In a challenging 12 months for Hong Kong retailing, beauty and healthcare retailer Bonjour Holdings felt the pinch with a drop in both turnover and gross profit for the year ended December 31.
Its audited results show turnover of HK$2,286,806 (US$294,877), down from the previous year’s $2,795,658, with profit falling from $1,168,435 to $955,055.
The group says the continuous slowdown of economic growth momentum and volatile stock market in China dampened mainland tourist spending. Also, the devaluation of currencies against the strengthening US dollar saw fewer tourists visiting Hong Kong.
Bonjour currently owns 47 retail stores in Hong Kong, Macau and Guangzhou selling more than 26,000 kinds of featured products spanning international and in-house brands. Some Bonjour branches contain the “More Mall” which is specialised in snacks from Japan, Korea and Taiwan.
In its results filing, Bonjour said Mainland China tourists had been the main retail sales growth driver in recent years, but after restrictions introduced in April limiting Shenzhen residents to only one visit a week, there was a negative effect on Hong Kong retail markets, underlined by local social uncertainties.
The group says it strived to steady its profitability amid the deteriorating economic conditions
through a promotion strategy and comprehensive product mix while adopting a cautious pricing strategy. It introduced quality Korean cosmetic brands to meet consumer preferences, and these sales produced about 18.5 per cent of revenues.
Direct communication
Recognising the huge potential of eCommerce in China, the group put more resources into online channel development. It communicated directly with customers via online social platforms such as WeChat and Facebook. A Tmall.hk online store was opened, and the group partnered with Alipay, which raised brand awareness in China. Distributing 180 beauty and healthcare products such as Dr Schafter, Suisse Reborn, WowWow and Yumei, the group invited Hong Kong celebrities to be brand ambassadors, including Ada Choi (Suisse Reborn), Myolie Wu and Kary Ng (Dr Bauer), Elanne Kwong (WowWow), Elaine Yiu and Louis Cheung (Dr Schafter), and Tracy Chu (Yumei).
Fresh challenges
Looking ahead, the group says there will still be challenges because of economic uncertainty, social and political issues and intensive competition making the Hong Kong retail market volatile. Given the depreciation of the renminbi and other currencies against the Hong Kong dollar, the tourism and retails sector will continue to face headwinds this year.
Bonjour plans further cost controls. It relocated to a new office in Tsuen Wan in November which integrates warehousing and logistics. It will continue to adjust strategies to adapt to the important China market, taking a “cautious, prudent” approach.
The groups says it is confident it can maintain its performance in China through using different
channels and leveraging online partners, as well as enhancing its O2O platform. It has been using WeChat to provide product news and information to customers, and is about to launch a Bonjour membership program.
In Hong Kong, the group continues to encourage consumer investment in beauty and skincare products as older people seek to maintain their appearance and image. It sees opportunities in rising disposable incomes and increased consumer sophistication.
As at December 31, the group had about 1200 full-time and part-time employees in Hong Kong, Macau and the PRC, down from 1700 the previous year.