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

NATIONAL ECONOMIC UNIVERSITY - - INTERNATIONAL MARKETING EXPORTING STRATEGY FOR COCOON – VEGAN COSMETICS TO THAILAND Group: Class: Marketing Management 63D Members : Dinh Thi Phuong Lan 11219713 Le Huyen Trang 11215776 Dinh Viet Quy 11215030 Nguyen Ha Anh 1211977 Ngo Vu Hai Nguyen 11219761 Shyrine Armouche 11230002 Ha Noi, 2023 A Company introduction What is Vegan Cosmetics? Vegan cosmetics, also known as cruelty-free cosmetics, are products that entirely abstain from utilizing any ingredients or derivatives sourced from animals, such as beeswax, honey, sheep's wool, silk, milk, and notably, they refrain from conducting animal testing (on animals like mice or rabbits) This ethical standpoint is highly favored by many consumers, particularly those who hold a strong affinity for animals In addition to the ethical aspect, vegan cosmetics feature plant-based ingredients that are gentle, safe, and nutrient-rich Consequently, vegan cosmetics have gained increasing popularity among consumers Within the global beauty industry, vegan cosmetics are experiencing a surge in prominence, underscoring their growing influence 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 is from this symbolism that Cocoon emerged, driven by the purpose of nurturing the skin and hair of Vietnamese individuals, helping them become more beautiful, refined, and radiate in their unique ways Cocoon Vietnam is a renowned cruelty-free cosmetics brand, established in 2013 and well-known for its natural and benign products Each of Cocoon's products distinctly reflects the Vietnamese spirit, utilizing entirely natural ingredients sourced from diverse 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 clear commitment to product quality, adhering to the CGMP standards of the Ministry of Health, and maintaining transparency in product information 3 Cocoon’s mission We are born to provide you with healthy, youthful, and vibrant skin and hair, derived from simple and familiar ingredients that you consume daily We are guided by a central mission: to harness the benefits of the natural world, combined with scientific knowledge, to create safe and effective cosmetic products for everyone The arduous journey towards true beauty is not solely your responsibility; we will accompany you on this path It has always been this way, and it will continue to be so Source: Cocoon Vietnam 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 origin from both domestic and international suppliers Cocoon's products undergo extensive research 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 not incorporate any animal-derived ingredients Instead, Cocoon harnesses and optimizes the potential of active ingredients and plant extracts without relying on components of animal origin In line with Cocoon’s dedication to animal welfare, Cocoon never conducts tests on animals Their cosmetic formulations are thoroughly researched and tested through laboratory experiments or on volunteers Furthermore, our raw material suppliers share our commitment and not conduct animal testing during the research and production of their materials Cocoon strictly adheres to the principle of not subjecting animals, such as rabbits, mice, or fertilized egg yolks, to any testing procedures." Catalogue 5.1 Skincare: · · · · Cleansing oil Micellar water Cleanser Toner · · · · Face polish Serum Cream Mask 5.2 Body care: · · · · Hand soap Shower gel Body polish Body lotion 5.3 Haircare: · · Hair tonic Hair serum 5.4 Lip care: · · Lip balm Lip scrub 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 for natural-original cosmetics ● Reasonable prices, affordable for low to middle-income individuals ● High-quality Vietnamese goods, meeting international standards and undergoing 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 not offer mini sizes, which can be inconvenient for travel or on-the-go users ● The packaging design is minimalist, and does not have barcodes for authenticity checks => making the products susceptible to counterfeiting ● Almost all Cocoon products are in concentrated form, which can be costly for each use." 1.2 The environment 1.2.1 Overview about natural cosmetics in Vietnam Throughout its existence and development, Buddhism has been closely attached with the historical ups and downs in Vietnam, assimilating and deeply influencing various aspects of social life, including ethics and lifestyles The ethical standards of Buddhism tend to guide behavior, shape individual character, and have a positive impact on consumers As a result, when making purchasing decisions, Vietnamese people often gravitate towards products that align with safety and health for their bodies, protect the environment, and uphold the humanitarian values inherent in each individual As a result, the use of vegan cosmetics in Vietnam is becoming increasingly 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 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 and environmental 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-conscious people, the availability of advanced and enhanced organic products, and the region's adoption of policies to reduce the use of synthetic components in cosmetic products Growth in the nation has been facilitated by both the growing emphasis on sustainability and the expanding demand for organic color cosmetics There are numerous opportunities for the sales of organic cosmetics items since consumers 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 their purchasing habits, millennials are driving the trend toward healthy and clean products ● 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 animal parts has been banned, supporting the growth of the vegan