China Brands, News

Sa Sa International’s Turnover Declined by 4.1% in 2024 Q1 Despite the Recovery in Mainland

Recently, Sa Sa International Holdings Limited (hereinafter referred to as “Sa Sa International”) released its sales data for the fourth quarter ending March 31, 2024. During the fourth quarter, Sa Sa International’s turnover decreased by 4.1% year-on-year to HK$1.041 billion. Offline sales declined by 8.7% to HK$865 million, while online sales increased by 27.1% to HK$176 million. Compared with the same period in 2019 before the pandemic, the group’s offline sales have recovered to 44.5% of pre-pandemic levels.

Sa Sa International stated that following the reopening of borders between the Hong Kong and Macau SARs and Mainland China last year, the Group experienced a significant increase in turnover in the Hong Kong & Macau SARs, totaling HK$867.2 million from January to March 2023, attributed to a boost in tourism and consumer retaliation spending. However, this year, the combined online and offline sales in the Hong Kong and Macau SARs amounted to HK$800.7 million, reflecting a year-on-year decrease of HK$66.5 million due to the influence of a high base effect.

Sales in the last quarter were affected by the increasing trend of Hong Kong residents traveling to cities in mainland China, leading to reduced local foot traffic, especially on weekends and public holidays, particularly noticeable in residential areas near the Shenzhen border. During the Lunar New Year holiday from February 10th to 13th, approximately 1.16 million Hong Kong residents visited mainland China, twice the number of mainland visitors to the Hong Kong SAR, which was approximately 0.65 million. Overall, visitor arrivals to the Hong Kong and Macau SARs did not meet expectations during this period. Additionally, due to economic challenges such as a downturn in equity and real estate markets, the purchasing power of local consumers has declined.

Offline sales decreased 7.4% year-on-year, while same-store sales declined 10.9%. Despite a decrease of 36 stores, or 30.5%, operated by the Group in the Hong Kong and Macau SARs as of March 31, 2024, sales have recovered to 42.5% of pre-pandemic levels. Tourist sales accounted for 49.7%, compared to approximately 74% during the pre-pandemic period.

Online sales in the Hong Kong and Macau SARs reached HK$48.1 million, constituting approximately 6.0% of the total sales, marking an 11.7% decline compared to the previous year as consumers shifted their preference back to offline stores.

During this period, Sa Sa International achieved a turnover of HK$150.0 million in Mainland China, marking an 18.2% increase compared to the corresponding period last year. Online sales played a significant role, constituting 73.0% of this region’s total sales. The growth trend in online sales, which started in the third quarter, continued with a year-on-year increase of 67.5% to HK$109.5 million. Despite operating five or 13.5% fewer stores compared to the same period last year, offline sales decreased by 30.5% (measured in local currency) to HK$40.5 million.

As of the first three months of this year, Sa Sa International had a total of 183 retail stores, a decrease of 3 compared to the same period last year, including 32 in mainland China, 82 in the Hong Kong and Macau Special Administrative Regions, and 69 in Southeast Asia.