BW Confidential Store Visit: Beauty Avenue, Hong Kong

Standalone beauty

Prestige retail concept Beauty Avenue will inaugurate its second store in Hong Kong this year. The retailer plans to expand to mainland China in 2015.

Luxury goods and retail group Dickson Concepts opened its first Beauty Avenue standalone
prestige beauty store in November 2013 in Hong Kong and is now on the road to expansion.
The first Beauty Avenue store spans more than 20,000ft2 (1,858m2) across two floors and is
described as a beauty megastore with a branded focus. “The concept is about providing brands
with large-scale counters, which is the key differentiator from other concepts like Sephora. This
is very much about brand image and the service that brands provide,” notes Beauty Avenue ceo
Sarah O’Donnell. There are a total of 54 branded counters at the store.

The ground floor houses premium brands such as Dior, Guerlain, Shiseido, MAC and
Sulwhasoo, while more accessible brands like L’Oréal Paris, Origins and Biotherm are housed
on the second floor. Some brands, like Benefit, have two counters—one that offers only
product, on the ground floor, and a brow bar that also sells products, on the upper floor. The
store also features both pay-for and complimentary services. While each counter is staffed with
brand-specific beauty advisors, there are also general BAs throughout the store.
The retailer is looking to offer a wide range of product categories. “Local consumer tastes
are changing in terms of product assortment and brands—they are looking beyond just the
top-sellers and are also becoming more interested in make-up, rather than just skincare,”
comments O’Donnell. Beauty Avenue is located in Mong Kok, an area that O’Donnell says was “previously tier two”. 

Retail growth in Hong Kong is shifting from very grade-A locations like Causeway Bay and Pacific Place to areas such as Mong Kok. Locals are looking to shop closer to home, while PRC customers, who make up nearly all of the tourist spend, are branching out and are now shopping in different areas,” O’Donnell explains.

She adds that skyrocketing real estate costs in Hong Kong is encouraging smaller format stores, as opposed to multi-category department stores.

Beauty Avenue is focusing expansion in Hong Kong and mainland China. A second store will
open in Hong Kong and Macau is also on the radar. In mainland China, O’Donnell says a store
will open in at least one tier-one city in 2015, but tier-two and tier-three cities are the priority,
as growth is stronger there and operating costs are lower. “Our expansion is very location
dependent. The one consistent thing is to have traffic. We want to be profitable right away, so
we look at projects that will generate traffic very quickly,” she concludes.

Beauty Avenue,Hong Kong
Location: Mong Kok, Hong Kong
Size: More than 20,000ft2 (1,858m2)
On offer: 54 branded counters, complimentary and pay-for services