BUSINESS STRATEGY FOR e COMMERCE BUSINESSES IN VIETNAM THE CASE STUDY APPLIES TO EUPHORIA COSMETIC

Figure 1.2: Revenue of some Vietnamses cosmetic brands1.2 Market share: Lipstick is the most used product line in the cosmetic market share.. Euphoria also captures a separate market sh

VIETNAM GENERAL CONFEDERATION OF LABOUR

TON DUC THANG UNIVERSITY FACULTY OF BUSINESS ADMINISTRATION

REPORT SUBJECT: ELECTRONIC COMMERCE

advised by

Ph.D Bui Thanh Khoa

IN VIETNAM THE CASE STUDY APPLIES TO EUPHORIA COSMETIC

_Group 2_

Ho Chi Minh, 22 May, 2022 th

Ho Chi Minh, May 23, 2020

Lecturer

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TABLE OF CONTENT

I MARKET OPPORTUNITY 6

II COMPANY OVERVIEW: 10

III MARKET ANALYSIS 14

1 PESTEL analysis: 14

2 Five Forces analysis 17

3 SWOT Analysis 19

IV STP 21

1 Customer Segmentation 21

2 Target customer 22

3 Positioning 22

V MARKETING PLAN 25

1 Product: 25

2 Price: 25

3 Place: 25

VI WEB DESIGN: 27

VII COMMUNICATION AND ADVERTISING 30

1 Social networking (Facebook): 30

2 Affiliated Marketing (Tiktok): 31

3 Master plan: 34

VIII OPERATIONAL PLAN: 39

1 Fulfillment process: 39

2 Order process 39

3 Delivery process: 39

4 Payment process: 40

5 Security and Policies: 40

6 Customer Service: 41

IX FINANCE 42 CONCLUSION 50 REFERENCE: 52

I MARKET OPPORTUNITY

1.1 Market:

In the cosmetic industry, it is easy to see that lipstick is the most popular and best-selling product when leading with 88% of cosmetics used regularly.

Figure 1.1: Popular cosmetic items

According to a survey in 2020, about 30% of Vietnamese women have daily lip balm In particular, Ho Chi Minh City is considered a large consumer market of the cosmetic industry in general and lipstick in particular According to a study by the Far Eastern Economic Review, cosmetics companies are attracted to Vietnam have a rapidly increasing disposable income and an annual GDP growth rate of 7.24% Increased income leads to increased willingness to pay for lipstick products According to Mintel, a London-based market research firm, the Vietnamese cosmetics market was worth $2.3 billion at the end of 2018 Cosmetics market revenue has been constantly increasing in the past two decades, making Vietnam an attractive destination for many foreign cosmetic brands.

Figure 1.2: Revenue of some Vietnamses cosmetic brands

1.2 Market share:

Lipstick is the most used product line in the cosmetic market share With market share of domestic and foreign lipsticks The amount of imported lipstick for a significant market share of 77%.

Figure 1.3 : Lipstick market share

With market share is lipstick for everyone Euphoria also captures a separate market share for Vietnamese lipstick cosmetics

Figure 1.4: Lipstick domestic

However, Vietnamese consumers tend to love products of foreign origin such

as brands from Japan and Korea Meanwhile, in the face of stiff competition and consumer preference for international brands, domestic enterprises make up only a small part of the entire lipstick market In order to be able to stand on the home turf, domestic manufacturing companies need to pay special attention to improving packaging, design, marketing and promotion so they can take advantage of market opportunities.

Figure 1.5: Natural domestics

According to a report on the Vietnamese cosmetic market, the demand for natural cosmetics is on an increasing trend If in the past beauty technologies were favored with cosmetic chemicals thanks to the quick effects it brought Recently, beauty trends with natural extract products have been preferred More than anyone else, cosmetic users are increasingly interested in ingredients in skin care products, hair etc It has also been discovered that synthetic cosmetics are gradually having a negative impact, affecting health in the long run Therefore, consumers are gradually turning to using natural cosmetic products that are not chemically processed, do not contain artificial ingredients, colorants, alcohol should ensure safety for users That is one of the reasons why the market for natural cosmetics is growing.

