(Tiểu luận) international marketingexporting strategy for cocoon – vegancosmetics to thailand

Vegan cosmetics, also known as cruelty-free cosmetics, are products that entirelyabstain from utilizing any ingredients or derivatives sourced from animals, such asbeeswax, honey, sheep'

- -INTERNATIONAL MARKETING EXPORTING STRATEGY FOR COCOON – VEGAN

A Company introduction

1 What is Vegan Cosmetics?

Vegan cosmetics, also known as cruelty-free cosmetics, are products that entirelyabstain from utilizing any ingredients or derivatives sourced from animals, such asbeeswax, honey, sheep's wool, silk, milk, and notably, they refrain from conductinganimal testing (on animals like mice or rabbits) This ethical standpoint is highlyfavored by many consumers, particularly those who hold a strong affinity for animals

In addition to the ethical aspect, vegan cosmetics feature plant-based ingredients thatare gentle, safe, and nutrient-rich Consequently, vegan cosmetics have gainedincreasing popularity among consumers Within the global beauty industry, vegancosmetics are experiencing a surge in prominence, underscoring their growinginfluence

2 Cocoon’s overall.

What is Cocoon? The term "Cocoon" derives its meaning from a protective casing,often linked to a "home," where small caterpillars can nurture and develop.Eventually, these caterpillars transform into beautiful and resplendent butterflies It isfrom this symbolism that Cocoon emerged, driven by the purpose of nurturing the skinand hair of Vietnamese individuals, helping them become more beautiful, refined, andradiate in their unique ways

Cocoon Vietnam is a renowned cruelty-free cosmetics brand, established in 2013 andwell-known for its natural and benign products Each of Cocoon's products distinctlyreflects the Vietnamese spirit, utilizing entirely natural ingredients sourced fromdiverse regions, including Dak Lak coffee, Ben Tre coconuts, Tien Giang cacao butter,and Cao Bang roses Additionally, they incorporate natural elements such as pomelo,pennywort, sacha inchi, and winter melon

Cocoon's success is not solely attributed to its captivating narrative but also to its clearcommitment to product quality, adhering to the CGMP standards of the Ministry ofHealth, and maintaining transparency in product information

We are born to provide you with healthy, youthful, and vibrant skin and hair, derivedfrom simple and familiar ingredients that you consume daily We are guided by acentral mission: to harness the benefits of the natural world, combined with scientificknowledge, to create safe and effective cosmetic products for everyone.

The arduous journey towards true beauty is not solely your responsibility; we willaccompany you on this path It has always been this way, and it will continue to be so

Source: Cocoon Vietnam

4 Principle of Cocoon:

All of Cocoon's products contain ingredients that are 100% traceable and skin-safe.Every ingredient used in Cocoon's products is backed by documented proof of originfrom both domestic and international suppliers Cocoon's products undergo extensiveresearch for a period of 12 to 24 months before they are introduced to the market.These products undergo rigorous testing, including microbiology, pH, irritation,stability over time, temperature, and humidity tests

Cocoon is committed to being 100% vegan, meaning they do not incorporate anyanimal-derived ingredients Instead, Cocoon harnesses and optimizes the potential ofactive ingredients and plant extracts without relying on components of animal origin

In line with Cocoon’s dedication to animal welfare, Cocoon never conducts tests onanimals Their cosmetic formulations are thoroughly researched and tested throughlaboratory experiments or on volunteers Furthermore, our raw material suppliersshare our commitment and do not conduct animal testing during the research andproduction of their materials Cocoon strictly adheres to the principle of not subjectinganimals, such as rabbits, mice, or fertilized egg yolks, to any testing procedures."

B International market segmentation

1.Building criteria for international market selection

1.1 The firm

- Size of business: Medium

- Overseas experience: No experience

- The Strengths

● "100% vegan, safe products => meeting the growing demand fornatural-original cosmetics

● Reasonable prices, affordable for low to middle-income individuals

● High-quality Vietnamese goods, meeting international standards andundergoing rigorous quality testing => enhanced customer trust

● Over 1000 systems and stores across 63 provinces in Vietnam => easy to find

- The weakness

● The majority of our products are in large containers or bottles, and do not offermini sizes, which can be inconvenient for travel or on-the-go users

● The packaging design is minimalist, and does not have barcodes forauthenticity checks => making the products susceptible to counterfeiting.

● Almost all Cocoon products are in concentrated form, which can be costly foreach use."

