Category Archives: IBC

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Global Retail Intelligence – January

To follow is a brief review of retail news from around the world:

January 4 – Future Group partners with Cognizant for FMCG arm FCL
IT major Cognizant has entered into a strategic partnership with Kishore Biyani-led Future Group to transform its FMCG arm Future Consumer Ltd (FCL) into a connected enterprise. Under the pact, the New Jersey-based firm will build a platform for FCL to simplify, automate and secure business processes, speed up collaboration and maximise synergies across all lines of business, the companies said in a joint statement. The platform will enable FCL to optimise its supply chain and improve business throughput, it added. Read more at India Times.

January 4 – Aeon Vietnam Launches Online Store
Aeon Vietnam has launched an online store, AeonEshop.com, offering discounted Japanese goods and local brands. The Japanese-headquartered retailer says its AeonEshop.com B2C platform in Vietnam will stock a majority of Japanese and imported products, along with Aeon’s own brand Topvalu which has been available at its physical stores nationwide. Products span various categories, including fashion, cosmetics, furniture, electronics, household items, food and office stationery. Similar to Aeon’s other eCommerce sites in the region, AeonEshop will provide discounts up to 50 per cent for specific product types. Ho Chi Minh City is the first market for AeonEshop with other Vietnamese cities to follow in the near future. The company plans to develop an English-language version and mobile app by mid-2017. See Retail News Asia.

January 5 – Carrefour to open major Middle East DC
Carrefour will open a major new distribution center for Carrefour at the National Industries Park (NIP) in Dubai, UAE, according to a Majid Al Futtaim company statement. The center, once operational, will be the largest and most advanced distribution hub of its kind for Carrefour in the region, said a statement from the company. The facility is constructed on a land area of 1.5 million sq. ft. and offers a built-up area of over 800,000 sq. ft., almost four times the size of Carrefour’s current largest distribution center building in the region, it said. For additional details, read ME Construction News.

The International Business Council is a special interest group of IHA members, dedicated to helping its membership market and sell their products internationally by sharing information, providing networking opportunities and offering programs to assist, support, and educate. Membership is free to all regular, IHA members – visit the IBC website to learn more.

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Taiwan Market Visit

IHA Staff recently made a market visit to Taiwan in preparation for a potential trade mission to that island country in 2018.  The visit included meeting with key importers and distributors, meeting with relevant key major chain retailers and touring multi-chain retailers and malls to better understand the market.

Distributors met with included Farcent Enterprises, a well-respected FMCG vendor to major department stores and representative for World Kitchen in Taiwan; as well as Holy Ocean International, a bakeware specialist representing many international brands including Wilton Brands.

Retailers met with included Testrite Retail Group, Far Eastern Department Stores, Carrefour, Costco Taiwan, Mitsukoshi Department Stores and Jason’s/Wellcome Taiwan.  Testrite, a publicly traded company, is both a retailer and distributor in Taiwan.  They own House of Living Arts (HOLA), the soft furnishings chain with 25 stores in Taiwan and another 38 in mainland China.  As a brand agent, they represent brands such as KitchenAid, OXO, and Joseph Joseph.  As a channel agent, they operate two Crate & Barrel stores in Taiwan.  As a distributor, they supply the Hypermarkets and Costco.  Besides its 11 department stores, Far Eastern also owns the Sogo department stores (both in Taiwan and mainland China), the City Super stores in Taiwan, and 16 hypermarkets.

IHA staff came away with a good understanding of the major sales channels and players in the Taiwan market, which include:

Brick & Mortar:

  • Department Stores – Far Eastern, Mitsukoshi, Sogo, Pacific
  • Hypermarkets – Costco, Carrefour, Geant, RT-Mart, Far East Mart
  • Supermarkets – City Super, Jason’s, Wellcome
  • Home Specialty Stores – HOLA, TLW
  • Flagship/Road Shops – World Kitchen, Crate & Barrel

Online:

  • Internet Shopping Malls – PC Home, Momo Shop, Go Happy, Yahoo Kimo, UDN

Currently, department stores in Taiwan do not buy from homewares vendors or overseas sellers. They are simply acting as “landlords”, renting out space in the home and appliance areas of the store to their local wholesale vendors. These vendors are responsible for supplying the products, staffing, branding and sales.  Therefore, these wholesalers/vendors play an important role in homewares sales in Taiwan.  One retailer that does purchase directly from international brands is Testrite.

