Page 20 - Sphere No.10 (Dec 2003)

SPHERE
1222
C O V E R S T O R Y
“W hen you
have only
two pennies
left in the
world, buy a loaf of bread with one,
and a lily with the other.”
The Chinese proverb encapsulates
an age-old truth about the human
condition: The desire to be healthy
and beautiful is as fundamental as our
need for food and drink, something
A.S.Watson has known since its pre-
decessor, the Canton Dispensary, first
began distributing medicine to the
rural poor in Canton (Guangzhou),
China, in 1828.
In those days, the primary motiva-
tion was to improve and maintain people’s health. But, as everybody
knows, good health is the bedrock of physical beauty — each
embodies the other’s essence. Since the doors of the Canton
Dispensary opened 175 years ago, the twin pillars of health and
beauty have merged in the minds of consumers, and the retail world
has responded accordingly. Many of today’s health & beauty chains
have grown out of traditional dispensaries and pharmacies.
It is still a relatively new mix, less evident as a concept around
the world than food retailing, for example, but it is catching
on fast.
According to Euromonitor International, a market-intelligence
company, health & beauty market revenues worldwide totalled
US$180 billion in 2002, having grown steadily at a rate of approx-
imately 1.6% per annum over the past five years.
Today, the Health & Beauty Division of A.S. Watson (ASW),
Hutchison Whampoa’s retail group, extends across 15 countries
and regions on two continents, operating more than 3,200 retail
stores in 910 cities under eight distinct brand concepts. It is the
largest health & beauty retailer by store numbers outside the
United States.
What’s more, the company is on an aggressive expansion trail,
seeking to expand geographically and in existing markets both by
new acquisitions and internal growth.
“Wherever opportunity presents itself we aim to grow the busi-
ness,” says ASW Group Managing Director Ian Wade. A 40-year
veteran of the business, the last 22 in his current position,Wade
has been a key architect of the Retail Division’s growth strategy,
and he maintains a gimlet-eyed focus on the unfolding future.
“Our expansion is in keeping with the wide growth that has
been taking place within the Hutchison Group as a whole,” he
says. “From ports and property to energy and telecoms — they
have all been expanding.”
E ARLY BIRD
ASW’s expansion drive began in earnest back in 1963 when
Hutchison acquired a controlling stake in the company, paving the
way for sustained growth of Watsons The Chemist into Southeast
Asian markets. The chain moved into Taiwan, Macau and
Singapore in 1988, Malaysia in 1994, Thailand in 1996, China in
1998 and the Philippines last year, following a tie-up with the
ShoeMart Group.
With this background, ASW is among the most experienced
health & beauty retailers in the world.
The Group made its first foray into Europe in 2000, acquiring
the Savers health & beauty chain in the UK.
“We wanted to spread our portfolio out of Asia,” Ian Wade
recalls.“The 1997 recession taught us that you don’t want all your
eggs in the Asian basket.”
Savers’ retail style was a perfect fit, with a “mega-discount” for-
mat accentuated by simple store design, focusing on fast-moving
toiletry products, and backed up by strong logistics and low oper-
ating costs. Under ASW, Savers embarked on a rapid expansion of
its own, growing from 165 stores at acquisition to 300 by
early 2003.
ASW was propelled into the global headlines last year with its bold
8
Leveraging on its extensive experience in Asia, the A.S. Watson Group
has embarked on a major expansion drive into Europe.
By Gwyneth Roberts