FROM THE DESK OF DEBORAH WEINSWIG

In New York this week, the Fung Global Retail & Technology team hosted an event called Breakfast with the Disruptors: Women-Led Beauty & Fashion Startups, which attracted a standing-room-only crowd of more than 150 women and men. The event was held at Arno Ristorante, a well-known fashion industry meeting place located in the Garment District. The event featured presentations from seven women-led startups that competed for a $2,500 prize offered by event co-sponsor HookLogic, which provides a performance marketing platform for brands to reach in-market shoppers, drive traffic to products and attribute resulting sales. The competition was judged by executives from The Fragrance Foundation, Elizabeth Arden, and Macy’s. The seven participating startups were: en.JOYYE is a social shopping community in which jewelry lovers can enjoy discovering and shopping for socially curated jewelry trends around the world. Site visitors can explore the community, discover new trends, follow their friends and save their finds, as well as help others in need when purchasing featured products. Findmine runs a retailer’s product catalog and merchandiser’s looks through proprietary algorithms and then highlights the retailer’s goods in a perfect outfit for each shopper, which can be displayed on the retailer’s website, in advertisements, in email or in stores. Findmine was selected as the winner of the $2,500 prize. Four Mine, whose founders have 35 years of experience in the jewelry industry, offers a better way for consumers to shop for engagement rings and jewelry online. Customers can select several designs on the site and then receive replicas of those items (made from non-precious materials) to evaluate at home before they make their purchase choice. The Ritualist allows customers to book in-home, professional skincare treatments that range from mini facials to advanced procedures such as microdermabrasion. A highly qualified network of licensed estheticians provides the services. SUPA (formerly SoftSpot) offers a unique plug-and-play sensor system for clothing that monitors biometric and environmental data and automatically connects with the Internet of Things. Manufacturers can easily integrate the sensors into clothing in the form of a zipper. Travel Beauty offers a hyper-curated collection of the best beauty products from around the globe, in the context of a luxury shopping experience featuring a personal shopping concierge, phone product consultation and rich editorial content. We were thrilled to host these women-led startups at our Breakfast with the Disruptors event this week, and we look forward to hosting future events in New York and other cities.

US RETAIL EARNINGS

Source: Company reports

US RETAIL & TECH HEADLINES

Study: Online Shoppers Still Prefer Traditional Platforms over Mobile (June 13) Retailing Today

• In a survey of more than 1,000 US consumers, 72% of respondents said they prefer to use a laptop or desktop to shop online. Only 28% said they prefer to use a tablet or smartphone. In addition, 42% said they have never used a tablet to shop online, while 32% said they have never used a smartphone to shop online.
• Retailers, however, must take into account that frequent online shoppers are 46% more likely to prefer using a tablet or smartphone to a desktop or laptop when shopping online. Popular e-commerce site features include product image zoom (cited by 71% of respondents) and site search (63%), while product recommendations (29%) and featured product listings (24%) are the least used features.

Online Shoppers Want Delivery Faster, Cheaper, Survey Shows (June 13) The Wall Street Journal

• Customers expect to wait an average of 4.8 days for delivery, down from 5.5 days in 2012, according to a survey by supply chain consulting firm AlixPartners. Of the 1,000 US consumers surveyed, more than half said they have never used same-day shipping, but a growing number say free shipping has “greatly” impacted their purchasing decisions.
• Over half of the shoppers polled said they browse products online based on available shipping methods. The results of the survey underline the role of shipping in e-commerce. Retailers are experiencing pressure as they cope with the high cost of delivering goods to homes in a timely manner.

Fashion’s Fraught Relationship with 3D Printing (June 13) Glossy

• 3D printing allows businesses to personalize products, with almost no product waste and no inventory. While it is faster to make 10,000 of a product at once, 3D printing allows for cost-effective customized production and minimizes the risk involved with predicting inventory demand months, if not years, in advance.
• 3D printing also reduces the need for returns, helping the environment by eliminating emissions from shipping products back and forth. However, the impact of 3D printing on other areas of sustainability remains to be seen.

