Health and beauty giant AS Watson opens 15,000th store as CK Hutchison chair Victor Li tries to emerge from father Li Ka-shing’s shadow

Lam Ka-sing
Health and beauty giant AS Watson opens 15,000th store as CK Hutchison chair Victor Li tries to emerge from father Li Ka-shing’s shadow

Founded almost two centuries ago as a simple dispensary, it is now part of the fabric of Hong Kong, selling everything from beauty products and tissues to snacks and its own brand of bottled water.

Watsons is almost as ubiquitous as 7-Eleven, with at least one shop in every neighbourhood of the city. Breakneck expansion into overseas markets has seen AS Watson Group grow into the world’s biggest and fastest growing health and beauty retailer, opening a new store on average once every seven hours across Asia and Europe.

On Tuesday it hit a milestone, opening its 15,000th store globally, in Kuala Lumpur. AS Watson’s expansion in foreign markets has become more aggressive and high-profile since Victor Li Tzar-kuoi became chairman of parent company, CK Hutchison.

The move signals the desire of Li to make his own name after taking the helm from his famous father, the Hong Kong tycoon Li Ka-shing, analysts said.

“The market has recently been watching him, comparing him with his father,” said Harris Wan, fund manager at CIS Pride Select Fund. “There is a need to be more high-profile. It is reasonable.”

The opening marks the 500th Watsons store in Malaysia, one of the fastest growing markets for health and beauty products. Watsons is the flagship retail brand of AS Watson, with over 7,200 stores in 13 markets in Asia and Eastern Europe.

The retailer began life as the Hong Kong Dispensary in 1841, and then transitioned into AS Watson & Company, named after the British pharmacist and early company manager, Alexander Skirving Watson.

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“We are one of the longest standing companies in the world with 178 years of history,” said Dominic Lai, group managing director of AS Watson, which has 140,000 staff.

Wan said Victor Li’s more high-profile approach to overseas expansion would probably not last.

“The policy of CK Group has always been to internationalise, with a lot of businesses in places like Australia,” he said. “The business strategy of Li [Ka-shing] was relatively conservative when he was still the chairman, without ambitiously bidding for land at high prices.

“[Victor Li] may be more high-profile initially but after a couple of years, he will run out of attention if he continues like that.”

As CK group transitions from Li Ka-shing to Victor Li, monopoly should no longer be its bread and butter

Since becoming chairman, Victor Li appears to have turned CK Asset’s investment focus back to the Hong Kong property market, initiating residential and commercial projects estimated by industry consultants to require some HK$66 billion of investment.

But he told reporters last week that the company had not changed its strategy, and that “quality of earnings is more important than the absolute amount of profit.”

His father in 2016 said the group would spread its focus globally as it faced challenges finding investments with reasonable returns in the local property sector.

That change saw the firm sell down assets in the city and plough HK$64 billion into aircraft leasing, infrastructure and utility assets in Europe, Australia and Canada.

The conglomerate with businesses spanning container ports, retail, telecommunications, and power plants, saw its net profit increase 11 per cent to HK$39 billion (US$4.97 billion) last year.

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