II COMPANY OVERVIEW:

1 Company background:

Currently, the quality of life is increasingly improved, we will gradually move towards beauty, so cosmetics gradually become an essential need of the community, typically lipstick This is an inseparable object of Asian women in particular and Vietnamese women in general But the lipsticks that we often use are really harmful to health and nature Since then, we have had a deep belief in public health-oriented beauty products, which has led to the birth of Euphoria Euphoria is committed to very benign lip care and lip care products, regardless of gender, young children or the elderly Euphoria's ingredients and packaging are in harmony with nature, colorless, suitable for all ages, all genders with beauty and lip care needs without any barriers

Short story “about us” Founded on the desire to equal beauty for all genders.

In addition, the product is safe for consumers of all ages With the main message from the product "Life is beautiful"

Mission: Euphoria's mission is at its core to bring customers a completely

natural product “Life is beautiful” is our commitment to bring customers safe and quality beauty products with our careful selection, sincerity and high responsibility for the health of our customers.

Vision: "Becoming the leading symbol of trust in Vietnam about safe and

quality lipsticks serving people's lives".

2 Business objectives:

2.1 Short-term goals:

Over the next six months, Euphoria will double its current number of employees, to a total of 100 in the production plant, 60 in the sales and marketing departments, and 40 in delivery staff Aim to improve product quality and as well

as customer service Economically, the company is expected to sell 20,000

products/month and increase the price by 2% per product every 6 months Regarding the initial loan, it is expected to pay 20,000,000/year.

Bring the "Euphoria" lipstick brand to consumers In the first 6 months of

2022, implementing 5 marketing campaigns and 3 advertising campaigns on social networking platforms In the last 6 months of 2022, 2 events will be held at 2 major shopping centers of Saigon Customer satisfaction, receiving at least 4.5* rating from customers.

B2C: After launching the brand Euphoria, it mainly focused on in-store retail

services and online retail channels to reach the number of customers of the original target.

B2B: Start cooperation and find distribution channels Products are available at

cosmetic stores of major trade centers: Vincom, Takashimaya, Lankmad 81, etc.

Figure 2.1: Popular purchase locations

After customers have gradually become acquainted and become familiar with Euphoria products, the brand will aim to build strategies to create core values, and better customer care strategies during this period Cooperate with youtubers or

artists to represent the product brand Expanding the number of products sold and the number of customers reaching over 50,000 products

Expanding 2 more branches in Ho Chi Minh City before 2030 and 1 branch in the North by 2033 and becoming a multinational company in 2040 Developed and marketed 2 new product lines Increase brand awareness across Asia by 2035 Euphoria will continue to launch other lipstick product lines, namely color lipsticks with natural essences During the next half year - the second year, Euphoria continues to expand with many other cosmetic lines such as skin creams, hair creams, skin serums, etc, still following the safe and natural nature of the brand brand stated from the very beginning of its launch.

3 Core competencies and competitive advantages

Core Competence: Europa invests heavily in product research, aiming to be 100% safe and natural Paying attention to the health of consumers and being benign to all ages using the product As well as being unlimited in terms of gender are the distinct advantages of the brand Businesses sell on both direct and online platforms Make it easier for customers to purchase products Create many sources

of domestic and foreign customers Distributor network covers a wide range in supermarkets and trade centers The place has a large number of regular customers Helps promote brand recognition and brand familiarity to consumers Promotion and research are two key areas of Europhia, besides the brand also pays

great attention to the 'post-consumer' aspect - customer care Employees are professionally selected and trained to be able to bring product values and messages

to customers Listen and care about the customer's experience because that is the shortest and most direct way for a brand to reach the hearts of customers In addition, Euphoria is also constantly innovating in terms of products and service processes.

Core values: All Euphoria products are meticulously cared for, from the outer shell to the inner quality of the lipstick Products are made from 100% Organic Ingredients/USDA/COPA Organic Certificate: 100% natural (Lead-free, Non Toxic, Chemical Free, Non-nano particles, No paraben) or USDA, COPA (safe) organic certifications, all subjects) Euphoria's products have a minimalist design combined with inscription technology on the body of the lipstick to help women choose a meaningful sentence for themselves, this is also an advantage of the brand for men when dealing with men Faced with the problem of gifts for sisters.

