Sheng Siong Group

(21-12-2015, 08:36 AM)Bibi Wrote:

(01-12-2015, 11:13 AM)riverfish Wrote: For "dry goods", yes the online e-commerce sites can be a competition to the brick & mortar supermarkets.

But for fresh produce like vegetables, fruits, seafood & poultry, I think the mass majority would still prefer the old-fashion brick & mortar supermarkets. Eg you have paid for the fruits & fish online, when delivered, you think they look a little 'aged', not up to your ideal expectation of freshness, but definitely not rotten & definitely still edible. Do you have a legal right to demand a refund & refuse to accept the goods? How much hassle do you have to go through to demand a refund?

Looks like I am able to answer this question now as last week Redmart delivered a packet of moldy sweet potatoes. Likely due to poor storage or handling. Just a call to Redmart customer service and my wife told me the amount for the sweet potatoes was refunded immediately. Took about 1 to 2 minutes to resolve unlike those telcos where you have to wait sometimes 10 mins for them to pick up the call.

What is quite challenging for these e-commerce sites is that they may lack the continuity in terms of the support for fresh produce. 

From what I understand about redmart, it basically is in the biz of fulfillment. It carries little to no inventory and requisites all inventory on just in time basis. For them to succeed, its really a question about how efficient they can get in bringing the commodities from "farm to fork". Not exactly an easy process. The delivery of orders is prone to various issues, including driver's sending wrong goods or taking lease. These are real issues, which (thankfully) SSG does not need to worry over as much. 

SSG directly procures much of its goods from the growers and farms, which keeps costs largely managed. Their cost leadership contributes to wider margins. I'm not sure if this is the case for redmart. But, if redmart is not able to have this kind of advantage in terms of procurement, it will always have a limitation as to how much more value can they deliver to their customers without stressing the bottomline margins. However much e-commerce remains attractive to certain consumer segments, those supermarkets (with physical shop front) will tend to have its own loyal following. 

Just some thoughts.

I doubt fresh food or produce will every take hold in e-commerce for city where amenities are nearby. There are simply too many variables that a walk down to nearby makes life much easier and with even more pleasant experience.

(24-12-2015, 11:33 AM)vesfreq Wrote: What is quite challenging for these e-commerce sites is that they may lack the continuity in terms of the support for fresh produce. 

From what I understand about redmart, it basically is in the biz of fulfillment. It carries little to no inventory and requisites all inventory on just in time basis. For them to succeed, its really a question about how efficient they can get in bringing the commodities from "farm to fork". Not exactly an easy process. The delivery of orders is prone to various issues, including driver's sending wrong goods or taking lease. These are real issues, which (thankfully) SSG does not need to worry over as much. 

SSG directly procures much of its goods from the growers and farms, which keeps costs largely managed. Their cost leadership contributes to wider margins. I'm not sure if this is the case for redmart. But, if redmart is not able to have this kind of advantage in terms of procurement, it will always have a limitation as to how much more value can they deliver to their customers without stressing the bottomline margins. However much e-commerce remains attractive to certain consumer segments, those supermarkets (with physical shop front) will tend to have its own loyal following. 

Just some thoughts.

Supply chain management is a key for grocery retailer, and warehouse is the necessary infrastructure. All key grocery retailers in Singapore, have their own warehouses. I really doubt redmart is doing the "farm to fork" approach.

I further checked on redmart press releases, and found the following. Redmart has likely invested heavily in warehousing, both hardware and software. IIRC, one of the rounds of funding was mainly dedicated for building new warehouses.

Quote:Press Release: Online Grocer RedMart Optimizes Supply Chain Commerce with Manhattan Associates

SINGAPORE and ATLANTA, Nov. 11, 2013 -- RedMart, a Singapore-based online grocery service, today announced that it has completed three months of seamless operations post the successful implementation of Manhattan SCALE™, a warehouse management system (WMS) developed by Supply Chain Commerce solutions provider, Manhattan Associates (Nasdaq:MANH). "

http://about.redmart.com/press/

Sheng Siong FY2015 result. In brief

Revenue up 5.3%
Gross PM up 0.5 percentage point to 24.7%
Net Profit up 19.3%
http://infopub.sgx.com/FileOpen/SSG_FY20...eID=390564

Similar trend, with top-line growth in single digit, while bottom-line is improved by +20% with operational efficiency. Congratulation to fellow shareholders with the increased final dividend of 1.75 cents per share, which mean total dividend of 3.5 cents per share.

