Need for speed: Agility and responsiveness key to succeeding in China’s hyperactive beauty market – A.S. Watson

By Amanda Lim

- Last updated on GMT

A.S. Watson believes speed and the agility to respond to market changes are key to capitalising on the immense opportunities for personal care in China. ©A.S. Watson
A.S. Watson believes speed and the agility to respond to market changes are key to capitalising on the immense opportunities for personal care in China. ©A.S. Watson
The COO of beauty retailer A.S. Watson believes speed and the agility to respond to market changes are key to capitalising on the immense opportunities for personal care in China.

According to Kantar Worldpanel, the Chinese beauty market saw its skin care and make-up categories increase 13% and 17% respectively during 2018, outperforming total FMCG growth rates.

For the first half of 2019, A.S. Watson subsidiary, Watsons China, delivered a healthy EBITDA margin of 19% and revenue growth of 8%.

From June 2018 to June 2019, the health and beauty retail group increased store numbers in China by 9% and it plans to continue opening more doors.

Last April, the company announced it planned to open over 1,300 stores this year, and over one-third was planned for China, reflecting the size of the opportunity A.S. Watson sees in the market.

Malina Ngai, group chief operating officer of the A.S. Watson Group told CosmeticsDesign-Asia​: “The opportunity is huge if the company is agile enough to respond quickly.”

A.S. Watson considers beauty and health its “high-growth”​ categories in China as well as the rest of Asia.

“If we look at the return on capital investment, in China it’s about less than a year to pay back – this is our customers telling us their demand, therefore we are confident about the China market,” ​said Ngai.

Ngai added that the beauty category remained “resilient”​ with good growth. In particular, its cosmetics and derma skin categories were growing among beauty consumers aged 15 to 45 years.

The firm hopes to capitalise on the growing demand in the colour cosmetics category, which is rapidly growing in China.

“[Colour cosmetics] is a much smaller category than skincare in China but is growing immensely amongst the younger customers in particular. Their increasing knowledge and adoption in makeup regimes brings new opportunities to the category,” ​said Ngai.

Additionally, A.S. Watson also sees the potential for vitamin and supplements in China, which are growing in popularity with consumers as young as 25 years old.

Speed is key

These trends are growing largely thanks to the country’s rich and diverse social media landscape.

“Consumers in China are socially very active. This helps to create demands in beauty hence a lot of opportunities in all city tiers,” ​said Ngai.

However, the opportunities in China’s beauty market can prove to be a double-edged sword, Ngai added.

“Speed is the challenge. Everything moves so fast, including changes in consumer behaviours. The challenge to brands and retailers is to stay relevant to customers in terms of product innovation, experience, and marketing communications.”

In order to overcome this challenge, A.S. Watson has to rely on technology to help the firm keep abreast with trends and consumer demands.

In 2018, the group invested HK$1bn to launch DataLab, a team dedicated on data science by generating insights on its 135 million consumers in its loyalty program.

“Our organisation is designed to allow us to listen to customer feedback constantly, make decisions based on science, and action efficiently in order to overcome the challenge,” ​Ngai said.

Additionally, the company invests in in-store digital innovations, bridging its offline and online platforms to keep connected with its consumers.

This includes partnerships with technology companies like Meitu and L'Oréal-backed ModiFace to enhance the beauty retail experience.

Moving forward, Ngai said the company’s focus remains on building its relationship with its consumer by maintaining a relevant assortment of offers, optimising its physical store network, online channels and team of beauty advisors.

Related news

Show more

Related products

show more

Tagra: Stabilizing Retinol to Rejuvenate Skin

Tagra: Stabilizing Retinol to Rejuvenate Skin

Tagra Biotechnologies | 03-Oct-2022 | Product Presentation

Retinol is widely regarded in the cosmetics industry as a golden ingredient for ageless skin. Yet, it tends to lose its efficacy quickly due to a variety...

Sensiva™ go natural,a protector without compromise

Sensiva™ go natural,a protector without compromise

Ashland Global Holdings Inc | 24-Jun-2022 | Technical / White Paper

Consumers are increasingly buying natural, organic beauty and wellbeing products as noted from the increasing number of product launches with natural claim...

Follow us


View more


Indie Pioneers Podcast

Indie Pioneers Podcast