According to Hong Kong media news on the 11th, Lu Kai, chief financial officer of Salsa (00178), revealed that in addition to mainland visitors to Hong Kong, local customers' spending on cosmetics has also decreased compared with the past, so Sasha may promote online sales performance with lower-end products.
Zhitong Finance learned that Sasha's net profit plunged 54.3% last year to about HK$380 million, but the e-commerce business became a major highlight.
For the year ended March 2016, the turnover of the sasa.com of the Salsa e-commerce platform was 442 million yuan, an increase of 6.2% year-on-year, of which sales in the mainland market increased by 25.9%. Revenue in the Hong Kong and Macau markets fell 14.2%, from HK$7,357 million in FY2015 to HK$6,312 million.
The Group said that the mainland market is in high demand for skincare products and has launched a new Chinese mainland website and a mobile version of the Chinese mainland website, which has increased the flow and conversion rate. Sasha also mentioned that as the warehouse and logistics departments are still operating in Hong Kong, the transportation cost is high and the delivery time is long, so it will focus on customers with strong spending power.
Mr Luk said that the recent strengthening of the Hong Kong dollar has made the local retail industry even more difficult. But he said he would continue to increase the number of boutiques with less than 1,000 square feet to attract consumers.
Zhitong Finance previously reported that Sasha will continue to open branches in Hong Kong, but will concentrate on the local customer market. Salsa will open shops in retail areas that target local customers, especially residential areas, because residential areas are much cheaper to rent than tourist areas. According to the financial report, as of the end of March 2016, the number of Shasha stores in Hong Kong and Macao increased from 287 to 291.
For the future development of Hong Kong's retail industry, Lu Kai believes that its competitiveness can be slowly restored.
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