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A.S. Watson has expanded its Watsons One Pass loyalty program to cover over 660 stores in China’s Greater Bay Area.

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Dairy Farm has released its results for the first quarter of 2019, with sales ahead of the same period last year.

Food: large formats remain a challenge, convenience strong

The Group’s multi-year transformation plan for its Supermarkets and Hypermarkets business is underway, but CEO Ian Mcleod previously estimated it will take the company five years to complete its turnaround plan.  Sales in North Asia were in line with last year, with sales growth in Hong Kong and Macau offset by weakness in Taiwan.

Sales in Southeast Asia were impacted by the launch of a store consolidation plan in the region.  which aims to drive stronger profitability longer term.

Convenience store sales increased in all markets, but store network expansion impacted profits.

Health and beauty: continues to trade strongly

Sales and profits growth continued for the Health and Beauty business in North Asia. Southeast Asia also delivered a solid performance with encouraging sales and profits growth in the quarter, particularly in Malaysia and Indonesia.

Home furnishings: sales up in all markets

Profitability in the Home Furnishings business was lower mainly due to the increased cost of goods compared with last year and the pre-opening costs for new IKEA stores under development.

Joint ventures and associates: sales and profit up

Maxim’s and Yonghui delivered strong sales growth for the period and their like-for-like contributions were also ahead. The Group’s results also benefitted from its 20% stake in Robinsons Retail it acquired in November last year.

Our view

As Dairy Farm looks to reshape the Food business to achieve long-term sustainable growth, performance from key associates Maxim’s, Yonghui and Robinsons Retail will become even more important to support Dairy Farm’s top-line growth.

Want to know more?

Asia subscribers can read more on Dairy Farm's Strategic Outlook here.

Dairy Farm FY18 results here.

Japanese cosmetics company Shiseido and A.S. Watson have partnered to launch an exclusive derma skincare range under the “D Program” brand.

A.S. Watson working closely with brands

A.S. Watson partners brands to drive innovation. Last month, we outlined how it is partnering L'Oréal's AI and AR firm ModiFace have launched a virtual makeup service.

The retailer's latest initiative is to launch a new derma skincare range in Thailand, Taiwan and China. Masahiko Uotani, Shiseido's President and CEO, said, "A.S. Watson is the largest health and beauty retailer in the world that acts with speed, innovation and vision making them the perfect retailer to bring Urban Damage Care to the high street.”

The two businesses have co-created a range that maximises their respective strengths, A.S. Watson’s strong distribution network and customer insight and Shiseido’s expertise in R&D and innovation. The project started with a customer survey on a selected panel of Watsons members 18 months ago.

1,300 new stores this year...

A.S. Watson continues to expand its store network across the world. Like in 2017 and 2018, this year it has committed to opening more than a 1,000 stores. Sales growth remains higher than store network growth, with the retailer performing strongly in 2018. The retailer also has a strong and growing base of returning customers, with approx. 135 million members worldwide. Dominic Lai, A.S. Watson's Managing Director, said, "Continuing this momentum, we will be expanding at the speed of one store every seven hours. In 2019. we target to open over 1,300 stores, around one-third will be in China."

To drive offline and online integration, it has been investing in digital transformation in order to connect its customers through different channels. Click and collect, which links 13,000 stores to the respective localised ecommerce sites plays an important role in the retailer's O2O strategy. It allows customers, for example, to browse online and pick up in any of the stores the next morning. This helps drive more purchases when customers visit the store. Malina Ngai, A.S. Watson’s COO, said, “So on average, 20 to 30% of the shoppers will buy something else [...] in some markets, like Taiwan, that rate grows as high as 52%."

Want to know more?

Subscribers can read the latest news and insight on A.S. Watson here.

Shoppers can pick up their parcels from more than 300 Circle K stores at their own convenience with a new feature by DHL Express.

On-demand delivery by DHL Express

Shoppers are informed of their shipment’s progress through SMS or email on the day of delivery. They can then choose a variety of delivery options through a mobile-optimised website, including redirecting their delivery to a DHL service point or nearby convenience store. Couriers will be alerted to any changes in delivery methods in real time.

Shoppers avoid missed delivery

By adding the new feature, shoppers know the exact time when they can expect to receive their package. They can pick up their parcels at any time at a service point if they cannot be present. The partnership allows shoppers to access over 600 DHL service points.

DHL Express Hong Kong and Macau’s senior VP and MD Herbert Vongpusanachai said, “the familiarity and convenience of Circle K will help enrich the connections we have with our customers as well as ensure we stay on top of their evolving needs. With this service, we offer local consumers a hassle-free international online shopping experience whilst supporting retailers around the world to reach their customers reliably and punctually”.

 

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A.S Watson will invest HKD1bn (US$128m) on digital innovation over the next ten years as it continues to step up transformation across the business to enhance the shopping experience.

Staying ahead of competition

A.S. Watson continues to invest in technology and ecommerce. By next year, the retailer will have spent approx. HKD1bn on digital and technology since 2012. Over the next ten years, it plans to invest another HKD1bn. In recent years, A.S. Watson has invested in self-checkout machines, virtual technology make-up service, predictive modelling technology and facial recognition for payments. It has also launched a Technology Partnership Programme to build a network of strategic partners.

Investment in personalisation

Looking ahead, the retailer plans to roll out machines for skin analysis, digital panels to let customers choose products and technologies for customising product positioning in different stores. It continues to introduce new initiatives to offer greater personalisation, as well as partner technology start-ups in countries such as Canada, the U.S. and Australia to accelerate digital transformation.

In 2017 for example, A.S. Watson partnered with Toronto-based Rubikloud as part of its investment in big data capabilities. At some of its stores, the retailer has developed a traffic management system that uses big data analytics to help it choose future store locations.

A.S. Watson FY18 results: sales up 10%

Click here to see A.S. Watson’s FY18 results.

Want to know more?

Subscribers can read more on A.S. Watson's Strategic Outlook here.

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