Cosmed pledges to double stores

Cosmed (康是美) promised to double its outlet number to 200 nationwide in three years, as the local health and cosmetics retailer continued to play catchup with sector leader Watsons.

"We expect to boost our outlet number to 200 in the next three years," said Hsu Chung-jen (徐重仁), president of President Chain Store Co (統一超商), at the opening ceremony of a new store yesterday.

Cosmed, Taiwan's second large drug and cosmetics store chain, was founded by President Chain Store Corp (統一超商) eight years ago and has 110 stores nationwide. Watsons boast 235 stores nationwide. The company hopes to generate annual sales of NT$2.4 billion this year, an increase of 30 percent compared to last year.

"We estimate that Taiwan's drug and cosmetics market value is NT$25 billion in annual sales and that figure may keep growing by more than 20 percent every year," Cosmed marketing manager Kenny Hsu (徐建華) said.

The health and cosmetics chain store business has vast room for growth, in view of the transformation of consumer patterns in recent years, an industry expert said.

"The market is currently on its way up the development stage," said Shirley Huang (黃淑麗), director at Taiwan Chain Store & Franchise Association (連鎖加盟協會). "Retailers are targeting mainly the younger generation and the career women, who have stronger purchasing power," Huang said.

President Chain's know-how and long-term experience in retailing would be a great help to Cosmed's future development, she added.

To stay competitive and help differentiate itself from rivals, the company has been introducing more medical cosmetics brands, such as Nov from Japan and NeoTec from the US. Cosmetics make up to 40 percent of Cosmed's annual sales.

The company also set up a space for customers' consultation with cosmeticians and pharmacists and is collaborating with other pharmaceutical companies in developing health food and pills.

"All the efforts aim to build up our image as a professional drug and cosmetics chain store," said Tony Tsai (蔡篤昌), Cosmed's general manager.

Rival Watsons appears upbeat about Taiwan's health and cosmetics chain business. The Hong Kong-based venture has been in Taiwan since 1987.

"Compared to the ratio of Watsons' 130 outlets to the 4-million people in Hong Kong, we estimated we can double our scale in Taiwan in the future," said Brenda Kou (寇碧茹), Watsons Taiwan's senior marketing communication manager.

The company expects annual sales to grow up to 23 percent this year from a year earlier, Kou said. She declined to give exact sales figures.

Watsons banked on its pricing strategy to gain an edge over its competitors, Kou said.

"Our constant competitive pricing strategy lends us a great edge in the market," Kou said. "We conduct tracking of customers' preference criteria on an almost weekly basis to know what improvements customers want us to make."

Strategic alliances are the company's other approach to boosting competitiveness.

"Cooperating with the British-based Boots to sell the cosmetics under its brand in our outlets differentiates our cosmetics selection from competitors as well as strengthens our beauty consultation service to the customers," Kou said.