Watsons Was Fined for More Expensive Promotion Prices

Recently, a branch of Watsons in Beijing was fined 50,000 yuan (about $7,500 ) by the Beijing Yanqing District Administration For Market Regulation for allegedly using false price methods to deceive transactions. It is worth mentioning that this is the eighth time in the past two years that Watsons stores have been punished for various violations.

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Discounts and promotions are the most common means of attracting customers in beauty stores. In addition to special occasions such as traditional Chinese festivals, stores will also launch promotional activities according to the actual situation. However, a Watsons branch was fined for the promotion.

According to information from China's National Enterprise Credit Information Publicity System, recently, a branch of Watsons in Beijing was suspected of using false price methods to deceive transactions. It turned out that the store wanted to do promotional activities to attract customers' attention and increase store sales.

But there is a problem with the "price discount" of the promotion. For example, when this facial mask was promoted, the marked price was "Yan Xi Bai Moisturizing Facial Mask 6-Piece package", the original price was 49 yuan (about $7.35), and the current price was 44 yuan (about $6.60).

According to its transaction data, the price of the mask was 44.1 yuan (about $6.62) per piece before the promotion, which was inconsistent with the original price of 49 yuan (about $7.35) per piece at the time of the promotion.

Therefore, the Beijing Yanqing District Administration For Market Regulation determined that the branch's behavior violated the "Price Law of the People's Republic of China": using false or misleading price methods to lure consumers or other operators into trading with it. Therefore, according to the relevant legal provisions, the store was ordered to correct the violations involved, and a fine of 50,000 yuan (about $7,500) was imposed.

As the largest retail chain of health and beauty products in China, Watsons' business scope includes the retail of medical masks, the sales of second-class medical equipment, the sales of hairdressing accessories, the sales of daily necessities, and the wholesale of cosmetics. It has nearly 50 branches and more than 4,000 stores in mainland China. According to the latest financial report of the parent company of Watsons, CK Hutchison Holdings Limited, as of the end of 2021, the number of Watsons stores in China has reached 4,179, an increase of 2% year-on-year in 2020.

An industry veteran in China said that when the number of stores in the chain reaches a certain level, this situation is prone to occur. Moreover, the vast majority of Watsons clerks are promoters of manufacturers, so it is not uncommon for this kind of promotional chaos.

It is worth noting that this punishment is the eighth time that Watsons stores have been punished for various violations in the past two years. From June 2020 to December 2021, Guangzhou Watsons has a total of 4 pieces of administrative punishment information, with a total fine of about US$5,700, of which 3 are related to cosmetics. Not only Guangzhou Watsons has been fined many times, but also the stores of Shanghai Watsons, Qingdao Watsons and other branch stores have also been repeatedly reported to be fined and sold substandard products.

Although these penalties involve minor problems and the fine is not high, Watsons, as a well-known cosmetics chain, has had problems many times, which should also be paid special attention to. Under the strong supervision of cosmetics in China, Watsons has to make great efforts in the standardized operation and management of stores.

Otherwise, it will eventually cause losses to the Watsons brand in the long run.  For a brand, it is a long process to establish public praise, but it often takes only a moment to destroy it.