III MARKET ANALYSIS

Figure 1: Percentage of cosmetic use by age

In addition, Euphoria is a young brand, so it will face great difficulty in market share Euphoria bears the cost of import taxes on ingredients in lipstick because the domestic supply cannot meet production demand If inflation spikes, lending rates will rise, negatively impacting consumer spending and the cosmetics industry

in general

1.3 Society

The Vietnamese beauty market is still in the process of development This is an opportunity to gain market share for businesses With about 20 million Vietnamese women between the ages of 15 and 39 (40% of the female population) is a potential land to exploit in the field of cosmetics and beauty.

Figure 2: Frequency of skin care product

According to the European Union - Vietnam Trade Connection Organization (EU - Vietnam Business Network - EVBN), the South and South Central regions are leading the country in the trend of consuming beauty products with a large scale more than 67.1% of the whole market More than 80% of urban consumers buy at least 1 beauty care product in a year.

The beauty culture of Vietnamese people greatly influences the behavior of buying and using cosmetics, especially lipstick In Vietnam, lipstick not only represents women, but it is an indispensable thing when it comes to images.

In addition, in recent years, consumers' shopping behavior has shifted from direct shopping to online shopping channels mainly on websites and e-commerce trading floors Vietnam accounts for 41%, is the country with the highest percentage of new Internet users in the region Specifically, in 2020, up to 74% of people shop

on websites, e-commerce trading floors while buying on forums and social networks reaches 33%.

Figure 3: Percentage of online shoppers in Vietnam and other countries in the

region (Source: TMDT White Paper)

1.4 Technology:

Thanks to Euphoria's AI integration, the company took advantage of big data from surveys and selfies posted by users to analyze customers' faces, thereby producing the right lipstick color for them Ability to determine which lipstick color best suits the client's skin tone Pick out a color from over 2,000 different tones And send the results to the lipstick maker The machine will mix and match the pigments on the spot to create the most suitable lipstick color for the customer.

1.5 Environment:

Nowadays, the environment is a major concern globally that many customers especially consider before choosing a product Since Euphoria is a nascent brand, the products that the company offers need to be manufactured entirely with environmentally friendly materials in order to impress consumers, which will help Euphoria increase brand value as well as increase the sustainability of the company.

1.6 Legal:

Cosmetics are an essential need in life, especially for women, but this product has a direct impact on the health and beauty of consumers Therefore, the law stipulates that in order for cosmetics to be circulated on the market, it is necessary

to undergo procedures in accordance with the law.

Euphoria enterprise was established on the basis of Vietnamese law and legal documents such as: Decree on business registration No 01/2021/ND-CP; Enterprise Law No 59/2020/QH14; Law on Product and Goods Quality No 05/2007/QH Besides, Euphoria must carry out the necessary procedures to register the circulation of cosmetics in Vietnam through the cosmetic announcement at the agency Registrar (Drug Administration - Ministry of Health) Euphoria must also meet the requirements of the Ministry of Health when manufacturing and trading lipsticks.

2 Five Forces analysis

Euphoria's performance is influenced by five criteria, according to the 5 Forces model Analysis of these five criteria will help Euphoria and investors determine the attractiveness of the industry, as well as understand the current level of competition and the intended position of Euphoria in the future Examine each of the five factors in the 5 Forces model:

2.1 The threat of new competitors - Medium

This can be considered as one of the major threats that we can face if we do not continuously innovate, develop as well as create promotions, publicity and plan for success long-term development of Euphoria New entrants can capture market share if they have superior products at comparable prices However, Euphoria lip balm has gathered all the elements that are benign, easy to use, suitable for all ages and at a reasonable price Besides, Euphoria also continuously develops and improves its products based on actual needs and evaluation of customers From there, it will be very difficult for new competitors to appear on the market to compete with us, but that doesn't mean they can't, so the new Euphoria is constantly developing to improve product quality.

2.2 Supplier power - High

Euphoria's products are made up of inputs from a proprietary supplier, so the supplier has a significant influence on the selling price of the product, affecting

Euphoria's profits and revenue For example, suppliers can put pressure on Euphoria by increasing the cost of supplying raw materials from nature.

