Watsons, the world's largest health and beauty retailer, has changed its leadership.
Li Ka-shing's retail empire ushered in its first female helmsman, Ni Wenling.
01
A few days ago, A.S. Watson Group announced the appointment of Malina Ngai as the CEO of A.S. Watson Group, and the change of power was officially completed.
Source: Watsons official website
Watsons is a traditional retail beauty giant, with more than 12,000 stores around the world, dominating the industry for decades, and is the originator of beauty retail collection stores in the minds of many post-80s and post-90s. CK Hutchison has four basic businesses: ports, retail, infrastructure and telecommunications, of which the retail business is mainly composed of A.S. Watson Group.
Since Li Ka-shing became the actual controller of Hutchison Whampoa through an acquisition in 1981, in the past 43 years, there have only been three heads of Watsons Group, and the new CEO Ni Wenling is also the first female CEO of Watsons.
Born in Hong Kong, Ni Wenling is a proper elite student, not only holds a master's degree in business administration from the University of Leicester in the United Kingdom, a master's degree in finance from the University College Dublin in Ireland and a bachelor's degree from the University of Canberra in Australia, but also won a bronze medal in rowing at the Asian Games.
According to public information, Ni Wenling joined CK Hutchison in 2000, was transferred to A.S. Watson Group in 2001, became the Group's Chief Operating Officer in 2013, and was promoted to Chief Executive Officer of A.S. Watson Group (Asia and Europe) in 2019.
As one of the few women among the CEOs of leading multinational companies, Ni encouraged the younger generation in an interview that women have unique strengths in many ways, including empathy, building collaboration and trust, a desire to nurture talent, resilience in the face of adversity, and a keen and studious spirit. Be prepared to go the extra mile and continue to work hard in areas where you can make a difference.
In her 24-year career, Ni Wenling has been deeply involved in almost every major reform and expansion of the company.
During Ni Wenling's five-year management period from 2019 to 2023, A.S. Watson Group (Asia and Europe) achieved quite impressive results, with health and beauty products recording revenue of 108.133 billion, 101.624 billion, 113.380 billion, 115.33 billion, and 132.749 billion respectively, of which, revenue in 2023 increased by 15% year-on-year, and EBITDA (note: earnings before interest, taxes, depreciation and amortization) increased by 18.94% year-on-year The number of stores has also expanded to 12,248, achieving expanded growth.
Ni Wenling proved her ability with her strength and was successfully promoted.
02
Fire and ice.
Watsons achieved double growth in global performance, but in the Chinese mainland market, it showed a bipolar trend and retreated.
Last year, the total annual revenue of Watsons China's health and beauty products was 15.145 billion, down 6% year-on-year; EBITDA was 959 million, down 4% year-on-year, with a slight increase in the number of stores, but still not reversing the decline.
This is a further decline in performance after Watsons' "biggest Waterloo since entering China" in 2022.
Source: Jumeimei
In order to rescue the declining Chinese market, A.S. Watson China pioneered the "joint governance" model for the first time, appointing Chen Zhihao and Nie Wei as Co-Managing Directors of A.S. Watson China, both of whom are key drivers of A.S. Watson's O+O business transformation, which shows the importance attached to the Chinese market.
After more than 30 years in the mainland, Watsons once occupied the C position of major shopping malls, and the door was "squeezed in", and now the consumers in the store are often not as many as the staff, can it be said that Watsons can not escape the "35-year-old crisis"?
03
Watsons entered the Chinese market in 1989 and opened its first store in Beijing, but if you go back in time, few people pay attention to the fact that Watsons is actually a century-old brand, originating from a Western-style pharmacy in 1828.
In the most glorious days of the early days, Watsons had more than 100 affiliated pharmacies selling its brand of opium smoking cessation drugs, and the famous Li Hongzhang, Zuo Zongtang, and Shen Baozhen all endorsed or wrote inscriptions for their "smoking cessation drugs".
In 1903, Watsons also founded China's first soda factory, Watsons Distilled Water, with "medicine + soda" as the core, and expanded all the way to a global cosmeceutical brand.
In 1981, Watsons' parent company, Hutchison Whampoa, had a market value of HK$6 billion, ten times that of Cheung Kong Group, and that was the year Li Ka-shing pocketed it.
In 1982, Li Ka-shing hired Wei Yi'an, the executive director of the retail supermarket chain Asda, from the United Kingdom to take the helm of Watsons, and under Wei Yi'an's leadership, Watsons Group went on a global acquisition spree, and by 2006, Watsons had become one of the top three global health and beauty retailers.
In 2007, the first change of leadership of Watsons Group, Lai Kai Ming took over as the managing director of Watsons Group, and reclassified Chinese mainland into the first echelon of development.
The continuous cultivation of the Chinese mainland market has directly accelerated the pace of Watsons becoming "the world's first".
