Hong Kong Companies in the GBA (18): Seizing Retail Opportunities Interview with Malina Ngai, Group Chief Executive Ocer, A.S. Watson Group and CEO, A.S. Watson (Asia & Europe) Analysis and News - Case Studies Founded in 1841, A.S. Watson Group has grown into the international health and beauty retail giant with more than 15,700 stores in 25 markets. Its business spans across health and beauty, luxury perfumeries and cosmetics, food, electronics and wine and beverages. Watsons is the Group’s agship health and beauty brand, with more than 3,900 outlets in mainland China. Over 700 of these are in the Guangdong-Hong Kong-Macao Greater Bay Area (GBA). In an interview for HKTDC, Malina Ngai - Group Chief Executive Ocer of A.S. Watson Group and CEO of A.S. Watson (Asia & Europe) - shares the company’s experience of operating in the GBA. Opportunities in the GBA As sales of health and beauty products grow rapidly in Asia and mainland China, A.S. Watson Group has seen a payback period of less than one year for its capital investment in mainland China. The overwhelming response from customers points to the huge potential in the market. At Watsons China’s stores, cosmetics and skincare products are particularly popular among young consumers, and there is a surging demand for these products among this age group spells good opportunities for the Group. In 2018 in Guangzhou, Watsons opened its rst makeup concept store in China, Colorlab by Watsons. It provided its customers with a brand new, trendy, experience-led make-up space in which they could freely play around with the latest offerings from major cosmetics brands and try out different looks. Within a year, more than 60 Colorlab had been opened in the mainland. Malina Ngai, Group Chief Executive Ocer, A.S. Watson Group and CEO, A.S. Watson (Asia & Europe). The commissioning of the Hong Kong-Zhuhai-Macao Bridge and Guangzhou-Shenzhen-Hong Kong Express Rail Link has led to an increase in people travelling within the GBA. Capitalising on the opportunities this has brought, A.S. Watson Group launched the rst Watsons One Pass© in the GBA in 2019, allowing its members to enjoy benets offered by local Watsons stores in tourist hot spots. Upon presenting membership cards or their e-versions on mobile apps, customers are entitled to the special offers made by Watsons stores across the GBA and other parts of Asia. Enhancing Shoppers’ Experience via Technology 06 April 2020 Alice Tsang
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Hong Kong Companies in the GBA (18): Seizing RetailOpportunitiesInterview with Malina Ngai, Group Chief Executive O�cer, A.S. Watson Group andCEO, A.S. Watson (Asia & Europe)
Analysis and News - Case Studies
Founded in 1841, A.S. Watson Group has grown into the international health and beauty retail giant with more than 15,700 stores in 25 markets.Its business spans across health and beauty, luxury perfumeries and cosmetics, food, electronics and wine and beverages. Watsons is the Group’s�agship health and beauty brand, with more than 3,900 outlets in mainland China. Over 700 of these are in the Guangdong-Hong Kong-MacaoGreater Bay Area (GBA). In an interview for HKTDC, Malina Ngai - Group Chief Executive O�cer of A.S. Watson Group and CEO of A.S. Watson(Asia & Europe) - shares the company’s experience of operating in the GBA.
Opportunities in the GBA
As sales of health and beauty products grow rapidly in Asia and mainland China, A.S. Watson Group has seen a payback period of less than oneyear for its capital investment in mainland China. The overwhelming response from customers points to the huge potential in the market. AtWatsons China’s stores, cosmetics and skincare products are particularly popular among young consumers, and there is a surging demand forthese products among this age group spells good opportunities for the Group. In 2018 in Guangzhou, Watsons opened its �rst makeup conceptstore in China, Colorlab by Watsons. It provided its customers with a brand new, trendy, experience-led make-up space in which they could freelyplay around with the latest offerings from major cosmetics brands and try out different looks. Within a year, more than 60 Colorlab had beenopened in the mainland.
Malina Ngai, Group Chief Executive O�cer, A.S. Watson Group and CEO, A.S. Watson (Asia & Europe).
The commissioning of the Hong Kong-Zhuhai-Macao Bridge and Guangzhou-Shenzhen-Hong Kong Express Rail Link has led to an increase inpeople travelling within the GBA. Capitalising on the opportunities this has brought, A.S. Watson Group launched the �rst Watsons One Pass© inthe GBA in 2019, allowing its members to enjoy bene�ts offered by local Watsons stores in tourist hot spots. Upon presenting membership cardsor their e-versions on mobile apps, customers are entitled to the special offers made by Watsons stores across the GBA and other parts of Asia.
