Despite slowing momentum in consumption, local conglomerate Mercuries & Associates Ltd (三商行) expects sales for next year to be boosted by its reinvestment in cosmeceutical retail stores.
Sanyou Drugstores Ltd (三友藥妝), a NT$120 million (US$4.12 million) joint venture by Mercuries and Japan-based Sumitomo Corp, launched its first cosmeceutical retail store — Tomod’s Health Solutions — yesterday in Taipei.
It was the first Tomod’s outlet to be established outside of Japan, following the cosmeceutical retail channel’s rise to popularity in Japan a few years ago, Sanyou said in a statement.
“We are the first ‘native’ Japanese-style drugstore in Taiwan,” Sanyou Drugstores president Primo Wang (王建中) told reporters.
The company will first focus on building up the quality of its service, instead of on expansion, Wang said, adding that Sanyou plans to launch two more Tomod’s outlets in the Greater Taipei area in the first half of next year.
Wang did not specify the sales target he had set for the first Tomod’s store.
However, Mercuries Group adviser George Wong (翁肇喜) said he expects Tomod’s to become one of Taiwan’s major cosmeceutical retail chains, competing with the established heavyweights Watsons (屈臣氏) and Cosmed (康是美) in the long-term.
Mercuries posted NT$1.72 billion, or NT$2.89 in earnings pershare, in consolidated net profit in the first three quarters of the year, up from NT$1.44 billion, or NT$2.43 per share, a year earlier.
Following the increasing number of players in the market, Watsons — Taiwan’s largest cosmetics and drugstore operator — said it has been shifting its focus to selling snacks and beverages to attract more customers.
The company, which has more than 440 outlets, said revenue has been showing double-digit growth for the past few months.
Smaller player Cosmed, owned by President Drugstore Business Corp (統一生活事業), said the total number of its stores may total close to 400 by the end of the year.
However, sluggish economic sentiment has dragged down Cosmed’s profitability in the first three quarters, with net profit during the period sliding 38.22 percent from a year earlier to NT$153 million, company statistics showed.