Core Viewpoint - The article discusses the high gross margins of the beauty and personal care sector compared to other fast-moving consumer goods (FMCG), highlighting the potential for investment in companies like Watsons, which is planning an IPO with a target valuation of approximately $30 billion [1][2]. Group 1: Market Overview - The beauty and personal care products generally maintain gross margins above 60%, with leading brands like Estée Lauder achieving a gross margin of 74% in their latest financial report [1]. - In the global FMCG market, food and beverages account for 55% of sales, while beauty and personal care hold about 20% market share, which could rise to 40% when including home care and over-the-counter health products [1]. Group 2: Watsons' IPO Plans - Watsons Group, a subsidiary of CK Hutchison Holdings, is preparing for an IPO, with reports indicating a target valuation of approximately $30 billion (around 208.8 billion RMB) [2]. - The company has engaged Goldman Sachs and UBS as underwriters for the IPO, which may take place in Hong Kong or London, with expectations for the listing to occur as early as the second quarter of this year [2]. Group 3: Historical Context and Strategic Moves - Watsons previously sought an IPO in 2013, claiming to be the largest beauty and personal care retailer in Asia and Europe, with over 10,500 stores and an EBITDA of $1.64 billion in 2012 [3]. - The company shifted its strategic focus from Europe to mainland China, where it saw significant revenue growth, contributing 24% of total revenue despite only having 13% of its stores in that market [4]. Group 4: Recent Performance and Challenges - By 2021, Watsons had expanded to 16,398 stores globally, but growth in mainland China slowed significantly, with a drop in store count and revenue in 2022 and 2023 [11]. - In 2023, Watsons reported a revenue of 16.453 billion HKD in mainland China, a decline of 6% year-on-year, marking the first negative growth in store count in nine years [11]. Group 5: Future Outlook and Investor Sentiment - The upcoming IPO is seen as a favorable exit opportunity for investors, with expectations of raising at least $2 billion and a potential valuation increase of 33% for Temasek's investment [16]. - The retail business of CK Hutchison, which includes Watsons, reported a revenue of 99 billion HKD in the first half of 2025, reflecting a 41% year-on-year growth, driven by strong performance in beauty and personal care sectors [15].

Core Viewpoint - The current moment may represent the best exit opportunity for investors in the past decade, particularly with the upcoming IPO of Watsons Group, which is expected to be valued at $30 billion (approximately 208.8 billion RMB) [4][19]. Group 1: Market Insights - In the fast-moving consumer goods (FMCG) sector, beauty and personal care products have the highest gross margins, typically exceeding 60%, compared to food and beverage products, which generally maintain margins of 30% to 40% [3]. - The beauty and personal care segment holds approximately 20% of the global FMCG market share, with the potential to rise to 40% when including home care and over-the-counter health products [3]. Group 2: Watsons Group IPO Details - Watsons Group is preparing for an IPO, having engaged Goldman Sachs and UBS as underwriters, with potential listings in Hong Kong and London [4]. - The IPO is anticipated to occur as early as the second quarter of this year, with a target valuation of $30 billion [4]. Group 3: Historical Context and Strategic Moves - Watsons previously sought an IPO in 2013, claiming to be the largest beauty and personal care retailer in Asia and Europe, with over 10,500 stores and an EBITDA of $1.64 billion in 2012 [6]. - In 2014, Watsons opted for strategic investment from Temasek, raising 44 billion HKD (approximately 39.2 billion RMB) for a 25% stake, which was seen as a premium investment [7][8]. Group 4: Recent Performance and Challenges - By 2021, Watsons had expanded to 16,398 stores globally, with 4,179 in mainland China, but faced a decline in growth rates, dropping from 17% in 2012 to 3% in 2019 [13]. - In 2023, Watsons reported a revenue of 16.453 billion HKD in China, a 6% decline year-on-year, marking the first negative growth in store numbers in nine years [13]. Group 5: Future Outlook and Strategic Adjustments - Watsons is planning to open approximately 3,800 new style stores globally by 2025, with an investment of $250 million, indicating a significant strategic shift [17]. - The retail business of the parent company, CK Hutchison, is showing signs of recovery, with a 41% year-on-year revenue increase in the first half of 2025, driven by strong growth in beauty and personal care sectors [18].

Core Viewpoint - Mannings, a well-known beauty and personal care chain from Hong Kong, announced a significant strategic adjustment by closing all its stores and online operations in mainland China, marking a complete withdrawal from the market [2][3][4] Group 1: Store Closures - Mannings will cease operations in mainland China, with the last physical store closing on January 15, 2026, and its online platforms shutting down by December 28, 2025 [2][3] - The company has been gradually reducing its presence in major cities since 2020, with notable closures in Beijing and Wuhan, where several stores have already shut down [3][4] - In Shenzhen, only two stores remain operational, and similar sentiments of regret have been expressed by consumers in Dongguan regarding the brand's exit [3][4] Group 2: Market Challenges - The decision to exit the mainland market is attributed to intensified competition, the rise of domestic beauty brands, and the influx of international brands, which have diversified consumer choices [3][4] - The rapid growth of e-commerce has significantly impacted traditional brick-and-mortar stores, leading to decreased foot traffic and sales for Mannings [3][4] - Rising rental and labor costs have further pressured Mannings' operations, prompting a reevaluation of its market strategy [4] Group 3: Strategic Adjustments - Despite efforts to optimize its store layout and product offerings, including a focus on health and beauty products, Mannings has struggled to compete with emerging beauty retailers that attract younger consumers [4][5] - The company plans to continue offering its products through cross-border e-commerce channels, allowing consumers to purchase items from Hong Kong stores [4] - The exit of Mannings is part of a broader trend, as other Hong Kong beauty retailers like Sa Sa International have also announced their withdrawal from the mainland market due to similar challenges [5]

Core Insights - Watsons has launched a fun pop-up store in Shanghai featuring the iconic character Mengququ as the "Hair Volume Ambassador" to promote hair care products and engage consumers in interactive experiences [1][4][10] Group 1: Event Highlights - The pop-up store includes immersive experiences such as a giant hair volume waterfall arch and themed areas like the Hair Volume Research Institute and the Fluffy Supply Warehouse [4][7] - Consumers can participate in various interactive challenges, trying on fun wigs and taking photos, enhancing their emotional satisfaction [4][5] - The event aims to attract young consumers by integrating health hair care concepts into creative interactions like "getting hair volume" and "styling" [10] Group 2: Product Offerings - Watsons has introduced exclusive co-branded hair care sets in collaboration with multiple brands, including hair oils, conditioners, masks, and shampoos, providing a comprehensive hair care solution [7][11] - The themed stores in Shanghai and Chengdu feature dedicated stations for scalp and hair care, creating a lively shopping atmosphere [7][9] Group 3: Marketing Strategy - The collaboration with Mengququ reflects Watsons' keen insight into young consumer trends and preferences, aiming to innovate marketing activities and strengthen brand identity [10]