"Hong Kong is very volatile. We've been able to expand during the economic downturn when retail stores were more available. Now that times are good, rentals have shot up. In one case it rose from 400,000 to 2.5 million (Hong Kong dollars)! We can't afford that kind of… rental increase!" said Eu, who graduated with a law degree from London University and is a former merchant banker.
From the Special Administrative Zone, the Singapore-listed company has set its sights on the broader Chinese region, which Eu admits is a tough market to crack. For one, the mainland has complicated regulations in the healthcare and medicine sector.
"We've tried opening stores, also tried selling our products via wholesale. Our latest move is to open a restaurant in Shanghai and sell herbal food. We felt this modern approach could help us expand in China faster because if you sell a bowl of soup with herbs, there are far less regulations as opposed to putting them into a pill. That's the way regulations are," he said.
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And this varied approach towards expansion is what Eu Yan Sang is banking on to realize its ambition to set up thousands of physical stores in the world's second-largest economy.
"China is the largest traditional Chinese market in the world but we need to get our business model right [because] we are up against very large players in China and that is their home ground. But on the other hand, I know we have a good reputation in Southern China so I think we can build on that," Eu added.
— Reported by Christine Tan | Written by See Kit Tang