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Watsons to boost China investment in 2009

By Zhan Lisheng (chinadaily.com.cn)
Updated: 2009-02-20 19:33

Watsons Your Personal Store said on Friday it would increase its investment budget in China this year despite the global financial crisis.

A subsidiary of Hutchison Whampoa Ltd controlled by Hong Kong tycoon Li Ka-shing, Watsons is a leading health and beauty retailer in Asia.

"We plan to launch 120 new stores, or two a week, in China in 2009 and open stores in another 10 cities this year," said Christian Nothhaft, managing director of Watsons China, in an interview on the sidelines of a ceremony launching the Watsons membership card on Friday.

He said that the new stores would primarily be located in the north and west of the country, but did not disclose further information about the targeted cities.

The retailer spends an average of 1 million yuan on each new store it opens.

Watsons has opened 418 stores in 64 cities, largely in southern and eastern China, 86 of which were opened in 2008.

He said that the firm had yet to feel any significant impact from the global financial crisis and was optimistic about the firm’s business prospects this year.

"2008 was really a tough year with the snowstorms in South China, the earthquake in Sichuan province and the economic downturn due to the global financial crisis; and our business in some cities did slow down a little bit," he said. "Nevertheless, Watsons still saw a sales growth of 30 percent."

He attributed Watsons's bullish development momentum in China to its unique market and product positioning, its endeavors to improve service and launch promotional campaigns and own-label products, as well as the contribution made by its new stores.

Unlike any other premium department store, supermarket or convenience store, Watsons offers healthcare products, personal care products and beauty products, primarily targeting young female customers.

"Our customers are sophisticated and they are generally loyal to the brands and products they have used, and they prefer additional value to discounts," he noted.

He said the global financial crisis had influenced premium department stores and supermarkets more evidently than Watsons.

"Our business in China in the first two months of this year was satisfactory, better than in the comparable period in 2008," he said.

He said Watsons would continue to put pressure on its suppliers so as to give consumers more value and the company would continue to launch new own-label products this year.

Watsons entered the mainland in 1989 with the opening of a store in Beijing and its key competitor in many cities is Manning, a fellow retail giant in Hong Kong.