Hong Kong beauty products retailer Sa Sa believes Sasa.com and O2O represent huge opportunities in the tight retail climate.
Sasa.com turned over HK$416.0 million in the fiscal year to Match 31 – a modest rise of 5.6 per cent over the previous year, but a better performance in percentage terms than any other area of the company’s business.
“Our [online] performance in the Mainland China market was boosted by more focus on flash sales and their associated purchases, enhanced marketing capability and optimisation of channel advertisements, as well as localised payment gateways,” the company said in its earnings statement.
“These positive factors were partially offset by declining sales in other markets due to resource re-allocation.”
But with stagnant sales in its core Hong Kong/Macau and China Mainland physical retail stores, the company expects online to provide a significant opportunity.
“In order to meet these challenges, the group will focus on tapping the opportunities of O2O and
cross-border eCommerce. Our O2O initiatives will initially launch in Hong Kong and gradually
extend to our markets outside Hong Kong. Our long-term eCommerce goal is to allocate more
resources to drive our O2O operating capabilities, thereby benefiting both the turnover and profit
contribution from all existing markets including our online business.”
Last week, Sa Sa announced a partnership with social media company Tencent to accept payment via mainland Chinese customers’ WeChat accounts in its Hong Kong stores.
Last year it strengthened partnerships with Weibo – increasing its fan base from 1.4 million to 21 million – and in YouTube and WeChat.
“Going forward, the group will develop the O2O business model and digitise the personal services of our beauty consultants. We aim to capture the potential of sales to Mainland customers after their return to the Mainland by optimising our cross border eCommerce operations and using social media to promote and project our business into the Mainland, thereby strengthening customer loyalty, driving development of our online business, and improving our online gross profit margins,” Sa Sa said.
It does not expect the running to be easy.
“Sasa.com has various market challenges to face, such as cross-border and online/offline competition, as well as intensifying price competition from other shopping websites and mobile apps; for example, 80 per cent of products sold online are discounted, flash sales and group buying.
“However, strong growth in the Mainland China market is expected as a counterbalance to these
challenges and the group will launch fresh initiatives to grow our customer base in order to
maximise revenue. For overseas markets, we will devote further efforts to enhancing market share, especially in regard to new customer acquisition.”
Sa Sa says it will develop its online platform to strengthen cooperation with its physical stores, building the O2O offer by leveraging the capability of its beauty consultants and online marketing expertise to highlight the attractive product offerings of our online and offline stores.
“We will focus on platform synchronisation to adapt and cater to consumers’ shopping habits, especially mobile users, and enhance the efficiency of all new devices that modern consumers use.”
Sa Sa has already launched a new Mainland China shopping site, mobile site and app to better target customers in what is its primary revenue driving country market – and to offer a better user experience. For example, it has enhanced its search engine and the way it monitors and records customers’ personal purchasing histories and recommendations.
“We will refine our product strategy in order to tap the opportunities of market trends, with Korean
products being the major area of focus. The group will also continue to optimise current marketing channels including search engine marketing, affiliate marketing, email marketing and social media to increase traffic and conversion rates. A new Customer Relationship Management program will be developed to increase repeat purchases and customer retention. At the same time, we will continue to explore potential partnerships and alliances,” the company said.