Enhancing Shoppers’ Experience via Technology
06 April 2020
Alice Tsang
Today’s customers do not just shop in-store but increasingly do so online via their mobile phones anytime and anywhere. Customers’ expectationsare also rising, focusing not only on product quality and special privileges, but also on the personal and unique shopping experience associatedwith different brands. Meeting the customers’ fast-changing demands is one of the biggest challenges that retailers are facing nowadays.
A.S. Watson Group invested HK$1billion between 2012 and 2020 to accelerate the group’s digital transformation and drive the integration ofonline and o�ine platforms in order to improve their customers’ shopping experience. Explaining A.S. Watson Group’s strategy, Ngai said: “Wemust be agile and respond promptly to the needs of the market and customers, as well as connect closely with customers at all times in order todeliver the most novel products and shopping experience. We also listen carefully to customers’ opinions, make decisions based on solid data andadjust our strategies to respond to customers in good time.”
The need to respond in this manner is increasingly pressing. The spending power of Generation Z (Gen Z) digital natives is continually increasing,and their demands and shopping preferences and habits are distinctly different from those of other generations. According to A.S. Watson Group’scustomer data analysis, 99% of Gen Z loves the experiential aspects of browsing and shopping at physical stores with friends. They also look forretail outlets with technology elements. To meet this demand, Watsons has introduced in its stores a number of the latest retail technologies suchas the StyleMe tablet powered by augmented reality (AR) technology, RFID mobile payment systems and arti�cial intelligence (AI) devices, as wellas providing an online-to-o�ine (O2O) shopping experience through mobile apps and social media.
StyleMe, a virtual makeup tablet, in a store.
Meanwhile, Watsons China has rolled out a new one-to-one beauty consultation service, whereby customers can enjoy a personalised service byadding store staff as friends via the company’s WeChat Work. If a customer’s selected product is not available in a speci�c outlet, the staff willhelp place an order through the system. The customer can then opt to have the order delivered via a one-hour �ash delivery, ‘click & collect’ or aregular courier service. They can also make appointments for spa sessions through the members’ centre and enjoy a full range of beauty servicesincluding skin analysis and makeup.
Using the GBA to Boost Competitiveness
Hong Kong’s retail sector has for a long time faced di�culties in recruiting skilled staff, especially in shop management and retail technology. ButNgai reckons the development of the GBA will change that, saying: “The Group believes that the GBA brings with it plenty of opportunities fortalents. At the same time, the Group will also be able to recruit more talents here for expediting our digital transformation and businessdevelopment.”
In September 2019, A.S. Watson Group launched TechLab, a technology experience centre, in Shenzhen. The aim was to bring together technologytalent in the GBA in order to research, develop and test state-of-the-art retail technologies. The latest technologies on seamless payment andunmanned stores are being tried out at TechLab.
Being an international �nancial and trade centre, a shipping and aviation hub, and boasting a world-renowned professional services sector, HongKong is known for its vibrancy and creativity as well as the free �ow of talent, information, capital and goods. This all means that the city is highlyconducive to the development of start-ups, especially technology start-ups.
A.S. Watson Group has been in the forefront of working with such start-ups. AI Lab was founded by the Group, along with innovation andtechnology giants and start-ups. It allows start-ups to study the Group’s business and make use of big data analytics, in order to pitch innovativeand effective business solutions for enhancing customer experience. Given A.S. Watson Group’s operations around the globe, these start-ups willhave the chance to �ex their muscles in the GBA and beyond.
Pointing out how the Group hopes to use the strengths of the GBA, Ngai said: “Every year, over �ve billion customers shop in the physical andonline stores run by our 12 retail brands all over the world. To keep our customers happy and engaged, we strive every day to maintain a stronginternational network and platform. If we can capitalise on the strengths of various GBA cities to create synergy, it will assist us in achieving ourgoal – Put a Smile on Our Customers’ faces.”
Related Topics
Medical & Healthcare Services Technology Beauty Services Hong Kong Mainland China Guangdong
Macau Beauty cosmetics concept store Express Rail Link Generation Z AR virtual makeup
arti�cial intelligence social media
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