Sa Sa observes ‘swing’ towards brick-and-mortar retail as online sales dip by 5.6% in HK and Macau

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Sa Sa reports that online sales in Hong Kong and Macau fell by 5.6% while offline sales grew by 44.3%, signalling the firm to advance its brick-and-mortar expansion. [Sa Sa]

Beauty retail chain Sa Sa reports that online sales in Hong Kong and Macau fell by 5.6% while offline sales grew by 44.3%, signalling the firm to advance its brick-and-mortar expansion.

According to its third-quarter financial report published on January 10, the Hong Kong-based retail company said the year-on-year decrease in online sales “reflects a marginal swing” towards offline sales following the end of COVID-19 social distancing measures.

Its online sales totalled HKD58.4m (USD7.47m), approximately 6.6% of its total sales, which was in line with the market, said the firm.

On the other hand, physical retail sales grew by 44.3% year on year, with same-store sales increasing by 43.7%.

According to the company, store sales have recovered to 46.9% of pre-pandemic levels.

This is despite the fact that it now operates 36 fewer stores, a decrease of 30.5%, in the Hong Kong and Macau areas. It currently operates 82 stores in the area.

In Hong Kong, offline sales increased by 40.3% year on year, reaching 43.1% of pre-pandemic levels. Same-store sales also saw a significant rise of 38.4%.

The company attributed this to the holiday season and support from the local Hong Kong government.

“This Christmas was the first since boundaries fully reopened following the end of the pandemic and the Hong Kong SAR Government supported campaigns to attract tourists and boost local consumption.”

Over the quarter, the firm unveiled two new stores in Central and Wong Chuk Hang districts, bringing its total number of stores in Hong Kong to 73.

The group stated that it is actively seeking 'gaps' in Hong Kong to open more doors to serve local consumers as well as travellers in prime tourist locations.

Meanwhile, in Macau, offline sales recorded year-on-year growth of 57.4%, recovering to 62.8% of pre-pandemic levels. Same-store sales grew by 57.6% year on year.

China and SEA

On the flipside, online sales continued to drive its growth in China.

The firm reported growth of 80.2% year on year to HKD146.1m (USD18.68m), while offline sales decreased by 6.9% to HKD41m (USD5.24m).

Sa Sa noted that it was operating five fewer doors in China, a 13.2% decrease compared to the same period last year.

Sales from online channels accounted for 78.1% of the group’s total sales in the market.

To encourage growth in this area, the company aims to leverage the WeChat mini-program.

“With the return of and gradual increase in Mainland tourists visiting the Hong Kong and Macau SARs, the group is seeking to connect with these customers after they return to Mainland China to enable them to shop and purchase online.”

In South East Asia, where the firm’s retail stores were primarily in Malaysia, offline sales experienced a slight year-on-year decline of 0.4%, whereas same-store sales showed consistent improvement, growing by 4.6%.

In December Sa Sa re-established its physical retail presence in Singapore with one store, and it has more stores set to open in 2024.

Online sales in SEA for the period grew by 24.3% and accounted for 23.4% of total sales in this market.

The Group's turnover saw an increase of 36.7% year on year, reaching HKD1.18bn (USD150.9m).

Offline sales rose by 35.7% to HKD950.6m (USD121.6m), while sales experienced an increase of 41.2%, reaching HKD231.6m (USD29.6m).