FOREIGN TRADE UNIVERSITY
JAPANESE INTERNATIONAL BUSINESS DEPARTMENT
---------***--------
REPORT
SHISEIDO GINZA’S E-COMMERCE EXPANSION PROPOSAL
IN VIETNAM
1
EVALUATION
NO FULL NAME
COMPLETE LEVELS
1.
NGUYỄỄN PHƯƠNG THẢO ANH
2.
NGÔ MAI ANH
3.
NGUYỄỄN THỊ THÙY LINH
4.
THÁI THỊ HOÀNG LINH
100%
5.
VŨ THỊ NGỌC
100%
6.
100%
100%
100%
HOÀNG MINH TÂM
100%
2
7.
PHẠM MINH NGỌC
100%
8.
ĐÀM HƯƠNG LY
100%
Contents
Introduction................................................................................................................4
Theories & Models.....................................................................................................4
A. Analysis of Solutions of Business.........................................................................5
II. Solutions...........................................................................................................6
1. New target customer.....................................................................................6
2. Marketing mix strategy..................................................................................8
B. Action Plan...........................................................................................................9
I.
Attract...............................................................................................................9
II. Engage and Convert..........................................................................................9
III.
Nurturing.....................................................................................................10
C. Conclusion..........................................................................................................11
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Introduction
Electronic commerce or E-Commerce is a business model that allows firms and individuals to
buy and sell things through the internet. Nowadays, thanks to the development of technology, ECommerce is becoming a big trend for the expansion of many enterprises.
Shiseido is a Japanese multinational personal care company, which is one of the oldest cosmetics
companies in the world. The company owns numerous brands and subsidiaries in the world. In
2011, it opened a flagship store named Shiseido Ginza Tokyo which has become the most
premium sub-brand.
With the development of offline channels, Shiseido is making an effort to develop their business
online to expand sales on E-Commerce. This report details two main phases including current
situation and marketing strategy for Shiseido to expand sales on Shopee in Vietnam.
Theories & Models
To come up with this campaign, this study uses SWOT model to analyse the current situation of
Shiseido and 4P as well as Conversion Funnel to reach our goal.
SWOT: is a technique for evaluating four aspects of a company: Strength, Weakness, Opportunity
and Threat
4P: The 4Ps are used by companies to identify some key factors which are involved in marketing
of a good or service for their business. 4Ps stands for Product, Place, Price and Promotion.
Marketing Funnel includes 4 phases: Attract (to raise customer awareness), Engage (to make
customers interested in the brand), Convert (to make customers decide to purchase) and Nurture
(to build good relationships with customers) with the purpose of building lifetime customers.
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A.
Analysis of Solutions of Business
I.
Current situation
Shiseido has entered the Vietnam market since 1996. Currently, there are four main product lines
distributed in Vietnam: skincare, sunscreen, makeup and cosmetics for men with the range of
price from 1.000.000 VND to 6.000.000 VND. Shiseido focuses on anti - aging function as
merging characteristics. Products mainly distributed through offline channels - stores in shopping
malls in big cities such as Shiseido Vincom Ba Trieu, Shiseido AEON Mall Ha Dong, Shiseido
Lotte Ha Noi,... The majority of Shiseido current customers are 35- 45 females, in urban areas,
who can afford the majority of products and care about anti- aging functions. The E-Commerce
activities are in early stage development with malls in Tiki and Lazada. Lancome and Estee
Lauder are identified as direct competitors who have a similar customer segmentation with
Shiseido. These two competitors have distributed their products on Lazada. In fact, for Lancome's
website, more investment in designing product distribution than Shiseido and Estee Lauder,
especially customers can buy directly on the website, which the other two brands do not have.
Vietnam e-commerce market has achieved a growth rate of 33% in 2019, which means that the
consumers are transferring rapidly to online platforms for purchase, with the impact of Covid- 19,
the speed will be faster. The young is the most frequent user and 25-29 group accounts for 55%
the whole e-commerce consumer.
According to Daxue Consulting (2016), Shiseido has achieved great expansion in E-Commerce
with the close collaboration with Tencent in the Tmall platform. The E- Commerce environment
in Vietnam and China are similar in not only customer characteristics but also infrastructure.
