Impact of COVID-19 Outbreak on FMCG Market During CNY

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Cityneon Raises S$235 Million; Well Positioned for Next Growth Chapter

  • The global experience entertainment company gets a S$235 million shot in the arm, closes its private fund raising in April 2021
  • Investors both new and existing include Singapore's Pavilion Capital, Seatown Holdings International and EDBI, Qatar's Doha Venture Capital and financial institutions and family offices in Singapore and China
  • These now join other existing Cityneon shareholders CITIC Capital, veteran entrepreneur and investor Mr. Johnson Ko, and Executive Chairman & Group CEO Mr. Ron Tan
  • Funding comes just after the Group acquired multi-year licensing rights for James Cameron's AVATAR touring exhibition, and two original artefacts IP on the ancient civilization Machu Picchu from Peru and Ramses the Great (Ramses II) from Egypt
  • Investments position the Group well to bring experiences across the globe, targeting to launch six experiences in China and five in the U.S. by the end of 2021, with more in other parts of the world

SINGAPORE - Media OutReach - 21 April 2021 - Cityneon Holdings ("Cityneon", the "Company"/collectively with its subsidiaries, the "Group") raised S$235 million in the most recent round of private funding. The latest round of funding adds seasoned investors to Cityneon's already strong stable of shareholders.

This funding round was led by Singapore's Pavilion Capital, Seatown Holdings International, EDBI, and Cityneon's Executive Chairman & Group CEO, Mr. Ron Tan. EDBI and Pavilion Capital are existing shareholders of Cityneon whilst new investors include Seatown Holdings International, Qatar's Doha Venture Capital, which will now own approximately 4 per cent of the Group, and other financial institutions and family offices in Singapore and China.

These now join other existing Cityneon shareholders CITIC Capital, veteran entrepreneur and investor Mr. Johnson Ko, and Executive Chairman & Group CEO Mr. Ron Tan to form a new and strong shareholder base for the Group. Mr. Johnson Ko and Mr. Ron Tan remain as the largest shareholders of the company via their combined entity, West Knighton Limited.

The Group is now well positioned for its next growth chapter and will use the proceeds for capital expenditure that includes building more of its various intellectual property (IP) exhibition sets, totaling 24 travelling and four semi-permanent sets under the Studio IP partnerships and three travelling sets under the original artefact IP partnerships by the end of 2022.

Already, the Group just signed its fifth IP rights with Avatar from 20th Century Studios last year. Amidst the anticipation from Avatar fans worldwide, Cityneon will debut a multi-sensory Avatar exhibition in Chengdu, China in May 2021, ahead of the Avatar movie sequel which is slated for release in 2022. Avatar is the world's top grossing film of all time at over US$2.8 billion, and adding millions more after its successful re-release in China in March 2021. Avatar's director James Cameron has announced that he will be producing four sequels with 20th Century Studios, with the first sequel slated for release next year. Disney acquired 20th Century Studios for US$71 billion in 2019.

The Company also recently entered the original artefacts IPs space and will stage international exhibitions of the treasures of the ancient civilization Machu Picchu from Peru in Boca Raton, Florida and Pharaoh Ramses II from Egypt in Houston, Texas. These two experiences will start welcoming visitors in October and November 2021, respectively.

Other IP rights that the Group holds include partnerships with Universal Studios for Jurassic World: The Exhibition, Marvel for Avengers S.T.A.T.I.O.N., Lionsgate for The Hunger Games: The Exhibition and Hasbro for Transformers Autobot Alliance. All in, Cityneon holds the IP rights for five of the top 10 worldwide box office hits and two artefacts IP from Peru and Egypt. The Group expects to have six sets of its various IP rights travelling across China, and five travelling and permanent sets in the United States, with a few more in other parts of the globe.

The Group will also be reopening experiences that were temporarily closed in 2020, aiming to provide visitors with a safe entertainment option. These include the Marvel Avengers S.T.A.T.I.O.N. in Toronto, Canada that will be re-opening in May 2021; and the Marvel Avengers S.T.A.T.I.O.N. exhibition in Lotte Mall in Seoul, Korea in April 2021; the same exhibition space which previously housed Jurassic World: The Exhibition, another IP experience exhibition by the Group in 2019. In the past month, the Group also witnessed record visitor numbers at their semi-permanent installations in Las Vegas, USA, signaling a strong comeback and demand for their immersive experiences, as they step into the 6th year of operations there.

While there are exciting plans lined up, the Group is not resting on its laurels. More Hollywood IPs and artefact IPs can be expected, and there will be further announcements on new IP verticals in entertainment experiences that the Group is looking to enter.

