Raising the bar in Taiwan's personal care retailing business, Watsons inaugurated yesterday its 6,500-ping distribution center in Taoyuan County - the beauty and health purveyor's biggest hub of its kind in Asia.
"This distribution center represents the future of Watsons in Taiwan," company managing director Stuart Mitchell told an audience that included Vice Premier Wu Rong-i, international suppliers, and local officials.
"We believe that if you have a healthy heart, you will have a healthy business. To us, this facility is the heart that will be pumping blood into Watsons' (dynamic business)."
Located in Tayuan in Taoyuan County, the distribution center can accommodate the trading volume of 500 Watsons stores, and is designed to accept daily deliveries of up to half a million products.
The distribution center cost Watsons a small fortune to build.
In addition to incurring building-related expenditures, the retailer spent NT$30 million on its state-of-the-art storage equipment. The facility also created over 150 jobs in Taoyuan, said Mitchell.
The three-floor distribution center is equipped with 42 docks - 10 for receiving and 32 for product deliveries - and high-bay racking comprising 4,400 earthquake-proof pallets. A 100-ping cool room for chocolates and a 200-ping cool room for cosmetics have even been installed. Both cool rooms are kept at temperatures just under 20 degrees Centigrade, said Phil Vaudin, Watsons director for logistics.
"We have a complete backup system for the whole building to keep those rooms' temperatures stable," Vaudin said. "By the way, you might also be surprised to know that Watsons sells 70 percent of the chocolate volume consumed (in the country annually)."
The distribution center also has a 1,200-ping re-packaging and labeling area.
"We can be very flexible with the offering that we have for our customers," Mitchell said.
Security also tops Watsons' priority list. The 24-hour center, which is open 365 days a year, is equipped with an access control site, access control to all internal working areas, full CCTV coverage, and integrated security systems. Guards will also be on duty 24 hours a day, Mitchell said.
"Our distribution center has five objectives: ensure that products are available for our customers; act as the main stockroom for our domestic business; ensure timely replenishment of supplies to meet market demands; fast-track the delivery of new products into the market; and work with vendors as partners to set new industry standards," he said.
"We would like to thank our local partners - Exel Logistics and GTM - for making this center a reality."
The company clinched several milestones this year, Mitchell said. The retailer grew by 87 stores or an average of one store every four days, and created 1,000 new jobs in 2005, he said.
Upbeat about his company's prospects in 2006, Mitchell said Watsons would have at least 400 stores in the country by the first quarter of next year. Currently, the retailer operates 384 stores in Taiwan that draw some four million consumers every month.
"We are on track to meet our growth targets," he said. "We will open (at least 50 more stores) next year and do major refurbishments and refittings of our existing facilities."
Watsons also recently rolled out its card program with Chinatrust. The loyalty program allows members to redeem up to 24 billion points from Watsons annually, Mitchell said.
"More importantly, this card will provide us with data concerning customers' preferences," he continued.
Taiwan's No. 1 health and beauty retailer is also actively supporting community programs. Mitchell recently launched Watsons' fourth annual Christmas charity campaign, a fundraising dedicated to the Child Welfare League Foundation.
To raise money for CWLF, the retailer is donating a portion of revenues generated by its Mickey and Minnie plush toys to the welfare organization.
Watsons' Christmas charity events have raised a total of NT$11.7 million for children's organizations.