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

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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 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.

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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.

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

AS Watson is rolling out a new global VIP loyalty program to further connect with its customers around the world.

VIP loyalty program

A.S. Watson plans to make its new VIP loyalty program available across the 24 markets it operates by early next year. The retailer has approx. 130 million members worldwide, but the new program will be invitation-only to reward top customers.

Personalised rewards and benefits

VIP members will benefit from personalised rewards which will also vary between markets. Some of the advantages include, free health and wellbeing classes (Watsons China), cooking classes (Watsons Malaysia), free movie tickets (Watsons Thailand), free exclusive gifts and sample boxes (The Perfume Shop in the UK) and beauty workshops and shopping nights (ICI PARIS XL).

The retailer first invested in CRM programmes back in 2010 and more recently has been using Tech Partners to accelerate global digital transformation. The retailer's data analytics has revealed that around two thirds of its customers who qualify for the new program will continue membership in the following year. Retaining these VIP members are key as they spend up to eight times more than average members annually.

Malina Ngai, Group COO of A.S. Watson Group, said, “We appreciate our customers, no matter how much they spend in our stores, and we know they love to feel valued. Our existing loyalty programs reward everyone with great offers, but our VIP programs thank our most loyal customers for shopping with us with amazing benefits and even more tailored rewards.”

Want to know more?

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

Watsons launches new makeup concept store in China through its partnership with L’Oréal.

Watsons launches new makeup concept store in China

A.S. Watson has partnered with L’Oréal to launch its new makeup concept store in China under the fascia "Colorlab by Watsons".

The retailer opened its first Colorlab store in Shenzhen in January but plans to roll-out a further 50 across China by the end of 2018.

The stores offer an experience-led beauty space, with makeup specialists on hand to offer advice and expertise. The space allows shoppers to sample a wide range of colour cosmetics.

Fixtures dedicated to L’Oréal Paris and Maybelline, two of L’Oréal's most popular brands, account for over 30% of the sales area, and stand out in fixtures exclusive to this format.

Malina Ngai, Group Chief Operating Officer at A.S. Watson Group commented on the new concept, “Makeup was identified as a huge growth area for Watsons and working with L’Oréal on the development of this new store concept meant that we had the expertise of an established makeup supplier at the forefront.”

A.S. Watson (45 seconds)

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