FROM THE DESK OF DEBORAH WEINSWIG

This week we attended CES Asia 2015, which took place in Shanghai, China, from May 25 to 27. The inaugural show focused on three major themes: connectivity, innovation and the Internet of Things (IoT). More than 200 exhibitors from 16 countries represented 14 product categories—3D printing, automotive, content and online, green technologies, health, home entertainment, lifestyle, mobile, robotics, smart home, sports and fitness, video/4K Ultra HD, video gaming and wearables. More than 20,000 attendees and 1,200 members of the media turned out for the event, which showcased some of the latest innovations and technologies entering the Asian marketplace. CES Asia 2015 also included a packed discussion schedule, with speakers from leading Chinese and global brands in consumer electronics, data analytics, advertising and technology. Overwhelmingly, the industry leaders and technologists shared their optimistic views on a future in which connected devices will make our lives easier. The convergence of the cloud, IoT (sensing devices) and Big Data analytics will allow companies to provide customized services based on a customer’s profile and context. We’ll have AI-powered connected homes, which turn on the AC just in time to accommodate our return from work, and smart cars, which turn commuting time into free time. Audi revealed that it will release the first publicly available car with piloted driving in 2017, and we found out that Haier will be integrating Microsoft’s AI engine, Xiaobing, with its consumer devices by the end of this year. Although neither of these technologies has passed the user adoption test, the prevailing opinion is that the connected future is not far away. Some of the devices showcased at CES Asia proved this point. The Moley Robotic Kitchen, which “features a dexterous robot integrated into a kitchen that cooks with the skill and flair of a master chef,” won the Best of the Best award. The robotic kitchen made its public debut at the Shanghai event and drew large audiences throughout the show. Mercedes-Benz showcased its concept driverless vehicle (as it had at the International CES earlier this year), and it also became a crowd favorite. The car has seats that rotate to face each other, redefining the driving experience. CES Asia offered great insights into what the future will look like from a consumer and a business perspective. We’re on the cusp of profound changes in the way companies serve the needs of their customers in an era of smart homes and connected devices. From a consumer standpoint, it seems that the easy living economy and AI companions to help with our daily tasks will be here soon. The question is: What will people do with all that free time?

Through March 31, 2014 Source: CoreLogic and S&P Dow Jones

• March house prices increased in all 20 US cities in the S&P Case-Shiller 20-City Composite Home Price Index.
• The largest year-over-year gains were in San Francisco (up 10.3%), Denver (up 10%) and Dallas (up 9.3%).
• The overall index increased by 5% year over year, beating economists’ consensus of 4.6%.

US RETAIL TRAFFIC

Through May 23, 2015 Source: ShopperTrak

• Weekly traffic in the week ended May 23 declined by 1.5% year over year, an improvement from the prior week that was likely due to pent-up demand for summer products.
• Apparel and electronics store traffic declined by 2.1% and 1.4%, respectively.
• Sunny summer weather in most of the country might have driven shoppers to outdoor activities.

US REGULAR GASOLINE PRICES

Source: US Energy Information Administration

US RETAIL EARNINGS

Source: Company reports

US RETAIL HEADLINES

Glossier to Appear in Nasty Gal’s Pop-Up Stores (May 27) Women’s Wear Daily

• Online skincare brand Glossier and women’s apparel store Nasty Gal formed a partnership that would allow shoppers to buy Glossier products at Nasty Gal’s physical stores.
• This is Glossier’s second pop-up shop collaboration; the first was with San Francisco–based e‑tailer Everlane.

eBay to Introduce Cost-per-Sale Payments for Online Merchants (May 26) Women’s Wear Daily

• eBay is introducing a new service called Promoted Listings that allows merchants to pay for ads only if they lead to actual sales.
• This will allow small online merchants (which constitute the bulk of all eBay merchants) to improve advertising efficiency and lower their revenue risk. eBay currently generates ad revenues from banner ads and brand promotions.

Michael Kors Names Marcel Ostwald New Senior Vice President for Men’s Design (May 26) Women’s Wear Daily

• The new SVP will work with Kors and the president of Men’s Design to roll out product and brand strategy for the division.
• Ostwald was previously the head of creative management and concept design for Boss Sportswear. Prior to that, he was with JOOP!, a German contemporary menswear designer.

Sears Hometown to Add More Stores-Within-Stores in Wisconsin (May 26) Dallas Morning News

• Sears Hometown, which focuses on home appliances, hardware, tools and home improvement goods, spun off from Sears Holdings in late 2012.
• The company has opened an appliances store inside one local home improvement store in Virocqua, Wisconsin, and is considering adding other stores-within-a-store in locations in southeast Wisconsin.

Amazon Targets Artisan Goods Marketplace Etsy (May 22) The Wall Street Journal

• Amazon sent Etsy sellers an invitation to preview this new marketplace, called Handmade
• The company pointed sellers to a targeted questionnaire on the Amazon site that asks them to identify which of 11 categories their products fall under.

