Labour crunch hampers fulfilment by gifts, florist firms

Singapore

GIFT hampers are just the thing during the Chinese New Year (CNY), when people want to give - or receive - "abundance". However, among the hamper companies assembling and packaging these gift items, the outlook is a mixed bag. As the pandemic tightens purse strings, some players are finding their footing, but still others have gained ground this year.

FarEastFlora.com, for instance, was bracing for a fall in corporate sales of hampers amid the gloomy economic climate.

To counteract that, it redesigned "a fair bit" of its products for consumer-to-consumer gifting; it figured that, with families unable to visit as many friends and relatives this year, they would buy more gifts.

It figured right. Corporate and retail orders went on an uptick, culminating in a 15 per cent increase in revenue from last year, said managing director Ryan Chioh.

Companies gifted staff with hampers, as they had funds from government support and extra budgets from the large internal events that could not be held, he said.

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Simply Hamper also recorded a surge in revenue - by 20 per cent this CNY. It does not match last year's 30 per cent growth rate, but is a tidy increase nevertheless.

Although the price tier of hampers purchased among its regular customers has dropped by about 10 per cent, Simply Hamper clawed back earnings from new customers, which Alexis Tan, its managing director, credits to "modernising" its operations and a push to sell online. For example, the company does not offer the traditional pyramidal hampers; it favours novel items like bubble tea cakes.

Once again, digitalisation was key. Simply Hampers advertised aggressively on social media sites and tailored marketing using historical search and purchase trends observed by its in-house data analysts.

Other hamper companies are not doing as well because of sluggish demand and high costs.

Tightened budgets have had a trickle down effect, said May Aw, director of Bell Brand. The company, which caters mainly to small and medium-sized enterprises, suffered a 40 per cent fall in hamper sales revenue, with many construction-sector regulars not putting in orders this CNY.

Noel Gifts and its subsidiary, Humming Flowers & Gifts, the established players in the field, have fallen victim to lacklustre sales.

Noel Gifts' revenue has fallen by about 5 per cent from last year; for Humming Flowers & Gifts, the shortfall has been more than 15 per cent. Both hope for a recovery in sales over the 15-day CNY period.

Hamper companies will have to hustle to fulfil last-minute orders despite supply issues. Delays in shipments have forced some to source items early, delay deliveries or substitute items with alternatives. Freight costs have gone up, with demand overwhelming export capabilities at major ports, undercutting profits.

Hamper basket vendors have chosen to tread cautiously and limited the range of designs available.

Many are also suffering from a manpower crunch. The Malaysian government's Movement Control Order has hindered recruitment of seasonal hamper workers for Xpressflower.

Joseph Soh, its managing director, said: "Locals are not exactly fond of this trade."

With competition from the food and beverage and retail sectors, and now, temperature-screening crews, Xpressflower has had to pay as much as 30 per cent more per hour to attract workers.

Staff will work through the first two days of CNY, further inflating costs. "We can't celebrate," he said.

Furthermore, with Valentine's Day falling on the third day of CNY this year, companies have had to choose a focus or divide their already-limited resources, dampening earnings.

Thankfully, e-commerce has been a lantern in the gloom, with Web site traffic and online sales proportions increasing.

Jess Chan, product and services manager at Noel Gifts, reported that online sales this CNY has about doubled from those of past years.

Humming Flowers & Gifts has also run up more sales from online-exclusive promotions, said e-comm manager Chantel Seet.

Bell Brand, which took an omnichannel approach, has recorded a year-on-year rise in online patronage and the adoption of digital solutions like corporate PayNow.

"The CNY ambience seems to be lacking this year," said Ms Aw. "We expect this year to be tough, but we sincerely hope it gets better."