Chinese consumers are becoming increasingly affluent, and female shoppers are particularly finicky.

This is especially true for women who buy beauty products. Consumers looking for perfume, shampoo, skincare products, and beauty accessories want carefree, one-stop shopping. Other women expect professional guides to give make-up and skincare advice before they part with their cash.

The demand for customer-oriented services in the beauty industry has not gone unnoticed.

Mainlanders, especially affluent women in big cities such as Beijing, Shanghai and Shenzhen, should be familiar with SaSa, a Hong Kong-based cosmetics retailer with a huge presence in the Asia-Pacific region. Ninety per cent of SaSa's clientele across Asia are Chinese and 40 per cent are from the mainland, says Macy Leung, the company's corporate communications director.

"SaSa still emphasizes learning more about the local market, however," Leung says.

It opened its first store in Shanghai in late-March. It is the largest one in the Asia-Pacific region, with an investment of approximately HK$15 million.

"The mainland market looks promising," Leung says.

Chinese mainland is currently the second largest cosmetics market in Asia after Japan, reaching more than 85 billion yuan (US$10.49 billion) in 2004.

Cosmetics have now become the fifth most popular consumer product on the mainland, after real estate, automobiles, telecommunications products and education and tourism-related goods. The market is expected to expand at an annual rate of about 13 per cent, with sales revenues reaching 100 billion yuan (US$12.35 billion) by 2010, according to a recent report by Li & Fung Research Center.

SaSa has used its proven one-stop shopping concept in the new Shanghai store. It offers a wide range of beauty products across more than 7,000 categories and 120 brands, 70 per cent of which are foreign. This includes skin, body and hair care products, perfume, make-up, and beauty accessories.

"We provide a variety of products at different prices. We want shoppers from all socio-economic backgrounds to feel comfortable shopping here," Leung says.

SaSa currently has more than 70 stores across Hong Kong, Macao, Taiwan, Singapore and Malaysia. Hong Kong alone is home to 47 outlets.

"We want to use what we've learned in other places, like Taiwan and Hong Kong, and apply it to the mainland. We are very confident," she says.

Seasoned consumers know that SaSa's biggest draw is its low prices. This price difference, however, has not been particularly advantageous on the mainland.

Complications, restrictions, local policies and regulations have made beauty product prices in Shanghai 15 to 20 per cent higher than in Hong Kong, says Leung.

"We tried to cut prices on the mainland, but the time is not right for Hong Kong levels. We are working on it," she says.

Leung adds that SaSa has performed well on the mainland thus far. She refuses to reveal details, but says that Shanghai's growing economy and affluent youth have greatly contributed to sales.

"Local consumers care more about quality," she says.

Value-added services are one of the most important ways that SaSa attracts customers.

SaSa's saleswomen provide comprehensive beauty consulting, including skin analysis, product recommendations, and other customized services. Sasa also provides four dressing rooms for customers.

"They (salesclerks) never push you to buy this or that, which often happens at other places," Leung says.

SaSa saleswomen therefore must be familiar with both products and retail skills. The new store in Shanghai currently employs about 40 salesclerks, all of whom have gone through a 150-hour training program led by senior beauty consultants from Hong Kong.

It is time consuming understand the mainland market and achieve success here, and stiff competition in the local cosmetics sector makes matters even more difficult, Leung says.

"We still need to improve our product displays, brand promotions, market examinations and training programs," she says.

The cosmetics sector holds enormous business potential, and an increasing number of international brands are entering the market.

French company Sephora opened its first store in Shanghai in April this year. Four months later, it set up a second outlet. It expects to open six stores in two years and 100 stores by 2010, a company spokesperson says.

"We still have our own advantages," Leung says.

With 27 years of retailing experience in the Asia-Pacific region, SaSa understands mainland customers, and its products are appealing to Chinese consumers. It provides a wide range of items for local consumers, but Sephora only targets affluent shoppers, Leung adds.

SaSa is the sole domestic agent for international skincare brands used in beauty salons, including Swissline, La Colline, Darphine and Ingrid Millet.

The company is also aggressively expanding. It is considering opening a second Shanghai store by the end of this year.

"Location is the most important thing, and we are looking for the best place for it," Leung says.

SaSa will open more than 20 stores on the mainland over the next three years in Beijing, Guangzhou, Chengdu and Shanghai. The number of stores should hit 100 by 2010.

(China Daily October 12, 2005)