Pressing ahead: Struggling Sa Sa finds respite in e-commerce progress as it endures sales dive

By Amanda Lim contact

- Last updated on GMT

Sa sa online sales record year-on-year sales increase of 108.8% during the April to June quarter. [Sa Sa]
Sa sa online sales record year-on-year sales increase of 108.8% during the April to June quarter. [Sa Sa]

Related tags: retail, e-commerce, financial results

Beauty retail group Sa Sa International’s pivot towards e-commerce appears to be paying off as it recorded a year-on-year sales increase of 108.8% during the April to June quarter.

The pandemic and its repercussions on an already declining brick-and-mortar market have driven the firm to focus more investments in its online channels.

In 2019, for instance, it announced the decision to shut all 22 of its retail stores in Singapore as performance in the market had been unsatisfactory over the past few years. The company re-launched in Singapore a few months later via the e-commerce marketplace, Shopee.

The group’s online business has been improving steadily, with sales increasing 108.8% year-on-year in the first quarter. Compared to the FY2018/19 period, sales grew by a respectable 64%.

The firm attributed the performance of its online business to its partnerships with third-party e-commerce platforms such as Shopee and WeChat’s mini programme.

Its growth on these platforms was also driven by the 6.18 mega shopping festival held in Asian markets including China and Singapore.

Furthermore, the group has pushed ahead with the integration of its online-to-offline (O2O) operations this quarter.

It further expanded its click-and-collect service and launched an initiative that would allow consumers to enjoy the same shopping discounts at both online and offline stores.

“This has enabled the group to drive customer conversion between its online and offline operations, increase repeated purchases and enhance customer loyalty,”​ said chairman and CEO Dr Simon Kwok.

This has helped to spur the brand’s brick-and-mortar business in China, where it expanded operations further in the first quarter with four more outlets, bringing it total retail outlets in China to 61.

In China, it recorded year-on-year increases of 27.5% and 7.2% in retail sales and same-store sales respectively. Retail sales also grew by 4.2% in the first quarter compared with to the FY2018/19 period.

Excluding the impact of extending its VIP reward point programme, the firm said sales in China would have increased by 34% year-on-year compare to the year before last.

Previously, CosmeticsDesign-Asiareported​ that Sa Sa is planning to roll out experiential retail concepts in Hong Kong and Macau, which are expected to launch in FY2021/22.

­First quarter results

For the first quarter of FY2021/22, the Hong Kong-headquartered company announced that its retail and wholesale turnover increased by 42.1% year on year.

The latest positive figure came with an important caveat, as it was compared to the period last year that was bogged down by the COVID-19 outbreak.

When compared to the year before last, the firm’s sales suffered a hefty 59.3% decline as it continued to be impacted by the aftermath of the COVID-19 outbreak.

The firm’s operations in the Hong Kong and Macau rose by 38.7% year-on-year in the first quarter but decreased by 68.7% compared with the same period of FY2018/19.

The business in Malaysia remained severely affected by the pandemic, as the government-imposed movement control order (MCO), caused its stores to be temporarily closed for a total of 30 days during the quarter.

This resulted in a 31.9% decline in turnover in the first quarter. Compared to the previous year, the business declined 56.2%.

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