Wendy Zhang/ Shanghai Daily news

One of Hong Kong's most popular cosmetics chains Sa Sa International Holdings Limited is adopting  conservative strategies to tap the Mainland market including the opening of franchise stores in the coming years to share its operational risks, today's Youth Post reported.
However, at the end of December last year, Sa Sa senior officials said in Shanghai that at present they were not considering opening franchises on the Chinese mainland.
The change in decision is mainly caused by the recent release by the Chinese Ministry of Commerce of relevant regulations on franchise operations, said an industry analyst, adding that certain regulations on franchise businesses are finally available.
Sa Sa's poor business performance after October last year is cited as another reason for its conservative business strategies, the analyst pointed out. In October and November last year, except for Hong Kong and Taiwan, Sa Sa's outlets in other regions all reported sales declines. Moreover, the tsunami last month had a negative impact on its businesses, mainly in Southeast Asia regions.
Opening franchise stores can help share operational risks with Sa Sa, he added.
To date, Sa Sa boasts 66 retail shops in Asia, bringing in annual business volumes of nearly HK$2 billion, with 40 percent from mainland travelers. All of Sa Sa's stores in Hong Kong are operating in direct sales.
Sa Sa's first mainland store will open on the Huaihai Road M. in Shanghai in March, and it is predicted to lose HK$10 million (US$1.3 million) in the first year of operation.