Retailers’ strategy new trend

Given the obstacles facing retailers today, we believe that there is additional, largely complementary sales approach that retailers in some sectors should consider. They can replace underperforming stores and support e-commerce efforts with showrooms. Instead, a showroom offers items for inspection, gives advice on products, and takes orders. The products are then shipped to the customer’s home from some other location. But because retailers still aim to sell from their store inventory, they have to maintain the full range of existing store support infrastructure, making the current arrangement not economically beneficial.

Showrooms work best for differentiated goods. Their counterparts are common goods that consumers are very familiar with and that are essentially the same in every store. Common goods sell well online, but differentiated goods are harder to move via e-commerce; consumers may need or prefer to browse for these items, examine them, and even seek out advice about what to buy. Furthermore, if they do buy, consumers return differentiated goods at much higher rates.

Others business models have all the advantages of a high-end, high-touch retail store. Customers can try on clothing, get plenty of advice, and be enticed with possible accessories and add-ons. At the end of the sales appointment, the goods are ordered online and shipped to the customer at home. This save money by requiring fewer salespeople and having smaller footprints than a traditional retail store. Furthermore, since customer details are recorded in the data system, customers are more likely to make online purchases unassisted in the future, driving customer loyalty and lower returns, even for e-commerce transactions.

This model essentially combines experience retailing and efficient inventory management. The store’s space can be used for displays and visual merchandising and actual goods for sale can be held at a few central fulfillment centers, rather than at numerous retail outlets. Pooling inventory in a small number of warehouses makes forecasting sales volumes and stock levels much easier because volatile demand tends to smooth out over the showroom network.

Since 2005, we help retailers to enter new markets successfully. To expand your business, please contact us.

Why to expand in Asia

Singapore is now the top financial hub in Asia and trails London and New York globally, while Hong Kong slipped to fourth place overall. Both Singapore and Hong Kong feature a low tax environment with strong IP protection, contract enforcement, and dispute resolution, and promote fast and accessible business establishment procedures. As both were once British colonies, their legal systems are familiar and effective for Western investors. While “ease of doing business” is often seen as a euphemism for limited government activity and intervention, in reality effective regulations and government promotions contribute to the countries’ high standings. Although Singapore and Hong Kong are comparable in many areas, each has their own strengths and weaknesses. As a multilingual state using English as its lingua franca to go along with strong Mandarin, Singapore holds a clear communication advantages over Hong Kong, where the primary language is Cantonese.

Singapore is the world’s third most innovative and future-ready economy due to its ability to facilitate people and organizations to drive change, provide quality infrastructure, and promote innovation, growth, and profitability. In contrast, Hong Kong ranked 25th in this survey. Similarly, Singapore’s reign on top of the World Bank’s ease of doing business index spanning over a decade is demonstrative of the city state’s inviting environment for forming and operating businesses.

Although Singapore leads in innovation, Hong Kong has a greater capacity to leverage new listings and is particularly strong in equities and IPOs. While Singapore is known for its business-friendly environment, Hong Kong is similarly competitive in this regard, and surpasses its South East Asian rival in some aspects. For example, Singaporean companies must have at least one director who is a resident of Singapore, whereas in Hong Kong there is no such restriction.

Since 2005 we help companies expand in Asia. Please contact us for more details on our services.

Cambodia business opportunities

According to the Ministry of Commerce, the value of Cambodia’s international trade surged to 22 billion USD last year on double-digit growth of both imports and exports. The figures show total exports topped 10 billion USD in 2016, an 18% increase over a year, while imports grew to 12 billion USD, a 16% year-on-year increase.

9 billion USD of goods, 90% of all exports, were shipped under the Most Favored Nation (MFN) schemes, which allow Cambodian products to enter markets with reduced tariffs. Of these, garments accounted for 6 billion USD and footwear for another 700 million USD, with another 100 million USD in textile products. The remainder comprised 300 million USD in rice and 2 billion USD of other products.

