REPORT SHISEIDO GINZA’S e COMMERCE EXPANSION PROPOSAL IN VIETNAM

FOREIGN TRADE UNIVERSITY JAPANESE INTERNATIONAL BUSINESS DEPARTMENT -*** REPORT SHISEIDO GINZA’S E-COMMERCE EXPANSION PROPOSAL IN VIETNAM EVALUATION NO FULL NAME COMPLETE LEVELS NGUYỄỄN PHƯƠNG THẢO ANH NGÔ MAI ANH NGUYỄỄN THỊ THÙY LINH THÁI THỊ HOÀNG LINH 100% VŨ THỊ NGỌC 100% 100% 100% 100% HOÀNG MINH TÂM 100% PHẠM MINH NGỌC 100% ĐÀM HƯƠNG LY 100% Contents Introduction Theories & Models A Analysis of Solutions of Business .5 II Solutions New target customer Marketing mix strategy B Action Plan I Attract .9 II Engage and Convert III Nurturing 10 C Conclusion 11 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 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 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 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 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) II Solutions 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 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 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 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 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 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 10 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 11 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 12 References 13 ... women in their 30’s that their skin is becoming increasingly desensitized to skincare There are main product types: Essential Energy Eye Definer Eye cream, Essential Energy Moisturizing Cream, Essential... 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... 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