Watsons reported to shut store near Star Ferry Pier in Tsim Sha Tsui after 20 years

Watsons is reportedly closing one of its stores at Tsim Sha Tsui after leasing it for about 20 years due to the pandemic and the new customer lifestyle.  According to the South China Morning Post, the closure is due to the pandemic which had severely affected Hong Kong's economy and customers' lifestyles. Moreover, the number of tourists visiting Hong Kong saw a drastic drop of over 90% and Watsons' business was affected, like many other business located at tourist areas with high rental costs. According to the latest figure from the Hong Kong Tourism Board, the provisional visitor arrivals for September 2021 were 9,879, an 8.2% increase year on year, with a daily average of 329. However, the total visitor arrivals from January to September dropped 98.2% year on year to about 63,000.

On Watsons' Website, the store is no longer listed and there are only six Watsons stores in Tsim Sha Tsui. The closest one is located at K11 MUSEA.  It was reported that Watsons paid more than HK1.5 million a month for the 4,200 square-foot store. The SCMP report also cited a source saying that the landlords have had to cut the asking price of the location by 46% to HK$800,000 a month in order to have a new tenent. 

Currently, Watsons operates about 200 stores in Hong Kong and Macau. It has been strengthening its online plus offline strategy amid the pandemic. Previously, in an industry event, A.S. Watson Group & CEO of A.S. Watson (Asia & Europe) Malina Ngai explained the idea of offline plus online (O+O), which has become the new standard for retail and is shaping the future.

As modern customer journeys often include both online and offline channels, the O+O strategy, according to Ngai, is the core business strategy of A.S. Watson Group and more about creating an integrated experience to better serve customers’ needs that enables them to shop across different channels without the limit of locations and time. Traditionally, the strategy of O2O (online to offline or offline to online) drives customers from one channel to another, but the O+O strategy contains an ecosystem that is powered by technology, big data and AI.

The group's physical stores are connected to digital platforms, while members are digitally connected with social media and digital platforms and they can shop online not only on A.S. Watson’s mobile apps and websites, but also via WeChat, WhatsApp, and phone. With 100 e-commerce platforms in 27 markets in Asia and Europe, the company can set out to leverage the potential of the O+O strategy.

Several retailers have had to close their brick-and-mortar stores amid the pandemic. Victoria’s Secret also closed its flagship store in Causeway Bay last year, while Topshop announced it plan to close the only store at Central, Hong Kong in August 2020. US fast-fashion retailer Forever 21 even closed the store at Causeway Bay in 2019, pulling out of the city amid social unrest. 

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