About the E-Commerce infrastructure, the leaders which have the same business model are
influencing the whole market, Taobao and Tmall in China and Shopee and Shopeemall in
Vietnam.
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All in all, currently, Shiseido has both strength and weakness when expanding E-Commerce
sales. Shiseido has a good base of offline distribution networks with good locations and
experienced staff that can help to attract and convert customers to online shopping. In addition,
the experience of Shiseido in China can be applied in the Vietnam market. However, the
infrastructure for customers to buy Shiseido products online is not well developed and can be
considered a weakness. For external environment evaluation, there is a great opportunity due to
the rapid growth of the E-Commerce market, and expansion to the younger segment can build
loyalty for long term sales generation. Besides opportunities, Shiseido can face severe
competition with various brands for a wide range of customers.
Strength
Offline stores:
experienced staff
Weakness
good
locations,
Well-known brand with high-quality
products
Experience in the case of Shiseido
China
Opportunities
Improvement in EC infrastructure
High sensitivity to EC of the young
young
now
Limited products for the young
Inconvenient EC experience
No real experience of product
Threats
The
customers
High price
is
Customer perception: “ Shiseido is
too expensive for me”, “Shiseido is for the
old”
long-term
Effect of the image “High end antiaging brand”
Easy approach to online activities
High competitive segment
From the SWOT analysis above, this report will details two main suggestions: First, Shiseido can
expand its customer base into younger group; Second, Shiseido Vietnam might focus on Shopee
to promote online sales (Shopeemall, run campaigns)
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II.
Solutions
1.
New target customer
In big cities, the standard of living of people in big cities is gradually improving. The average
income in big cities like Hanoi and Ho Chi Minh City is about 2000 $ / year. This leads to a large
purchasing power of customers in these cities, especially the young working class (25-35 years
old). Women in the 25-35 year olds, living in urban areas, often have active outward-looking
lifestyles, and their need for cosmetics is also very high.
According to a report by Q&Me in 2019, more than half of 30-year-old women use cosmetics
more than once a day. Moreover, the demand for skin care products is also very high, research
shows that 60% of women respond that they use skin care products at least once a day. With an
active and outgoing lifestyle, the demand for cosmetics of urban young women is very high. The
demand for using cosmetics and skin care products of Vietnamese women is not only high but
also increases significantly. According to the Q&Me report, the average amount of money spent
by Vietnamese women in cosmetics every month increases from VND 400,000 in 2019 to VND
460,000 by 2020, with an increase of 10%.
Vietnamese customers tend to care more about quality than price. Factors such as country of
origin, ingredients and quality of a product are generally placed above price factors. In addition to
buying directly in stores or malls, Vietnamese customers are gradually turning to shopping online
more. With the explosion of e-commerce, buying through online sales channels is becoming more
popular than ever. By 2020, the share of online cosmetics purchases will increase from 57%
-73%. Tiki, lazada and shopee are the most used platforms.
To understand more deeply about the mindset of young customers in Vietnam, we also conducted
a survey of more than 100 subjects about their cosmetic usage habits as well as their views on the
required properties of a skin care product. Most of the survey respondents' need is the ability of
cosmetic products to moisturize, with 50,9% of the respondents. This is consistent with the hot
and humid climate in Vietnam.
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The
young urban female is a very potential customer base for general cosmetic companies and
especially shiseido to exploit. Although it is a luxury brand from Japan, Shiseido is difficult to
reach this group of customers. An interview with 15 young ladies from 25 to 34 has brought us a
deeper view into what customers actually think of Shiseido products. Even though being
renowned as a high-quality and luxury brand, Shiseido has long been known for its well-known
line of anti-aging products which are suitable for customers aged 40-50 years old. As a result, this
unintentionally constitutes a mindset of customers that the product of shiseido is suitable for
middle-aged people and that people using Shiseido are aging, which no young ladies want to see
themselves as. Hence, for young and active clients, shiseido might need to refresh its brand image
if they want to get more attention and sales from potential young urban female fields.
2.
