Beauty retailer SaSa says its Hong Kong and Macau sales for the first half of the current financial year are down about 71 per cent year on year, almost entirely due to the absence of visitors from the mainland during the Covid-related border closures.
Broken down by market, Macau fared the worst down 78 per cent, with Hong Kong sales down by 68.4 per cent as the company adjusted its offer to focus on local consumers.
In the September quarter, sales plunged 55.3 per cent year on year, but were up 17.8 per cent quarter on quarter.
Chairman and CEO Simon Kwok said in a stock-exchange filing that the number of transactions through Hong Kong and Macau stores by mainland customers is down by 97 per cent.
Despite the pivot towards the local market, transactions by Hongkongers slipped by 2.2 per cent year on year, largely because of people observing social distancing.
In Macau, the dropping of restrictions on mainlanders travelling to the territory in mid August saw some respite with second-quarter sales up 95.6 per cent quarter on quarter.
But post quarter, the Golden Week holiday provided little respite for SaSa with sales across the two territories down by 51.9 per cent.
This was partially offset by a 38.7-per-cent increase in sales on the mainland during the eight-day holiday, a considerable improvement on the 10-per-cent first-half sales decline.
Kwok said the operating environment in Hong Kong remains uncertain. The company has responded by trimming stores, especially in districts traditionally popular with tourists, and negotiating rent reductions and short-term leases with landlords.
In the six months to September 30 SaSa had a net loss of three stores in Hong Kong and Macau and two in Malaysia which offset a net gain of five in Mainland China to maintain 231 in all.
“Meanwhile, the group has been adapting to the retail market evolution, in particular, the new retailing era, by actively developing its e-commerce capabilities which include its online-to- offline operations,” said Kwok.
During the quarter, online sales channels, product assortment and the company’s sales team have been consolidated, with a view to enhancing the supply chain, product mix and competitiveness.
SaSa has used its WeChat mini-program, other social media and live-streaming platforms to continue to develop its core social-commerce strength.
“As a result, sales at the group’s e-commerce operation have surged by 36 per cent year on year and by 38.7 per cent quarter on quarter in the second quarter,” said Kwok.
Sales outside Hong Kong and Macau (predominantly in Mainland China, Malaysia and online) slipped by 1.3 per cent year on year.