ASIATECH HEADLINES

App Annie’s Data Tools Peer Deep into Asia’s Mobile Gaming Trends (May 26) TechinAsia

• According to App Annie’s data, gaming revenue on iOS continues to climb, having grown over 30% from the fourth quarter of 2013 to the fourth quarter of 2014, while Google Play grew 75% over the same period. Apple is still the market leader as of March 2015, earning 30% more in revenue than Google Play.
• Game revenue in March 2015 was driven primarily by Japan, the US, China and South Korea, and the iPhone’s surging popularity in China obviously contributed to those numbers. Google Play’s numbers are deflated in China because it’s technically not available in the country.

Mobile Internet to Be Worth More than Apple by 2018 (May 26) TechCrunch

• Digi-Capital forecasts that mobile Internet revenue will grow by more than two times, from $300 billion last year to $850 billion by 2018. The market Apple spawned could generate more revenue within three years than its own market cap value today.
• Asian m-commerce also passed that of the US in 2014, and by 2018, Asian users will account for almost half of the more than $600 billion that shoppers are estimated to spend on goods and services using mobile devices. The rise of Alibaba, Flipkart and others shows that m-commerce is no longer just the domain of familiar giants such as Amazon and eBay.

CES Asia: Cadillac Unveils New 4G/LTE In-Car Telematics System (May 26) Malaymail Online

• GM-owned Cadillac is partnering with Shanghai OnStar on a new in-car online entertainment system and supporting smartphone and Apple Watch app.
• This first-of-its-kind system in China will offer connection speeds that are up to 10 times faster than current 3G in-car networks. The system will allow more and richer data to be pushed to a car dashboard, and its 4G/LTE connection will be strong enough to provide high-speed Wi-Fi access for several devices simultaneously.

Applyifi Generates Investment Decks for Startups, Matches Them to Investors (May 25) TechinAsia

• Applyifi helps other startups generate an investor pitch deck by having them first fill out a form. The deck is then sent to investors within and outside Applyifi’s network. Applyifi targets small startups seeking to raise under US$150,000 in capital, which is difficult, as angel investors look for investment opportunities worth more than US$500,000.
• “We present an assessment report in the form of a 36-point scorecard accompanied by qualitative comments. This helps startups understand their strengths and weaknesses, and provides investors with a perspective on the startup,” says Prajakt Raut, Cofounder and CEO of Applyifi.

China’s JD Leads $70 Million Investment in Fresh Produce E-Tailer FruitDay (May 25) TechinAsia

• Founded in 2009, FruitDay expects to have more than 10 million users this year. The company says that 80% of its orders are placed through mobile devices and that more than 60% of its orders come from outside Shanghai.
• FruitDay imports 80% of its products from countries such as the US, Australia, New Zealand, Chile and South Africa. Both Alibaba and JD are racing to sign up producers and wholesalers to capitalize on China’s growing demand for foreign foods.

The Website that Knows What China’s Wealthy Want (May 25) CNN.com

• Chinese consumers can now pick the products they want directly from the Mihaibao website, with the rest of the transaction, from calculating live prices and import costs to arranging delivery, completed automatically by the site’s systems.
• “It’s very difficult for people to buy from Western websites in China,” said Jacqueline Lam, Cofounder of Mihaibao. “It’s not just the language barrier…the foreign servers slow things down, you can’t pay in yuan and that’s before you face customs and import duty.”

This Robotic Device Can Help Wheelchair Users Walk (May 25) e27.co

• REX is a hands-free robotic walking device that can be used by people with a complete spinal cord injury up to the C4/5 level. It protects the shoulders from injury, thereby safeguarding independence.
• Richard Little, Cofounder and Chief Technology Officer of Rex Bionics, says, “Asia is an emerging market with wealthy pockets. People are willing to spend on healthcare and many countries in Asia are also attracting a lot of medical tourism. Hence, it presents a great opportunity for us.”

Expedia Gives Up on China Partner, Sells Off $671 Million Majority Stake in eLong (May 22) TechinAsia

• Ctrip, China’s top travel site, announced it has taken a US$400 million stake in longtime archrival eLong, acquiring shares from Expedia. Expedia sold off its entire 62.4% stake in eLong, worth US$671 million, selling the remaining shares to three other buyers.
• The huge Expedia sell-off marks a sea change in China’s highly competitive travel e-commerce sector. It seems to be a huge win for Ctrip, which has now tamed its closest competitor, leaving it freer to focus on newer and fast-growing rivals such as Baidu-owned Qunar, Tuniu and LY.

