Hong Kong immigration focus on Hong Kong business investment: A.S. Watson Group, the retail flagship under CK Hutchison, has not slowed its pace of development since introducing Temasek as a partner last year. Yesterday, it celebrated the opening of its 12,000th global store, a new flagship location in Hong Kong. CK Hutchison Deputy Chairman Victor Li emphasized that "Hong Kong is our home" and noted that the CK Hutchison group, with its heart set on Hong Kong, will continue to invest in the territory. A.S. Watson plans to open 1,300 new stores globally this year, focusing primarily on Asia and Mainland China, and will strengthen its e-commerce business development.
"Hong Kong is our home, and creating a new milestone here is particularly meaningful to me." Victor Li, who attended the opening of the A.S. Watson Causeway Bay flagship store, emphasized that CK Hutchison is committed to Hong Kong and will continue to invest in the territory in the future.
Confidence in Hong Kong Retail
Dominic Lai, Group Managing Director of A.S. Watson, frankly stated that while the local retail industry has been "a bit soft" compared to the previous two years, the group still sees significant room for development in Hong Kong. He mentioned that rents in the Causeway Bay area have fallen, meaning A.S. Watson no longer has to "endure high rents." Consequently, the group invested over HK$6 million to open the flagship store in Causeway Bay, reiterating its continued confidence in the local retail sector.
Lai stated that A.S. Watson opened and renovated 76 stores in Hong Kong last year, and this year that number will increase to over 80, with a total investment of approximately HK$620 million over the two years. He added that the plan is to open 1,300 new stores globally this year, mainly in Asia and Mainland China. He noted that although the retail market in Mainland China has slowed, the A.S. Watson brand is very well-received there, and business growth remains strong.
Additionally, regarding the recent decline in the number of Mainland visitors to Hong Kong under the Individual Visit Scheme, Lai emphasized that the group has always focused on the local market, so the reduction in Mainland visitors has a limited impact on its business. He also noted that compared to currencies like the Euro, the fluctuation of the Renminbi is more orderly, and since the group conducts procurement globally, he is not concerned about the impact of Renminbi exchange rate fluctuations.
Facing the rise of online shopping, A.S. Watson launched an e-shop a few months ago and recently partnered with Tencent (00700) WeChat. Lai emphasized that the group's development of e-commerce is not just "following the trend," noting that there is competition in the market every day and that "everyone has their own methods."
Timely Participation in O2O Market Development
When asked about Alibaba partnering with Suning Commerce Group to develop online-to-offline (O2O) business, Lai stated that A.S. Watson will also coordinate its e-commerce development with its physical stores and participate in the O2O market at the appropriate time. He continued that A.S. Watson began its e-commerce business several years ago and has established e-commerce teams in Hong Kong and Europe, investing US$60 million (approximately HK$468 million), adding that the partnership with Tencent is just the first step.
A.S. Watson General Manager Cheung Wai-ping added that the earlier partnership with WeChat aims to integrate membership cards and mobile payment services. It is estimated that the relevant procedures will be completed by the end of this year, introducing WeChat Pay services to Hong Kong stores.
The A.S. Watson Causeway Bay flagship store covers over 8,000 square feet across three floors. In addition to offering over 8,300 products, its most unique features include the first in-store nursing room, as well as free mobile charging services and restrooms. Cheung stated that they will consider adding registered Chinese medicine services later, noting that health products are currently the most popular items in the store, with average per-customer spending slightly higher than in regular stores.