Taipei Times (TT): Earlier this year, you said that Watson’s has the potential to be very successful in marketing its store-brand products. Could you share the company’s vision for developing these types of products this year?
Toby Anderson: We believe that Asian markets represent a great opportunity for Watson’s-brand products.
Housebrand product awareness has been built in the US and European markets for years, with 40 percent of retail revenues are from self-brand products, compared with 5 percent recorded in Asia.
The company aims to increase the proportion of revenue generated by its own-brand products in Asia to 10 percent over the next few years by expanding the product range.
Given the increasing pace of growth that Watson’s-brand products have recorded over the past few years, we expect revenue generated by these products to outperform overall product sales in the next few years. For example, our data show that overall sales grew by between 2 percent and 3 percent last year, while sales of our own-brand products more than doubled.
TT: How do you plan to strengthen sales of your own-brand products in Taiwan this year?
Anderson: Given the current retail trend of super bargains, Watson’s is planning to maintain its fair pricing strategy on own-brand products to boost sales.
Currently, the company carries more than 500 store-brand items in Taiwan, such as Watson’s tissue packs manufactured by YFY Group (永豐餘集團), which are performing very well and selling 150,000 units a month.
In addition, we are also aiming to launch more premium-priced store-brand products in Taiwan, starting with a skincare brand that is to be introduced next week, following the product range’s success in South Korea.
TT: Aside from focusing on own-brand products, what are Watson’s other strategies for developing in Taiwan this year?
Anderson: In keeping with a worldwide brand refreshment initiative devised this year, we launched a brand renewal campaign in Taiwan last month by refreshing our services, logos and store decorations. For example, our newer stores that have more space will now offer healthcare counseling services by pharmacists.
TT: Has the company set a target for store expansion in Taiwan this year?
Anderson: We plan to expand our Taiwanese outlets by 27 this year and will prioritize the establishment of larger stores in urban areas such as Watson’s flagship store in the ATT 4 Fun shopping center in Taipei’s Xinyi District (信義), which was launched last month.
In addition, the company is also aiming to establish smaller stores closer to suburban areas to expand our customer base to communities further way from city centers.
TT: What are your predictions for consumer sentiment in Taiwan this year?
Anderson: Consumer confidence in Taiwan has been quite low since last year since the public remains concerned about the rising costs of living.
However, we have seen sentiment turn optimistic in the last quarter and expect sentiment to continue improving in the rest of the quarters of this year.
Overall, consumer confidence in Taiwan is lagging behind other Asian markets like China, which means that this year will likely be a tough one for the retail industry.
This interview has been condensed and edited.