Air­port up­graded for vis­i­tor in­flux

China Daily (Canada) - - CHINA - By XU XIAO xuxiao@chi­nadaily.com.cn

that be­tween Septem­ber and March, 3,029 for­eign­ers passed through Chengdu cus­toms.

Most of them were from the United States, Bri­tain and Ger­many.

Herbal tea is not just an­other warm bev­er­age in south­ern China. It was listed by UNESCO in 2006 as part of the World’s In­tan­gi­ble Cul­tural Her­itage.

Herbal tea — a prod­uct of one of Hong Kong’s leading tea re­tail­ers Hung Fook Tong (HFT) — has also come to sym­bol­ize holis­tic well­ness and wis­dom taken from na­ture, from all re­gions of the south.

“The stock mar­ket’s at­trac­tion for the time-hon­ored tra­di­tion of herbal tea re­mains to be seen. HFT’s an­nounce­ment (of a HK$500-mil­lion IPO launch) was met with mixed re­ac­tion in the mar­ket. But, tra­di­tional Chi­nese herbal tea could break new ground, once com­bined with Western mar­ket­ing strate­gies,” said Yang Fan, an an­a­lyst with a Shang­hai-based se­cu­ri­ties com­pany and a knowl­edge­able in­vestor in herbal tea.

HFT is at the van­guard of a move­ment among lo­cal tea com­pa­nies, to re-es­tab­lish their mar­kets af­ter the tide of pop­u­lar Western soft drinks swept the re­gion be­fore it be­gan to re­cede. The com­pany ap­pears on solid ground in its lo­cal op­er­a­tions, hav­ing re­designed the pack­ag­ing and pre­sen­ta­tion of its age-old prod­uct.

What once was sold from bronze urns at cor­ner stores was repack­aged as bot­tled herbal tea to ap­peal to a younger mar­ket. Now, herbal tea is avail­able in su­per­mar­kets and con­ve­nience stores.

Yang pre­dicted the fast-mov­ing-con­sumer-goods mar­ket will di­ver­sify quickly to meet the niche de­mands of dif­fer­ent con­sumer groups. HFT aims to reach be­yond its present medic­i­nal prod­ucts mar­ket, and is mar­ket­ing new lines — herbal desserts, soy­bean milk, nour­ish­ing home-made soups and other food prod­ucts.

The multi-brand strat­egy, Yang noted, may be use­ful for tap­ping into the flour­ish­ing well­ness drinks mar­ket. “Prod­ucts in­tended for night owls, heavy com­puter users and of­fice work­ers are be­ing well­re­ceived,” he said.

Yang, how­ever, added a cau­tion. The drive to launch new prod­ucts risks di­vert­ing man­age­ment’s at­ten­tion, com­pany cap­i­tal and re­sources from the core busi­ness. “It all de­pends,” he said. “Sales data should de­ter­mine whether the com­pany ought to be prod­uct-driven or brand-driven.”

HFT owns 99 re­tail stores in Hong Kong. Some, in high traf­fic ar­eas like sub­way sta­tions, are low-profit, high-vol­ume lo­ca­tions. On the other hand, “HFT.M2 Mall Square” of­fers food, In­ter­net ac­cess and a mini book­store

A spokesman for the ex­i­ten­try ad­min­is­tra­tion depart­ment said the bureau made prepa­ra­tions for the new pol­icy. He said these in­cluded train­ing the city’s pub­lic se­cu­rity

Stop­ping for a bowl of nour­ish­ing soup is ap­peal­ing and af­ford­able. HFT’s lo­cal ex­pan­sion, to­gether with the pro­mo­tion of a healthy life­style, should be wel­comed by con­sumers.” ADAM FUNG FI­NAN­CIAL AN­A­LYST

as well as herbal tea.

“The sub­way lo­ca­tions are based on the no­tion of ap­proach­ing cus­tomers with far lower costs, while the Mall Square con­cept is meant to el­e­vate the brand’s im­age and give added value to its prod­ucts,” said Yang.

Adam Fung, a lo­cal fi­nan­cial an­a­lyst at a global ac­count­ing com­pany, com­mended HFT for em­brac­ing trendy con­cepts, em­pha­siz­ing well-be­ing, ad­di­tive free prod­ucts and even “feel­ings” of home, thus re­ju­ve­nat­ing a prod­uct that had come to be re­garded as passé.

