An accidental career in beauty

Fate steered Patrick Chong into skincare and fragrances, but the LuxAsia chief leaves nothing to chance in keeping his business looking good

PUBLISHED : Friday, 28 March, 2014, 10:52am
UPDATED : Saturday, 29 March, 2014, 2:12am

Singaporean Patrick Chong Fook Seng was just 26 when he landed a job in the beauty industry by chance. More than three decades later, as chief executive of his own company, LuxAsia, he oversees the Asian distribution of more than 100 of the most prestigious beauty and fragrance brands, including Burberry, Guerlain and Escada.

Chong has also helped introduce sought-after niche labels like Acqua di Parma, Diptyque and Strivectin to the region.

When you enter [China] you have to be very careful selecting what brands you represent

Despite having offices in 11 Asian countries, LuxAsia has kept a low profile these past 27 years. In his first interview in Hong Kong, Chong talks to the South China Morning Post about repositioning the company from a distributor to a market maker, the rising appeal of niche brands for Asian consumers and his ambitions to merge with or acquire other businesses.


How did you find yourself in the business of beauty?

It was certainly an accidental career. When I was young, my ambition was to become a commercial pilot, but life always has an element of fate.

The national service policy at the time said it was not possible to become a commercial pilot without completing your national service [in the air force].

I wanted to become a pilot because the pay was one of the best, you got to see the world and meet all the beautiful ladies. I didn't want to sit in a fighter plane all by myself, and at that time, the air force pay was the lowest.

Consequently, I decided to go out to the open market and do a few interviews and got a job with British company Inchcape.

When they offered me the job, they said: "What would you like to do? Wines and spirits or fragrances and cosmetics?"

Of course being a guy, I said wine and spirits. But when I reported for work, they said: "Welcome, we're very happy to have you. Just for your information, we've decided to assign you to fragrances and cosmetics."

That's over 30 years ago now, so it's kind of no turning back.


What gave you the idea to start LuxAsia?

Inchcape could not provide the back-up or infrastructure needed in Indonesia, so that's how it gave rise to our business. I moved into a set-up that covered Singapore, Malaysia, Indonesia, the Philippines, then went into other markets.


Why have some of the biggest brands in the beauty industry, such as Revlon and L'Oreal's Garnier, failed on the mainland?

I think that China certainly is a market with tremendous opportunity if you are successful. But one thing, if you go to China, the cost of failure is immense.

Therefore it is very important that when you enter the China market you have to be very careful selecting what brands you represent, what segment you want to go into and how you want to go into it.

China is such a huge market. Everybody wants to get there, and that's where the problem is. It's a market with huge opportunities, but you have to do your research well.

For us, when we went to China five years ago, we were certainly a latecomer. But that's the nice thing about China, even if you are a latecomer, there's still a good future.

Our forte at that time was fragrances, but we didn't see that much potential [for fragrances] in China. So, instead, we decided to focus on skincare.


What kind of footprint do you have on the mainland?

We started with skincare, and we are working with Sephora on an exclusive basis. That has given good results, because customers know Sephora now.

We launched two brands there. The first is Peter Thomas Roth. The second, which launched in the first week of March, is Dr Brandt.

Many people haven't heard of these brands. Although these brands may not be clear winners in China, we are taking these brands because we've tested the products and we know that they're good.


What sort of niche brands are you responsible for now?

Brands reach a certain amount of maturity, so now we're bringing in more niche brands. Philosophy is a new brand that we're building on a retail platform.

More and more, we feel that consumers are looking for something different. For Philosophy, they have several peeling products, so what we're trying to do is also create concepts. We're creating a peel bar so people can come in and do a facial peel.

Having good clean skin is the very basis of whether you get the value out of your products.


Is there an opportunity to distribute Chinese beauty brands in other parts of the world?

I look forward to the day, but unfortunately there's none at the moment. What is very sad is to see these aspiring brands get bought up by multinationals.

I truly hope that there will be a Chinese brand that will be a global player. Yue Saikan, I remember meeting 20 years ago. She sold [her brand, Yue Sai] to Coty, and then it was sold to L'Oreal. L'Oreal also bought the mass brand Mininurse.

I think it would be really nice if an international brand can bring a Chinese brand global, but having said that, I'd like to see a Chinese brand brought out globally by the Chinese themselves.

The leading brands in Korea are Korean. The leading brands in Japan are Japanese. There's no reason why China cannot also do that.


How have Asian beauty hits like BB cream changed the global beauty marketplace?

Actually, BB cream was invented in Germany, but the Korean guys developed the product, and it became a runaway success.

[People in the industry said:] "Wow, look this is a wonder cream." It's selling so well, so eventually every brand has to [develop a BB cream product] to not give away their market.

Twenty or 30 years ago, Kose invented a two-way cake. It's a dry and wet powder. To a certain extent, you had to create a similar product or else you lost market share.


How much of your business is in men's products?

It's still in the low teens [by percentage]. We've always given attention to men's products. In absolute terms, it's growing, but one thing that's interesting is that women's consumption is growing faster than men's.

It's always in the 10 per cent range and never becomes 30 or 50 per cent. Usage has grown, but as a percentage it's more or less the same.

It's no longer considered effeminate to use these products, because men also want to look good.


How do Asian men's habits differ from their global counterparts'?

Western men, because they have full beards, focus on a lot of grooming products. They do aftershave, whereas the Asian men don't have that same intensity. They like to look young, so they do use the basic moisturiser, night cream, day cream. It's becoming quite the norm.


What are your company's plans for expansion?

We are not in Japan, Korea or Australia.

We nearly went to Australia 10-15 years ago, but the operating conditions are very different.

What we'd like to do with our Korean office is have it act as sourcing for all the Korean brands that we can sell to the world. Or similarly in Japan, because there are many good brands, but many of them are too small to go out.

We've registered our company officially in Korea, but the partners I'm looking for will take about a year to finalise the deal.

One thing we are certainly looking for now as a market maker, apart from partnerships with brand owners, is mergers and acquisitions - if we feel that we can merge with another distributor. For instance, if we are No5 and they are No6, and together that gives us No2. At the end of the day, I'd rather end up with 50 per cent of a No2 company than 100 per cent of a No5.

Acquisition of distributors - we're also open to that idea.