Hong Kong cosmetics retail leader Sa Sa International (00178.HK) announced on October 7 that during the "October 1 National Day" holiday period from October 1–7, 2026, offline sales in Hong Kong and Macau surged more than 60% year-over-year, with same-store sales climbing over 50%, reflecting that the group's recent operational strategy adjustments and store upgrades are accelerating in their effectiveness.
The company stated that the National Day holiday carried forward the upward momentum from the second quarter of fiscal year 2026/27, with sales remaining robust. Beyond the significant overall revenue growth, transaction volume, average transaction value, and units per transaction all recorded notable year-over-year increases, indicating that consumer purchasing power and willingness to spend strengthened in tandem—not merely a function of higher foot traffic.
To capitalize on the Golden Week consumption wave, Sa Sa launched a "National Day Golden Week Shopping Festival" featuring multiple shopping incentives. The group recently opened new concept-design stores in core tourist districts including Mong Kok and Tsim Sha Tsui, with store designs centered on playful, trend-forward aesthetics, along with themed product zones and interactive photo spots. Management noted that this strategy has effectively boosted store foot traffic and extended customer dwell time, further driving sales conversion.
Second-Quarter Results Show Broad-Based Growth
Quarterly data disclosed simultaneously showed that Sa Sa's total revenue for the second quarter ended September 30, 2026, reached HK$1.414 billion (approximately $180.2 million), up 37.2% year-over-year. Of this, total offline sales amounted to HK$1.22 billion (approximately $155.5 million), up 47.6% from the same period last year, serving as the primary growth engine for the group.
The Hong Kong-Macau market was particularly outstanding. Second-quarter offline sales in Hong Kong and Macau recorded a 52.0% year-over-year increase, with same-store sales up 46.9%. Average transaction value, total transaction count, and units per transaction all moved higher across the board. The group noted that despite Hong Kong and Macau entering the rainy and typhoon season, foot traffic and consumer sentiment remained positive, particularly in tourist districts such as Tsim Sha Tsui, Mong Kok, and Causeway Bay, driving strong store-level sales performance in these areas.
The operational optimization strategy in Southeast Asia is also gradually bearing fruit, with second-quarter offline sales up 11.4% year-over-year. Growth was likewise positive on a local-currency basis, indicating that regional portfolio adjustments have begun contributing stable growth momentum.
Structural Adjustment in Online Business
On the online front, the group's total online sales for the second quarter declined 5% year-over-year to HK$190 million (approximately $24.2 million), but this decline stemmed primarily from a deliberate strategic adjustment. Sa Sa intentionally reduced low-margin bulk B2B orders, causing B2B revenue to fall 49% year-over-year. Meanwhile, the higher-margin, fast-growing B2C online segment recorded robust growth of 22.5%, reaching HK$154.3 million (approximately $19.7 million), further enhancing the overall profitability of the online business.
The group explained that reducing low-margin B2B orders was aimed at reserving inventory and concentrating resources on higher-margin, higher-growth-potential channels—namely offline retail and B2C online. Management is also closely monitoring inventory levels of best-selling products to ensure sufficient supply across all channels and avoid stockout risks arising from the strategic shift.
Note: Figures represent unaudited sales data for the second quarter ended September 30, 2026, compiled from company announcements.
Store Network Continues Expansion
As of end-September 2026, Sa Sa operated a total of 162 offline stores, a net increase of 2 from end-June. Of these, Hong Kong-Macau stores increased by a net 3 to 90, reflecting the group's confidence in the local consumer market outlook. The group opened five new stores in Hong Kong during the first half of the fiscal year to meet local consumer demand, with new store locations concentrated in high-traffic tourist and shopping districts, aligning with the group's strategy of using concept stores to elevate brand image and shopping experience.
From an overall portfolio perspective, Sa Sa is in a clear transformation phase: on one hand, improving its profit structure by scaling back low-margin bulk wholesale operations; on the other, increasing investment in offline retail experience and B2C online channels. The National Day holiday and second-quarter data provide preliminary validation of this strategy's viability, particularly the strong recovery in the Hong Kong-Macau market, which signals that tourist-district consumption momentum has returned to a stable growth trajectory.
Market observers believe that with mainland Chinese tourists continuing to return to Hong Kong and Macau, coupled with the group's upgrades in store experience and product mix, Sa Sa still has opportunities to sustain growth momentum heading into the traditional peak consumption season. However, the overall contraction in online business scale remains a metric warranting continued observation. Whether B2C can fully offset the revenue gap left by the B2B exit in the coming quarters will be key to assessing the strategy's effectiveness.
The group emphasized that its current inventory management strategy prioritizes "ensuring sufficient supply of best-selling products" while avoiding excess inventory buildup in low-margin channels. This margin-driven operating approach helps maintain cash flow and gross margin stability in a volatile consumer market environment.
Once added, BigGo Finance appears first in Google Search Top Stories, so you get the broadest, most up-to-the-minute, and most comprehensive global financial news first.