The company’s maiden foray into SEA was its Vietnam launch in 2019. The COVID-19 pandemic slowed down the firm’s expansion plans, and CEO Ryan Chao is keen to get back on track.
“It’s been pretty tough because we started up in 2019 just before COVID started. We had more than 20 franchisees around 2019. But now we only have about 11. But I am still really optimistic about Vietnam. The market is booming, and the female spending power is growing. I’m really looking forward to that expansion,” he told CosmeticsDesign-Asia.
After Vietnam, the company hopes to expand into Singapore, which Chao believes will be the ideal base of its Nanyang operations.
CHLITINA was established in Taiwan in 1989 as a beauty salon chain. Today, the firm develops its own cosmetic products with the help of its own manufacturing and research and development facilities.
Its largest market remains mainland China, where the lion’s share of its 5,000 beauty salons is located. CHLITINA salons operate as a franchise model.
While the company continues to identify growth prospects in China, it also recognises the significance of economic development and increasing consumer spending in SEA.
“In the past few decades, China’s growth has been a miracle. It’s still growing but the growth is slow [compared to the past]. Today, I think the opportunities are in SEA and markets like Vietnam and Indonesia. These are good markets because of the large and young populations,” said Chao.
Chao also highlighted Malaysia, Thailand, and Cambodia as markets with potential. He added that he does not rule out expanding further south to Australia.
Extending its reach beyond China and Taiwan will enable the company to continue its mission to empower the entrepreneurial ambitions of women.
“We’ve been empowering women since 1989 when we decided on a franchise business model. We built a platform to fulfil any woman’s entrepreneurial dreams.
“About two-thirds of store owners in our CHLITINA beauty salon network are women who were nurtured by us first as beauticians and then as store managers, before signing a franchise contract with us.
“We will continue to encourage those women to pursue their dreams through the CHLITINA platform.”
Brick-and-mortar priority
The beauty salon business remains integral to the company and establishing a strong network is a top priority when entering new markets, said Chao.
This approach ensures that the brand can directly engage with customers and build brand awareness. Furthermore, physical retail not only allows for more meaningful face-to-face interactions, which is critical in building trust in a new market.
Chao highlighted CHLITINA’s brick-and-mortar network in China as a prime example of the importance of having a strong offline presence.
“In China, Internet retail has been experiencing extraordinary growth, but the truth of the matter is that a lot of new Internet-only businesses have failed. We think that our CHLITINA physical stores will always be a key asset. Internet retail works well for us as a complement but cannot replace our brick-and-mortar network.
“In this day and age, it’s becoming more and more difficult to maintain a network as large as ours – let alone create one from scratch. Our stores look very good and help us develop a good relationship with end-customers.
We know that women need a long-term, stable relationship with their beauty salons – a relationship that is based on trust. They need a place where they can talk about their skin issues, get the beauty services they need, and so on. So, this complementarity between online and offline retail will always be an advantage.”
A new generation
Aside from finished products and salon services, CHLITINA is also involved in the medical aesthetics space. It has also established RnD, a manicure and eyelash care business targeted at the younger demographic.
“Diversifying business activities within the stores helps store owners expand their income and their customer base, since manicure and eyelash extension corners attract younger women. This allows beauty salons to reach customers from a younger age and this helps them develop a loyal clientele.”
Chao told us that the company is currently working to develop its “second-generation” of stores which would bring all its businesses “under one roof”.
“In these stores, customers can also learn about the services provided in our medical and aesthetic clinics, or purchase products through our e-commerce platform. So instead of restricting ourselves to selling services, we engage customers in a larger conversation on beauty and health that supports our retail business.”
In addition to this, the company is also working with its franchisees to enhance the design of their salons.
“Another important direction we are following today is motivating store owners to redecorate their beauty salons by taking inspiration from our beautiful flagships,” said Chao.
“It is very important to have a retail space inside a beauty salon so as to keep the customer longer in the store, and to attract new customers who might first step in to take a look at products on display, and then inquire about beauty services.”