cosmetics industry According to Ypulse, 36% of Gen Z and Millenials females in Western Europe are 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 concerns are likely to drive organic cosmetics sales in the region China is the most active regional participant in term of new product introductions, followed by Thailand, Malaysia, Indonesia and Singapore The emergence of new brands or established companies introducing new vegan product lines, or even transitioning to complete vegan offerings, has seen exponential growth 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 ( months ) The market is expected to grow annually by 6.85% (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 is expected that Southeast Asia - the Pacific will quickly rank second in market share in the near future Moreover, Cocoon is a small-scale business in Vietnam and lacks Document continues below Discover more from: Marketing MKMA1104 Đại học Kinh tế… 999+ documents Go to course Premium Marketing LÝ THUYẾT 56 188 112 34 Marketing 98% (51) Premium Sách hướng dẫn học marketing Marketing 100% (12) Premium Marketingcan ban 2021 C78910 Marketing 100% (11) TracPremium nghiem MAR1 trắc nghiệm mar Marketing 100% (11) 34 TrắcPremium nghiệm Marketing Marketing 100% (10) experience in exporting to foreign countries Choosing the Northbản American and European markets, which are large and highly competitive with international vegan cosmetics brands, may not be the best option Therefore, Cocoon may consider the Southeast Asia-Pacific region as its target export market ẢnhPremium hưởng => Criteria ● Countries in Southeast Asia - the Pacific, especially thoseyếu withtố strong môirelations trường… with Vietnam, offer significant advantages due to their proximity Marketing ● People in these countries tend to be beauty-conscious and prefer to use vegan 100% (8) cosmetics ● The level of competition in the vegan cosmetics industry is not excessively high ● The population income generally falls into the middle to high-income bracket => Potential Market : SINGAPORE, THAILAND, MALAYSIA, KOREA First screening Malaysia Singapore Thailand Korea Population 34.401 million 6.02 million 71.823 million 52.185 million GDP Per Capita $13,942 $84,500 $8,273 $35,000 GNP $95.713 bn $396.501 bn $121.819 bn $425.715 bn Cosmetics industry market worth (2023) $436.50m $1,233m $361.6m $1.74bn Minimum wage $347 per month no minimum wage laws $261 per month $1,638 per month Tariffs Export tax: 0% Import tax: 0% Export tax: 0% Import tax: 6% Export tax: 0% Import tax: 0% Export tax: 0% Import tax: 20% Chandler Good Government Index Rankings 33th 1st 47th 18th Compound 3.12% (CAGR 0.97% 5.16% 2.20% (CAGR annual growth rate (CAGR) 2023-2028) (CAGR 2023-2028) (CAGR 2023-2028) 2023-2028) - Malaysia Malaysia is a country in Southeast Asia, with a population of about 34.401 million people, and an average GDP per capita of about $13,942 The cosmetics industry in Malaysia is a significantly growing and valuable sector in the country's economy Malaysia has many famous cosmetic brands, both domestic and international, such as Bio-Essence, SimplySiti, Safi, and Vivy Yusof's dUCK Cosmetics With a majority Muslim population, the demand for halal-certified cosmetics in Malaysia is high Malaysia is among the world's top 10 halal pharmaceutical and cosmetics manufacturers - 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 responsible for 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 are perceived to be trusted by professionals or are unlikely to have a negative impact on their 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 in Thailand Thailand is the second largest cosmetics exporter in ASEAN, after Singapore, and ranks 10th in the world The Thai cosmetics market has total sales of 191.1 million VND Thailand has abundant labor resources and cheap labor costs, on average only about $261/month Therefore, this is a potential market for investment, production and business Another advantage of Thailand is that the tax rate on imported products from Thailand is not too high compared to other countries in the Southeast Asian region (some countries are not even taxed) - Korea Korea is a country in East Asia, one of the four countries with the most developed economies in Asia along with Taiwan, Hong Kong and Singapore This is a country with 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 around the world In addition, Korea has signed a VKFTA agreement with Vietnam, creating favorable 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 Market attractiveness evaluation ( Second Screening) Cocoon is known as one of the leading Vietnamese brands in producing vegan cosmetics With the purpose of expanding export markets, the selected criteria will focus 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 have higher weight because they are consistent with the business's goals - GDP per capita: evaluates the living standards and willingness to pay of the people 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 foreign businesses to participate and develop in that country's market Based on the criteria reviewed in the markets, the group came up with the following scoring scale for evaluating the markets: - Very Poor - Poor - Medium - Good - Very Good Score Evaluation criteria Weight Thailand Korea Population 0.05 4 GDP Per Capita 0.1 Cosmetics industry market worth 0.15 Minimum wage 0.1 Average spending on beauty 0.15 3 Tariff 0.15 Political stability index 0.1 Cosmetics industry growth 0.2 3.55 3.4 Total score (Multiplied by weight) Table 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 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 for Vietnamese people, they are actively looking for new partners and