Densely populated urban centers give rise to skyscrapers, traffic congestion, and fewer relaxation spots. The Dragonfly Therapeutic Retreat Company operates a franchise of retreats in Mainland cities for urban souls who seek temporary peace from the stress and pressure of city life. Its CEO and founder Georgie Yam talks to Amy Cheung of The China Perspective about how to introduce the concept of spas to China and how the franchise intends to expand into the market.

The China Perspective: How do you promote Dragonfly to the Mainland audience?
Georgie Yam: The spa is a relatively new concept in China and we promote Dragonfly by creating an ambience, a relaxing place mainly targeting at people of Western profiles, business travelers and tourists. In this way, a services-oriented business profile characterized by Western customers will also attract many Chinese white collar workers, since this market segment is particularly interested in trying Western culture trends. This draws them to Dragonfly as well.

TCP: What is the overall outlook of spa industry in China?
GY: China’s spa industry is young but very vibrant. It has tremendous space for growth particularly in the next five to six years. Many local Chinese start to travel overseas and try a spa, with an exotic touch, which leads this group of people to have the same experience at home. For those who haven’t traveled to spa resorts aboard, they are also keen to experiment at similar locations in China. We forecast an annual growth rate of at least 20 to 30% across the country in the next few years.

TCP: Why does Dragonfly have a branch in Oslo Norway?
GY: We had a couple from Oslo whom on visited to Shanghai on business about three times a year and both of them love Dragonfly. Whenever they are in Shanghai, they will visit us on daily basis. One day they approach us with the idea to start a business in Oslo. After much consideration, we decided to franchise our brand to them. We did it because we want to give our staff a platform and a chance to work overseas to earn a much better living there with around 20,000 yuan a month. Moreover, Oslo is the global capital for spas. Having a branch there gives us a very good profile.

TCP: Do you have any plans for expansion?
GY: We will open a new Suzhou retreat by the end of December and a fourth outlet in Beijing in late January 2007, which will be followed by an outlet in Hong Kong. We are also in talks with partners in Spain, Germany and Scandinavia about possible cooperation. New branches in Moscow and Tibet are also expected in 2008. AS for second-tier cities, we are looking into Nanjing, Dalian, Hangzhou and Tsingdao, which could possibly start operations by the end of next year. In these new outlets, we will use a similar and consistent design but more localized artifacts. We will also include one to two additional localized treatments to be more appealing to local people.

TCP: What are the principle promotional campaigns you use at Dragonfly?
GY: We only advertise in English, expatriate or tourist publications. We attach greater importance to giving our customers a perfect as an experience can be so they can be our ambassadors. Word-of-mouth is indeed a strategic tool in the service industry. Moreover, we launch one or two street campaigns on a monthly basis. After collaborating with the American Chamber of Commerce and British Business Board, we sponsored Formula One in Shanghai in October by sending six therapists to VIP area. We will also be sponsoring the Tennis Masters tournament in Shanghai next year. Street campaigns are also beneficial to us because they allow our target audience to have personal experience with our product and stimulate interest and awareness towards our brand.

TCP: Is there any customization or localization of your spa concept to better fit for Mainland consumers?
GY: Dragonfly is a brand that targets mostly Western consumers. The oriental treatments and elements assimilated to our spa culture are undoubtedly very well received. However, due to the different preferences and expectations of Western and Chinese consumers, we plan to launch a new brand tailor-made for the Chinese market within the next six months. This new brand will offer more typical Chinese massages that are stronger and include some elements of traditional Chinese medicine.

TCP: How do you train your Chinese employees to be more service-oriented?
GY: The service industry is still in its infancy in China so to train service-oriented frontline personnel in a spa setting is not an easy task. Influenced by divergent cultures, things that are common practices or knowledge in a spa culture are alien to Chinese employees. Training has to be constant such areas as hygiene and proper attitude. We have two internal trainers from Singapore responsible for our training program. Apart from Basic English training, we have to convince them of the importance of services in securing customers. To many Chinese, customers are satisfied with the products or services as long as they are willing to pay. Therefore, we need to change this age-old way of thinking and enable our employees to understand that apart from technical skills, how to guarantee customer loyalty is an important part of the business.

TCP: How does Dragonfly position itself in comparison to spas at five-star hotels and resorts?
GY: It is a fact that most hotels in China have spas, but they also come with extremely high fees. In Beijing and Shanghai, where there are no destination areas comparable to Sanya or Dalian, most consumers particularly business travelers want short and convenient relaxation. With a competitive pricing policy, we target at urban residents who are price conscious. This is where our competitive edge lies. While we constantly strive to improve our services to keep up with the five-star hotels, we try to create a convenient urban retreat where consumer are satisfied what their spending have bought them.