Interview with Mr. Michael Gao, General Manager of Universal SpaEquip Asia
Michael Gao studied in Wuhan University, the Wharton School of Business, and Stanford Graduate School of Business. Since graduation, Michael has accumulated rich work experience at top Global 500 companies including Johnson & Johnson and Adidas. At the end of 2013, he joined the spa industry and founded SpaEquip Shanghai Ltd. Now as the Founding General Manager of Universal Companies Asia, the biggest one-stop solution provider to spa and wellness sector of five-star hotels worldwide, Michael is in charge of the operations and business development of the company’s business in the Asia-Pacific area. SpaChina interviewed him concerning the current spa market demand and situation and how to follow the latest market trends.
What’s the relationship between Universal Companies and Universal SpaEquip Asia?
Universal SpaEquip Asia is the Asia Pacific headquarter office of Universal Companies Inc, whose business covers the whole APAC area from India in the west to New Zealand in the east. Universal Companies is headquartered in Virginia, in the U.S.. As a trusted supplier of global spas and professionals for over 30 years, it has been dedicated to providing professional and high quality spa products, equipment, facilities, accessories and retails goods to partners. It has also provided retail consultancy and training programs. Besides, The Wellness & Beauty Learning Center by Universal Companies in Southern California is offering training sessions and site instructions to multitudes of professionals in the wellness and beauty industry.
How is China’s spas’ demand to spa products?
With the continual increasing number of spas, spa operators have higher demand for differentiation of products. Meanwhile, due to the long-term strict product registration system, including animal testing, in mainland China, the products must possess complete registration certificates to enter hotels, different from beauty salons and medical spas. Naturally, it becomes even harder for the high-end brands to render exclusive offerings at the spas. Since it is illegal for hotel spas to use invasive equipment, they become more in need of professional products with obvious quick effects.
How is China’s spas’ demand for spa equipment?
Firstly, the hotel spas can get the latest spa equipment innovations first hand due to the group’s consistent high standards on quality and their attendance to global and regional industry summits. Meanwhile, beauty salons and medical spas have quicker spa equipment upgrade than before. They show advantages over pre-opening hotels in this aspect because the hotels normally have a longer budget and CAPEX application process. On the contrary, with faster approval process, beauty salons and medical spas are able to purchase and renew more quickly to follow the latest trends of the industry.
Based on my experience, imported products or the true global brands (instead of “export-oriented commodities sold at home”) usually feature better quality and updated design and are therefore win more applause in the market. To sum up, hotel spas consistently maintain their high standard while beauty salons and medical spas are undergoing equipment upgrades.
How to select the right equipment is the key. Many suppliers were originally transferred from the spa operation, F&B or other sectors, so they lack knowledge of spa equipment or even defraud customers. They fail to give qualified after-sales services or maintenance and thus raise the spa operation risks.
How big is the influence of spa products and equipment on spa operations and revenues?
Just like good spa products, good spa equipment can help spa operators offer better service and also enable more flexible price adjustments to result in higher profit. The Rosewood Beijing, one of the best high-end hotels in Beijing, is a good example. As soon as taking up the post, the new spa director immediately upgraded spa products and equipment by using results-proven skincare ranges and updating massages tables. Besides, an adjustment of the spa menu further fends off part of group purchase customers who bring very low profit. After all these reformations, the spa witnessed an obvious revenue increase of over 100%. The new edition also better suits the hotel positioning. As a result, it now has become one of the spa landmarks in Beijing.
What is the percentage of spas that have retail area? Do they reach expectations?
As I observe, more than half of all spas have set a retail area. High-end brands like Marriott Group have retail areas at all their spas. The main categories sold at the retail area are spa products, complemented by brand labelled accessories, just like the display shelves by the counters in the supermarkets and shopping malls. To improve transaction per customer is surely a good option for spas. A La Mode, a subsidiary corporation of Universal Companies, provides professional retail guidance and training to spa people. Honestly speaking, the retail area of hotel spas normally doesn’t have truly satisfying results mainly due to poor sales skills.
What are the shortcomings of China’s spa and wellness industry at present?
Human resources. Personnel shortage will hinder the further development of the industry. Moreover, it seems this problem cannot be solved in the short term. This is indeed a global issue yet appears especially severe in China. To make it worse, some professional therapists are becoming fickle, negative and keep seeking new employers, which causes a high turnover rate and talent outflow.
Therefore, it is important for the employers to build better team culture, offer better salaries and emphasize professional training. The hotel spas, in particular, should also think of seeking good outsourcing partners so that they can quickly fill the post vacancies with the help of the partners’ network. How to choose a good operation partner? Professionalism is the priority. It is of great significance to ensure legal performance and avoid violating laws by rendering unacceptable business. On the other hand, the outsourcing operators need to fully understand the operation process and manners of the hotels lest they fail to be well adapted and give up halfway. Meanwhile, professional training is a great necessity, including both introductory training and advanced training.
What is your opinion on the training programs and personal cultivation in China’s spa and wellness industry?
Two words: Huge Potential. As Peter Thiel, the business legend at Silicon Valley and the icon of PayPal Mafia, commented in his book From Zero to One: Be it an industry or a company, it is extremely hard to change from zero to one. It is in fact easier to turn from one to hundred. Many of the training programs in China’s spa industry are in the phase of “from zero to one”. So there is a huge potential. The personnel shortage should be regarded as a great chance. While communicating with some training schools, I discovered that the most difficult part is student enrollment. The one child policy in the past 40 years has resulted in the fact that young people today are so spoiled by their parents that they are not willing to do service jobs. Meanwhile, the second and third-tier cities still have their biased and incorrect view about massage. All these factors contribute to a great difficulty in personnel recruitment.
We need to also notice that the training scale is still far from meeting the market’s demands. Nevertheless, this is not an industry that will promise you money overnight. Slow and steady wins the race. Furthermore, since there is not a national or regional industry standard for spa training, all kinds of people, professional or not, can easily set up a training institute. The final results of course cannot be guaranteed. The unsatisfactory trainees are more likely to shift from one work place to another and thus cause an increase in labor costs for the employers. For this reason, it is advisable for training schools to partner with global industry training giants. We are thinking of bringing our Wellness & Beauty Learning Center in California to China by adapting ourselves and more deeply exploring the local market. We believe it would be a fantastic chance. Yet we are also considering the possibility of applying the global standard training fee and employment here. Besides, it would be decisively helpful to the long-term healthy development of the industry’s training system if relevant national departments such as the Ministry of Human Resources and Social Security can establish a unified industry standard.
What are the top three star products or equipment of Universal Companies?
We have many star products and equipment which we are longing to introduce to spa professionals. If we can only choose three, then they would be the Sposh linen range, which wins numerous high-end spas with its super soft texture; the Babor range, as the creator of Ampoules, well-known for its German quality; and our customized massage tables, which we tailor according to the demands of hotel groups and end projects, such as Marriott Customization.
Why is Universal Companies so trusted by its customers?
As the biggest spa solution provider in the world, our company possesses a gigantic customer database. With the help of big data analysis using Oracle’s ERP system, we can, through training and after-sales service, share with industry people the information we get on the global and key area summits such as APAC and China concerning end-user feedback and market demand, so as to help operators meet the requirements of customers and establish top-ranking spas.
At the same time, as the biggest spa product and equipment supplier, we firmly hold to “One Source Spa Solution”. We strictly select quality suppliers and offer supreme spa equipment, products and consumables to our customers all around the world including Greater China, East Asia, ASEAN, South Asia and Oceania.