“Stop­ping for a bowl of nour­ish­ing soup is ap­peal­ing and af­ford­able. The price of a bowl of soup and steamed rice at HFT is HK$50. That’s al­most the same as a meal at Café de Co­ral. So, HFT’s lo­cal ex­pan­sion, to­gether with the pro­mo­tion of a healthy life­style, should be wel­comed by con­sumers,” said Fung.

Al­though HFT still faces stiff com­pe­ti­tion from com­pa­nies like HealthWorks, Fung ob­served, HFT still boasts con­sid­er­able con­sumer ap­peal.

While HFT’s lo­cal op­er­a­tions are mov­ing for­ward with vigor, its fu­ture plan­ning has raised doubts among ob­servers. It’s widely spec­u­lated that the com­pany plans to use the pro­ceeds of its IPO to make a full scale ad­vance into the main­land mar­ket, where the com­pany al­ready owns 29 branches. Three of them are in Shen­zhen, 23 in Guangzhou and three in Shang­hai.

One lo­cal stock trader com­mented that the sat­u­rated lo­cal mar­ket is likely to limit HFT’s growth po­ten­tial here, but he be­lieves a push into the main­land, where the cus­tomer base is im­mense, could go badly.

He said the HK$500 mil­lion HFT plans to raise from its IPO on June 23 is in­tended to ex­pand its re­tail net­work, not its fac­tory and pro­duc­tion fa­cil­i­ties. That’s a clear in­di­ca­tion that the com­pany’s pro­duc­tion is al­ready out­strip­ping sales.

“Given the ex­pected cut-throat com­pe­ti­tion from (main­land ri­vals) Wang Laoji and JDB Group, I think the out­look for HFT on the main­land should be fairly grim,” said the stock trader who de­clined to be named.

Yang agreed. “As Wang Laoji and JDB Group have a com­bined mar­ket share above 80 per­cent, it may be pretty dif­fi­cult for HFT to take a slice of the pie,” he said.

Yang cal­cu­lated that the main­land herbal tea in­dus­try had al­ready peaked af­ter ex­pe­ri­enc­ing sus­tained, rapid growth be­tween 2003 and 2009, be­fore sta­bi­liz­ing at 32 bil­lion yuan. The growth rate has slowed from a ro­bust 25 per­cent an­nual growth rate to a still healthy 15-17 per­cent.

Sta­tis­tics from the Bei­jing Academy of In­dus­try Econ­omy Re­search showed that sales vol­ume for the main­land herbal tea mar­ket reached 32.18 bil­lion yuan last year. The re­tail mar­ket for herbal tea grew by 17.8 per­cent.

Re­tail stores are as­set-in­ten­sive, added Yang. Since on­line com­pe­ti­tion is be­hind the slump in sales at bricks-and-mor­tar re­tail stores, HFT may have to re-eval­u­ate the costs of main­tain­ing tra­di­tional store­front op­er­a­tions and shift its main­land ex­pan­sion fo­cus to on­line sales.

But JDB Group al­ready is a step ahead. The main­land com­pany is al­ready work­ing with Jing­dong Mall, the main­land’s leading on­line re­tailer, to broaden its on­line busi­ness.

Yang spec­u­lated that HFT’s most prof­itable ex­pan­sion strat­egy might be to move be­yond China’s borders, and reach out to over­seas Chi­nese. HFT, in fact, opened the first over­seas herbal tea house in Toronto, Canada, in 1994.

Some still con­tend that mar­ket con­di­tions on the main­land are fa­vor­able, based on ris­ing con­sumer de­mand for health-ori­ented prod­ucts, world­wide.

Swire Bev­er­ages, the Hong Kong-based fran­chise pro­ducer and dis­trib­u­tor of Co­caCola Com­pany prod­ucts, re­ported that sales of bot­tled wa­ter and fruit juices in Hong Kong have drawn equal to sales of car­bon­ated drinks. Dur­ing the 1990s, car­bon­ated drinks ac­counted for 80 per­cent of sales vol­ume.

