city u biz school erwin huang tsl presentation mar 2010
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Navigating in the Tsunami: Brand strategy in the Chinese Luxury Market
Presentation at CU MBA class, byErwin Huang, Deputy Chairman,
4th Mar 2010
Strictly Private & Confidential
1. Vision
2. Tools for Navigating the Tsunami
3. Changes and Reflections
Agenda
Strictly Private & Confidential
Corporate Mission
• Be the Leading Branded Luxury Retailer for the Chinese people– most innovative, efficient & profitable
• “Local Jeweller with a Global Touch”
Which Industry?
1st Generation HK Manufacturing Entrepreneur
Modern Retailer for Chinese
Low Cost High Value
Skill and Knowhow in Production Design, Fashionable Branding
Mass, Economy of Scale Targeted, Economy of Scope
Vertically Integrated Manufacturer Quick Response Efficient Retailer
Traditional Apprentices System Re-engineered Corp Governance
Trusted Brand name Trusted Brand name
Believe in Service, go the extra step Believe in Service, go the extra step
Long term loyal customer Long term loyal customer
Care and Love for the Customer Care and Love for the Customer
Strictly Private & Confidential
Market and Brand Positioning
• Largest Luxury Market in the world• Segmentation • Competitor positioning• TSL, positioning
– Focus on the mid-top market– High margin, High Value– Selective market and cities– Develop new brand: TSL:SAXX– Wedding Expert– Pt and Diamond Expert (the “White” jewellry)
Franchise vs Self Own
• vs competitor’s 800+ Franchise stores in China• TSL ~150 stores, all self owned• Vision, “not to be the biggest”
Modern Management tools
• SAP: ERP “Live Enterprise”• Retailing KPI’s• Service/Value Focus• CRM
Focus on Service
• Buy in HK, service in your home city• Knowledge sharing
– Wedding fiesta– Parties teaching how to buy jewellery– Actively share with customer on how to value luxury
products• Retail Management Assoc Service award• >$10,000 per staff investment in training• Empower frontline •
Customer Centric Biz model
• Customer Life Cycle Model• “the young shanghai girl story”• Grow together• Walk together• Biz model built around the customer growth• KPI’s
– Acquisition, conversion, APRU/period– Telco business model
Media Management
• Media Management– In 08, TSL is on 30+
frontpage bad news– All Baidu, Google
search results– No coverage is best
PR during that period• Search recently..
Changing Industry Practice
• Look into processes of the Tourist Industry and ask “Why Not?”
• Work with the Gov (HK, PRC) and NGO’s– TB, TIC, Customs Dept, Legco, – Business Associations
• Introduce “Best Business Practice” approach– Against “Zero-Price Tour”– First to implement “180 days refund policy”– First to implement “Buy in HK, Maintain in PRC”– Intro Non-Cash Transactions– Good Documentations
• Contracts, IT, Audit trails
ACHIEVEMENTS FOR THE YEAR 2009
Summary:
Summary for the Year
• Achievements for year– Smooth Transition for the New Management
• Good Reception from the Media, Partners and the Public
– Improvements over efficiency even against Economic Tsunami changes
– Reduced Gearing even during tough times– Improved internal controls across the company,
verified by independent parties– Continuous Dividend payment to improve Shareholder
returns– Resumption of Trading on HKSE (Jun 2009)
Store network – 170+ stores
Xinjiang 陔蔭2
Gansu 裘顏1
Sichuan 侐捶8
Yunnan ? 鰍2
Guizhou 惸笣2
Guangdong 10
Hunan 綬鰍1
Jiangxi 蔬昹1
Fujian 腦膘4
Zhejiang 涳蔬6
Shanghai 奻漆8
Jiangsu 蔬妶5
Anhui 假閣1Hubei 綬控
1
Shandong 刓2
Tianjian 毞踩4
Henan 碩鰍2Shaanxi ? 昹
3
Hebei 碩控3
Beijing 控儔13
Liaoning 腶 ?7
Jilin 憚輿1
Heilongjiang 2
Xinjiang 新彊2
Sichuan 四川8
Yunnan 雲南3
Guizhou 貴州6
Guangdong 廣東 16
Hunan 湖南Jiangxi 江西2Fujian 福建
Zhejiang 淅江7
Shanghai 上海15
Jiangsu 江蘇19
Anhui 安徽3Hubei 湖北
2
Shandong 山東7
Tianjian 天津4
Henan 河南6
Shaanxi 陝西5
Hebei 河北4
Beijing 北京29
Liaoning 遼寧6
Jilin 吉林2
Heilongjiang 黑龍江3
6Guangxi 廣西
6
The wholly-own, Franchise and JV shops are grouped into 6 divisions and 3 regions.