(vested)

The Yishun property is TOPed earlier now, which is previously scheduled in mid 2017. New outlet will contribute to FY2016 revenue.

http://infopub.sgx.com/FileOpen/Junction...eID=390548

Sheng Siong growth remains strong. In 2016, more retail space will be in operation, and the search for new stores is on-going. There are more room to grow domestically, IMO.

(vested)

Sheng Siong's 1Q earnings jump 17% to $16.4 million

SINGAPORE (April 27): Sheng Siong Group's earnings jumped 17% to $16.4 million in the first quarter ended March 31, 2016, from $14.1 million a year ago.

The improved bottom line came on the back of higher revenue of $208.5 million, up 5.1% from $198.4 million.

Revenue grew mainly on sales from new stores despite a contraction in same-stores sales growth, says the supermarket chain group.

SSSG was affected by tepid Chinese New Year demand and a decline in liquor sales, among other reasons.
...
http://www.theedgemarkets.com/sg/article...-million-0

Are the any plans by
Sheng Siong to expand abroad?

(19-05-2016, 10:37 AM)stam Wrote: Are the any plans by
Sheng Siong to expand abroad?

I think esp for retail stores that targets the lower end consumers like Sheng Siong, it'd be very hard to expand overseas.
There are already players in that market and they'd find it a crowded space.
If they do try to go overseas, Malaysia would be the most logical step as currently, they source most of their products from there.
And if they do try to go overseas, I think the safest and most logical way is via acquisitions and M&As, rather than trying to expand organically.
Unless they've some knowhow or some special competitive edge, it would be hard to displace existing leaders in the mass market space. Having an efficient low cost business model is not necessarily a competitive edge when talking about overseas market, it'd be a different animal compared to singapore. For eg. the consumers may not want this low cost model, the margins may be tighter with regulations etc, or they may not be able to even import this low cost model abroad efficiently



https://thumbtackinvestor.wordpress.com/

(19-05-2016, 10:48 AM)TTTI Wrote:

(19-05-2016, 10:37 AM)stam Wrote: Are the any plans by
Sheng Siong to expand abroad?

I think esp for retail stores that targets the lower end consumers like Sheng Siong, it'd be very hard to expand overseas.
There are already players in that market and they'd find it a crowded space.
If they do try to go overseas, Malaysia would be the most logical step as currently, they source most of their products from there.
And if they do try to go overseas, I think the safest and most logical way is via acquisitions and M&As, rather than trying to expand organically.
Unless they've some knowhow or some special competitive edge, it would be hard to displace existing leaders in the mass market space. Having an efficient low cost business model is not necessarily a competitive edge when talking about overseas market, it'd be a different animal compared to singapore. For eg. the consumers may not want this low cost model, the margins may be tighter with regulations etc, or they may not be able to even import this low cost model abroad efficiently



https://thumbtackinvestor.wordpress.com/

Sheng Siong has already gone out to China, and the very 1st store will operate in 4Q2016, in Kumming.

It is tough to go oversea, but a must with a small Singapore market. IMO, there is more room to grow in Singapore, but it will saturate soon, probably in 2017/18. Oversea venture takes time to settle down.

The partnership with LuChen Group, will ensure back-up infra and regulation support, instead of big-ticket infra capex out-front. Sheng Siong approach is very Asia-style, and likely able to fit into local market. Let's see the performance in FY2017.

(vested)

Another JV with Kunming LuChen?

Xpress in China supermarket JV with Sheng Siong and Kunming LuChen

SINGAPORE (May 27): Xpress Holdings says iSmart Investments (ISI), a wholly owned subsidiary of the company, has entered into a joint venture agreement with Sheng Siong Group and Kunming LuChen Group Co. to operate supermarkets in China.

The Joint Venture company will have a registered capital of US$10 million ($13.7 million). Sheng Siong Group will subscribe to a 60% stake for US$6 million; Kunming LuChen will subscribe to a 30% stake for US$3 million; while ISI will subscribe to a 10% stake for US$1 million.
...
http://www.theedgemarkets.com/sg/article...ing-luchen