Sa Sa Q3: sales growth remains challenged

Date : 02 February 2021

Francis Ramos

Senior Retail Analyst

Sa Sa International Holdings Limited has announced its unaudited sales for the quarter ending 31 December 2020, with sales down 36.4%.

Year-on-year turnover remains negative, but indicates a slowing decline

Although Sa Sa’s turnover this quarter continued to slide, the decline is now at a slower pace.  Its overall turnover this quarter increased by 34.8% when compared with the preceding quarter.   The recovery can be attributed to softer comparative trading periods in Hong Kong in the previous financial year, an increase in the number of Mainland Chinese visitors in Macau, plus growth in ecommerce and its retail operations in Mainland China.

Macau and Hong Kong: quarter-on-quarter sales continue to improve 

During the quarter, Sa Sa’s turnover in Macau and Hong Kong decreased by 48.8% year-on-year, but increased by 35.6% relative to the previous quarter. 

  • Sales improvement in Macau is due to its opening its borders to some cities in Mainland China in August 2020, and ultimately the whole country by the end of September 2020.  Year-on-year sales declines in Macau have narrowed from 72.9% in the earlier quarter to 45% this quarter.
  • In Hong Kong, tourists from Mainland China have not increased due to the outbreak of the fourth wave of the COVID-19 pandemic in November 2020.  Despite this, Christmas helped boost sales by 8.2% quarter-on-quarter, narrowing the year-on-year decline to 50.8%.

Mainland China: ecommerce and store expansion have driven growth

Sa Sa seized sales opportunities in China during the extended ‘Double 11’ shopping festival in November 2020, as well as via maximising its WeChat mini-programme.  These have helped its ecommerce sales surge by 66.5% year-on-year and 61.8% quarter-on-quarter.  It also opened an additional six stores during this period, enabling total sales to grow in China 15.6% year-on-year.

Malaysia: stores remain to be affected, and business strategy to be adjusted

Business in Malaysia continued to be weak, with sales down 38.5%.  Sasa is now adjusting its strategy “by actively developing markets with good potential, as well as its promising online business.”  Dr. Simon Kwok, Chairman and Chief Executive Officer of Sa Sa International Holdings Limited, added, “The Group will continue to rationalize its retail store network to reduce rental expenses and will maintain stringent cost and inventory management to preserve working capital. The Group will also adjust its product mix by introducing more popular products to cater to local customers’ needs.”