Apple Wants to Use AI to Keep Google off Your iPhone (June 15) Bloomberg

• At the Apple Worldwide Developer Conference this week, the company unveiled new artificial intelligence (AI) capabilities that it hopes will protect its software and services businesses from incursions by Google.
• These updates from Apple—which include an expansion of Siri, automated emoji creation on iMessage and image recognition for use in organizing photos—seem to be in response to Google’s own AI offerings, which include a planned digital assistant, a mobile keyboard and a picture-organizing app.

EUROPE RETAIL EARNINGS

*Global Brands Group's reporting period includes one additional quarter due to change in the group's financial year to March 31, therefore the 15-month reporting period is not directly comparable to the Group’s previous annual results covering the 12-month period ended 31 December 2014. **Poundland acquired 99p Stores in the fiscal year, and converted its stores to the Poundland banner. Source: Company Reports

EUROPE RETAIL HEADLINES

Asda CEO to Step Down, Be Succeeded by Head of Walmart China (June 13) Company press release

• Andy Clarke, President and CEO of British grocer Asda, will resign from his position and be replaced by the head of Walmart’s China unit, Sean Clarke, according to an Asda press release. Andy Clarke will continue with the business until the end of July 2016, after which he will serve as an advisor for the rest of the year.
• Sean Clarke served in a similar role at Walmart China, and will assume his position as President and CEO of Asda on July 11 in the UK.

NorgesGruppen Trialing Online Grocery Shop (June 13) Retailanalysis.igd.com

• Norwegian grocery group NorgesGruppen is set to launch an online grocery trial this week, as part of its Meny retail chain. Some 5,000 customers in Oslo and Akershus will be invited to try out the service.
• The move to offer online shopping is a first for an established Norwegian brick-and-mortar chain, as grocery e-commerce in the country has mainly been driven by pure plays such as Kolonial.no and Marked.no.

Tesco Agrees to Sale of Kipa and Giraffe (June 10) Company press release

• British grocer Tesco has agreed to sell its 95.5% controlling stake in Kipa, its supermarket chain in Turkey, to domestic supermarket chain Migros. After the companies receive the necessary regulatory approvals, the transaction is expected to bring in about £30 million (US$42 million) for Tesco.
• Tesco also announced that it has agreed to sell its Giraffe restaurant chain to Boparan Restaurants, a group that operates several food manufacturing companies and restaurant chains. Tesco bought Giraffe in March 2013.

Metro Group Trialing Robots for In-Store Assistance and Delivery (June 9) Retailanalysis.igd.com

• Germany’s Metro Group is trialing robots from Starship Technologies to carry shoppers’ purchases through a store in Düsseldorf, so that customers can focus on “hands-free” shopping. These autonomous robots are also being trialed to deliver online purchases to customers.
• Starship’s robots operate similarly to self-driving cars and can carry groceries weighing up to 15 kilos (~33 lbs). The tech company has been testing these robots in London’s Greenwich borough in order to understand how effectively they can navigate through crowded streets and urban areas.

Sainsbury’s Sales Rise in First Quarter, but Comps Fall (June 8) Company Press Release

• Sainsbury’s, Britain’s second-biggest grocery retailer, reported a 0.3% increase in retail sales, but a 0.8% decrease in comps, excluding fuel, in the first quarter ended June 4, 2016. Including fuel, total retail sales fell by 0.1% and comps fell by 1.0%.
• The company noted that clothing sales grew by nearly 5% and general merchandise sales grew by more than 5% during the period. It added that, although comparable sales across all channels grew, as did sales volumes, challenging market conditions and food price deflation will impact sales and pricing for the foreseeable future.

ASIA TECH HEADLINES

Japan’s Messaging App Line Confirms IPO to Raise US$917 Million (June 10) TechinAsia

• Messaging app Line kicked off its IPO on June 10. The IPO is scheduled for July 14 and looks to raise US$917 million with an initial share price of US$26.21. The Japanese company plans to dual list on the Tokyo and New York Stock Exchanges. With approximately 175 million shares outstanding and 35 million shares to be newly issued, Line’s public market capitalization is estimated to be US$5.5 billion.
• Line has 218.4 million active users, but its growth has been slowing recently. It added only 13 million new monthly active users last year, while WhatsApp and Facebook Messenger added hundreds of millions.