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South Korea Market Visit

IHA Staff recently made a market visit to South Korea in preparation for a potential trade mission to that country in 2018.  The visit included touring major retail outlets/malls, meeting with key distributors to better understand the market, and meeting with relevant key retailers.

Distributors met with included Venta Korea Co., Ltd., household appliance distributor for Vornado of the USA and Venta Airwasher of Germany, as well as bakeware specialist representing Wilton Brands; Electrom, Inc., a large and small appliance distributor representing KitchenAid, Whirlpool, and Maytag among others; and Hanway Trading Co., Ltd., a specialist in department store supply and representing brands such as Villeroy & Boch, Casa Bugatti, Le Creuset, Thermos, and Libbey Glassware, as well as other tableware and kitchenware suppliers.

Retailers met with included Lotte Home Shopping, GS Home Shopping, and Costco Wholesale.

A summary of the major sales channels and players in the Korean market include:

Brick & Mortar:

  • – Department Stores – Lotte, Shinsegae, Hyundai, Galleria
  • – Hypermarkets – Costco, Emart, Home Plus, Lotte Mart
  • – Home Appliance Stores – Samsung, LG Best Shop, Hi Mart, Price King
  • – Flagship/Road Shops – Kitchen Aid, Miele, Whirlpool, GE, etc.

Online:

  • – TV Home Shopping – GS Home Shopping, CJ Mall, Lotte Home Shopping, Home & Shopping
  • – Internet Shopping Malls – GS Shop, CJ Mall, Lotte.com, Shinsegae Mall, AK Mall
  • – Open Markets – A.Auction, 11st, G Market, Interpark

The strongest channels in South Korea appear to be the Hypermarket channel and the Internet/TV Home Shopping channels.  Department stores are still relevant, but mostly for branding and visibility purposes, most consumers will make their purchase through other channels once seeing the product in department stores.

An important takeaway from meeting with both distributors and retail buyers is that in many cases, the retail buyers do not purchase directly from overseas brands/suppliers, but rely on their local distribution partners/vendors to affect these purchases and maintain inventory.  Therefore, importers and distributors play a critical role in the success of international brands in the South Korean market.

IHA Staff also met with the Korean Trade-Investment Promotion Agency (KOTRA) at their Seoul headquarters.  KOTRA has a Foreign Investment in Korea division, which supports the entry and establishment of foreign businesses in Korea. They provide comprehensive services for foreign businesses, including consultations, assistance with investment notification and corporate establishment, and support for business activities in Korea.  More information about this division of KOTRA and their services may be found at Invest Korea.

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Protecting your Brand in Cuba in Uncertain Times

Prior to Fidel Castro coming to power, the following three statements pertained to Cuba:

  • – Its workers had the 8th highest wages in the world
  • – More Americans lived in Cuba than Cubans lived in America
  • – Its per-capita income was higher than those of Austria and Japan

Diplomatic relations between the U.S. and Cuba were then severed for the 53 years between 1961 and 2014 under the Castro regime. In 2015, U.S. President Obama and Cuban President Raúl Castro agreed to restore ties.  Today, the U.S. operates an embassy in Havana, and Cuba has an embassy in Washington D.C.

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The trade embargo, which prohibits the sale of commercial merchandise, however, is still in effect, making it illegal for U.S. companies to conduct business on the Island.  President Obama has begun to ease commercial restrictions, allowing U.S. travelers to bring back Cuban cigars and rum into the country.

A White House website article, “Charting a New Course on Cuba,” outlines the current Cuba policy and the next steps to be taken to normalize relations.  Those interested in selling products on the island should note one important section of the policy:

Authorize expanded sales and exports of certain goods and services form the U.S. to Cuba The expansion will seek to empower the nascent Cuban private sector and make it easier for Cuban citizens to have access to certain lower-priced goods to improve their living standards and gain greater economic independence from the state.

While this does not in itself authorize full-scale commerce, it is clear that the door has begun to open.  The White House Press Office has also posted information on current efforts to restore relations with Cuba in their “FACT SHEET: Charting a New Course on Cuba”.

