China News Brief
    February 02, 2024

    Alibaba mulling sale of department store arm, P&G offloads Sassoon brand in China, and retail sales rebound in Hong Kong.
    Alibaba's InTime arm owns 100 stores and malls. Photo: Shutterstock

    Alibaba mulls sale of InTime arm#

    Alibaba Group Holding is reportedly considering  the sale of its InTime department store arm as part of its broader restructuring efforts, signaling a shift in its strategy to dominate both physical and online retail. The company has reached out to potential buyers for the chain of more than 100 stores and malls, initiating discussions around the time when Joseph Tsai took over as CEO in 2023. InTime was valued at approximately $4 billion in a 2017 take-private deal led by Alibaba, but its potential sale comes amid challenges such as a weak post-Covid-19 Chinese consumer rebound. This move reflects Alibaba's renewed focus on core businesses like e-commerce and cloud services as it reshuffles its top management and reevaluates its diverse portfolio.

    P&G sells Sassoon brand in China#

    After acquiring Shiseido's hair care business, Henkel Group, the parent company of Schwarzkopf, announced yesterday that it has signed an agreement with Procter & Gamble (P&G) to acquire  the Sassoon brand and related hair care business in Greater China. However, specific financial details of the transaction have not been disclosed. Sassoon entered China officially in 1997 and established the first hairdressing academy in Asia in Shanghai in 2001. In the fiscal year 2023, Sassoon achieved sales exceeding $244 million (200 million euros). After the completion of the transaction, this move will further strengthen Henkel Group’s leadership position in the high-end hair care market.

    Coupang acquires Farfetch#

    On January 30, Coupang, Inc. announced that it had completed  the acquisition of the assets of global online luxury company Farfetch Holdings. By providing access to $500 million in capital, this acquisition allows Farfetch to continue delivering services for its brand and boutique partners, and to more than four million customers around the world.

    Hong Kong retail sales rebound strongly#

    Hong Kong's retail sales growth in December showed  a slowdown, although it didn't significantly impact the strong annual improvement. For the entire year, retail sales increased by 16.2 percent in value and 13.8 percent in volume compared to 2022, with a 5.9 percent decrease in online sales as consumers returned to physical stores post-Covid. December's sales rose by 7.8 percent, slower than November's 15.9 percent rate. When adjusted for price changes, December's sales only grew by 4.8 percent year on year. Rising household income and government efforts to promote events were noted as factors supporting retail businesses. In December, watches and jewelry, apparel, and medicines and cosmetics saw notable growth, while spending in supermarkets and electronics declined. For the whole year, watches and jewelry, apparel, medicines and cosmetics, and footwear and accessories were the main growth categories.

    Singapore visitor numbers up#

    Singapore experienced  a significant rebound in its international visitor arrivals in 2023, doubling to 13.6 million from the previous year, with leading sources being Indonesia, China, and Malaysia, reaching 71 percent of 2019’s levels. Tourism receipts for the year exceeded expectations, ranging from $18.13 billion to $19.24 billion (S$24.5 billion to S$26 billion), surpassing earlier forecasts. The average hotel room rate, at $208.68 (S$282), also exceeded pre-pandemic levels. The tourism industry is expected to continue its recovery in 2024, driven by enhanced global flight connectivity and a 30-day visa-free travel agreement between China and Singapore.

    APAC markets boost Canada Goose’s revenue#

    During the third fiscal quarter ending on December 31 of 2023, Canada Goose's global revenue increased  by 6 percent to over $468 million (600 million CAD). The strong performance in the Chinese market drove a significant 62 percent increase in revenue in the Asia-Pacific region, offsetting challenges the brand faced in European and North American markets. Simultaneously with the financial report release, Canada Goose announced the appointment of Cheng Tengkuan, the former China managing director of Italian luxury watch brand Panerai under Richemont Group, as the president of the China market, effective immediately.

    Adidas posts sales, profit declines#

    Adidas recently released  preliminary performance data for 2023, reporting a 5 percent year-on-year decrease in sales to $26.21 billion (21.43 billion euros), with a gross profit margin of 47.5 percent. Operating profit plummeted by 60 percent to $327.36 million (268 million euros), falling far short of analysts' expectations. The group attributed the performance decline primarily to the suspension of Yeezy product sales and announced plans to sell the remaining Yeezy product inventory at cost in 2024. Following the financial report release, Adidas saw its stock price open with a sharp drop of over 7 percent, resulting in a current market value of $35.38 billion (29 billion euros).

    Dior returns to men’s watch segment#

    Dior is set to reintroduce  the Chiffre Rouge men's watch collection in the first quarter, featuring a total of eight limited-edition timepieces. Prices start at 6,800 euros, approximately $8,296. Notably, this marks Dior's return to the men's watch segment after a gap of 20 years. The first Chiffre Rouge watch was launched in 2004 and was designed by Hedi Slimane, who was the creative director of Dior Homme at the time.