(Yicai Global) Aug. 18 -- Retail chain Watson's store sales dropped 6.2 percent in the first half of this year, its latest financial data shows.

Though the decline narrowed somewhat compared with last year's annual 10.1 percent, Watson's still faces a tough road ahead.

Watson's parent CK Hutchison Holdings Ltd. [HK:00001] issued its semiannual report for its subsidiary this year, the Beijing News reported on Aug. 18. Its retail segment's revenue was USD9.4 billion (HKD73.56 billion), compared with HKD73.41 billion in the same period of last year. Watson's revenue in mainland China was HKD10.61 billion, flat with the HKD10.63 billion posted for the same period of last year, the semiannual report shows.

Watson's still logged a 6.2 percent drop in sales despite the number of its stores in mainland China increasing by 15 percent to 3,014 in the first half. The once-towering retailer of health care and beauty products is now mired in a slump in performance, and is facing unprecedented challenges and shocks. Missed online development and brand aging are the main reasons for the firm's weak performance, analysts said. China's personal care and beauty industry has embraced the e-commerce era, but Watson's, which still pursues profits by increasing the number of its physical stores, missed the best opportunity for e-commerce development.

The company is now gradually shifting online and constantly improving its internet matrix. It is providing online shopping services on the mainstream e-commerce platforms, unveiling a beauty app, and setting up personalized online stores.

Founded in 1828, Watson's was originally named Guangdong Pharmacy and officially adopted its current name in 1871. Its 3,000th store opened in Shanghai in April.