The passing of Fidel Castro on November 25 is certainly a significant milestone that perhaps portends the beginning of the end of the long-standing disagreement between the two capitalist and communist nations.  Raúl Castro, Fidel’s 85-year-old brother, is now in control and has been called “a transitional president between the old guard and the future…” by Volker Skierka, a Castro biographer and Cuba expert in an article posted by The Guardian newspaper.

With the recent election of Donald Trump as the next U.S. President, however, the direction and speed being taken to normalize relations may change dramatically.  When interviewed by Fox News, Reince Priebus, the incoming White House Chief of Staff, said that President elect Trump will keep his campaign promise to void the 2014 deal made between President Obama and President Castro unless further demands, which include “religious and political freedom for the Cuban people and the freeing of political prisoners”, are met.  Time will tell if President-elect Trump will be able to renegotiate a favorable diplomatic and trade deal with Cuba.

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Although no one knows for certain what is next on the horizon for U.S. and Cuban relations, U.S. companies are already registering their brand names in order to protect their commercial interests for if and when they are legally permitted to conduct business on the island.

According to the Miami Herald in an article published on November 15, the Cuban Office of Industrial Property (OCPI) has received more than 1,000 applications in 2016 to register trademarks from U.S. companies.  American companies that have submitted applications include Netflix, Hershey’s, General Motors, Disney, Starbucks, Domino’s, Apple and Microsoft.

Cuba has a “first-to-file” policy, allowing anyone to register a trademark, provided it has not previously been registered.  It is therefore possible for someone to register a trademark and then attempt to “sell” the rights back to the rightful owner.  Thus, even if you do not plan to sell products within Cuba in the immediate future, it still may be prudent to register your brand name to ensure that it is available when you do decide to enter the market.

As an alternative to registering directly through the OCPI, American companies should know that Cuba is also a signatory to the Madrid Protocol, which is an international registration treaty that allows companies who have submitted an “international application” to seek protection from any member country.  It is important to note though that each country may apply their own laws to determine if trademark protection can be granted.  Additional information about the Madrid Protocol is available on the United States Patent and Trademark Office.

A patent and trademark attorney should offer advice on the appropriate type of registration for your company and brand.  Although the listing below does not represent an endorsement, the following two law firms have published informative articles about registering a trademark within Cuba:

Hunton & WilliamsTrademark Registration in Cuba

  1. – Filing a National Trademark Application in Cuba
  2. – Filling an International Application through the Madrid Protocol Treaty

Foley Hoag LLPTop Five Reasons Why You Should File For Trademark Protection in Cuba

  1. – You don’t need to use your trademark in Cuba to obtain a registration
  2. – The trademark application process in Cuba is relatively simple
  3. – Obtaining a trademark registration in Cuba is relatively inexpensive
  4. – It may be difficult to take back your brand in Cuba from “pirates”
  5. – Cuba could become the next hot spot for your business

Although no one knows for certain what is in store for U.S. – Cuban relations, it certainly is a small but potentially interesting market that is worth watching. Cuba has just 11.38 million people, and it would be safe to say that there is a dearth of disposable income.  Therefore, it’s important not to get too carried away.  At the same time, if Cuba becomes what is was in the 1950’s, then there is an opportunity to get in on the ground floor.

The International Business Council plans to take a small group of members to the island country as soon as appropriate to begin exploring opportunities in this yet-to-emerge market.  Watch the IBC website for additional details and updates.

 

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December Currency Outlook

In their December 2016 Currency Outlook report, Tempus, an exchange rate and global payments company, provides a detailed report including the following topics and sections:

In Brief

  • – US Dollar gains broadly as markets continue to price-in interest rate hike
  • – Japanese Yen has worst month since 2009 on policy divergence and inflation prospects in U.S.

In Focus

  • – US Dollar / Mexican Peso and the Trump Win
  • – Peso Weakens Drastically on Trump

The View – US$ rises as economy keeps moving

  • – Trump victory boosts dollar as well as volatility
  • – Euro under pressure as Italy votes and Brexit looms near

Dates to Watch

  • – Dec 8 – European Central Bank Decision
  • – Dec 14 – US Federal Reserve Decision

 

IBC Members can download the complete Currency Outlook from the members-only section of the IBC website under the Special Reports section.  IBC membership is free for all regular IHA members – to learn more and to join, visit the IBC membership information page.