HONG KONG, June 20, 2007 (PRIME NEWSWIRE) -- Asiamart, Inc. (OTCBB:AAMA), a leading tourist retailer in Hong Kong, released comments from its Chief Executive Officer regarding the Hong Kong government's "Refund Protection Scheme for Mainland China's Inbound Tour Group Shoppers," recently enacted by the Travel Industry Council of Hong Kong, a consumer protection scheme aimed at protecting the consumer rights of mainland China's tourist visitors, and improving the service standards in the industry. The new refund scheme became effective on June 15, 2007. Under the Refund Protection Scheme, retailers who intend to arrange for mainland China's Inbound group visitors must register with the Travel Industry Council and one of the conditions of registration is that registered retailers shall offer six-month, full refund protection to mainland China's inbound group visitors. As a part of the conditions of the Refund Protection Scheme, registered retailers must assist tour operators and inbound visitors seeking refunds. Registered retailers who fail to comply may be subjected to penalties imposed by the Travel Industry Council. Asiamart reports that it has registered with the Travel Industry Council under the new rules, and has begun offering a 180-day refund policy to its customers.
"We believe the new Refund Protection Scheme will help boost confidence among China inbound visitors in the Hong Kong retail sector," said Mr. Alex Yue, Chairman and CEO of Asiamart. "However, we anticipate a certain amount of unavoidable abuse of the new refund rules by certain customers, which will result in an increase in returned products. We believe that retailers such as Asiamart that offer quality, genuine branded products will benefit in the long run from these heightened industry standards. However, we are preparing to weather adjustments in this industry that we anticipate may last for 12 months or longer."
Asiamart disclosed that the number of China inbound visitors to its stores dropped significantly in May 2007, partially because of a shift toward individual travel as opposed to group tours. The number of visitors per day to its stores dropped from 1,219 to 1,081 in the two month period of April - May 2007 compared with the first two months of the first quarter of 2007. Meanwhile, spending per capita decreased from US $82 to US $72 during the period from April - May 2007 compared with the first two months of the first quarter of 2007. Alex Yue noted that "in response to this shift in customer traffic, we have adopted immediate measures such as reducing the base salaries of senior staff with bonuses linked to retention and unpaid leave for general staff during slower periods. In addition, we have restructured the commission agreements we have with our travel agents, specifically, we have negotiated cuts in commission rates and began using progressive commission rates based on turnover in order to encourage quality tours and higher spending per tourist." Mr. Yue added that "these recent developments present some tough challenges for our company which are likely to harm our profitability in the near term. However, we also believe these challenges can be overcome, and that the continued growth in outbound tourism from China presents numerous promising opportunities for our company."
About Asiamart, Inc.
Asiamart, Inc., a Delaware corporation, is a retail and trading company based in Hong Kong focused on the outbound China tourist retail market. Asiamart operates a chain of outlets and discount shopping centers catering principally to tourists brought to its stores through a large network of travel companies and tour operators. Asiamart offers its customers selected international brands in a wide range of merchandise categories including consumer electronics, cosmetics and skin care, dietary supplements, health care products and optical instruments. For more details, see the company's latest report on Form 10-K filed with the SEC on April 4, 2007, and subsequent periodic reports.
Cautionary Statement Regarding Forward Looking Information
This press release contains forward-looking information about Asiamart that is intended to be covered by the safe harbor for forward-looking statements provided by the Private Securities Litigation Reform Act of 1995. Forward-looking statements are statements that are not historical facts. These statements can be identified by the use of forward-looking terminology such as "believe," "expect," "may," "will," "should," "project," "plan," "seek," "intend," or "anticipate" or the negative thereof or comparable terminology, and include discussions of strategy, and statements about industry trends and Asiamart's future performance, operations and products. This forward-looking information should be considered only in connection with "Risk Factors" in Asiamart's annual report on Form 10-K filed with the SEC on April 4, 2007, and its other current and periodic reports filed with the SEC. Asiamart assumes no obligations to update any forward-looking statements or information set forth in this press release.