China Life to Invest US$605 Million in Didi Chuxing (June 13) TechinAsia

• Chinese ride-hailing app Didi Chuxing received a US$605 million investment from China Life, the nation’s biggest insurance company. It is the biggest investment that the company has received since Apple invested US$1 billion in it last month.
• China Life will invest US$300 million in equity and US$305 million as long-term debt. China Life is also an investor in Uber.

Car Marketplace Carro to Accelerate Through Southeast Asia with US$5.3 Million Series A (June 13) TechinAsia

• Singaporean car marketplace Carro has raised US$5.3 million in a series A round led by Indonesia-based Venturra Capital. Other investors include Singtel Innov8, Golden Gate Ventures, Alpha JWC Ventures, Skystar Capital, GMO Venture Partners and Zebra Global Capital Management.
• The startup will use the funding for market expansion to bring Carro to over 350 million people in Singapore, Indonesia, Malaysia and Thailand by the end of 2016.

P2P Mobile Payment App Tapp Raises US$9 Million to Tap into the Cash Economy in Southeast Asia (June 13) TechCrunch.com

• Finland-based mobile payment app Tapp Commerce has raised US$9 million to expand its operations in Southeast Asia for users without a bank account or credit card. Tapp will strengthen its operations in Indonesia and expand into the Philippines, Thailand and Vietnam by the end of 2016.
• The company will also focus on consumer acquisition and continue to build platform services that reward participation and create stickiness for end users.

LATAM RETAIL HEADLINES

Brazil Retail Sales Climb in April as Consumer Confidence Rises (June 14) Bloomberg

• Brazil’s retail sales rose in line with analysts’ expectations in April as consumer confidence rebounded. This was in line with economists’ forecasts, which say that Brazil may emerge from recession faster than initially estimated.
• Sales rose by 0.5% in April, following a 0.9% drop in March. Consumer confidence is showing signs of improvement as annual inflation slows, and forecasts continue to show hope for growth.

Foreign Investment in Latin America Could Fall up to 8% in 2016 (June 15) Reuters

• The United Nations’ Latin American arm said that foreign direct investment could drop as much as 8% in 2016, following a drop in 2015 of 9.1%, which was the lowest level since 2010. The fall in investment is largely due to a decrease in natural resource investment and the regional economic slowdown.
• Though foreign direct investment fell in Brazil, which is struggling with economic recession, and in Chile and Colombia, due to low demand for minerals, Mexico and Argentina saw investment increases of 18% and 130%, respectively, in 2015.

E-Commerce Growth Slows in Latin America (June 15) Internet Retailer

• Online sales growth in Latin America is slowing due to the Brazilian recession, though Brazilian retailers are still finding ways to grow online despite macroeconomic challenges. Overall, web sales in Latin America grew by 15.4% in 2015, compared to 22.1% in 2014.
• In Brazil, overall retail sales fell by 4.0% in 2015, but e-commerce sales still increased by 15.3%. Consumers are turning to the web to search for better prices and a wider assortment of products.

Uber Offers Helicopters to Escape São Paulo Gridlock (June 13) Reuters

• Uber is offering commuters the option to fly above the traffic jams in São Paulo, starting at US$20. Using the app, commuters can hail on-demand helicopter rides between airports, hotels and convention centers.
• Uber is partnering with Airbus Group to offer the affordable chopper rides, cutting the commute time between hotels and airports by up to three hours.

Florida Bank to Offer Credit Cards for Travelers to Cuba (June 15) Bloomberg

• Stonegate Bank, a mid-cap bank based in Florida, is the first US financial institution to offer travelers credit cards for use in Cuba. The bank will offer a MasterCard for use during travel to the island.
• Stonegate was also the first bank to offer debit cards for use in Cuba, which it did back in 2011, leading the way for US-Cuba relations in terms of financial services.