Watsons to double stores in mainland
By Zhang Lu (China Daily)
Updated: 2004-09-24 08:43

Watsons, the world's third largest beauty and health care retailer, aims to double the number of its personal care chain stores in Chinese mainland to 160 next year.

"China is a country with the greatest business potential in Asia and in the world," said Ivor Morton, managing director of Watsons China, yesterday in Beijing.

"If policies permit, our intention for 2005 is to double our stores in the mainland," Morton said.

Watsons, a subsidiary of Hutchison Whampoa Ltd which is owned by Hong Kong tycoon Li Ka-shing, has opened 80 stores in 28 cities in the Chinese mainland since the first one opened in 1989.

Earlier reports said that Watsons plans to further increase its investment in the Chinese mainland to ensure its leading position in the retail sector for personal care products.

The reports said that Watsons will invest some 1.5 million yuan (US$181,000) in each of its new stores, and it will open three big stores with a sales space of 1,000 square metres.

Watsons' move is regarded as a sign of heating competition in the mainland market between Hong Kong-based retailers.

Since the Mainland-Hong Kong Close Economic Partnership Arrangement (CEPA) came into effect in January, Hong Kong retailers are using CEPA's preferential policies to invest or expand business in the mainland.

Another health and beauty chain store Mannings of the Jardine Matheson Group announced earlier this month that it had received a certificate to establish sole-invested stores in the mainland.

Mannings plans to open 30 stores in South China's Guangdong Province in two to three years, and expand to other regions when they are ready.

The most famous cosmetics retailer in Hong Kong, Sasa, also has the intention of entering the mainland market. It aims to open two stores in East China's Shanghai Municipality in the second half of this year.

To lure more customers into its stores, which sell health and beauty products, as well as fashion products, gifts and foods, Watsons launched a Dare to Swear (DTS) market strategy for its operations in North China yesterday in Beijing.

According to Ivor Morton, the DTS strategy means "I dare to swear, Watsons everyday will offer low price products."

The retailer has selected 1,200 products among a total of 8,000 to sell at low prices.

"These low price products are decided in accordance with the best selling products in Watsons' stores and products people most need as shown by consumer surveys," said Pamela Lam, merchandise controller for Watsons' East and North China operations.

"Customers can ask for a double repayment if they buy products in Watsons at higher prices than other stores," she said.

Among the 1,200 products, 200 are Watsons' own labels.

In July, the retailer introduced this policy into its operations in China's eastern and southern regions, and it has received a warm welcome from local customers.

Through seven-week operations, sales in the two regions increased by 20 per cent, Morton said, though he did not give specific figures.

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