Marketing mix strategy
Product
Essential Energy is the chosen product line for our campaign to in part solve the problem of
Shiseido Ginza brand image in Vietnam. Essential Energy can meet a growing concern among
women in their 30’s that their skin is becoming increasingly desensitized to skincare. There are 4
main product types: Essential Energy Eye Definer Eye cream, Essential Energy Moisturizing
Cream, Essential Energy Moisturizing Gel Cream, Energy Day Emulsion. ReNeura Technology
is the unique technology developed by Shiseido exclusively for Essential Energy product lines. It
is inspired by neuroscience and reawakens skin's sensors to better communicate information.
ReNeura Technology’s two key ingredients are: Active Response Powder (Detect), Ashitaba
(Transmit). ReNeura TechnologyTM awakens the senses of the skin to respond instantly,
preventing signs of aging such as dry skin, wrinkles, leaves skin radiant, smooth and moisturized.
Citrus Unshiu Peel Extract included in the Essential Energy line is known to support skin’s inner
moisture-generating power as well. The product's packaging with opalescent color, design is
inspired by Japanese ceramic art, pure and delicate, sharp and meticulous to every detail.
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Therefore, Essential Energy can be the first representative product line to approach our potential
young customers.
Price
The price range of the essential energy product line is from 1.100.000 to 1.400.000 vnd which is
suitable for the high quality product line for customers with middle income.
Place
Nowadays, with the development of information technology, consumers tend to shop online on ECommerce platforms and websites. Therefore, Shiseido could promote sales on both offline
stores and E-commerce stores. Firstly, Shiseido can consider developing their website with
convenient functions that facilitate automatic interactions with customers (chatbot, Call-toactions buttons), hence, customers can purchase directly through the website. Furthermore,
Shiseido might open an official store on Shopee which has the largest number of customers on
the E-Commerce platform in Vietnam while maintaining their online activities on Lazada and
Tiki.
Promotion
Currently, Shiseido often runs advertising campaigns and discounts on Facebook, Lazada and
Tiki to attract buyers. However, the campaign introduced in the following with Essential Energy
as the representative product line is the Action plan towards the final goals: To Rejuvenate
Shiseido brand and to increase sales on E-Commerce at the same time.
A.
Action Plan
The Campaign shall be implemented based on the marketing funnel, which includes four phases:
Attract, Engage, Convert and Nurture.
I.
Attract
First, according to Nielsen, compared to traditional advertising, online advertising can optimize
customer delivery by focusing on better placements and high performing sites. It can also
optimize the effectiveness of the campaign at a reasonable cost. Hence, Shiseido Vietnam can run
online advertisements on Facebook, Youtube, and EC sites, which are the platforms that
cosmetics consumers use most frequently (QnMe, 2020).
Second, as macro-influencers have a large and diverse audience with a broader reach, Shiseido
could use them at the Attract phase. The influencers can deliver the importance of inner skincare
and review Essential Energy products on their pages and Youtube channels. They will focus on
conveying the energetic and youthful image of Shiseido to introduce to the customer a new image
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of them. To be more specific, we suggest HannahOlala, a beauty blogger in Vietnam representing
the modern, successful, and financially independent women. Moreover, she has 505.691
followers on Facebook that are mainly women from 25-50 years old (7SAT, 2019).
II.
Engage and Convert
The engage phase is in the service of increasing interaction with users in association with the
young image of Shiseido. Thus it starts off with several supporting activities such as redesigning
the website with better interaction by using chatbot and counsel. Another one is training
salespeople at stores to advise on products and purchasing online channels. Moreover, online ads
and influencers continuously advertise the core up-coming event specified next.
The heart of the phase is a series of online events run on the Shopee platform namely Shopee
Awaken Beauty Day. Each event is held quarterly with themes delivering Essential Energy’s
features. Thus, colors and titles are utilized to implicitly and automatically paint in the customer's
mind a refreshing and energetic image of Shiseido. The strategic colors are blue and grey in
association with glowing lines that provide floating alike feelings. As targeted customers might
see the posters during the event frequently, Shiseido brand image would ultimately tie to that
sense.
