Asia’s largest beauty retailer plans GCC expansion

AS Watson

• Watsons has 18 shops in Gulf
• Bahrain, Kuwait and Oman in sights
• Franchise deal with Al Futtaim

Watsons, Asia’s largest health and beauty retailer, is to launch in two more GCC markets after recording sales growth of 53 percent in the region last year.

The company has 18 stores in the UAE, Saudi Arabia and Qatar through a franchise deal with AI Futtaim Group. It is targeting expansion into Bahrain and Kuwait this year.

Malina Ngai, CEO, AS Watson (Asia & Europe), told AGBI the Gulf has a “vibrant” beauty culture, adding that Oman is also on the company’s radar.

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“The GCC and wider Middle East and North Africa region hold immense significance for Watsons as it embarks on its international expansion,” she said.

“Mena has a strong heritage and culture of beauty and our presence in the market allows Watsons to bring the latest international beauty trends.”

The business has more than 8,000 stores and 1,500 pharmacies across 15 markets, according to its website. Ngai said it had more than 118 million customers worldwide. 

The Mena cosmetics industry is valued at more than $40 billion, she added. It is expected to grow by 12 percent annually to 2027, outstripping the global growth forecast of 6 percent.

“In 2024, our focus is on entering two new markets, Kuwait and Bahrain, where the skincare market is experiencing high annual growth rates,” she said.

“With a population of 56 million in the GCC, over 50 percent of the local population is under 25 years old. This presents a magnificent opportunity for Watsons to attract a younger customer base in the region.”

Ngai pointed to an increase in female participation in the labour force across all GCC markets as another driver of sales growth.

Watsons opened its first e-commerce store in the UAE in 2022 and following what the CEO described as “overwhelmingly positive feedback”, it is finalising plans to launch a Saudi e-commerce operation next month.

The three bestselling categories online are face masks, face creams and serums, and e-commerce sales grew by 30 percent last year.

Despite this, Ngai admitted Watsons had experienced challenges as a result of varying e-commerce regulations across the Gulf.

She said Al Futtaim Group had been able to help with its “immense understanding” of the local markets.

AI Futtaim and AS Watson reached a franchise agreement in 2020. The first regional Watsons store opened in Dubai Mall later that year. Expansion followed across the UAE and Saudi Arabia, before the first shop in Qatar opened in 2022.

“GCC is one of the world’s fastest-growing markets for beauty products so it holds a large potential for business opportunities,” said Simon Naga, vice president – retail (Mena and South East Asia) at Al Futtaim.