While customers are still ordering hampers as Chinese New Year (CNY) gifts, they are cutting down on the amount spent per hamper, say gift companies here.
A gloomy market outlook coupled with the recent bloodletting in the stock market has impacted how customers spend for CNY.
Mrs Winnie Tan, director of Humming Flowers & Gifts, says: "Some customers have given us feedback that they have cut back their budgets due to the poor business sentiment."
Joaquim Florist and Gifts managing director, Mr Kenneth Chee, says: "Maybe they will be more thrifty. Instead of spending $200 on a hamper, they may cut down to $150."
General manager of Noel Gifts, Ms Bernadette Kwan, reports a similar trend.
She says: "Due to the softened economy, some companies' budgets have been affected.
"Hence, we have seen a small number of customers drop their average purchase buy, cut their purchase quantity or choose to only buy CNY hampers and leave out the Christmas gifts."
However, gift companies say their clients will still continue to order hampers as presenting gifts to their business associates is the usual practice during CNY.
Ms Kwan says gift-giving still plays a big part, especially among corporate buyers, in CNY tradition.
She says: "The exchange of gifts during CNY helps to maintain business relationships, build rapport, leave an impression and garner more sales for the coming year."
Mrs Tan says: "They (customers) shared that they are still buying CNY gifts and hampers as it is still important to maintain good business relationships even though the business outlook is uncertain."
Orders started coming in the middle of December last year, but the pace has been slower than previous years, says the gift companies.
But they are optimistic as the bulk of the orders usually come in during the last two weeks before CNY.
Mrs Tan says: "Looking at our current sales compared with previous years, we are slightly behind by about 3 to 4 per cent.
"But we still have about two weeks more to go and more sales are expected to come in the coming weeks.
"Of those who have already ordered with us, we can see a buy down trend."
Mr Chee, who notices the same, says: "There will definitely be an impact. The question is, by how much. As much as 60 per cent of the orders come in the last two weeks before CNY.
"Even if I say that orders are down by 10 per cent now, it may pull back in the last two weeks."
Costs of imported raw materials and manpower have risen too, further impacting the profit margins of these companies.
To counter this, the gift companies have introduced promotions to entice customers.
For example, marketing manager of FarEastFlora.com, Ms Chris Kok, says they have developed more affordable hampers, with prices ranging from $88 to $238, to be in tune with market needs.
Noel Gifts has come up with "buy two and get one free" hamper promotions as well as a special abalone hamper.
Ms Kwan says: "We try to work it out internally instead of compromising the quality and value of our hampers or imposing additional costs on our customers.
"Hence, to ensure sustainability, we are lowering other costs by increasing productivity and negotiating better terms with our suppliers."
Meanwhile, Humming Flowers & Gifts has introduced two "Special XO (Cognac) Promo" hampers at $155 and $198 - a 5 to 8 per cent savings off the normal price.
Mrs Tan says: "The promotion is doing very well, with the hampers doing 25 per cent better than the other selections.
"We hope that the promotion will gain us more customers to overcome such cost increases."
To stand out from their competitors, the company has also come up with collectibles such as pen and card holders as well as an exclusive musical box to go along with their hampers.
Similarly, Ms Kok says FarEastFlora.com's series of Signature Vessel hampers, launched every year since 2007, has become a collector's item, with each year's design going according to the zodiac.
She says: "We have several regular customers who purchase our Signature Vessel hampers not only for CNY gifting. They also buy them for their personal collections and would want to continue doing so yearly."
This article was first published on Jan 24, 2016.
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