28 Apr 2020 Sheng Siong provided
1Q20 Update
https://links.sgx.com/FileOpen/SSG_1Q202...eID=608333
(click to read SGX announcement)
I will leave it to you to click and read 1Q20 result.
My thought:
1. When we move from DORSCON yellow to orange, certain stocks (you know what lar) that SS had been stocking up in 4Q19 was depleted immediately.
2. Thanks to SS foresight, they had been stocking up in 4Q19 that we had avoided food and supply disruption. Excellent!
3. Moving forward, SS will continue to stock up.
4. However, when the CB is relaxed, there might be a dip in SS revenue as consumer will need to deplete those food that they brought during CB.
Take note.
Stay home and stay safe, everyone.
This is probably where all the restaurant, hawker and foodcourt sales have gone. After giving staff a 1 months' bonus in April, the Lims have done the right thing by doubling the interim dividend payout from 1.75cts to 3.5cts for shareholders.
Sheng Siong Group’s net profit grew 150.7% yoy to S$46.2 million for 2Q2020
Revenue grew significantly by 75.8% in 2Q2020 of which 61.2 percentage points was contributed by comparable same store sales, 13.3 percentage points by new stores and 1.3 percentage points by the stores in China.
1H20 PR:
https://links.sgx.com/FileOpen/SSG_2Q_1H...eID=625508
1H20 results:
https://links.sgx.com/FileOpen/SSG_2Q_1H...eID=625507
huat har!
this is the up side coming! retail sales went up the roof!!
It seems like the Supermarket sector is lucrative as Shopee is having a Supermarket Grand Launch.
Shopee Singapore is having their Supermarket Grand Launch. Here’s a sneak peek to our Shopee Supermarket Grand Launch Pre-claim exclusive 18% cashback vouchers right now, and look forward to 50% cashback vouchers with no min. spend for new Shopee Supermarket users, $0.10 hourly specials, best prices amongst online grocers, and also crazily slashed deals including suntory roku gin, ka laundry capsules and more! On top of that, spend and stand a chance to win over $3.5K worth of prizes from Fairmont Singapore or Swissotel The Stamford Promotion starts on the 14 April and ends on 16 April, 23:59.
https://shopee.sg/m/shopee-supermarket-l...12_0830_cm
No one has been able to run an online supermarket successfully here in sg.
Redmart tried for years and most probably still in the red even with a covid spike in sales. Or rather I would be inclined to think that the more sales they generate the more red ink they bleed. (hence the name red mart?) The business, in its current form, is deeply flawed. Much like bicycle sharing. It does not work.
I dont own any shares of Diary Farm or Sheng Shiong but physical supermarkets are still the most efficient/effective way of selling. There just too many challenges for the online supermarket to be viable, massive inventory needed, challenges of managing and delivering fresh produce, frozen food. The huge fleet of vehicles and manpower needed. Couple that with thin margins. Online supermarkets at at a huge disadvantage compared to the traditional brick and mortar one.
My best guess is while Shopee can take away market share by offering discounts and free delivery and by bleeding itself, the odds of long term success on this front is extremely low. The suppliers are the same, the cost structure is at a disadvantage, it is next to impossible to offer the same variety / lower cost/ speed of buying at a physical supermarket. Also the penetration is 100% for physical supermarkets and there sometimes is more than a few nearby. Why order when you can get it immediately downstairs or one block away?
My tiny brain cant work out any scenario where online supermarkets can work. The supply chain is also too complex/fragmented/diverse to be able to do anything meaningful or gain any competitive advantage. In the best case scenario, it may be successful on certain products where they can pull in existing online partners/sellers and have the suppliers themselves do the fulfilment. Ie Milk Powder Bundled with Diapers and sold in bulk. That would mean that they would be classified more like a online supermarket platform/portal for suppliers rather than operating an online supermarket themselves.
Indeed, fresh food (supermarkets) and convenience stalls (7-11) have seem to buckle the slaughter of online retail, so far.
But I believe that how one performs isn't as important as how competitors perform. It is not impossible for the pure online retail play, to one day discover the secret after trial and error. Alibaba's Hema is trying that and with a whole generation growing up with that in 5-10 years' time, it probably isn't too far away. Netflix spent more than 5 years via practice evolution, before coming into its current form of the OTT cable slayer (credit: Marc Randolph's book That Will Never Work)
Online fresh food selection may be barely profitable but what if it is only a customer acquisition tool? In this case, the unprofitability becomes a cheap way to acquire new customers. That was probably what Meituan Dianping did with Mobike a couple of years back. Shopee (online shop) working with Grab (transportation), anyone? (they still need a logistics partner to store the stuff)
Of course, offline fresh food selection will never go away. It will just become smaller or stop growing. Just like Comfort Delgro, Starhub or SPH's businesses to name the local ones.
Here is the thing about bleeding during start up phase to acquire customers. There are a few things to note here.
1. if the loses dont improve as time goes on and volume/value of sales increases, it is completely flawed. Ultimately it needs to be sustainable and at the very least break even.
2. What Meituan Dianping did with Mobike is completely senseless. Makes a good storyline and looks good on paper, in real life it is a complete disaster, throwing billions of dollars for no benefit. They acquired extremely cheap customers, many of which are in for a free ride, literally. These customers are not worth very much, in fact, companies should choose to avoid these customers. The ride data is completely useless and the cost of maintaining and reposition the bikes is extremely high.
Bike sharing ranks as the worst business in history, period.
With all that being said, there is still hope for online super market by shopee, but chances of success( by that i mean sizable market share and at least breaking even) are extremely low and they will not be profitable anytime soon.
(16-04-2021, 12:38 AM)Big Toe Wrote: [ -> ]Online supermarkets at at a huge disadvantage compared to the traditional brick and mortar one.
Why order when you can get it immediately downstairs or one block away?
Online supermarkets big advantage is no need to pay for rental? A big warehouse to store their stuff and I believe traditional big brick and mortar like NTUC also hv their own warehouses.
Not many stay near a supermarket especially those new town area like Pungol, SengKang, Jurong West. It takes me 7mins one way. For working pp, weekends is usually the time where they can do their purchase in supermarket. And the supermarket is jam pack with pp on weekends. The queue there is also horrendously long. Wiggling thru crowds of pp to buy yr stuff and waiting for at least 30mins for payment is simply not a pleasant experience.
And for those smaller supermart player which is near housing block, their stuff are more expensive. Now online prices already match those big supermart players.
I think traditional supermart started it due to competiton from redmart and amazon sg. Customers I believe will choose the online route for convenience especially those staying in new town areas. The only downside for customer is a minimum purchase requirement for the stuff to be delivered to them for free.
The use of autonomous robots for last mile delivery may help to lower cost once there is sufficient economics of scale.
Singapore is trialing the use of autonomous robots to make deliveries in Punggol, paving the way for wider use of robot "couriers" for on-demand delivery services.
https://www.channelnewsasia.com/news/sin...o-14382374
Researchers from the Nanyang Technological University (NTU) have made a breakthrough in the field of light detection and ranging sensors (LiDAR), which could see the key component of autonomous vehicles becoming 200 times cheaper – and the size of a fingertip.
https://www.channelnewsasia.com/news/sin...082018_cna