Aeon Hong Kong is eyeing to increase its Daiso specialty store network in Hong Kong and Mainland China despite losing US$60 million last year.
According to the Hong Kong-listed Aeon Department Store’s financial results for last year, the company saw a 4.1 per cent drop in revenue compared to the year before, down to $1.2 billion.
MD Isei Sugahara said the decline in the revenue and gross profit was due to the “intensified competition” in Mainland China on top of the disruption of the ongoing Covid-19 situation in the regions. The company also faced higher operational expenses, including staff costs, advertising and administrative expenses.
In Hong Kong, the business’ results dropped from a profit of $7.9 million) in 2020 to a loss of $23.5 million last year, as it “did not receive the same amount of government grants from the Hong Kong government”. As part of its plan to further develop in the territory, Aeon Department Store aims to expand the small specialty store network under the Daiso brand this year to at least the same number of stores as in 2021. It currently operates 81 stores across Hong Kong, including six Daiso stores, and one Aeon Style concept store.
The company will also accelate the development of technology and automatic payments to reduce the workload of manual processing.
Meanwhile, in Mainland China, the company experienced a loss of $33.8 million last year, more than three-time higher compared to the previous year. The company said several stores were temporarily closed due to the government’s measures. The loss was also attributed to the “fierce competition” in the region, “causing a greater impact on the sales of existing large-scale stores”.
“Even though the global economy is still shrouded by uncertainties and the rapidly changing consumption habits of customers, the group will adhere to the basic concept of “customer first” and strive to stand out in the fierce competition in the retail department store industry,” said Sugahara.
