PHILIPPINES
Growth slows to 6% in Q2
Economic growth slowed sharply in the second quarter and fell well short of expectations as a result of policy decisions that included the shutdown of Boracay Island, officials said yesterday. The 6 percent expansion in the April-to-June period was the weakest in three years and ended a run of 10 consecutive quarters in which the economy grew at least 6.5 percent. Forecasts in a Bloomberg News survey put growth at 6.6 percent. “The slowdown is partly due to policy decisions undertaken that are expected to promote sustainable and resilient development,” Secretary for Socioeconomic Planning Ernesto Pernia said. “We are referring to the temporary closure of Boracay,” he added. The holiday island was shuttered in April for a six-month clean up on the orders of President Rodrigo Duterte, who branded the popular island a “cesspool” sullied by tourism-related businesses flushing sewage into the sea.
E-COMMERCE
JD invests in delivery branch
Dada-JD Daojia has raised US$500 million from existing backers JD.com Inc (京東) and Walmart Inc to quicken the growth of its delivery network across China. The logistics company said it intends to use the funds to invest in supply chain technology and serve merchants on its platform, which connects scooter-riding drivers in about 400 cities with about 1.2 million online merchants and delivers everything from packages to groceries. Walmart’s Chinese-based supermarkets are one of Dada-JD Daojia’s (京東到家) key clients.
APPAREL
Adidas reports strong sales
Germany sporting goods firm Adidas yesterday said the FIFA World Cup in Russia and strong e-commerce sales lifted net profit in the second quarter, keeping the company on track to meet its goals for the year. Net profit at the Bavaria-based company more than doubled to 396 million euros (US$459.13 million) between April and June, up from 158 million in the same period last year. Group revenues climbed four percent to 5.3 billion euros year-on year, powered by brisk demand in the key North American and Chinese markets, as well as by online sales. A major growth driver in the second quarter was the World Cup, which helped drive a double-digit increase in sales in Russia alone. Looking ahead to the full year, Adidas said it expects a 10 percent increase in worldwide currency-adjusted sales fueled by North America and the Asia-Pacific region.
RETAIL
IKEA opens first India store
Band music and loud cheers yesterday greeted hundreds of customers as Swedish furniture giant IKEA opened its first store in India, five years after it received approval to invest in the country’s single-brand retail sector. The store in the southern city of Hyderabad, India’s information technology hub, is spread over 5 hectares. IKEA Group chief executive Jesper Brodin said that the company’s involvement with India began more than three decades ago with the sourcing of products. The company’s vast array of goods available at one place gives it an advantage in India. The Indian furniture market is mostly unorganized and composed of small and medium-sized businesses. IKEA plans to open 25 stores in India by 2025. It said that its Indian operation employs 950 people and plans to hire another 15,000 as it expands operations.
Among the rows of vibrators, rubber torsos and leather harnesses at a Chinese sex toys exhibition in Shanghai this weekend, the beginnings of an artificial intelligence (AI)-driven shift in the industry quietly pulsed. China manufactures about 70 percent of the world’s sex toys, most of it the “hardware” on display at the fair — whether that be technicolor tentacled dildos or hyper-realistic personalized silicone dolls. Yet smart toys have been rising in popularity for some time. Many major European and US brands already offer tech-enhanced products that can enable long-distance love, monitor well-being and even bring people one step closer to
TRANSFORMATION: Taiwan is now home to the largest Google hardware research and development center outside of the US, thanks to the nation’s economic policies President Tsai Ing-wen (蔡英文) yesterday attended an event marking the opening of Google’s second hardware research and development (R&D) office in Taiwan, which was held at New Taipei City’s Banciao District (板橋). This signals Taiwan’s transformation into the world’s largest Google hardware research and development center outside of the US, validating the nation’s economic policy in the past eight years, she said. The “five plus two” innovative industries policy, “six core strategic industries” initiative and infrastructure projects have grown the national industry and established resilient supply chains that withstood the COVID-19 pandemic, Tsai said. Taiwan has improved investment conditions of the domestic economy
Malaysia’s leader yesterday announced plans to build a massive semiconductor design park, aiming to boost the Southeast Asian nation’s role in the global chip industry. A prominent player in the semiconductor industry for decades, Malaysia accounts for an estimated 13 percent of global back-end manufacturing, according to German tech giant Bosch. Now it wants to go beyond production and emerge as a chip design powerhouse too, Malaysian Prime Minister Anwar Ibrahim said. “I am pleased to announce the largest IC (integrated circuit) Design Park in Southeast Asia, that will house world-class anchor tenants and collaborate with global companies such as Arm [Holdings PLC],”
MAJOR BENEFICIARY: The company benefits from TSMC’s advanced packaging scarcity, given robust demand for Nvidia AI chips, analysts said ASE Technology Holding Co (ASE, 日月光投控), the world’s biggest chip packaging and testing service provider, yesterday said it is raising its equipment capital expenditure budget by 10 percent this year to expand leading-edge and advanced packing and testing capacity amid strong artificial intelligence (AI) and high-performance computing chip demand. This is on top of the 40 to 50 percent annual increase in its capital spending budget to more than the US$1.7 billion to announced in February. About half of the equipment capital expenditure would be spent on leading-edge and advanced packaging and testing technology, the company said. ASE is considered by analysts