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Herborist to USA

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Zilin Zhou

on 26 April 2013

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Transcript of Herborist to USA

Company Background Any questions? Fung Fook Tien founded a cosmetics business in Hong Kong 1898 1989 After China’s civil war, the Chinese assets of Fung’s firm became a state- owned enterprise. Its manufacturing capacities, under the name of the Shanghai Mingxing Household Products Factory, emphasized household chemicals (called Jahwa) and cleaning products. Jahwa’s transformation lead by Ge Wenhao was well under way. 1949 Sephora, entered the Chinese market, with Jahwa as its 19% equity partner. 1995 2005 Two new product development projects :
to compete with foreign brands in the mainstream skin care market.
Distance and Herborist Brand Introduction The research on a new beauty care product based on traditional chinese herbal medicine Herborist was formally initiated.
First exclusive store in Shanghai 1995 2002 Expanded nationally
Launching into Hongkong Market Herborist SPA opened 2000 New brand image and packaging design 2008 Herborist products were officially lauched in the Sephora in France 2008 193 outlets in total six countries
France, Holland, Italy, Spain, Denmark, Turkey.
Revenue is continually growing. 2012 Products Description Technology and Ingredients T'ai Chi Line Revitalizing & Firming Line Re-energizing Line Hand & Feet Line
Hanfang SPA Herborist uses traditional knowledge from the Chinese herbal science to create its precious products : a delicate encounter between traditional knowledge and state-of-the-art contemporary cosmetics science. Strongly related to Taoism
Based on the theory of the balance of Yin and Yang.
The Tai Chi Mask is the most popular Herborist product in Europe, accounting for 40% of the brand’s revenues. Moisturizing line Marketing Plan Facial-17 products Product Bath & Body-5 products T’ai Chi Line The black mask is Yin, it purifies the upper skin layers and eliminates dust, traces of make-up and dead skin cells.
The white mask is Yang, it soothes, softens and leaves a radiant complexion. Anti-aging Line This soft cream helps the skin retain its radiance and elasticity. It effectively helps reduce the visible signs of aging while fading wrinkles and fine lines. Premium and high-end pricing
Comparable to European pricing
Compete with Bliss, Origins Price Facial:$29-$69 Body & Bath:$19-$59 Place 20 Sephora stores in big cities
Sephora.com First Sephora Second In Sephora Promotion Sephora Thank you for listening! Five-year Forecast Plan Move into all Sephora locations - over 300 stores across North America Market Analysis
a. Country market overview
b. Culture
c. Skin care Industry overview
e. Key competitors
f. Key issues to overcome
g. Target Market
h. Positioning Positioning
Premium brand, high end and sophisticated

Enhances beauty through Chinese philosophies of harmony and balance

Proven in the European Market Target Market Women, aged 25+, due to range of products

Urban Demographic

Middle to high Income



Fashion Forward SWOT for Herborist the US Entry Mode In-store presentations by company
Trained employees with product demonstrations Store signage Country Overview GDP 2012:
15.7 Trillion USD

Growth 2012:
3.22% growth

Annual disposal income 2012:
12,114.95 billion USD

Population 2012:1,35 billion Ease of doing business2012:
Ranked 4th

Key demographic:

Very diverse population
Big middle class group
Baby boomers turn into their 50s or 60s Skin Care Industry Overview Skin care increases by 4% in current value terms in 2011, to reach US$10.3 billion 

Premium skin care outperforms mass skin care, with 9% current value growth in 2011

Anti-agers sees the most dynamic performance, with 7% current value growth in 2011 

Estée Lauder leads skin care with a 13% value share in 2011

Skin care is expected to increase by 10% in constant value terms over the forecast period Culture Value perception of Skin care American women of What ages are looking for anti-agers? Premium or mass? “Natural” vs high-tech skin care: Which will win out long term? American women of all ages seek to look attractive, and look to anti-agers to reduce the signs of aging.

As baby boomers seek to remain active and attractive in their 50s and 60s. At the same time, women in their 20s and 30s are looking to prevent the early signs of aging. Most customers choose premium skin care products over mass products, especially for anti-agers. Even consumers with lower income will wait for discounts or sales. Many consumers who buy natural skin care do so due to concerns about various chemicals, such as parabens, used in standard brands. This means that many consumers of natural skin care are arguably more brand loyal, or at least more loyal to brands that do not contain the chemicals found in standard skin care products. Scientific evidence of efficacy is becoming more and more important to consumers, particularly when purchasing anti-aging products. Direct Export In-store events Free samples
when buying other products Feature in Sephora app’s
“Today’s Obsession” section Slogan: Balanced Beauty

Emphasize Chinese philosophy

Combine internal and external / mental and physical

“Natural and balanced” brand identity Market Tactics Improve brand awareness

Number of natural skincare options available to customers

Balance between remaining loyal to TCM identity and confusing/driving away consumers

Maintain brand loyalty Key Issues to Overcome Culture Value perception of Traditional Chinese Medicine Do most Americans truly understand traditional Chinese medicine? The perception of Chinese philosophy? No General idea of Taoism, inner peace, external and internal balance.
Recognize of Tai chi and Yin & Yang Key Competitors A Spa and retail company, founded in 1996, HQ NYC
Products sold in Sephora
Natural ingredients
Has own Bliss Spas:
- About 15 in US and 10 International locations
- Carry full line of Bliss products
- Offer full range of spa treatments
- Premium price, urban locations
Comparable Product:
- Triple Action Instant Energizing Mask
- $54.00 in Sephora Bliss Key Competitors Origins Products continuously made in China to maintain authenticity - Will not move production to US
Customers trust that formulas and ingredients are authentic
Get slightly better protection for trademarks, patents and copyrights.
Preexisting agreement with Sephora
Low cost Brand Development & Communication
Consistent Messaging Brand Image: Luxury, Natural, Holistic, Restorative
Balanced beauty We will include information with each product with instructions for how and when to use and why

In accordance with Herborist philosophy that in order to be in harmony with nature, you must adapt your health and beauty regimens to changing days, seasons, and weather in order to look and feel your best

Maintain brand loyalty In store TV and Post:
Chinese philosophy Expand into Sephora stores in other major metropolitan areas throughout the country Year 2 Expand into Suburban locations including Sephora “Stores” within JC Penney department stores Expand into other national department store chains, and set up brand-centric skincare counters within the stores
Lord & Taylor
Nordstrom Year
3 & 4 After
5 years
Year 1 Carry Herborist products in all 280 stand-alone Sephora locations and 300+ Sephora JCP locations
Open first Herborist Spa in NYC
When people are more aware of the brand and interest level has peaked in terms of restorative and balancing properties
Have .3% market share, which is the standard for newer products and small companies in the market Founded in 1990 by Leonard Lauder
Is part of Estee Lauder organization
Known for their natural and organic products
Collaboration with Dr. Andrew Weil to create a line of skincare products for people with sensitive skin
Sold in Sephora, specialty stores and in stand-alone Origins stores
Introduced first anti-aging serum in 2011 – Plantscription Anti-Aging Serum
Comparable Product:
- Plantscription Anti-Aging Serum
- $55.00 in Sephora
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