Mr. Ron Tan, Executive Chairman & Group CEO of Cityneon, said: "It is exciting that the Company is going through such strategic expansion as one of the largest providers of exhibition entertainment experiences globally. The S$235 million funding round sets a solid foundation for us to invest in developing more of our entertainment experiences, to stage even more exhibitions of the five box office hits and two artefact IPs that we hold the rights to all over the world. I'm thankful that our strong investors base, now from Singapore, Hong Kong, China and the Middle East, have trust in our vision, and believe alongside us that this space of big ideas and big experiences will only grow."

By the end of this year, Cityneon will arguably be the largest provider of exhibition entertainment experiences internationally; with global footprints in more than 50 cities and welcoming 10 million unique visitors across the world by 2022.

Cityneon Holdings

With its global reach and international partnerships, Cityneon has the capability to serve its clients anywhere in the world. Cityneon was listed on the Mainboard of the Singapore Stock Exchange since 2005, and was privatized on February 2019 by West Knighton Limited, a company wholly owned by Cityneon's Executive Chairman and Group CEO, Ron Tan, together with Hong Kong veteran entrepreneur and investor, Johnson Ko Chun Shun. Johnson is a capital markets veteran and has held controlling interests and directorships in many listed companies. In May 2019, Cityneon welcomed CITIC Capital as a new shareholder, who holds approximately 10% shares in Cityneon. CITIC Capital is part of CITIC Group, one of China's largest conglomerates, and has over US$25b of assets under its management across 100 funds and investment products globally. Other institutional shareholders of the Group include EDBI - a Singapore government-linked global investor, and Pavilion Capital - a Singapore-based investment institution which focuses on private equity investments, that made strategic investments in August and October 2019 respectively, to support the Group's further expansion globally. For more information, please visit www.cityneongroup.com.


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Impact of COVID-19 Outbreak on FMCG Market During CNY - Brand Spur
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It’s been nearly a month since the outbreak of Novel Coronavirus (named by WHO as COVID-19) in China. The epidemic is significantly impacting the economy of China as well as the rest of the world. Since the outbreak took place just behind the celebration of the lunar new year in China, brands and retailers expect severe challenges to the sales of fast-moving consumer goods (FMCG) in this most celebrated festive season in China.

In an earlier report analysing the impact to the FMCG market by SARS last week, Kantar Worldpanel already shared key findings based on historical data from 17 years ago. However, as many analysts suggested, the scale and scope of the Chinese economy in 2003 was substantially behind the level in 2020, and therefore the impact of COVID-19 is believed to be much stronger than the impact of SARS. This impact will definitely be felt by the FMCG market but not all categories and retailers will see a negative impact.

Chinese New Year (CNY) is one of the most important sales peaks for many brands and retailers. The date of Chinese New Year is not exactly the same every year so we have realigned the reporting period based on lunar calendar to make the data comparable. Since Chinese New Year in 2019 was one week later than 2020, we re-adjusted the data period by week and after comparing consumers purchases two weeks before CNY and two weeks after Chinese New Year, we are now in a position to assess the impact.

Impact of COVID-19 Outbreak on FMCG Market During CNY - Brand Spur

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1. Pre-CNY Sales Stronger Yet Considerable Decline Observed After the Virus Outbreak

The total sales two weeks before CNY grew by 15%, substantially higher than the full-year FMCG growth rate of 5.3% in 2019. However, after the Wuhan lockdown was announced on January 23rd, panic started to gather. As the Chinese government appealed to everyone to avoid family and friends gatherings and all social activities (including the suspension of cinemas and entertainment facilities across major cities), the sales of the CNY week dropped by 24% on a like-for-like basis and then by 41% in the subsequent week, as people were asked to stay at home. Based on our preliminary estimation, total FMCG sales went down by 12% over the 4 weeks period compared with 2019.

The drop of FMCG market was partly due to the decline of shoppers by 2%, but more severely impacted by the drop of spending per trip by 10% as shoppers reduced the number of categories they purchased. There are two main reasons behind the changes: consumers reduced their new year celebration gathering, hence there was a lower demand for categories that were normally purchased for CNY gifts. In the meantime, consumers had to relocate their budget to critical health and protective categories, i.e. face masks, disinfectant products and fresh foods.

Impact of COVID-19 Outbreak on FMCG Market During CNY - Brand Spur

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2. Mixed Performance by Categories Amid the Epidemic

The sharp drop of consumer spending is bad news to many categories, especially those relying heavily on CNY sales. Both alcoholic and non-alcoholic drinks saw their sales fall by more than 40% during the 2 weeks after CNY as most consumers cancelled their family gathering. In China, top choices for gifting occasions include liquid milk, confectionery and biscuits, all of which faced considerable challenges during CNY this year. On the contrary, categories like instant noodles, frozen foods and quick soup witnessed soaring demand as consumers flocked to supermarkets to stock up and spend more time cooking at home. Moreover, seasoning products, butter and cheese also enjoyed significant growth as consumers opted to cook more indulgent meals at home.

