Distribution and Retail Chain

Market sentiment in Hong Kong deteriorated during the financial year under review amid the outbreak of SARS and the economic downturn which affected the retail industry at large. “CM Concept” as a one-stop-shop of telecommunications and digital consumer electronics products was inevitably affected by the market situation. Turnover of the distribution and retail consumer electronics products was inevitably affected by the market situation. Turnover of the distribution and retail chain business decreased by 14% to HK＄129million. 

However, at the end of 2003,business and marketing plans were put in place to capture the opportunities arising from the introduction of the “Individual Visit Scheme”. Responding to this huge business opportunity, the Group has set out to reposition “CM Concept”. In addition to introducing new products and services, we have begun to strengthen our retail chain network by relocating the retail outlets to areas that are convenient to both local customers and mainland tourists. As at 31 March 2004, our chain consisted of 27 shops in strategically chosen locations Hong Kong. The new flagship store, which was opened in June 2004,will provide a comprehensive range of pre-and after-sales services to customers. 

In the coming year, the dealership of Hutchison’s 3G services in Hong Kong obtained in early 2004 and the expansion of the ”Individual Visit Scheme” to the whole of Guangdong province and other provinces in China will be a positive driver of our distribution and retail chain business.