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Herborist into the UK market

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by

YIRAN ZHAO

on 11 March 2014

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Transcript of Herborist into the UK market

Content
Introduction
Background
Why Select UK Market
Entry Mode
Market Strategy
Suggest Strategy
Growth Strategy
Conclusion
Reference
Q & A

Introduction
Herborist, a high-end Chinese personal care brand, had been steadily expanding its share in global markets since 2008. The brans distinguished itself by integrating ingredients and principals from traditional Chinese medicine into their products (Zhou, 2012).
Herborist to expand their products into France, Spain, Italy, Netherlands, etc (Zhou, 2012).
Entry Mode
Boots
Network
Five porters
Threat of New Entrants
Threat of substitute products
i.e. Substitute performance, cost of switching,

technology change
Bargaining power of suppliers
i.e. Single supplier agent, easy to be controlled
Bargaining power of buyers
i.e. Price elasticity, brand identity, reduce expense on cosmetics
Intensity of competitive rivalry
e.g. Body shop, Lush
4Ps
Price
average price: £30-40
Place
Larger Boots around London & surrounding areas
Product
Launch limited edition regularly
Promotion
social networks, vouchers, fashion magazine, customers’ online reviews, CSR
Herborist into the UK market
MN5241 Research Project Dr. Yu Zheng
Group Member Candidate No.:

Background
The total retail cosmetics and toiletries market valued at £8 bn.
UK is a difference partly to the global focus of cosmetics market.
UK’s total market share percentage of 30.5.
In 2010, UK has more than 800,000 Chinese.
Britain does not have any herbal cosmetics
Why Select UK Market
Hypotheses
Research Method
Compare With Other Countries
Hypothese
H1: Correlated higher Chinese herb cosmetics experience of higher the customer buying behavior.
H2: Correlated higher Chinese herb cosmetics recommendation of higher the customer buying behavior.
H3: Correlated higher Chinese herb cosmetics strategy of higher the customer buying behavior
Research Method
Research Method
Target:
Location: Pharmacy, Boots is the best cooperation unit
Strategy: Personal Recommendation, Product Quality
Compare with other countries
Market Import
Compare With Other Countries
Market Share
Compare With Other Countries
Only 10% of the cosmetics supplied to the U.S. The major sources of imports into the U.S. are from France, Canada, China, Italy and the United Kingdom, etc.
The Japanese local brands accounted for 44.3% of the cosmetics market
Reference
Kevin Zhou (2012), ‘Herborist: a chinese personal care brand goes abroad’
Chris Barker (2013) ‘Report predicts slower growth, saturated markets for UK cosmetics industry’. (Cosmetics), Available: http://www.cosmeticsdesign-europe.com/Market-Trends/Report-predicts-slower-growth-saturated-markets-for-UK-cosmetics-industry (Accessed: 2014, March 1).
(2009) ‘Cosmetics: one industry looking good despite economic turmoil’. (Accuval), Available: http://www.accuval.net/insights/industryinsights/detail.php?ID=120 (Accessed: 2014, March 1).
H1< Sin 0.05
H2< Sin 0.05
H3> Sin 0.05
Amorepacific (the ginseng as main material) has a 34% market share.
Analysis of Competitors
Body Shop
Born on 1976
Local brand
“Inspired by nature”
Organic skincare line


Compare:
Organic VS Chinese herb
For price, Herborist might be higher
Lush
Born on early 1995
Local brand
Fresh handmade products
Some products contains lanolin, animal grease

Compare:
Differentiation
Price are similar

Short-term
Long-term
Flagship
Spa
SWOT
Strengths
The first to enter the European market Chinese cosmetic brand
Shoppe+Exclusive Shop+SPA
Products are in growth period


Weakness
Lack of experience
Limited by Boots
New product is not acceptable easily

Opportunity
Similar commercial competitors is not much
To develop the international market
Chinese culture is very popular

Threats
Competite with fomous foreign brands
Consumption decline
Preconceptions about "made in China"

Market Strategy
Cost Leadership
Differentiation
Flagship+SPA
Build fashion image

Avoid clash with Boots

Test the market
Full transcript