EUROPEAN RETAIL EARNINGS

Source: Company reports

EUROPEAN RETAIL HEADLINES

Argos and Sainsbury’s Join Forces to Offer a One-Stop Shop (May 27) Retail-Week.com

• Catalog retailer Argos opened its first two digital stores within UK grocery retailer Sainsbury’s stores. The small-scale shopping hubs enable customers to browse Argos’s wide product offering via a tablet and have goods delivered in-store the same day. The idea is that shoppers can collect household goods ordered from Argos while doing their grocery shopping at Sainsbury’s.
• This new partnership is intended to help Argos reach more customers and provides a solution to excess space in some Sainsbury’s stores.

Ahold Publishes Its Summary Report for 1Q 2015 (May 27) Company press release

• European grocer Ahold announced first-quarter sales of €11.3 billion (US $12.4 billion), a 14.9% increase.
• In the Dutch market, sales grew by 5.7%, which the company suggests was due to successful promotions and an improved product offering. The US market also benefited from an improved customer proposition, which the company said resulted in increased market share volume.

Carrefour Sets the Bar for Home Deliveries (May 26) RetailDetail.eu

• French supermarket chain Carrefour introduced an improved home delivery service in its Italian stores. Customers can now order their groceries online and have them delivered to their home within two hours.
• This latest initiative is one step beyond the grocery retailer’s offering in France, where shoppers can pick up their goods in-store within two hours of ordering online, a service it has also introduced in Italy.

Amazon Establishes a London Base and Starts Paying UK Corporation Tax (May 26) Retail-Week.com

• After establishing a new branch of its main retail company in London, Internet retailer Amazon is now paying corporation tax on British sales in the UK.
• The move came after the company was criticized for avoiding taxes by basing its activities in Luxembourg. There are also reports of other local-country branches being established in selected European countries.

Uniqlo Reports a 131% Rise in European Sales (May 26) wgsn.com

• Japanese fashion brand Uniqlo reported European sales of €203 million(US$ 222.5 million) for the year ending February 28, a 131% increase in sales. Growth in same-store sales contributed to the positive The report came after the fast-fashion retailer merged its UK and French businesses, marking a return to operating profit of €2.2 million from a loss of €3.4million only last year.

LVMH in Talks to Buy Another French Publication (May 26) uk.reuters.com

• Luxury goods group LVMH is looking to expand its media portfolio with the acquisition of French daily newspaper Le Parisien from media group Amaury.
• The deal is said to be dependent on approval by the relevant competition authorities and consideration by the Amaury works council.

Nike Targets Female Fitness Market with New Concept Store (May 22) bmmagazine.co.uk

• Sportswear brand Nike is set to open its first store dedicated to women and their fitness needs on Friday, May 29, on London’s King’s Road.
• With the aim of becoming a fitness hub, the store will offer additional services such as clothing alterations, brafitting and free training classes for customers.

QVC Announces Details of French Market Entry (May 22) wgsn.com

• US home shopping retailer QVC said its French website will go live in June 2015 and that its TV channel will start broadcasting in France in August 2015.
• QVC France will launch with 25 fashion brands and increase the number to about 300 by the end of 2015. The move is designed to create a new selling platform for French labels as well as a way for US labels to sell in France.

LATAM RETAIL HEADLINES

Brazil’s Supermarket Sales Decline by 1.6% YoY in April (May 26) Bloomberg

• This year-over-year figure represents a slowdown as compared to a month-over-month increase of 0.6% for April.
• Retail sales have increased 0.7% year to date through April versus 2.1% in the year-ago period.
• Supermarket sales had increased 7.2% month over month in March.

Williams-Sonoma Planning to Open Stores in Mexico City (May 26) El Universal

• Williams-Sonoma plans to open its first Mexico City store in Polanco, then one each in Perisur and Satélite.
• Local competitors include Mobico and Crate & Barrel.
• These will be Williams-Sonoma’s first stores in Mexico.

Siman Aims to Double Growth (May 26) Women’s Wear Daily

• Siman, a department store chain serving Central America’s middle class, hopes that gains in operational efficiency will enable it to double its revenues in 2015.
• The company expects retail sales growth of 4%–5%, combined with 2%–3% GDP growth, to drive an 8%–10% increase in same-store sales (up from 5%–7% last year).
• Siman installed merchandising software from Oracle last year to improve operations.

Walmart to Invest $100 Million in Costa Rica in 2015 (May 25) La Nación

• Walmart Mexico and Central America expects to invest $100 million in Costa Rica this year.
• The company plans to build eight new stores, including five Mas X Menos, two Maxi Palís and one Palí store.
• The new stores are expected to increase square footage by 4.3% and provide 2,400 jobs.

Guatemala’s Textile Industry Expects 6% Increase in Exports in 2015 (May 21) Women’s Wear Daily

• Officials at the 24th Annual Apparel show expect Guatemala’s textile exports to rise 6%, to $1.6 billion, in 2015, after a meager 1% increase in 2014.
• Guatemala has become more attractive for manufacturing due to a 33% decline in energy costs, among other factors.
• Moreover, manufacturers in Guatemala have improved their capabilities for manufacturing sportswear, wool suits and fashionable jeans.