Hainan 海南 2
4Regions Own shops JV shops Fran.
shops Cities
Northern PRC Division 4
Division 9
Southern PRC Division 7 Division 8
Central PRC Division 5 Division 6
Total
12
17
3013
2038
130
7
-
-3
--
10
-
25
--
-3
28
哈爾濱 , 長春 , 沈阳 , 抚顺 , 大連 , 青島 濟南 , 烟台 , 淄博北京 , 天津 , 西安 , 石家莊 , 塘沽
廣州 , 深圳 , 海南 , 佛山 , 广西 , 廈門 , 福州 長沙 , 南昌 , 武漢 , 合肥 , 焦作 , 洛阳 , 郑州
兰州 , 成都 , 重慶 , 昆明 , 貴陽 , 新疆 上海 , 寧波 , 杭州 , 无锡 , 南京 , 昆山 , 苏州 , 常州 , 南通 , 温州 , 常熟
甘肅Gansu1
Improvement in result mainly due to :
1. Growth in turnover and contribution from Mainland China
2. Compensation income from early termination of a shop lease
Turnover for the year : $1,959M(+2.2%)Profit attributable to equity holders of the Company $ 104.8M(+5.6%)
FY 08-09 Results
16
Cost / turnover under control and EBIT / turnover maintained stable
FY 08-09 Results
Borrowings was HK$ 131 million & gearing decreased to 22.7%
Equity attributable to shareholders increased to $ 512 million
Cash, Gearings and Equity
Feb 07 Feb 08 Feb 09HK$ m HK$ m HK$ m
Borrowings 149.6 171.1 131.8 Cash, Bank& undrawn banking facilitiy 99.2 79.0 137.0
Total Assets 920.9 1,259.0 1,212.4 Equity attributable to shareholders 275.6 401.6 512.1 Total Equity 307.3 448.2 580.4
Gearing (Borrowings / Total Equity) 48.7% 38.2% 22.7%
Dividends (Final 3 cents/share + Interim 2 cents/share = 5 cents /share)
Earnings per share increased to HK$ 0.50
Net assets per share increased to HK$ 2.45
Dividends and Returns per share
無鍚商廈
Wuxi
New Stores in PRC
Opened and expanded shops (HK)
Key Shop in Mongkok
Mongkok Hollywood Plaza (MH) - Perspective
International exhibitions
Hong Kong Premier Pavilion Jewellery Fair – 18th-21st June 2009
Continuous Product Innovations:Estrella, 100 Facets
Amazon Segundo Collection
Moving forward!• Continuous improvements:
– Efficiency and Effectiveness of the team– Brand improvements
• Nurturing of New Brand: TSL:SAXX• Continue Strong Position in Up-end market in PRC• Premium Position for TSL: Estrella product line• With Improved New Product and Shop Experiences• Strong Recognition in Wedding Market segment
• Cautious approach: – For New Shop investments– Raw Material Pricing not stable– Unknown Economic Recovery Cycle
Summary: reborn into a new industry
1st Generation HK Manufacturing Entrepreneur
Modern Retailer for Chinese
Low Cost High Value
Skill and Knowhow in Production Design, Fashionable Branding
Mass, Economy of Scale Targeted, Economy of Scope
Vertically Integrated Manufacturer Quick Response Efficient Retailer
Traditional Apprentices System Re-engineered Corp Governance
Trusted Brand name Trusted Brand name
Believe in Service, go the extra step Believe in Service, go the extra step
Long term loyal customer Long term loyal customer
Care and Love for the Customer Care and Love for the Customer
Strictly Private & Confidential
Summary: Navigating the Tsunami
• A clearly defined mission• Hard work
– Modern mgt tools– Process re-engineering– Innovation in retailing– Changing industry practice thru leadership
• Media Management– Press, client, public, government
Personal Sharing
• How’d I come to join TSL?• A little bit on my background• What’s the chemistry that drive success and
failure?
Discussions
Strictly Private & Confidential
Contact
• Email: [email protected]• Twitter: erwinhuang• Facebook: erwinhuang1• Today’s presentation: SlideShare.net/erwinhuang
Preparation Slide after these(Not used)
Strictly Private & Confidential
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