Annual Report 2016
33
Execu t i v e V i ce - Cha i rman ’s Repo r t
Department Stores
The intensified competition brought by e-commerce and
shopping malls, coupled with consumers’ diverse needs and
rising operating expenses, continued to impact the operating
environment of the department store sector in Mainland
China. In particular, e-commerce has continued to increase
its market dominance. In accordance to the figures released
by National Bureau of Statistics, the online retail sales in
China reached RMB2,236.7 billion in the first half of 2016,
representing a growth of 28.2%, among which the online
retail sales of physical goods were RMB1,814.3 billion,
representing an increase of 26.6%.
In response to the structural changes in the market and the
industry, the department store sector was actively pursuing
fundamental transformation, such as more precise market
positioning and optimised merchandise and service portfolio,
especially the focus on developing online and offline
shopping platform. As one of the key department store
b r a n d s i n Ma i n l a n d Ch i n a s i n c e 1 9 9 0 ’ s , New Wo r l d
Department Store China Limited (“NWDS”) will be pro-
actively exploring new sources of income and managing
expenses. In the meantime, NWDS will revamp its operations
to streamline its structure and consolidate stores resources
to enhance efficiency. NWDS will also actively fine tune the
cross-industry collaborations with technology companies to
strengthen technology applications in business aspects and
further unlock the hidden values of millions of NWDS VIPs.
I n F Y 2 0 1 6 , NWD S r e c o r d e d a p r o f i t a t t r i b u t a b l e t o
shareholders of HK$45.6 million. The commission income
from concessionaire sales was the major income contributor
to NWDS, accounting for 54.0% of the total revenue. Proceeds
from direct sales and rental income accounted for 27.4% and
17.5% respectively of the total revenue. The remaining 1.1%
was derived from management and consultancy fees. Region-
wise, Northern China Region contributed the most to the
revenue of NWDS, amounting to 51.1% of total revenue,
followed by the South Eastern China Region and the Central
Western China Region, which accounted for 31.1% and 17.8%
of the total revenue respectively.
As at 30 June 2016, NWDS operated and managed a total of
39 stores and 2 shopping malls spreading across 21 cities in
Mainland China with total GFA of over 1.6 million sq m.