Total exports to the European Union, Cambodia’s biggest market, rose to top 4 billion USD. Strong growth was also recorded in exports to Japan, increasing by 45% to 800 million USD, and China, rising by 50% to 600 million USD. By contrast, exports to the United States remained flat at 2 billion USD.

Meanwhile, leading imports included raw materials to feed the garment industry, vehicles and fuel products. Imports from China rose by 16% last year to 5 billion USD. Imports from Thailand and Vietnam increased by 22% to 2 billion USD and 53% to $1 billion, respectively.

The agricultural sector has taken on a marginal economic role in recent years. The sector will expand by only 2% this year, and remains a crucial source of income for the country’s rural poor. However, even with preferential trade privileges that have helped swell rice exports to the European market, Cambodian producers must improve quality and slash production costs to remain competitive.

The country’s 2 billion USD trade deficit was expected for a country in the throes of rapid development. For now, Cambodia needs many imports such as machinery and construction materials, which are required for the construction of manufacturing facilities and other business operations.

Are you looking to enter the Cambodian market? Our local team will be delighted to help your business expand in the most dynamic economy in South East Asia region.

How to succeed in business partnership

Knowing how to choose a business partner is a key factor in making any growing company successful. A partner can let you leverage their brand to give you more exposure. They could help you win business by offering services that you can’t, while you build out those competencies on your own team. When it works well, a partnership can be just what you need to speed up the growth of your business.

The partnership between a language center and an international business school is a good example of a partnership with mutual benefits. We helped one of our clients to collaborate with a top business school in Singapore to help students reach the necessary languages proficiency for entering the programs. This gave our clients the opportunity of being the leader of the local market. It also allows them to deliver a better experience to their online customers. In return, business school got the benefits of increasing their students’ population.

Partnerships are about getting to market fast, accessing talent and resources as an alternative to an aggressive hiring process. Here are few steps in developing successful partnerships:

  1. Finding the right partner is the same as finding new talents. You’ll be working closely together, so it’s important to have a good connection.
  2. Establishing clear objectives give you benchmarks for measuring a project’s success. Understand what you want to get out of a partnership, and have a solid grasp of your partner’s goals. This will make sure that everyone is aligned on the same vision.
  3. Seeking partners who are experts in a particular area will free you up to focus on your core competencies.
  4. Understanding what makes your business unique will help you negotiate the terms of any agreement. It also helps to determine when you should work with a partner or do the work in house.
  5. Asking a local firm to look for businesses partner with an established track record.
  6. Communicating frequently to talk through any problems.

These steps will keep confidence levels high on both sides, and means you can deal with any unexpected issues or changes swiftly. You are looking at entering a new market and you need a partner? Contact us for more details on our Business Partnership service.

The Comprehensive Economic and Trade Agreement advantages

The Comprehensive Economic and Trade Agreement (CETA) is a trade agreement between the EU and Canada. Negotiations on this agreement started in 2009. The goal is to strengthen the economic cooperation between the two parties, to make it easier to trade and to reinforce the rules based trading system by setting high standards together. The trade deal was approved in a session on 15th February 2017.

This deal will create new opportunities for EU companies by boosting trade and strengthening economic relations. It will make business with Canada easier, remove customs duties, substantially improve access to public contracts, open up new sectors of the Canadian services market, offer predictable conditions for investors, and protect 143 European high quality agri-food products, known as Geographical Indications. Companies in several sectors, in particular small and medium enterprises (SMEs), will also benefit from the gains derived from the elimination of double testing.

Under the terms of the CETA deal, most tariffs will be removed and more geographical indications (GIs) will be recognized. CETA can build bridges, instead of a wall, for the prosperity of citizens and will be a lighthouse for future trade deals all over the world. Thanks to our 11 offices worldwide on 4 continents, we can help companies entering European and Canadian markets successfully. Want to know more about our services? Please contact us.