1.2 The environment

1.2.1 Overview about natural cosmetics in Vietnam

Throughout its existence and development, Buddhism has been closely attached withthe historical ups and downs in Vietnam, assimilating and deeply influencing variousaspects of social life, including ethics and lifestyles The ethical standards ofBuddhism tend to guide behavior, shape individual character, and have a positiveimpact on consumers As a result, when making purchasing decisions, Vietnamesepeople often gravitate towards products that align with safety and health for theirbodies, protect the environment, and uphold the humanitarian values inherent in eachindividual As a result, the use of vegan cosmetics in Vietnam is becomingincreasingly popular

● According to Statista: Revenue in the Natural Cosmetics market amounts to

US$57.55m in 2023 The market is expected to grow annually by 3.87%(CAGR 2023-2028)

● Top 5 favorite vegan cosmetics in Vietnam

Cocoon ( made in Vietnam)

Sukin ( made in Australia)

The body shop ( made in Korea)

Melixir ( made in Korea)

Klairs ( made in Korea)

1.2.2.Overview about natural cosmetic in global market

Currently, vegan products are gradually asserting themselves in the cosmetics market,

in tandem with the increasing consumer interest in the humanitarian andenvironmental impact of products containing animal-derived ingredients

Regions with a high consumption of vegan cosmetics include North America, Europe,the Asia-Pacific, Latin America, the Middle East, and Africa

● The USA leads the global organic cosmetic industry: The USA dominates the

organic cosmetic industry due to the increasing number of health-consciouspeople, the availability of advanced and enhanced organic products, and theregion's adoption of policies to reduce the use of synthetic components incosmetic products Growth in the nation has been facilitated by both thegrowing emphasis on sustainability and the expanding demand for organiccolor cosmetics

There are numerous opportunities for the sales of organic cosmetics items sinceconsumers across the USA are prepared to pay extra for high- quality goods.Due to the sheer volume of customers in this age group as well as theirpurchasing habits, millennials are driving the trend toward healthy and cleanproducts.

● Europe is the second largest contributor to this global market Since March

2013, the use of animal-derived products such as leather, fur, and other animalparts has been banned, supporting the growth of the vegan cosmetics industry.According to Ypulse, 36% of Gen Z and Millenials females in Western Europeare interested in trying organic and natural products

● The Asia-Pacific vegan cosmetics market is also expected to experience the highest growth rate due to increasing consumer concerns about the skin's

absorption of cosmetics Rising consumer awareness, changing lifestyles,increased disposable money and increased health and environmental concernsare likely to drive organic cosmetics sales in the region China is the mostactive regional participant in term of new product introductions, followed byThailand, Malaysia, Indonesia and Singapore

The emergence of new brands or established companies introducing new veganproduct lines, or even transitioning to complete vegan offerings, has seen exponentialgrowth in recent years This has further expanded the vegan cosmetics market

● According to Statistic: Revenue in the Natural Cosmetics market amounts to

US$12.93bn in 2023 ( 9 months ) The market is expected to grow annually by6.85% (CAGR 2023-2028)

Conclusion: As we can see, North America ( particularly the USA) and Europe have

dominated the market share of vegan cosmetics in recent years However, it isexpected that Southeast Asia - the Pacific will quickly rank second in market share inthe near future Moreover, Cocoon is a small-scale business in Vietnam and lacks

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experience in exporting to foreign countries Choosing the North American andEuropean markets, which are large and highly competitive with international vegancosmetics brands, may not be the best option Therefore, Cocoon may consider theSoutheast Asia-Pacific region as its target export market.

● The population income generally falls into the middle to high-income bracket

=> Potential Market : SINGAPORE, THAILAND, MALAYSIA, KOREA

2 First screening

Population 34.401 million 6.02 million 71.823

$261 permonth

$1,638 permonth

Tariffs Export tax: 0%

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Ả nh hưởng của các yếu tố môi trường…Marketing

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rate (CAGR)

2023-2028)

(CAGR2023-2028)

2023-2028)

- Malaysia

Malaysia is a country in Southeast Asia, with a population of about 34.401 millionpeople, and an average GDP per capita of about $13,942 The cosmetics industry inMalaysia is a significantly growing and valuable sector in the country's economy.Malaysia has many famous cosmetic brands, both domestic and international, such asBio-Essence, SimplySiti, Safi, and Vivy Yusof's dUCK Cosmetics With a majorityMuslim population, the demand for halal-certified cosmetics in Malaysia is high.Malaysia is among the world's top 10 halal pharmaceutical and cosmeticsmanufacturers

