I just found and included this post in my Monday links collection posts - Emerging Market Links + The Week Ahead (August 19, 2024) https://emergingmarketskeptic.substack.com/p/emerging-markets-week-august-19-2024 Not familiar with this store or stock but this type of store seems to have alot of competition - at least in SE Asia e.g. Daiso, etc and from the picture you included, more geared for higher income places like Singapore and HK...
What do you see as the issue with their store expansion policy? Around half their stores are in the NT, and their stated strategy seems to be aligned with govt / developer focus to increase housing supply in the NT.
I think aligning with developers and building stores around housing estates makes a lot of sense, rather than opening stores in CBDs/commercial locations, industrial or touristy areas. After all, many of the buyers are housewives, domestic helpers, the elderly, etc. Growth in HK is unlikely going to come from a large increase in stores, but perhaps right-sizing store count & closing under-performing stores, increasing ASP and basket sizes, and overseas expansion. Being cautious and highly selective in store expansion, which IH retail has been given store count only went up from 365 in FY19 to 376 as of FY24. is the right strategy in this highly competitive retail market and the structural e-commerce shift.
In Malaysia, Speedmart, K.K. etc (in Indonesia, its Indomaret & Alfamart) have saturated every neighbourhood and housing estate with no frills stores staffed by (I think) mostly guest workers (from the pic in the article, IH Retail's stores seem to be more geared for higher incomes of SG/HK and not selling everyday items) selling every basic food, beverage, household item (cleaning products, light bulbs etc) people buy almost daily + phone loads, ATMs, Shopee payments, bill pay etc to the point they are eating into the grocery stores' core products (although Giant owned by Dairyfarm and other grocery stores usually sells stuff cheaper BUT its also hot in SE Asia - people don't want to walk or will need to drive to a traditional grocery store/hypermart)... If a shophouse owner a few doors down offers a cheaper rent, they pack up and move to that shophouse or if the store is underperforming, they simply close it and reopen somewhere else... Not sure if there are chains in HK doing the same thing...
I think HK/SG are quite different from SEA. For HK specifically, there are established supermarkets (Wellcome, Parknshop etc.), specialty retail stores across bakery chains, confectionary/snacks & beverages etc, convenience stores (7-Eleven, Circle K etc.). E-commerce payments, phone top-ups, bill payments aren't activities conducted in a retail setup in HK, though some do pay bills at convenience stores.
IH Retail mostly sells household (both consumable and durable) goods, with some F&B though that is definitely not their core. They don't really have a competitor with similar scale, but of course competition from smaller independent stores, e-commerce platforms, and competing retailers who happen to sell some of the same products.
I just found and included this post in my Monday links collection posts - Emerging Market Links + The Week Ahead (August 19, 2024) https://emergingmarketskeptic.substack.com/p/emerging-markets-week-august-19-2024 Not familiar with this store or stock but this type of store seems to have alot of competition - at least in SE Asia e.g. Daiso, etc and from the picture you included, more geared for higher income places like Singapore and HK...
What do you see as the issue with their store expansion policy? Around half their stores are in the NT, and their stated strategy seems to be aligned with govt / developer focus to increase housing supply in the NT.
I think aligning with developers and building stores around housing estates makes a lot of sense, rather than opening stores in CBDs/commercial locations, industrial or touristy areas. After all, many of the buyers are housewives, domestic helpers, the elderly, etc. Growth in HK is unlikely going to come from a large increase in stores, but perhaps right-sizing store count & closing under-performing stores, increasing ASP and basket sizes, and overseas expansion. Being cautious and highly selective in store expansion, which IH retail has been given store count only went up from 365 in FY19 to 376 as of FY24. is the right strategy in this highly competitive retail market and the structural e-commerce shift.
In Malaysia, Speedmart, K.K. etc (in Indonesia, its Indomaret & Alfamart) have saturated every neighbourhood and housing estate with no frills stores staffed by (I think) mostly guest workers (from the pic in the article, IH Retail's stores seem to be more geared for higher incomes of SG/HK and not selling everyday items) selling every basic food, beverage, household item (cleaning products, light bulbs etc) people buy almost daily + phone loads, ATMs, Shopee payments, bill pay etc to the point they are eating into the grocery stores' core products (although Giant owned by Dairyfarm and other grocery stores usually sells stuff cheaper BUT its also hot in SE Asia - people don't want to walk or will need to drive to a traditional grocery store/hypermart)... If a shophouse owner a few doors down offers a cheaper rent, they pack up and move to that shophouse or if the store is underperforming, they simply close it and reopen somewhere else... Not sure if there are chains in HK doing the same thing...
I think HK/SG are quite different from SEA. For HK specifically, there are established supermarkets (Wellcome, Parknshop etc.), specialty retail stores across bakery chains, confectionary/snacks & beverages etc, convenience stores (7-Eleven, Circle K etc.). E-commerce payments, phone top-ups, bill payments aren't activities conducted in a retail setup in HK, though some do pay bills at convenience stores.
IH Retail mostly sells household (both consumable and durable) goods, with some F&B though that is definitely not their core. They don't really have a competitor with similar scale, but of course competition from smaller independent stores, e-commerce platforms, and competing retailers who happen to sell some of the same products.