Are brick-and-mortar stores making a comeback, especially with younger shoppers? AS Watson, the retail behemoth, certainly thinks so. Their CEO, Malina Ngai, believes the key lies in offering experiences that online shopping simply can't replicate. But here's where it gets controversial: Are these experiences actually what younger consumers want, or are retailers just clinging to old strategies?
AS Watson's story is remarkable. Founded in Hong Kong in 1841 – a pivotal year when the British took control – the company has blossomed into a global health and beauty powerhouse. With nearly 17,000 stores spanning 31 markets, from mainland China and Malaysia to the UK, Turkey, and even Ukraine, their reach is undeniable. Imagine the logistical challenges of managing such a diverse empire!
At the Fortune Innovation Forum in Kuala Lumpur, Malaysia, Malina Ngai, the Group CEO of AS Watson, emphasized the company's people-centric approach. "We are a people company," she declared. Ngai acknowledged the weight of the company’s history. Did you know that AS Watson even provided a medical scholarship to Sun Yat-sen, the future leader of the 1911 revolution against the Qing dynasty? Talk about a deep-rooted legacy! Yet, Ngai insists that heritage alone isn't enough. "Heritage gives us credibility, so people trust us, but only if we stay relevant [will we] be able to stay alive," she stated.
So, what's the secret to AS Watson's success across so many different cultures and economies? According to Ngai, it boils down to understanding their customers. In Southeast Asia, a region she describes as one of AS Watson's "growth engines," consumers are young, digitally savvy, and deeply invested in health and beauty. They're also highly responsive to new campaigns and product launches. To cater to this dynamic market, Watsons, AS Watson’s primary drugstore brand, has launched campaigns like “Kaw Kaw Deals” in Malaysia, complete with a catchy jingle performed by local celebrities Jinnyboy and Ayda Jebat. (You can check out the jingle on YouTube!). And this is the part most people miss: It’s not just about catchy tunes, it’s about hyper-localizing the marketing to resonate with the specific cultural nuances of each region.
Ngai's market surveys revealed a fascinating trend: many young consumers in Southeast Asia still enjoy shopping in physical stores, despite the abundance of online options. "For younger customers, they want to be in the store, they want to get consultancy, they want to be able to touch the product—and this is what we can offer," she explains. This tactile experience, the ability to interact with products firsthand and receive personalized advice, is a key differentiator for brick-and-mortar retailers.
Beyond the usual J-beauty and K-beauty favorites, Watsons also caters to the diverse needs of its customers by offering a wide range of halal-certified skincare and beauty products specifically for Muslim consumers in markets like Malaysia and Indonesia. This demonstrates a commitment to inclusivity and cultural sensitivity, which is crucial for success in these regions.
Interestingly, C-beauty (Chinese beauty brands) is also experiencing a surge in popularity among Southeast Asian consumers. Chinese beauty brands are "strong in technology and social media, and they get engagement and popularity within Southeast Asia very quickly," Ngai notes. Their mastery of social media marketing and innovative product development is clearly resonating with the younger generation.
Ngai also places a strong emphasis on employee empowerment, championing a 'people-first' philosophy. "In the company, if everyone is a leader, it will be a very powerful company. This means they know exactly the [company’s] purpose, they know how to collaborate, and they care for each other," she asserts. By fostering a culture of leadership at all levels, AS Watson aims to create a more agile and responsive organization.
Furthermore, AS Watson is embracing new technologies, including generative AI, across its entire team. They launched a company-wide generative AI protocol in September. “AI used to be just with my data team, the programmers—but now Gen AI is for everyone,” Ngai explains. This democratization of AI tools empowers employees to leverage the technology in their daily work, driving innovation and efficiency.
As AS Watson approaches its 185th anniversary in 2026, Ngai reflects on her hopes for the company's future. "I don’t normally dream about work over the years. I sleep quite well, but recently, I dream a lot about 185 years," Ngai confesses. Her vision is for AS Watson to "be an organization that can stay fit for the future, the next 180 years." This long-term perspective underscores the company's commitment to adaptability and continuous evolution.
But let's get back to that initial question: Are physical stores really making a comeback? Or are retailers simply interpreting consumer behavior through rose-tinted glasses? And if they are making a comeback, is it due to the tactile experience, or is it something else entirely, like the social aspect of shopping with friends? What do you think? Share your thoughts in the comments below!
