Watsons to open 2,000 stores in five years

Updated: 2011-12-13 10:35

By Li Woke (China Daily)

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SHANGHAI - Health and beauty retail giant Watsons plans to open 2,000 stores on Chinese mainland during the next five years, a move made to maintain its market dominance in the personal care sector.

Watsons to open 2,000 stores in five years
 A Watsons store in Kuala Lumpur, Malaysia. [Photo/China Daily]

"By the end of 2016, we will have 3,000 stores in more than 300 cities," said Christian Nothhaft, CEO of Watsons China on Dec 9.

In 1989, the retailer entered the Chinese mainland by opening its first outlet and by 2009 it had 500 at the mainland. In 2011, the company has grown into Chinese mainland's largest health and beauty chain, with around 1,000 stores in more than 100 cities.

"(The Chinese mainland) is a promising market...Watsons will maintain its high-speed development strategy", said Nothhaft. "We invest hundreds of millions of yuan into opening new stores every year," he added.

Besides first-tier cities, Watsons will also cover other tiers, including those in the provinces of Fujian, Zhejiang, Anhui, Liaoning, Heilongjiang and Shaanxi. The company is planning a special focus on cities with high numbers of young people.

Although economic development is limited in smaller cities, the Hong Kong-based retailer is confident about consumer power in smaller locations. "We are already in 150 cities, and our expansion has shown that these third-, fourth- and sometimes fifth-tier cities already have good markets," said Nothhaft.

He attributed the rapid expansion to the company's strong foundations, flexible business model, knowledge of changing customer needs and good infrastructure.

In addition to the network expansion, the company will also focus on store-by-store profitability. "Some companies may think, 'OK in china you just expand, and then you manage later', but we don't think like that. So, we would like to make every store a success, and also we always want to stay ahead of the market in terms of trends," said Nothhaft.

The retail giant serves more than 3 million customers on the Chinese mainland every week, and has issued more than 20 million membership cards nationwide.

The company is part of the A. S. Watson Group, the international health, beauty and lifestyle retailer with more than 9,700 stores in 33 markets worldwide. A.S. Watson Group itself is the retail arm of the conglomerate Hutchison Whampoa Ltd, which has major interests in ports, property, hotels, retail, energy and telecommunications.

Meanwhile, Watsons' rival, Mannings health and beauty stores, has established more than 200 shops on Chinese mainland since 2004, according to its official website.