Page 31 - Sphere No.27 (Sep 2010)

29
Sphere
the retail business.
“The aim is to
open 250 to 300
quality stores
a year in the
Mainland, which
is about one third
of the total new
stores we plan to
open annually in
our 34 markets,”
said Malina Ngai,
Director Group Op-
erations, Investments
and Communications
and Head of International
Buying.
“We understand the market
very well after 20 years of operat-
ing experience. Our Watsons health and
beauty chain has 680 stores in over 101 cities, and
our PARKnSHOP food retail chain has 39 stores,
mainly in Southern China. Later this year, we will
have a Watson’s Wine Cellar retail store opening
in Shanghai.
“In the Mainland, with the impact of Internet,
the health and beauty market has been made more
and more dynamic. The high penetration rate in
Internet usage among the younger generation
means customers are more trend conscious. For
example, they follow what celebrities wear in
terms of clothing and make-up, both local and
international Hollywood stars. And they are able
to educate themselves on cosmetics and skin care
needs on the web and will shop at Watsons to
discover the products.”
In a Watsons outlet, customers benefit from
the fact the goods are displayed and promoted
properly by zones, rather than in the haphazard
manner that is so common in less sophisticated,
locally owned stores.
China is already the world’s second largest
economy behind the United States, and has had an
annual growth rate of more than 10 per cent for
most of the past 30 years. Watsons opened its first
store two decades ago, and now has more than
680 stores in 101 cities; it is even venturing into
the so-called fourth-tier cities, as the more remote
parts of the vast nation benefit from the sustained
economic boom.
China was barely affected by the economic cri-
sis of two years ago. ASW-owned stores in Europe,
likewise, weathered the storm well, even manag-
ing to increase turnover and boost profits.
Opposite: Delegates
gathered from all
around the world;
above: the very latest
Watsons stores in Asia
– known as G5, or fifth
generation.
Virtually every day, an A S Watson-owned
store opens somewhere in the world. Emerging
markets, in particular fast growing China, have
seen spectacular growth in recent years, as newly
affluent customers splash out on beauty and
healthcare products.
More – much more – growth is anticipated,
as the A S Watson Group (ASW) embarks on a
major expansion plan, which will see the company
reach the milestone of 10,000 stores next year.
Delegates at the first A S Watson Group Global
Suppliers Conference and Awards were given this
determinedly upbeat assessment, and appraised of
ambitious future plans that will reinforce ASW’s
undisputed position as the world’s leading inter-
national health and beauty retailer. Annual ASW
turnover currently stands at USD15 billion with
plans to expand vigorously, notwithstanding the
contemporary recessionary climate.
The 110 delegates to the conference, who hold
senior positions with the largest health and beauty
manufacturers, were told how ASW, through its
own name Watsons stores in Asia and its various
European wholly owned outlets such as Super-
drug, Kruidvat and Trekpleister, has plans to
increase trade in mature and established markets
and also in the developing nations of Eastern Eu-
rope, Mainland China and other parts of Asia.
Delegates used the conference, held under the
banner title of Global Retail Day, as an opportu-
nity to pool experiences and ideas, all of which
will ultimately benefit the consumer. A S Watson
senior executives were also able to give insights
into the company’s future requirements, and its
style of doing business.
“One of the things we are looking for is dif-
ferentiation,” said Dominic Lai, Group Manag-
ing Director of ASW. “This may be expressed in
innovative merchandising, category management,
an offer of exclusives or unique pack sizes.
“We also expect operational excellence when it
comes to working with manufacturers. At ASW,
we need to provide a quality service level and
maintain good systems to ensure loss prevention.
The other factor is excitement, through more at-
tractive marketing events, customer relationship
management and continuous staff training.”
Delegates were particularly fascinated to hear
of the changes afoot in the Mainland, in particular
the phenomenal increase in disposable income
among the middle classes.
Mainland China has a total of 1.3 billion peo-
ple, most of them neophyte consumers, a scenario
that offers tantalising opportunities for anyone in