail.asia/2013/03/01/familymart-to-boost- expansion-in-thailand/. 116 “Battles in Bangkok – Tesco talks tough on Thai c-store expansion.” 29 January, 2014. Planet Retail. 117 “Tesco Lotus ready to take on 7-Eleven.” 13 August, 2014. Bangkok Post.

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References Asia Market Update  Issue 2  October 2014  p35 122 “Australian bag maker debuts in Thailand.” 22 July, 2014. Inside Retail Asia. http://insideretail.asia/2014/07/22/australian-bag-maker- debuts-thailand/. 123 “Antony Morato to expand to Thailand.” 28 January, 2014.

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127 “Watsons plans major push in Thailand ahead of AEC.” 2 May, 2014. Retail in Asia. 128 “Three execs take over TFS (Thailand), plan more The Face Shop outlets.” 24 July, 2014. The Nation. http://www.nationmultimedia.com/business/Three-execs- take-over-TFS-(Thailand)-plan-more-The-30239283.html. 129 “The Face Shop Thailand sold.” 27 July, 2014. Inside Retail Asia. http://insideretail.asia/2014/07/27/face-shop- thailand-sold/. 130 “Beauty Community - A recovery of great beauty.” 26 June, 2014. Bualuang Securities.

131 “Pena House segues into Luce skincare products.” 16 July, 2014. TMC net.com.

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145 “Itochu agrees to $1.9 Billion food tie-up with CP Pokphand.” 24 July, 2014. Bloomberg. http://www.bloomberg.com/news/2014-07-24/itochu- agrees-billion-dollar-food-tie-up-with-charoen- pokphand.html.

146 “Charoen Pokphand Foods Public - Itochu to buy 23.75% in CPP; net-positive.” 25 July, 2014. Credit Suisse. 147 “Latte-loving Thais spur coffee chain battle.” 17 March, 2014. Nikkei Asian Review. http://asia.nikkei.com/Business/Consumers/Latte-loving- Thais-spur-coffee-chain-battle.

148 “True for all: Thai coffee franchise to expand in neighboring countries.” 3 March, 2014. Coconuts Bangkok. http://bangkok.coconuts.co/2014/03/03/true-all-thai- coffee-franchise-expand-neighboring-countries. 149 “Hawaiian burger chain to enter Thailand.” 10 September, 2014. Inside Retail Asia. http://insideretail.asia/2014/09/10/hawaiian-burger- chain-enter-thailand/. 150 “Thai Union Group announces the acquisition of “King Oscar” the brand with over 140 years of Norwegian heritage.” 15 September, 2014. TUF website. http://www.thaiuniongroup.com/en/newsroom/press- releases.ashx.

151 “TUF and its subsidiary MW Brands announce an agreement to acquire MerAlliance – A leading smoked salmon producer in European.” 4 September, 2014.

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References Asia Market Update  Issue 2  October 2014  p36 159 “Malaysian rate hike signals new trend.” 25 July, 2014.

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253 “Tom Ford opens first store in Singapore.” 6 May, 2014. Retail in Asia. 254 “Tom Ford debuts in Singapore.” 6 May, 2014. Inside Retail Asia. http://www.insideretail.asia/2014/05/06/tom-ford-debuts- in-singapore/. 255 “Asda’s George in Singapore expansion.” 21 May, 2014. Inside Retail Asia. http://www.insideretail.asia/2014/05/21/asdas-george-in- singapore-expansion/. 256 “Uniqlo to launch the first South East Asian e-commerce service in Singapore.” 22 August, 2014. Uniqlo.com. http://www.uniqlo.com/sg/corp/pressrelease/2014/08/uni qlo_to_launch_the_first_sou.html.

257 “Challenger: Cessation of retail operations in Malaysia.” 5 March, 2014.

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260 “Asustek eyes online sales in Southeast Asia.” 30 June, 2014. The China Post. http://www.chinapost.com.tw/business/company- focus/2014/06/30/411272/Asustek-eyes.htm. 261 “Local unit of S’pore retail invests in RI.” 30 August, 2014. The Jakarta Post. http://www.thejakartapost.com/news/2014/08/30/local- unit-s-pore-retailer-invests-ri.html. 262 “Singapore's Temasek invests in travel-focused chocolate chain.” 29 April, 2014. Reuters. http://www.reuters.com/article/2014/04/21/temasek- holdings-cocoatrees-idUSL3N0ND1LI20140421. 263 “French luxury group taking over Crystal Jade.” 30 April, 2014.

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267 “Location.” PastMania website (accessed 24 September, 2014).

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268 “Pie Face signs 50 store deal, makes entry into Singapore and Malaysia markets.” 18 June, 2014. Ausfood News. http://ausfoodnews.com.au/2014/06/18/pie-face-signs-50- store-deal-makes-entry-into-singapore-and-malaysia- markets.html. 269 “US restaurants to set up in Singapore.” 29 May, 2014. Inside Retail Asia. http://www.insideretail.asia/2014/05/29/us-restaurants- to-set-up-in-singapore/.

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