Here&rsquo s why Super Group is banking on a surge in China to lift its struggling sales

20% of consumers in China buy from e-commerce vendors abroad.

While the retail firm&rsquo s growth momentum in China isn&rsquo t exactly cheery due to new product launches and a general market slowdown, analysts still believe China may be a bright spot for the company.

According to a report by UOB Kay Hian, Singapore brands an hold a premium in China amid increasing affluence of Chinese consumers and food safety concerns.

&ldquo A survey by McKinsey highlights nearly 20% of digital consumers in China buy from e-commerce vendors outside of China, where cross border shoppers prefer items that are either too expensive or too scarce domestically,&rdquo the report said.

Meanwhile, UOB Kay Hian added that Super has also been gaining momentum on the ecommerce sales front and has expanded out of Jiangsu region to Chengdu as well as Wuhan.

 

This familiar household brand is challenging Super Group&rsquo s supremacy in Myanmar

The firm owns 50% market share in the country.

The retail firm has a firm grip on the Southeast Asian country&rsquo s market, primarily due to traditional trade channels and its ability to sell even in rural villages.

However, according to a report by RHB Research, modern trade channels have led to a shake-up in the retail market, with Super Group facing increasing competition from rivals, especially global giant Nestle.

Meanwhile, to keep its market share, RHB Research said Super Group has put significant focus on re-branding in recent years, and related activities have centred around launching new products such as Essenso Microground Coffee.

&ldquo We believe this is important to help the company maintain market share in its key markets, considering the intense competition in this product space. Investments in upstream capabilities in recent years should also help cushion possible increases in ingredient prices or price competition,&rdquo the report said.

On the other hand, RHB Research also suggested that profitability for the firm may have bottomed out.

&ldquo The company recently arrested a revenue decline (since early 2015) in its core branded consumer segment. With a possible margin uptrend due to the integration of upstream capabilities, as well as weaker commodity prices, we believe its profit decline has bottomed out,&rdquo the report said.