Watsons to open 20 new stores in the GCC

In 2020, global health & beauty retailer A.S. Watson Group signed its first franchise agreement, in its almost 200 years of history, with regional retail conglomerate Al-Futtaim. Cut to the present, there are 18 Watsons stores in the GCC – 12 in the UAE, 4 in Saudi Arabia and 2 in Qatar, along with an online store.  

Alongside being voted as the #1 brand in Asia by customers for 13 consecutive years, Watsons is seeing success in the Middle East as well. The brand grew 53% in year-on-year sales in 2023 and is preparing for an even stronger 2024. Watsons also plans to open 20 new stores and expand into Bahrain and Kuwait.

In an exclusive interview with IMAGES RetailME, Malina Ngai, Group Chief Executive Officer, AS Watson Group spoke about the company’s journey in the GCC, while decoding beauty trends.

Globally, AS Watson operates 16,000+ stores in 28+ markets. In all 28 countries, Watsons operates the business themselves, except in the GCC where they follow a franchise model. Asked about learnings and challenges associated with the franchise model, Ngai promptly said, “Having signed the partnership in January 2020 the pandemic was perhaps the only challenge. Yet, Al-Futtaim opened the first Watsons store in the GCC in October 2020. Although challenging, it was a good start full of learnings.”

Talking trends

Moving over to beauty trends dominating the region and beyond, is health & wellness a universal focus area?

Although the definition of wellness various from one individual to another and one region to another, it is a universal trend, Ngai confirmed. For some wellness could mean taking supplements, for others it could be exercising and maintaining an active lifestyle.

Adding another layer is sustainability, and here too the definition varies based on every individual’s interpretation. “Overall, doing what’s good for self, community and environment is sustainability. From a product that you choose, how you use electricity at home and how you treat others – everything has an impact on the planet.” Thus, health & wellness and sustainability are and will be dominating trends in 2024 and beyond in the beauty landscape, she summarised.

Staying with sustainability, how is Watsons working towards building a better world for the future generations by undertaking measures that positively impact people and the planet?

“Globally, we focus on some key areas centred around the goal to offer our customers better products. On one hand, this translates to offering customers access to a wider range of clean beauty products made with better ingredients. For example, since 2015 we have ensured that micro beads are taken out of products sold at Watsons.”

“Better packaging is another focus area for us. We use recycled, FSC [Forest Stewardship Council] certified paper as well as cardboard packaging. We always think of ways to reduce plastic wrapping; for example, coming up with innovative ways to use smaller tissue boxes without affecting the quality of tissues inside.”

For categories such as haircare products which usually come in big bottles, Watsons is encouraging customers to opt for refill packaging that has the potential to reduce 70-78% of plastic wrapping, while also saving the bottles from ending up in landfills. It’s all about “firing up the impact” in as many ways as possible, as Ngai puts it.

Intent versus affordability: The future of clean beauty

Data indicates that the clean beauty segment of the market is on the rise. However, is pricing a constraint coming in the way of consumers’ intent to buy clean beauty products?

The pricing of cleaning beauty products is relatively high, Ngai agreed. “At Watsons, we are seeing a gradual increase in the uptake of clean beauty products, but it’s not exponential yet. Even though the sales volume is not going up very quickly in this category, we have decided to offer choice to our customers to enable them to make decisions that are good for themselves and the planet. Hence, we constantly have dialogues with a lot of suppliers to find ways to make clean and sustainable products more affordable.”

Decoding “social listening”

In the age of Instagram and Tik Tok, a lot of beauty trends are surfacing across these platforms, and consumers are being inspired and influenced by content creators across social media.

Asked if this trend is likely to continue and if social commerce fits into Watsons’ growth strategy, Ngai observed, “Social media helps us to understand what customers are talking about, what they like and dislike. We do a lot of ‘social listening’ to gauge problems that customers are facing in order to find solutions for them.”

Staying with social media, Ngai also shared what’s trending in the beauty space:

• Dabi makeup is trending in Asia.
• Searches for acne treatment dominate social media searches in Europe, while searches for sunscreen and serums are high in the GCC.
• Ingredient related searches around retinol and hyaluronic acid and folic acid were high in Asia and the GCC, respectively.
• GCC consumers like to keep their skincare regime basic using around 2.2 skincare items on an average, versus 8-9 items used by consumers in Asia.
• Korean beauty products are trending in Europe, Asia and several other parts of the world.

In summation, Ngai emphasised that beauty is subjective in nature. “Everyone has their own beauty regime. Yes, there are trends, but everyone should find their own most suitable and comfortable regime,” she concluded.