Fung pointed out that in 2007, Wang Laoji, a 170-year-old herbal tea seller, recorded sales of more than nine bil­lion yuan, sur­pass­ing main­land sales of Coca-Cola Com­pany that year.

The herbal tea in­dus­try is mak­ing a strong come­back, fu­eled by a grow­ing con­sumer con­scious­ness of well­ness foods and bev­er­ages.

“As an ex­pe­ri­enced re­tailer of healthy drinks, with a strong pro­duc­tion net­work, HFT has some lever­age in the main­land mar­ket,” said Fung. “The value-added mar­ket­ing con­cept in HFT.M2 Mall Square is worth pro­mot­ing on the main­land.”

Trav­el­ers at Chengdu Shuan­gliu In­ter­na­tional Air­port can en­joy Mapo tofu and have a shower be­fore they board their flight as part of the im­proved ser­vices at the air­port’s re­stored in­ter­na­tional ter­mi­nal.

China’s western por­tal city Chengdu, in Sichuan prov­ince, has at­tracted more over­seas vis­i­tors since it brought in the 72-hour visa-free pol­icy last Septem­ber, said an air­port of­fi­cial.

The air­port has im­proved its fa­cil­i­ties to pro­vide bet­ter ser­vices to in­ter­na­tional guests.

Af­ter five months of con­struc­tion, the first-class cabin and tax-free shops in the air­port’s in­ter­na­tional ter­mi­nal were com­pleted in late April.

The new first-class cabin can host 140 people at one time. It is the only first-class cabin to pro­vide cooked meals and show­ers in cen­tral west China, an air­port of­fi­cial said.

The of­fi­cial told re­porters that the meals in­cluded some renowned Sichuan cuisines such as Mapo tofu and spicy diced chicken with peanuts.

The cabin fol­lows a Sichuan theme, with fold­ing screens dec­o­rated with the pic­tures of pan­das and Sichuan em­broi­dery, both hall­marks of the prov­ince’s cul­ture.

French win­dows give trav­el­ers views out­side and the new 400-square-me­ter tax-free shop was in­spired by coun­ter­parts in Hong Kong, Taipei and Sin­ga­pore. passed through Chengdu cus­toms be­tween Septem­ber and March tax-free shop in Chengdu Shuan­gliu In­ter­na­tional Air­port

The shop of­fers per­fume, cos­met­ics, tobacco and wine as well as food, health-care prod­ucts and travel ac­ces­sories.

More top per­fume and cos­met­ics brands are due to be added to the shop’s range, ac­cord­ing to an air­port of­fi­cial.

n air­port spokesman told re­porters that they sup­ported the 72-hour visa-free pol­icy through com­mer­cials and by im­prov­ing hard­ware con­struc­tion and el­e­vat­ing the man­age­ment level.

Chengdu was the fourth Chi­nese city, af­ter Bei­jing, Shang­hai and Guangzhou, to im­ple­ment the 72-hour visafree pol­icy for for­eign­ers.

In 2013, the over­all ca­pac­ity of Chengdu Shuan­gliu In­ter­na­tional Air­port reached more than 500,000 tons.

There were al­to­gether more than 250,532 air­planes tak­ing off and land­ing from the air­port, with the daily aver­age num­ber of the air­planes sur­pass­ing 687. To date, Chengdu has opened 73 in­ter­na­tional flights. Sta­tis­tics from the Ex­i­tEn­try Ad­min­is­tra­tion Depart­ment of Chengdu Mu­nic­i­pal Pub­lic Se­cu­rity Bureau showed de­part­ments and ho­tels and the launch of a round-the-clock hot­line in both English and Chi­nese to an­swer ques­tions about the pol­icy.

The depart­ment pro­moted the pol­icy through vis­its to for­eign ac­cu­mu­lated com­mu­ni­ties, com­pa­nies and col­leges, brochures sent to for­eign­ers in Chengdu and mes­sages broad­cast on lo­cal TV sta­tions.

The spokesman said the depart­ment also helped for­eign­ers who have to stay longer than 72 hours in Chengdu by pro­cess­ing all the per­mits needed within three work­ing days.

HUANG JIN­GUO / FOR CHINA DAILY

Chengdu Shuan­gliu In­ter­na­tional Air­port of­fers bet­ter ser­vices to vis­i­tors from home and abroad.

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