Watsons’ managing director David Boynton and Boots’ celebrity spokesperson, actress Cathy Tsui, at the opening of the Boots concept store

Leading British health and beauty chain Boots has opened a world-first concept store in Hong Kong, citing phenomenal response to its product launch two years ago.

Boots has reported a rapid gain in market share since partnering with local retail chain Watsons to enter Hong Kong in 2002. The partnership has proven so successful it will be used as a model for roll-out to other markets, according to Edward Yu, managing director of Boots Retail Hong Kong and Taiwan.

Starting with six counters in September 2002, Boots has grown by around 70 per cent to 40 outlets today. By December 2003 - after little over one year of trading - turnover had leapt tenfold and Boots had become one of the biggest selling skin care brands in Hong Kong.

Mr Yu said that the company's results to date in Hong Kong had far exceeded expectations.

Winning partnership

"Part of the reason is that we have in Watsons a strong, high quality partner with its head office in Hong Kong," Mr Yu said. "Equally importantly, in terms of market exposure Hong Kong is a great place for an international brand to be. Customers are aware of overseas trends and the health and personal care industry has been recording double-digit growth for the past two years. We see huge potential to grow and increase our strength in Hong Kong, which is one of the most competitive markets."

Mr Yu added that building its brand in Hong Kong would help give Boots a foothold in the Chinese mainland.

"We are very interested in China," he said. While there are no concrete plans to enter the mainland at this stage, Boots' experience in Hong Kong will help it to understand the China market and develop strategies to move when the time is right.

Strong retail network

David Boynton, managing director of Watsons, described the Boots juggernaut as "formidable". He attributes this to Boots' prudent strategy in leveraging the Watsons' retail network, the product's international reputation and a brand-aware customer base.

"Hong Kong is one of the most resilient markets in Asia in terms of economic rebound and consumer consumption," Mr Boynton said. "Despite inflation resumes, consumer prices remain low for retailers. Competitive and sharp pricing, great deals and offers are in constant demand regardless of the economy."

World-first concept store

Boots' new concept store in the International Finance Centre mall is the first of its kind in the world. It takes the company to a new level of customer service, offering free in-store consultations with a professional dietician, and free analysis on skin testing and toxicity machines. Mr Yu describes the new store, opened in September, as "the continuation of our business success with Watsons over the past two years."

In addition to the concept store, Boots plans a continuous expansion and will open another 10 outlets by the end of the year. It says Hong Kong remains a big focus for investment and growth in 2005.

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