- Singapore

Singapore is one of the open markets with the largest trade turnover in the world It is

a country in Southeast Asia, with a population of only about 6.02 million people, and

an average GDP per capita of about $84,500 High disposable income is responsiblefor the high penetration of luxury brands (like Dior, Guerlain, Clarins, Clinique,Lancôme, Estee Lauder, Shiseido, etc.) Consumers in Singapore are still largely

‘defensive’ when it comes to reading labels, preferring to go for products that areperceived to be trusted by professionals or are unlikely to have a negative impact ontheir skin

- Thailand

Thailand is a country in Southeast Asia With an area of 513,120 square kilometers,Thailand has about 71.8 million people The cosmetics industry is quite developed inThailand Thailand is the second largest cosmetics exporter in ASEAN, afterSingapore, and ranks 10th in the world The Thai cosmetics market has total sales of191.1 million VND Thailand has abundant labor resources and cheap labor costs, onaverage only about $261/month Therefore, this is a potential market for investment,production and business Another advantage of Thailand is that the tax rate onimported products from Thailand is not too high compared to other countries in theSoutheast Asian region (some countries are not even taxed)

- Korea

Korea is a country in East Asia, one of the four countries with the most developedeconomies in Asia along with Taiwan, Hong Kong and Singapore This is a countrywith a very high human development index and the highest democracy index in Asia.The Korean cosmetics market is one of the top 10 beauty markets in the world,accounting for nearly 2.8% of the global market The "Kbeauty" (Korean Beauty)

wave has long been an ideal model and has a great influence on beauty trends aroundthe world In addition, Korea has signed a VKFTA agreement with Vietnam, creatingfavorable conditions for import and export of goods between the two countries.

Conclusion: From the above information, Cocoon has chosen Thailand and Korea as

two potential markets to export its products

3 Market attractiveness evaluation ( Second Screening)

Cocoon is known as one of the leading Vietnamese brands in producing vegancosmetics With the purpose of expanding export markets, the selected criteria willfocus on economic and social factors

- In particular, some important criteria such as Cosmetics industry market worth,average spending on beauty, tariffs and cosmetics industry growth will havehigher weight because they are consistent with the business's goals

- GDP per capita: evaluates the living standards and willingness to pay of thepeople of that country

- Minimum wage: evaluate the cost that the business will have to pay for labor

- Political stability index: political stability will create conditions for foreignbusinesses to participate and develop in that country's market

Based on the criteria reviewed in the markets, the group came up with the followingscoring scale for evaluating the markets:

7 Political stability index 0.1 2 3

Total score (Multiplied by

Table 1 Thailand and Korea vegan cosmetics market attractiveness evaluation

Conclusion: According to the quantitative model, by calculating points and weights, the market with the highest score is Thailand (3.55), will be selected as the target

market that Cocoon guides to

Table 2 International market segmentation for Cocoon

C Entry mode

1.Factors influencing the choice of entry mode

1.1 Internal factors

1.1.1 Firm size

Besides the fact that Cocoon is the elite of Vietnamese people which are created forVietnamese people, they are actively looking for new partners and distributors in allcities and provinces across the country in order to expand their product distributionnetwork as well as provide natural cosmetics to more consumers, Cocoon completelyhas enough potential to enter foreign markets if they want.

Cocoon has various sales agencies located in different areas such as Ho Chi MinhCity, Ha Noi, Da Nang, Hue, Binh Duong, Can Tho, Dong Nai, Ba Ria Vung Tau,Thai Nguyen Also, their products are available at over 300 cosmetic distributionsystems It helps people to find and purchase Cocoon products easier no matter wherethey live

1.1.2 International experience

Cocoon has always focused on expanding and covering the entire Vietnamese marketbecause it prioritizes serving Vietnamese people Therefore, Cocoon has noexperience working with international customers and has no intention of enteringforeign markets before

1.1.3 IFE Matrix

IFE MATRIX

t Ratin g Weighted Score

1 The raw material source is cheap and

strictly controlled

3 Using unique and environmentally friendly

product packaging

5 Marketing strategies to promote products

successfully

7 The product price is cheap, suitable for the

income of many people

Dedicated and attentive customer service

11 They do not have high technology to

preserve ingredients for a long time

12 The production process has not been

automated yet

14 Taking a long time to research and develop

new products

15 The Cocoon's number of stores is limited 0.048 1 0.048

16 High costs for Marketing activities 0.052 1 0.052

18 The majority of sales staff do not have

in-depth expertise

19 There is no external financial support 0.05 1 0.05

20 Infrastructure has not yet been fully

developed

Conclusion: Cocoon's total weighted score of 2.602 is greater than the 2.5, which

shows that Cocoon has the strengths and key elements that are very suitable for the