When the supplier's multiplier head uses a significant amount of the total cost of the product for Euphoria, the supplier's commercial viability is greatly enhanced Euphoria will be difficult to convert or the cost of switching will be too great because the goods from the supplier side have certain characteristics.

2.3 Threat from substitute products and services - High

The growing market demand for Euphoria's products and services is likely to

be threatened by the entry of alternative products and services When the market appears more new product lines with the same use and equivalent quality as Euphoria's cheaper price to provide to consumers, this will make buyers tend to buy substitute products

2.4 Customer Power - Low

Customers have the ability to persuade or negotiate with the company to reduce the price of products or services when there are many suppliers of similar products and services in the market, usually customers always have the right to choose the supplier they want in their favor In addition, consumers or customers

of the company can pressure the company to provide high quality products and better customer service at lower prices So, customers can deal with the best perks

to choose to continue with the company, or they will leave if the company does not meet the customer's needs But when customers come to Euphoria, customers will not have to worry about bargaining because we are committed that the quality of the product will bring the right value for the money that customers pay for the product and customer service, not only that customers will receive many worthy offers from Euphoria.

2.5 Fierce competition of competitors in the same industry - Medium

Since the Vietnamese market is still in the process of development and is a potential land for cosmetic development because on average, at least 80% of

gain popularity develope However, because this is a potential market, there will

be many competitors with us Customer behavior in recent years has shifted to online purchases, so developing a large e-commerce site as well as participating in retail e-commerce sites will be an opportunity for us to go beyond opponents.

Basically we have big competitors in terms of market share Lemonade, Cocoon and Lipice, etc These are lipstick brands that appeared very early on the market with good quality and price However, we will be able to compete with these big players because Euphoria lip balm is of good quality, made from natural ingredients that are benign and suitable for all genders and all ages Besides, with

a price that meets good demand - competitive price that hits the buying psychology of consumers in Vietnam, Euphoria will have a good market share in the Vietnamese market.

3 SWOT Analysis

- Euphoria's products do not contain lead,

safe for consumers' health, and do not

cause irritation.

- Not only for women Euphoria also

creates products for both men and the

elderly.

- Euphoria product prices are suitable for

young people's pockets, especially those

with a moderate standard of living.

- Euphoria does not have much variety in products

- Vegan products will cost more to buy fuel, so the price competition is somewhat higher than the established brands

- Euphoria is a new brand, so the competition may be less prominent than other brands, etc

great attention to the 'post-consumer' aspect - customer care Employees areprofessionally selected and trained to be able to bring product values and messages

to customers Listen and care about the customer's experience because that is theshortest and most direct way for a brand to reach the hearts of customers Inaddition, Euphoria is also constantly innovating in terms of products and serviceprocesses

Core values: All Euphoria products are meticulously cared for, from the outershell to the inner quality of the lipstick Products are made from 100% Organic

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III MARKET ANALYSIS

14

Figure 1: Percentage of cosmetic use by age

In addition, Euphoria is a young brand, so it will face great difficulty in marketshare Euphoria bears the cost of import taxes on ingredients in lipstick becausethe domestic supply cannot meet production demand If inflation spikes, lendingrates will rise, negatively impacting consumer spending and the cosmetics industry

in general

1.3 Society

The Vietnamese beauty market is still in the process of development This is anopportunity to gain market share for businesses With about 20 million Vietnamesewomen between the ages of 15 and 39 (40% of the female population) is apotential land to exploit in the field of cosmetics and beauty

g p g(EU - Vietnam Business Network - EVBN), the South and South Central regionsare leading the country in the trend of consuming beauty products with a largescale more than 67.1% of the whole market More than 80% of urban consumersbuy at least 1 beauty care product in a year.

The beauty culture of Vietnamese people greatly influences the behavior ofbuying and using cosmetics, especially lipstick In Vietnam, lipstick not onlyrepresents women, but it is an indispensable thing when it comes to images

In addition, in recent years, consumers' shopping behavior has shifted from directshopping to online shopping channels mainly on websites and e-commerce tradingfloors Vietnam accounts for 41%, is the country with the highest percentage ofnew Internet users in the region Specifically, in 2020, up to 74% of people shop

on websites, e-commerce trading floors while buying on forums and socialnetworks reaches 33%

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