VF Franchise Consulting

Digital strategies boost Hong Kong Circle K sales

Aug 20, 2018

Circle-K-store-Hong-Kong

Digital and creative marketing strategies have been credited for rising sales at Hong Kong Circle K and Saint Honore stores in the first half of this year.

Parent Convenience Retail Asia says the combined operations achieved sales of HK$2.574 billion and drove core operating profit up 16 per cent to $81 million in the six months to June 30.

“The robust results were mainly due to effective eCRM programs for Circle K and Saint Honore as well as encouraging performance in developing businesses, particularly the new fast-fashion eyewear business Zoff,” the company said.

The group’s O2O business model which synergises Circle K’s OK Stamp It – eCRM app (driving online to offline traffic) and Circle K’s bricks-and-mortar store network (driving offline to online traffic), achieved a significant membership milestone, exceeding 1.1 million people and generated “a strong increase in comparable-store sales”.

In a commentary accompanying the results, CEO Richard Yeung Lap Bun said Convenience Retail Asia would continued to follow its ‘Three Plus’ strategies to achieve growth: focusing on smartphone-savvy ‘internet+’ customers; delivering the ‘4P’s+’ of exceptional products, promotions, places and pricing; ‘plus’ a great customer experience; and reinforcing its transformation into a ‘brick-and-mortar+’ O2O enterprise.

The group closed two Circle K Hong Kong stores during the period, and opened two, taking its network to 332. First-half sales for the chain rose 4.4 per cent, contributing total sales of $2.061 billion, largely driven by the OK Stamp It eCRM platform.

“OK Stamp It uses a special app to deliver promotional deals and loyalty program offers to members. It is a proven tool for marketing the group’s latest products, services, contests and premiums, and a valuable customer loyalty platform that drives online traffic into in-store traffic and repeat purchases. It also enables family members and friends to share their activities on their favourite social media,” he said.

In April, the group launched a three-stage summer promotion for OK Stamp It members. First was the return of the popular Shake Shake Lucky Star game, which gave members the chance to win one of 100 Samsung Galaxy S9 smartphones; the second was a collaboration with Zoff, which offered free sunglasses for the first 1000 members who purchased all nine selected items of newly imported ice cream brands from Japan and Korea; and the third was a World Cup-themed game with 100 grand prizes of Cathay Holiday coupons valued at HK$10,000 each.

“Launched less than two years ago, OK Stamp It has already become one of Hong Kong’s leading eCRM platforms,” said Yeung.

Saint Honore Cake Shop

At the end of the period, Convenience Retail Asia had 103 Saint Honore stores in Hong Kong and Macau, five more than at the same time a year earlier. It has another 33 in Guangzhou and Shenzhen.

“Although our bakery operations saw stagnant growth in comparable store sales in Hong Kong over the first six months of the year, total turnover grew on the back of key contributions from the opening of new stores in Hong Kong and an increase in festive product sales,” said Yeung.

However, gross profit margin was eroded by the appreciation of the renminbi, which caused surges in raw material and labour costs.

Zoff grows

Convenience Retail Asia opened its second store operating under the Japanese eyewear brand Zoff during the half year.

Zoff currently carries more than 1200 SKUs of frames and there are plans to expand this to more than 2000 SKUs, which Yeung says will strengthen product variety and differentiate the brand from competitors even more.

The second store opened on February 23 at Telford Plaza in Kowloon Bay.

Meanwhile, the company’s other developing business, FingerShopping.com achieved stable turnover.

As at the end of June, Fingershopping.com featured some 25,000 SKUs from more than 1700 brands on its e-commerce platform.

“Beauty and personal care continued to be the anchor category, representing 64 per cent of total gross merchandise volume and the team will continue to build variety within the site’s primary categories and seek strategic partners to boost new traffic,” said Yeung.

Inside Retail Hong Kong

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