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Retail dynamics and beauty trends in Macao and Hong Kong

Every time I travel to a new place in the world I am always struck by not the differences but rather the similarities.  Macao and Hong Kong were no different and it was a wonderful experience. 

View from the Upper house Bar in Hong Kong

I went to Macau to train the 3 sales teams at Wynn Palace and Wynn Macau where we have launched both of our brands Scalisi Skincare and Bob's Cream in the Gift Shop, Spa Shop and Sundries Shop.  I then went to Hong Kong for meetings with hotels and retailers about expanding our distribution into Hong Kong.  

Here are some photos of our retail displays at Wynn: 

The retail dynamics in Macao and Hong Kong:

Picture the US retail market in the 90's and that is the best way to describe the feel you get in both Macao and Hong Kong.  Hint: logo-emblazoned fare and malls or mall like shopping within resorts.  Hong Kong has more luxury retail shops than any place I have ever seen.  There are 14 Louis Vuitton's in Hong Kong versus 2 in New York City.  Louis Vuitton, like other luxury brands, do this because customers will not cross town to shop, they go to one area and spend, and they spend a lot.  There are 5 Dior's and 2 Chanel boutiques and don't be surprised if you need to wait in a line outside before getting in.  

Hong Kong has the main island which locals still refer to as a "village" because everyone knows everyone and Kowloon which is a ferry or taxi ride away.  I found myself traversing back and forth for meetings the entire time.   Someone compared Hong Kong/ Kowloon to New York City/ Brooklyn, and that seems about right.

People shop in Macao and Hong Kong because prices are 30-40% cheaper than on mainland China due to duty-free and no taxes.  The Chinese have a lot of cash and you almost wonder where all of it is all coming from and then I'm reminded that the Chinese are the largest holders of US debt so I'm not surprised. People discuss when the "bubble" is going to pop but there is no sign in sight and prices for real estate continue to sky rocket.  

The Chinese are very savvy consumers, they know their brands and quality and value is equally important.  There is a concern of "knock-offs" so foreign made goods carry a higher prestige.  

The Asian skin care market, focus and issues:

The North American market is being driven by color cosmetics, women in the US want to cover up their skin. The Asian market, on the other hand, is focused on treating their skin. We focused on Asia because Scalisi is effective, fast and easy.  An edited collection of 6 products, steeped in science and focused on natural, healthy ingredients. 

Asian customers are the largest spenders of skincare.  "Worldwide cosmetics sales have never declined in the past 18 years, and their annual growth rate was 4.4% between 1993 and 2011. From 2001 to 2011, the Chinese skin/ cosmetics market has shown a 17.0% growth rate, and premium skin/cosmetics market has grown by an even faster rate of 22.3%."  Growth has decreased in the last few years but still has been in the double digits.  This is why China is often cited as a key market for growth.  See more:  ASIANS DRIVE THE PREMIUM SKIN CARE MARKET

We focused on Macao and Hong Kong due to 1) the favorable regulatory requirements; 2) the fact they do not require animal testing and 3) the duty-free and tax benefit as mentioned above.

As it relates to what the consumer is looking for, fair skin is fashionable, so lighteners and brighteners are popular.  There are "whiteners" which from my observation left a subtle hint of white on the skin but for the most part, there are products that reduce the amount of melanin in the skin (brown spots).  Bob's Cream, by Scalisi, has an advanced brightening technology which not only helps to reduce the look of melanin in the skin but also works to inhibit the production of melanin.  

Walking around Hong Kong you see many people wearing surgical masks. At first it's a bit alarming and when I asked why, the response was "they must have a cold".  The use of surgical masks also helps to offset the pollution and there has been a development of "smog couture".  Since the environment and pollution can wreck havoc on the skin, products loaded with anti oxidants and SPF 30 are important. Scalisi's Anti Aging Moisturizer with SPF 30 has both and is very light in texture.  

The weather can be subtropical, every day I woke up to pouring rain and then it would let up for a short period and then down pour again.  During this time of year, lighter moisturizers like the Scalisi Silk Elixir Serum is better.  

Unlike the US skin care market where we are seeing a blurring of the line between mass and prestige skincare, the Asian skin care market remains very separate.  Watsons, Mannings and Sasa cater to the mass market while Duty Free Stores, Joyce Beauty, Harvey Nichols and others cater to the prestige market.  

Interestingly, the natural/organic movement, has yet to take foot in Macau and Hong Kong, but industry executives believe it is just a matter of time.  The final observation is K Beauty is popular, though the market may have had it's fill of the European products and US Indies have an opportunity.  

 

It was all work but I got to spend and evening with a friend.  We had drinks at the Upper House and then went out to dinner in Soho.  As I said, not too different from New York City.  With all the traveling I have done, it's surprising I never had the opportunity to go to the Far East.  Until now, the furthest I had gone was India which was also incredible.

Read More:  What I learned in India - the culture and local beauty issues.

I would love to hear your thoughts.  I'm headed back to Hong Kong a couple of months to learn more. 

 


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