A.S. Watsons & Co Ltd, owner of the largest health and beauty retailer in Asia, said on Monday it will open four stores in Shandong province, part of the company's plan to open 400 more stores in China by the end of next year.
The four new Watsons retail units will be in Jusco outlets, a department store chain owned by Japan's Aeon Co. They will be located in Qingdao, Yantai, Weihai and Zibo cities in Shandong province.
The company also plans to expand to other cities in Shandong, it said in a company statement.
"We are really confident of our future in Qingdao. This cooperation will not only push forward our expansion plan in this region but also play an important role in our nationwide strategy of '1,000 Stores in 100 Cities' by 2011," said David Inglis, general manager of Watsons North China.
Analysts said more cooperation between international retailers and domestic companies is expected.
International firms can reduce costs through cooperation and the network of domestic retailers can offer a growing customer base, said Gao Kun, a researcher with Dongxing Securities.
"They always sign a 15 to 20 year contract, which will reduce rental expenses," said Gao.
After entering the Chinese market in 1989, Watsons currently has 600-plus stores and more than 11,000 employees on the Chinese mainland. The company has 160 stores in Hong Kong, which has a total population of seven million.
Considering the population and consumption capacity of China, the company has a lot of opportunities in the mainland market, according to Watsons.
The company is planning more than 1,000 stores in 100 large- and medium-size cities in China by the end of 2011, including second-tier and third-tier cities, it said. Under the "1,000 Stores in 100 Cities" plan, the company will open about 400 stores within one year.
Analysts said Watsons rush to expand will require the company to focus more attention on human resources management, information management and cash flow issues.