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Non-food categories are typically less seasonal during the CNY period, however, some of them were experiencing astonishing growth as anxious shoppers, desperate to protect themselves from infection, have stripped stores of hand sanitisers and disinfectants. Meanwhile, tissues and wipes gained more popularity as they were used for hand cleansing when consumers are out of the home. Those categories are expected to maintain their growth momentum even in the post-epidemic era as Chinese consumers continue their sanitising habits.

“When did you wash your hair last time?” this is a top topic on social media during the period. As consumers stayed at home every day, their personal care routine tended to change. The sales of haircare products, including shampoo and conditioner, saw the decline and the situation is even worse for colourant and styling products. Due to the fact, people were not going out to meet friends or to the office, categories with strong social functions such as makeup and fragrance also experienced disappointing sales.

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Impact of COVID-19 Outbreak on FMCG Market During CNY - Brand Spur

3. Offline Stores saw Considerable Shopper Loss while Small Formats and Digital Commerce Enjoyed Growth

Hypermarkets and Supermarkets all faced severe challenges of reduced footfall during the Covid-19 spread, with penetration dropping by 15% and 12% respectively.   During the festive period, gifting occasions also dropped significantly, with categories relying on nice gift packs for family/friend visits being hit particularly hard. As many consumers cancelled their overseas travel plans, purchases from other countries and duty-free also saw a significant drop.

The epidemic did bring more demand to a handful of other retail channels. Small supermarkets, mainly those located in residential communities, reported strong growth during the CNY period, as they were closer to shoppers and stocked essential fresh foods and daily necessities. Ecommerce giant like Alibaba, JD and Pinduoduo, are also adapting their strategy proactively in terms of logistics and home delivery. Moreover, emerging channels riding on the popularity of Wechat enjoyed soaring demand as consumers spent far more time on social media for news and entertainment during this period.

New retail players, led by Hema, recorded stronger growth during CNY period, thanks to more shoppers and more visits as consumers opted to use delivery for their daily foods. With rapid store expansion, Hema almost doubled its footprint compared to CNY in 2019. Meanwhile, it’s the first retailer to accept redundant workers from restaurants and catering services as part-time workers for sorting and delivering merchandise. The move is a win-win solution for both industries to survive through this difficult period. Innovative solutions such as ‘contactless delivery’ was also invented to avoid physical contact between shoppers and delivery workers. Omni-channel penetration with O2O delivery is expected to be more accepted post the crisis.

The battle against COVID-19 is still on and the challenges to FMCG industry is yet to be fully observed. The wide spread epidemic will have a profound impact on FMCG categories in Q1 and possibly in Q2. Kantar Worldpanel will launch a monthly category tracker to help brands and retailers closely monitor the impact.

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HONG KONG SAR - Media OutReach - 21 April 2021 - Trend Micro Incorporated (TYO: 4704; TSE: 4704), a global cybersecurity leader, excelled in the latest ATT&CK Evaluation performed by MITRE Engenuity. The Trend Micro Vision OneTM platform quickly detected 96% of attack steps from the simulation that mimicked the behavior of two infamous APT groups.


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Trend Micro, a global cybersecurity leader, helps make the world safe for exchanging digital information. Fueled by decades of security expertise, global threat research, and continuous innovation, Trend Micro's cybersecurity platform protects hundreds of thousands of organizations and millions of individuals across clouds, networks, devices, and endpoints. As a leader in cloud and enterprise cybersecurity, the platform delivers a powerful range of advanced threat defense techniques optimized for environments like AWS, Microsoft, and Google, and central visibility for better, faster detection and response. With 7,000 employees across 65 countries, Trend Micro enables organizations to simplify and secure their connected world. www.trendmicro.com.hk


About MITRE Engenuity ATT&CK Evaluations

MITRE Engenuity ATT&CK Evaluations are paid for by vendors and are intended to help vendors and end-users better understand their product's capabilities in relation to MITRE's publicly accessible ATT&CK® framework. MITRE developed and maintains the ATT&CK knowledge base, which is based on real world reporting of adversary tactics and techniques. ATT&CK is freely available, and is widely used by defenders in industry and government to find gaps in visibility, defensive tools, and processes as they evaluate and select options to improve their network defense. MITRE Engenuity makes the methodology and resulting data publicly available so other organizations may benefit and conduct their own analysis and interpretation. The evaluations do not provide scores, ranks, or endorsements.


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