In the past 10 years, the number of stores in Chinese mainland has expanded from more than 230 in 2007 to 2,929 in 2016, which is unparalleled in the field of CS stores (traditional cosmetics collection stores), which is also the highlight of Watsons in Chinese mainland.
Although the gross profit margin of the retail industry is not high, the cash flow is relatively stable, and Watsons has also provided sufficient ammunition for the development of Li Ka-shing's business empire, transfusing its real estate, energy, communications, infrastructure and other sectors.
The watershed of Watsons China from prosperity to decline appeared around 2015, when Internet traffic beauty dividends exploded and e-commerce entered the game rapidly, but Watsons was too traditional and conservative, addicted to offline stores, and missed the best period of online transformation, and since 2016, China's revenue has experienced negative growth for the first time.
However, Watsons China did not sit still, and appointed Gao Hongda to take over as CEO of China in 2017, followed by drastic reforms, laying out the online + offline "O+O" retail model, trying to seamlessly connect offline stores with online platforms, but the practice of converting public domain traffic to private domain traffic has caused a lot of problems in practice.
Source: Watson's official mini program interface
For example, online discounts lead to price inconsistency, squeezing the space for offline development; online and offline marketing channels have not been opened, resulting in the problem of online buying and offline out-of-stock; in addition, driven by performance pressure, Watsons shopping guides continue to promote goods to consumers, causing consumer disgust; some internationally renowned brands that originally cooperated with Watsons have also withdrawn from Watsons actively or passively due to sales performance, pricing strategies, changes in retail market pattern and other reasons.
Although Watson's China's reform was well intentioned, it has achieved little in terms of results.
During this period, Li Ka-shing also suddenly sold about 25% of Watsons' shares at a low price, cashed out 44 billion Hong Kong dollars, and personally "ruined" the possibility of Watsons' listing.
Since then, he may not be optimistic about Watsons' business model?
04
No one knows the real reason why Li Ka-shing backstabbed Watsons, and the outside world only knows that he frantically sold mainland assets during that period, increased his position in the British market, and brought one large investment after another to the UK, and was even ridiculed for "buying half of the UK".
Li Ka-shing responded in a rare public manner:
"I'm a businessman, and I hope people don't put any hats on me, whether it's tall or short, I don't want to have it."
"Li Ka-shing can't run, he doesn't want to run, and he can't run. This is my true word and my vow".
In the years that followed, Li Ka-shing made few public appearances.
This year, the silent Li Ka-shing began to appear frequently on major occasions, and his movements continued to move funds around the world.
Judging from the 2023 annual report, Changhe Group's net profit attributable to the parent company fell sharply by 36%, to only HK $23.5 billion, which is the worst result in 14 years, and even worse than in 2020.
Li Ka-shing's optimistic British telecommunications company Three UK contributed nearly 30% of Cheung He's revenue, British pubs accounted for 50% of Cheung Kong's revenue, and the British business was the largest profit center of Cheung Kong Infrastructure and Power Industries.
But from the second half of the year, the British economy began to decline, and an antitrust investigation was launched against Three UK.
Li Ka-shing sensed the wrong direction of the wind in advance, laid out early, retreated first, and resolutely did not earn the last copper plate:
Sold the "5 Broadgate" office building in London, UK, and cashed out 729 million pounds;
UK Power Network和Three UK也已经被摆上了货架……
Li Ka-shing has also sold quite a few assets around the world:
125 private jets were sold to U.S. companies, cashing out $4.281 billion;
Sold the assets of the Eurotel tower and recorded 10 billion euros.
Not only that, Li Ka-shing's real estate in Hong Kong did not let go, and once again dumped the house at a 7% or 8% discount.
On April 6, Li Ka-shing's Cheung Kong Group Hong Kong Island South Coast Project opened, with only more than 400 suites for the first time, but nearly 30,000 people came that day, which means that almost 70 people grabbed one set. On the opening day, more than 400 units were sold out, and 8.8 billion Hong Kong dollars were recovered. Seven of them became local tenants, and three percent were mainland guests.
Whenever the market is uncertain, Li Ka-shing is always the first to cut prices.
This move has also attracted a lot of suspicion from the outside world, "whether Li Jiacheng has predicted something again", "Superman is going to liquidate and run away at a low price again".
If Li Ka-shing thinks about it in such a consistent style, Li Ka-shing may have "foreseen" the crisis of Watsons in advance, and it is easier to understand Watson's "cheap sale".
A businessman is a businessman after all, and "profitable" comes first.
Today, after ups and downs, the retail empire formed by A.S. Watson Group still occupies an important position in the business system of Changhe Group. Li Chaoren changed his coach at this moment, and issued 5 personnel appointments in a row, Watsons re-launched the O+O strategy, what opportunities do you see?