‘Skin care is surging’: A.S Watson reveals Middle East growth strategy after inking Dubai partnership

By Amanda Lim contact

- Last updated on GMT

A.S. Watson is eyeing what it sees as a gap in the market for skin care and masstige segments in Middle East. ©AS Watson
A.S. Watson is eyeing what it sees as a gap in the market for skin care and masstige segments in Middle East. ©AS Watson

Related tags: Middle east, Asia, as watson, Strategy, Business

Hong Kong-headquartered beauty retailer A.S. Watson is eyeing what it sees as a gap in the market for skin care and masstige segments for success in its first venture into the Middle East.

Last week, the health and beauty retail giant announced​ that it would be making its entry into the GCC by launching Watsons in the market through a partnership with Dubai-based conglomerate, The Al-Futtaim Group.

The company is eager to establish itself in the region’s health and beauty market, with plans to establish 100 Watsons stores in the region by 2025 beginning with a flagship in Dubai followed by entry into the Kingdom of Saudi Arabia in 2021.

“The GCC has an over nine-billion-dollar health and beauty market with great potential due to high affluence level, growing employment rate of local people due to governments’ initiatives, social changes and high proportion of young population, particularly young women,”​ said Malina Ngai, Group COO of A.S. Watson Group and CEO of A.S. Watson Asia & Europe.

Ngai told CosmeticsDesign-Asia​ that the group aimed to tap into the region’s rapidly expanding skin care market.

“Customers demand for quality beauty products in GCC is surging and skin care is one of the fastest growing segments in the beauty category. [A.S. Watson] saw the gap for a skin care expert retailer.”

Ngai believes that Watsons brings a unique line-up of international beauty brands that local beauty consumers are seeking.

Some of the exclusive international brands the retailer will be bringing into the market include French brand Marionnaud, Italian brand Miss Kay, US brand Demeter, and Korean brand Leaders.

“GCC customers like to be inspired by world-famous brands. [Watsons] can offer a wide selection of the trendiest international beauty brands and products appealing to beauty-lovers,” ​said Ngai.

The company has also observed that the market is lacking masstige beauty offerings and believes it can fill that gap.

“Watsons will bring the affordable and playful masstige beauty to the region, setting us apart from other retail formats like department stores, the pharmacies and hypermarket,” ​said Ngai.

She added that consumers would appreciate the Watsons position as a ‘beauty authority’​.

“We’re not simply offering a place for transaction but also for interaction, providing customers with a social experience, a place where they can spend time to explore with friends and being empowered with the secret of skincare, and how to look good and feel great.”

Vital partnership

Ngai noted that A.S. Watson’s partnership with Al-Futtaim has been vital to its new venture into the Middle East.

“Expanding a business into an entirely new market opens tremendous business opportunities; it also presents new challenges like cultural differences, local competitions, local regulations, operational and supply chain issues. A right business partner familiar with the market is crucial in ensuring a smooth entry to a new market.”

Furthermore, the company can leverage the consumer insights it has gleaned from its massive member database.

“Watsons has over 100 million members worldwide and our strong, unique loyalty programme enables us to stay connected with our members. Our customer insights help us better understand our members and provide more exclusive offers, and deliver an exciting, tailored shopping experience to them,” ​said Ngai.

Together with the expertise of Al-Futtaim, the firm is confident it can gain a strong foothold in the GCC.

“The local retail expertise of Al-Futtaim coupled with Watsons’ position as the number one brand in Asia can definitely make a strong debut in the market, bringing cutting-edge health and beauty format and a wide variety of exclusive and international brands and products to customers.”

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