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Japanese discount operator, Don Quijote (known as Donki) has opened its first store in Hong Kong today (12 July 2019).

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For the 16th year, the 18-day Mid-Year Shopping Festival which culminates on 6.18 has begun. This year, the online giant is focusing on social commerce and has launched WeChat group-buying in Hong Kong.

Engaging shoppers beyond discounts in mainland China

Last year, sold around CNY159.2bn (US$23bn) worth of products during the shopping festival. There are more than 50m products listed, including daily lifestyle products, and food and grocery.

This year’s event has a strong focus on driving engagement through social commerce, using existing customers to reach new. has allocated CNY500m (US$72m) for a nationwide city contest that requires participants to get their friends and/or family to engage with the retailer, retrieving virtual red packets of luck money. These can be redeemed for store credit during 6.18.

Group-buying on WeChat Hong Kong available

While 6.18 is long established, is only operating the event in Hong Kong locally for the second year. The retailer has increased promotions this year, introducing group-buying on WeChat Hong Kong and its online platform.

The group-buying (pingou) service will allow shoppers to purchase products at a significantly lower price than the single unit cost once they join or form their own shopping ‘team’.

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

Convenience for cross-border travellers

Shoppers in Guangdong, Hong Kong and Macau are now able to enjoy member benefits when they shop at Watsons by using just one loyalty card, Watsons One Pass. The retailer operates in all 11 cities in the Greater Bay Area, and the new initiative provide shoppers greater access to local benefits when travelling across different cities.

Expansion to other markets a possibility

The retailer has also outlined plans to expand Watsons One Pass loyalty program to other Asian markets including Singapore, Malaysia, Thailand, Taiwan and Indonesia in the future.

A.S. Watson’s Chief Operating Officer, Malina Ngai, said, Watsons has been the No.1 Pharmacy/ Drugstore brand in Asia for 10 consecutive years with more than 90 million loyalty club members, and the majority of them are frequent travellers […]”

Source: A.S. Watson

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.

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