Find out about the retailer's strategic priorities, commercial focus areas, channel and country presence.

See data on the retailer’s performance and forecasts for its operations by channel.

This in-depth guide to Hong Kong explores the key trends in grocery retail and the growth strategies of the leading retailers in the country.

We review A.S. Watson’s retail outlook over the next five years and the key markets to watch, as it continues to expand around the world.

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A.S. Watson has provided details of how it has successfully used predictive modelling to help brands successful launch products in its stores. It has shared two examples, Maybelline and Jeffree Star Cosmetics.

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Health and beauty retailer, A.S. Watson, will open its first store in Vietnam on 17 January 2019.

Store to be opened in Ho Chi Minh

The store will be located in Bitexco Financial Tower in District 1, Ho Chi Minh City. It is the tallest building in the city. The area is well visited by tourists due to its magnificent views on the Sky Deck. It is also known for its luxurious offices.

More about A.S. Watson

A.S. Watson, part of Hong Kong conglomerate Hutchison Whampoa, is one of the world’s largest health, beauty and lifestyle retailers, with over 14,000 stores covering 24 markets. It has a diverse portfolio ranging from ports, infrastructure, energy, telecommunications and retail. Its retail segment includes the largest international Health & Beauty retailer in Asia and Europe, plus food, wine and electrical appliances.

 

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A.S. Watson continues to digitally transform its business around the world. Its latest initiatives are to launch a Watsons Mini Store in China and Watsons Pay in Taiwan.

Watsons Mini Store to support O2O

In China, Watsons has also launched Watsons Mini Store, a WeChat Mini Program that enables shoppers to share in-store experiences via social media and create a more seamless online and offline experience. The initiative allows customers to recommend and sell Watsons products to their social media followers. To-date, it has over 10,000 customers selling on the platform.

Watsons Pay for convenience and to strengthen loyalty

In Taiwan, Watsons continues to bring digital features in-store. Earlier in the year, Watsons launched its Tech-Fun store in Taipei, featuring large-scale live broadcast screens and virtual technology make-up service. The retailer has also recently launched Watsons Pay, allowing shoppers to easily make payment via their mobiles online and in-store. Watsons Taiwan has around 5m members on its loyalty programme and hopes to increase this to 6m within two years.

To better connect with its customers...

Group Chief Operating Officer of A.S. Watson Group, Malina Ngai, said, “Customers in today’s digital world have high expectations, and if a company can’t satisfy them, they will churn and move on to one that can. From awareness, product consideration and purchase to loyalty and advocacy, it is of strategic importance that we use technology smartly to connect with customers at micro moments to provide relevant and enriched experiences.”

Tencent has partnered ParknShop and Yonghui to launch a new grocery chain ParknShop Yonghui. Valued at US$170m, the joint venture aims to help both Yonghui and ParknShop expand their businesses in China further.

A new grocery chain, ParknShop Yonghui 

Yonghui will be the largest stakeholder in the new joint venture, investing US$89.5m for a 50% stake. ParknShop will hold a 40% stake with contributions amounting to US$72.1m, while Tencent will pay US$17.8m for a 10% stake. Yonghui is already in partnership with Tencent, after the tech giant invested US$750m to purchase a 5% stake in Yonghui last December.

More about Yonghui and ParknShop

Based in Fujian, Yonghui was founded in 1995 but has presence in 24 provinces across China. It operates more than 830 stores, including supermarkets, hypermarkets and convenience stores. Yonghui has alliances with Dairy Farm, Tencent Holdings, JD.com, Zhongbai Holdings and Daymon Worldwide.

ParknShop is a subsidiary of A.S. Watson and is the second largest supermarket chain in Hong Kong with approx. 270 stores. It also operates 16 supermarkets in Macau. On Mainland China, it has around 54 stores in and around Guangdong province, but its store network has stayed largely the same over the last few years.

Yonghui staying ahead of competition

Despite increasing competition from online giants moving into bricks-and-mortar retailing, Yonghui continues to strong sales growth. In August, it posted 21.5% growth in revenue for the first half and continues to expand its store network quickly.

Yonghui's latest partnership with ParknShop is a surprise, particularly as A.S. Watson's fierce rival Dairy Farm holds a 19.99% stake in Yonghui. Nonetheless, with Tencent also involved in the new joint venture, we expect digital solutions via WeChat and innovation around online fulfilment to play a role in shaping ParknShop Yonghui.

 

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CK Hutchison's retail division A.S. Watson and telecom subsidiary 3 have partnered China’s Meitu to launch a new platform that integrates social media and retail.

Partnership to enhance shopper experience

The new platform will combine beauty with social media, with the companies drawing on their expertise in retail, telecom and AI technology to provide shoppers a better online and offline shopping experience. The project will look to drive engagement and interaction with customers of particularly the millennial generation, allowing Meitu users to try beauty products virtually on their mobile phone and receive product recommendations. 

Meitu's COO, Bryan Cheng, said, “3 Hong Kong customers can design personalised products and enjoy a new, one-stop mobile shopping experience through our cooperation with Meitu. We are confident of this partnership and believe that it will create a three-way win for customers, Meitu and CK Hutchison [...].”

Watsons Hong Kong launching Meitu Magic Mirrors

Watsons Hong Kong will launch Meitu’s Magic Mirror at Watsons Mongkok Bank Centre and Cameron Road stores later this month. In the first half of next year, the retailer will roll out to around 30 more Watsons stores. Furthermore, Meitu and 3 Hong Kong will partner to introduce MeituDIY, allowing users to print their photos directly on mobile phone cases, clothes, and more, so that they can create more personal and unique products. After launching its global VIP loyalty program last month, Watsons continues to look for new ways to offer greater personalisation.

Watsons China to feature on Meitu's BeautyCam app first

Meitu’s BeautyCam app has been upgraded to make product recommendations via skin analysis. The app will help users match the right products available at Watsons store. This feature will be launched in Mainland China this month, while users in Hong Kong will have access in the first quarter of next year.

In addition, Watsons China will begin its partnership with Meitu Social Media later this month, enabling the retailer to deliver personalised messages. When customers edit their photos using in-app features, Watsons will recommend the right products based on customer habits and big data. The strategic alliance will help Watsons reach a wider customer base in Hong Kong and China, bringing in new, and what the retailer hopes will be loyal members.

Want to know more?

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

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