Elite Traveler: Tell us about your background.
Ken Wong: I was born and raised in Hong Kong, and left when I was very young. I went to high school and university in Canada, worked there for five years and came back in the 80s, the golden time in Hong Kong.
I feel very comfortable being in this part of the world, where all of the action is happening. I worked for high-tech companies in my early career and by chance joined Estee Lauder 26 years ago.
I didn’t know anything about beauty products but it sounded interesting and something I would be able to relate to. When you are dealing with computers, you’re working with systems. The product is just a model number.
ET: Did you study business management?
KW: My training was more finance focused. Product consumption is very relatable. After work you go down to a shopping mall and you can see all activities, you can get a good sense of how the business is doing very quickly.
Estee Lauder was a relatively small company when I joined, and we didn’t become listed on the NYSE until 1996. Compared to HP which had a lot of corporate culture, Estee Lauder was very different. Estee Lauder had a lot of family culture; however, a small company that started in New York in 1946 is now a Fortune 500 company.
Mrs. Estee Lauder was a very bright business woman. Her son, Leonard Lauder, was our chairman during the 80s and 90s and took our company to international markets. He is succeeded by his son William Lauder, our present executive chairman.
I’ve been with the company since 1987 and have seen the company grown both globally and locally. It has been quite an interesting experience to see all the changes and to be involved in various company projects in this part of the world.
ET: Tell me about the Estee Lauder Companies.
KW: We are a beauty products manufacturer and marketing company. Our products include skin care, make-up, hair-care, fragrance. We are a ten billion dollar company on a global basis, doing very well over the last few years, gaining share in markets we operate in.
We established our office in Hong Kong in the early 70s so we have been around for long time and has grown a lot since then. We currently manage 16 brands directly in HK and have two brands managed by distributors.
Globally, we have just under 30 brands. There is opportunity for us to bring in more brands, however, the cost of entry is getting very expensive. This means big investments. Chinese tourists are important customers for us.
ET: Of the ten billion worldwide, approximately how much of that comes from Hong Kong and Macau?
KW: Unfortunately, I cannot disclose that information. China business is about 5-6%, it is in our annual report. The entire APAC region is very important to the company and is enjoying high growth, China is a key market and the largest in Asia at the moment.
ET: How has Estee Lauder become so successful?
KW: Firstly, we have very good products, they have high efficacy. We do everything with a long-term view, we are like marathon runners. We are very careful in protecting our brands’ equity. Our mission in the market is to make our brand as desirable as possible, which is what I always tell my colleagues. We are doing well in Hong Kong and is a market leader. The Estee Lauder brand is the #1 beauty brand in Hong Kong, which we are very proud of.
ET: How many brands?
KW: Under Estee Lauder Companies umbrella in HK we have Lauder, Clinique, La Mer, Origins, Mac, Bobbi Brown, Osiao Lab Series, and fragrances, which include DKNY, Michael Kors, Tommy Hilfiger, Zegna, Marni and Coach. We launched Tom Ford’s make-up and fragrances last year, an ultra premium brand.
I’m not an ingredient expert but the fragrance has distinctive character with power to endure. Mr. Ford personally has worked on every product. There are many fragrances in the market today with similarities but Tom Ford’s are unique and truly special.
ET: What sort of brand position do you think you will be up against with the various Korean and Japanese cosmetic influences. How strong do you think the future of your brand is versus these new Eastern brands?
KW: There are many Asian brands in the market today. In recent years the Korean brands have taken a strong foothold everywhere in Asia. They have very innovative products and packaging, at very affordable price points. K-pop has really helped the Koreans in moving products outside Korea and they are doing extremely well. They are in their era of innovation.
Last year we launched our own Asian brand called Osiao, a brand with a very unique positioning addressing the key concern of Asian women which is radiance. Osiao uses traditional Chinese medicine ingredients and made with western technology. It is also customised based on five skin constitutions.
Creation and research was done in China and Japan and that idea was carried over to the US headquarters, where the product was then further developed with Chinese traditional medicine ingredients implementing western technology in order to make it more protein. This is the first time that we have created our own skincare brand since we launched Origins in the late 80s.
ET: What does the future hold for Estee Lauder Companies in HK? Being the head of the ship, what is your vision for the future?
KW: The future looks very bright. Today, skin care and make-up products are not luxury products anymore, as they have become basic grooming essentials. Men’s skin care is a very important category with extraordinary potential, more so here in Asia than in the US.
People are looking into products that really work for them on a personal level. Technology and research is getting better. People that used to use mass brands are now trading up to premium brands. Hong Kong particularly, is very unique, as most countries have a larger mass beauty market than premium, but Hong Kong is the reverse – more than 60% of the market is premium.
The beauty industry is also resilient to economic ups and downs. Years ago, our Chairman Emeritus Mr. Leonard Lauder created the lipstick index, which measures the sales of beauty products during hard times. When the economy is not doing well, women get just as much pleasure buying a lipstick as oppose to an expensive handbag. That is why our industry is not that sensitive to the economy.
ET: Anything you’d like to add for our private jet travelling audience?
KW: I hope everyone is enjoying good health and doing the things they love to do. I wish everyone well!