AS Watson sales grew 7 per cent last year, despite protests
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Health-and-beauty retailer AS Watson recorded 7 percent growth last year despite the political unrest in its key Hong Kong market.
“What’s worth mentioning is the growth of health and beauty in Asia which was significantly impacted by the social unrest in the second half of 2019,” said AS Watson Group MD Dominic Lai. “If you take it out, the rest of Asia [outside Hong Kong] was growing at 14 percent, which is very healthy,” he said in comments translated by the South China Morning Post.
Watsons Hong Kong represented just 2.6 percent of the retail division’s pre-tax profit last year.
The retailer operates more than 15,000 stores in 25 international markets, predominantly in the health-and-beauty category. The sector benefited from developments in digital retail, house brands and exclusive offerings, and an uptick in customer connectivity with its 137 million-strong membership base.
The firm expects its China trading this year to be affected by the coronavirus pandemic but is confident that its profits will be sustainable profitability given its geographical diversity, strong partner relationships and loyal member base.
Questions & Answers
Q.How did AS Watson achieve 7 percent growth last year despite political unrest?
How did AS Watson achieve 7 percent growth last year despite political unrest?
The company's health and beauty division in Asia grew significantly, with the rest of Asia outside Hong Kong growing at 14 percent. This offset the impact of social unrest in its key Hong Kong market during the second half of 2019.
Q.What is the importance of Hong Kong to AS Watson's overall profitability?
What is the importance of Hong Kong to AS Watson's overall profitability?
Watsons Hong Kong represented a relatively small portion, just 2.6 percent, of the retail division's pre-tax profit last year. This suggests that while a key market, it doesn't dominate the company's financial performance.
Q.What strategies contributed to AS Watson's growth in the health and beauty sector?
What strategies contributed to AS Watson's growth in the health and beauty sector?
Growth was driven by developments in digital retail, the introduction of house brands and exclusive offerings, and enhanced customer connectivity with its 137 million-strong membership base.
Q.How does AS Watson plan to maintain profitability despite potential disruption from the coronavirus pandemic?
How does AS Watson plan to maintain profitability despite potential disruption from the coronavirus pandemic?
The firm is confident in sustainable profitability due to its geographical diversity across 25 international markets, strong partner relationships, and its loyal member base, which are expected to mitigate the impact.