A VivoPlus shop in Yau Ma Tei. China Resources Retail (Group) Co Ltd is making inroads into the health and beauty products retailing sector as it targets young consumers. Provided to China Daily by China Resources

Retail arm eyes young people, mainlanders

China Resources Retail (Group) Co Ltd, the retail arm of blue-chip conglomerate China Resources Enterprise Ltd, is making inroads into Hong Kong's health and beauty products retail sector as it targets young consumers.

It opened up its first two pharmaceutical and beauty retail shops in Yau Ma Tei and Tin Shui Wai Friday under the name "VivoPlus". It sells pharmaceutical and beauty products similar to that sold by the city's dominant players, Watsons and Mannings.

"With the opening of VivoPlus, we are able to expand our business scopes to the health and beauty sectors, while more innovative ideas are enhanced in the overall retail and customer experience," said Simon Mak, VivoPlus general manager Friday.

The store provides health care, personal care, skin care and cosmetics products. According to Mak, VivoPlus has more than 5,000 varieties of different products.

Jessica Law, marketing controller at VivoPlus, said the retail group came up with the idea last year, particularly in view of the huge purchasing power of mainland tourists.

The company plans to invest HK$500 million in the new brand initially, said Mak.

The opening of the Yau Ma Tei and Tin Shui Wai stores is just the first stage of the company's business plan for its newly launched retailing brand, he said.

China Resources Retail now runs a number of supermarkets in Hong Kong, and its flagship supermarket China Resources Vanguard Shop is the third largest supermarket chain in the city, though it remains far behind market leaders Wellcome and Park'n'Shop.

The next stage would be to expand to the mainland market in 2011, Mak added, without elaborating.

However, the site selections of the first two shops brings about concerns as one analyst said that China Resources has picked two unfavorable locations for their first two shops - both of which will find it difficult to attract the amount of young people it is targeting.

"Tin Shui Wai is one of the lowest-income areas in the city and Yau Ma Tei, though adjacent to Mong Kok, attracts far less traffic compared with the latter. If the brand is designed to serve young people, why don't they open up stores in Causeway Bay or Mong Kok which collect the most people as well as tourists?" said Lawrence Chor, an analyst with Taifook Securities.

Chor also believes it will not be easy for VivoPlus to gain a market in the city when Watsons and Mannings are selling almost the identical products. And they are spread out over every corner of Hong Kong.

"VivoPlus needs to figure out its real forte," Chor added. "Selling the same products at more competitive prices might be a good option."

China Daily

(HK Edition 10/09/2010 page3)