It is proved that applying games in marketing enhances engagement rate upto 37% regardless of
ages and professionals, then gamification strategy would effectively support providing users
positive and funny moments. According to reports, shopee campaign 12.12 super sale achieved
46 millions of playing turns for Shake and shake game and 11 millions of audiences for Shopee
arena. Thus, customizing two games into the Shiseido version would promisingly improve traffic
on the shopee site while running the event.
The first is shiseido arena which is similar to a TV show. To better approach targeted customers,
Shiseido should hire celebrities who are familiar with them and have similar lifestyles to host the
show. Topic is about facts, tips and tricks of beauty care. At the end of the show, winners are
awarded with coins and Essential Energy products sent to their homes. The game hopefully
would increase interactions and their desire for the products.
The other game is Beauty catcher which requires the players moving their heads and screen to
catch virtual Essential Energy items. These games are to help working women have relaxing
moments after their work. Additionally, they are promising to draw surrounders’ attention and
drive them to join the games. At this point, participants have become Shiseido’s ambassadors to
promote the campaign.
Witnessing other brands’ success in increasing sales upto 75% from Shopee live streaming, in the
converting phase, Shiseido Vietnam should follow the trend of this selling approach. In the
livestream, Shiseido staff would actively try the products on different types of skin to
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demonstrate for audiences. Then they offer better deals and vouchers during the live stream so
that it drives customers to buy the products immediately. The show should be run with high
frequency during the events to meet high demand. Moreover, this is also a weekly individual
activity outside of the event to generate sales.
III.
Nurturing
To build good relationships with customers, we suggest Shiseido Vietnam create ShiseidoID at
Shiseido’s website to save the information of customers, including the conditions of their skin.
Then they can use that ID for the following activities:
Loyalty points
Shiseido can give loyalty points for each ShiseidoID at their purchase. When customers have
certain loyalty points, they can get a discount. From this activity, the customer will have a sense
of belonging and Shiseido can retain their customers.
Counseling
Shiseido should send monthly or quarterly emails asking about the skin condition of the
customers to update their ShiseidoID data. Then they can utilize ShiseidoID to counsel the
products for the customer at the next purchase, both online (via chatbot) and offline (at retail
stores).
From this activity, the customers can get customized service, therefore, customer satisfaction will
increase. Moreover, Shiseido can obtain customer data and use those data to optimize the added
value that the customers can receive.
Offline-to-Online (O2O)
Shiseido can create an O2O platform at a custom device in stores that links retailers with ecommerce. That platform can not only suggest suitable products for each ShiseidoID but also
allow customers to order online the products not available in-store. As a result, Shiseido can earn
revenue from the incentive & obtain user data.
B.
Conclusion
In summary, based on the current situation of the cosmetic market and E-Commerce
situation in Vietnam, there is increasing demand for high quality and intensive products. The
youngsters are more willing to pay and use skincare products more frequently. E-commerce is in
the booming period bringing many opportunities for the one who can take advantage to expand
business. With all facilitating conditions combined with lessons learned from Shiseido’s success
in the China cosmetic market with Taobao and T-mall, we suggest for Shiseido to run Beauty Day
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Campaign on Shopee special occasions such as Mother’s day,.... With the main purposes of
expanding the customer base to Younger group, increasing engagement and conversion and using
Shopee as the main channel to promote online sales, Shiseido could focus on choosing Essential
energy as the main product lines for the marketing campaign which will educate customers of the
younger image of Shiseido, creating interactive games to increase the engaging rate, live stream
with Shiseido persona to increase convert rate. We also suggest that Shiseido could conduct
deeper after-sales services with ShiseidoID to facilitate big data of customers, care more about
customers, and encourage their loyalty.
In the long run, Shiseido could apply the similar campaign to other product lines to gain a
younger customer base (such as WASO product lines, ..). Hence, they are able to expand
the target customer to a wider range of ages. In addition, Shiseido might resonate with
current values of Shiseido Ginza to renew the image while retaining the original signature
of high-quality and high-effective anti-aging products to create sustainable values that
bring Vietnamese women beauty regardless of ages.
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References
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