Sun Art bets on ‘Feiniu Fresh’ de­liv­ery strat­egy

New Straits Times - - Business -

HONG KONG: Sun Art Re­tail Group Ltd, China’s No. 2 hy­per­mar­ket op­er­a­tor, said it is bet­ting on a new on­line de­liv­ery strat­egy to take on e-com­merce play­ers as com­pe­ti­tion heats up in the coun­try’s US$700 bil­lion (RM3 tril­lion) gro­cery mar­ket.

The re­tailer, which posted a higher net profit for the first half of the year mainly due to gains from un­used pre­paid cards, has been slow in the race to go on­line, with its plat­form Feiniu fall­ing sig­nif­i­cantly short ver­sus that of big­ger com­peti­tors like China Re­sources and Wal-Mart Stores Inc.

But Sun Art is look­ing to bridge the gap with its new on­line de­liv­ery ser­vice, Feiniu Fresh, that was launched in June and prom­ises to bring gro­cery to the cus­tomer’s doorstep within an hour from when the order is placed.

The Feiniu plat­form, which Sun Art sees as a key way to rein­vent it­self and com­bat de­clin­ing foot traf­fic in stores, saw nar­rower losses in the first half of the year and the com­pany hoped it would break even in 2019, said Peter Huang, an ex­ec­u­tive direc­tor at the re­tailer.

Feiniu has so far been rolled out to 400 mor­tar stores and has con­trib­uted to a 4.2 per cent rise in op­er­at­ing costs.

In­dus­try ex­perts warn cost pres­sures would fur­ther rise as ecom­merce gi­ants such as JD.com and Alibaba set up brick-and­mor­tar stores. Reuters

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