The elite European skincare brand Vichy can be found in over 60,000 pharmacies worldwide, from France to South Korea and even China's mainland, but not in Hong Kong. Not that is until now - with the launch of a Vichy outlet in Causeway Bay.

Vichy is a brand of dermo-cosmetics (also know as cosmeceuticals), which features under L'Oreal's Active Cosmetics Division. Dermo-cosmetics are hypo-allergenic, clinically tested products available principally in pharmacies and generally sold with pharmaceutical advice. In Hong Kong, however the products will be sold, for the first time in the world, in their own concept shop.

Denis Donohoe, managing director of L'Oreal Active Cosmetics Asia, says the reason for the delay of Vichy products making an appearance in Hong Kong is partly as a result of the sophisticated nature of the local market.

Donohoe, however, aims to change the view of local women and the testing ground will be the Vichy outlet in Hong Kong.

The products will be utilizing a previously untried distribution method for the brand - a concept store. By this means, the company hopes to offer something different in Hong Kong's multi-billion dollar beauty industry.

"Many Asian brands tend to focus on the results - so they tend to show beautiful models with beautiful skin, portraying the beautiful ideal of what customers would like their skin to be," says Donohoe. "Vichy takes a different approach. We feel that by showing consumers that we understand the problem they will be more inclined to trust us, that we can provide a solution."

Health, rather than beauty

There are many reasons for introducing Vichy to Hong Kong now. Although dermo-cosmetics comprise only about 5 per cent of the global cosmetics market, sales growth ran at 9 per cent in 2004, nearly three times the rate of the rest of the market.

L'Oreal's total Asia sales increased by 9 per cent in the first half of 2005, lifted in part by 19 per cent sales growth in Hong Kong. During the same period, L'Oreal's Active Cosmetics Department, which develops dermo-cosmetic healthcare brands, witnessed sales growth of 13.1 per cent. This is on top of Vichy's 14.5 per cent sales growth in 2004, up 49 per cent in Asia.

In light of such rosy numbers, Vichy is banking that Hong Kong consumers will react positively to its mix of expertise, service and health as the brand expands its presence in the region.

Vichy's concept store, which is its first in the world, embodies what Donohoe describes as the "something new, creative, something different from what's out there", meant to draw choice-rich Hong Kong consumers to the brand.

Donohoe believes that there is a population of skincare consumers seeking "more professional service, more professional advice".

Outfitted with its own seven-step diagnosis machines and UV cameras, and with a registered pharmacist on hand to provide free skin diagnosis and skincare advice, the new store is built to attend to the personal and specific skincare needs of consumers.

The use of technology for diagnosis and the emphasis on education also reflect Vichy's intention to target Hong Kong consumers interested in staying healthy, those "who are approaching their skin from a health perspective, rather than a beauty or fashion perspective".

In recognition of the city's diversity of consumers, the new store carries a wider range of products than anywhere else in Asia. The four main product ranges are still whitening, oily skin treatment, hydration, and anti-aging - the pillars of the brand in Vichy's other Asian markets, Taiwan, China's mainland, and South Korea, says Donohoe. All products for Asia have been clinically tested by Asian dermatologists.

In terms of price, Vichy is between luxury and mass marketed brands, a position reinforced by the sale of its products through its concept store, which separates Vichy products from the luxury brands found in department stores and the mass market skincare products more widely distributed.

"We want to be popular," says Donohoe, "we want to bring our products to as many people as possible - bring this concept to as many people as possible".

Pharmacy niche

Vichy devised the concept store as a way to stand out to consumers but was also impelled to do so as a remedy to a pharmacy distribution channel that the company felt would have difficultly meeting the expectations of their customers.

In Hong Kong, pharmacies are generally smaller, and "tend not to be where consumers go to buy skin care products, to receive skincare services," says Donohoe.

Through the concept store, Vichy has been able to fill one of the two gaps in its Asia expansion (the other being Japan).

Vichy began developing its presence in Asia at the end of the 1990s. Taiwan was the first Asian market it entered because of its large pharmacies and their high traffic of customers, which fit the needs of Vichy's conventional pharmacy-centered sales model.

The year 1998 saw Vichy's introduction of its products to China's mainland, where it began by launching education-focused marketing, with explanations on why certain types of products should be used.

Though still dominated by state-owned chains, China's pharmacy industry is developing quickly as more commercially driven operations emerge, with some able to establish themselves across provincial lines.

The mainland's pharmacy skincare market grew by 60 per cent last year. Vichy stands to profit from such expansion as it is already in 1,000 pharmacies in nearly 100 cities.

As for future plans for the Hong Kong market, Donohoe says Vichy wants to start with the concept store, and may take another look in three or six months time and make further decisions based on the degree of success.

And while he sees that Vichy's success could cannibalize the sales of L'Oreal's other products in the months following its launch, Donohoe doesn't see why L'Oreal's luxury and mass market brands would be adversely affected in the long term.

"It's offering a different type of product experience, a different type of brand experience from other L'Oreal products, and I'm sure I will take some customers (from L'Oreal), but I hope I will be able to take more customers from our Japanese competitors, our American competitors, because I think the brand is complementary."

(HK Edition 10/20/2005 page4)