distributors in all cities and provinces across the country in order to expand their product distribution network as well as provide natural cosmetics to more consumers, Cocoon completely has enough potential to enter foreign markets if they want Cocoon has various sales agencies located in different areas such as Ho Chi Minh City, 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 distribution systems It helps people to find and purchase Cocoon products easier no matter where they live 1.1.2 International experience Cocoon has always focused on expanding and covering the entire Vietnamese market because it prioritizes serving Vietnamese people Therefore, Cocoon has no experience working with international customers and has no intention of entering foreign markets before 1.1.3 IFE Matrix IFE MATRIX STRENGTHS Weigh t Ratin g Weighted Score The raw material source is cheap and strictly controlled 0.053 0.159 Product quality is always ensured 0.055 0.165 Using unique and environmentally friendly product packaging 0.054 0.216 Extensive distribution system 0.055 0.22 Marketing strategies to promote products successfully 0.055 0.22 Using a variety of social media 0.045 0.18 The product price is cheap, suitable for the income of many people 0.054 0.216 Dedicated and attentive customer service staff 0.051 0.153 The information system is diverse and continuously updated 0.045 0.135 10 Attractive salary and wage to attract employees 0.052 0.156 Weigh t Ratin g Weighted Score WEAKNESSES 11 They not have high technology to preserve ingredients for a long time 0.048 0.096 12 The production process has not been automated yet 0.03 0.03 13 High product packaging cost 0.051 0.102 14 Taking a long time to research and develop new products 0.053 0.106 15 The Cocoon's number of stores is limited 0.048 0.048 16 High costs for Marketing activities 0.052 0.052 17 There are few promotional programs 0.05 0.1 18 The majority of sales staff not have in-depth expertise 0.049 0.098 19 There is no external financial support 0.05 0.05 20 Infrastructure has not yet been fully developed 0.05 0.1 TOTAL 2.602 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 environment in Thailand The export of Cocoon products to Thailand is likely to be successful 1.2 External factors 1.2.1 Sociocultural distance between the home country and host country Source : Hofstede Insights According to the data updated by Hofstede Insights, in general, Vietnam and Thailand share nearly the same culture and society ● Power Distance: at the rate of 64 - slightly lower than Vietnam It means that a strict chain of command and protocol are observed Each rank has its privilege and employees show loyalty, respect and deference for their superiors in return for protection and guidance This may lead to paternalistic management Thus, the attitude towards managers is more formal, the information flow is hierarchical and controlled => Therefore, to export products to Thailand, it is necessary to have documents and certification from Government agencies and Thai Industry and Trade first.This process is similar to that in Vietnam, so there will not be too many different procedures for exporting in Thailand ● Individualism: equal with Vietnam, it means that Thailand as well as Vietnam is a highly collectivist country This is manifest in a close long-term commitment to the member ‘group’ Loyalty to the in-group in a collectivist culture is paramount, and overrides most other societal rules and regulations The society fosters strong relationships where everyone takes responsibility for fellow members of their group => Because of this similarity, Vietnam and Thailand still keep long-time trading partner relationships nowadays The long-term loyalty in this business relationship will be an advantage for licensing the export of Vietnamese products to Thailand ● Masculinity: Thailand scores 34 on this dimension and quite lower than Vietnam (40) Thus, Thailand and Vietnam are considered a Feminine society This lower level is indicative of a society with less assertiveness and competitiveness, as compared to one where these values are considered more important and significant => This also proves that people in both countries care about their quality of life and society Therefore, vegan cosmetics are a prominent trend in these two countries as Thai as well as Vietnamese people often prioritize choosing products and services that are useful to the community ● Uncertainty avoidance: The degree to which members of a culture want future occurrences to be certain and predictable - Thailand achieves 64 points in this dimension In order to reduce the uncertainty that occurs, a series of rules, laws, and policies have been established; with the desire to control everything and avoid unexpected events But because it has a quite high score, society is still not ready and needs more time to adapt to change, leading to risks being very normal - On the contrary, it is almost half lower , with a score of 30, Vietnam is a country with little desire to avoid ambiguity We are more comfortable and value practical things more than principles In societies with a low index, like Vietnam, people believe that restricting rules is not really necessary, if not clear and effective, they should be changed or eliminated => Because of this difference, in business, businesses should be careful in changing some plans and goals to convince the respective market Avoid sudden changes that cause business conflicts and things that are not really effective ● Long term Orientation: This is a dimension used to describe how society maintains traditions, while also coping with current and future challenges With a score of 32, Thailand is a short-term oriented country, less inclined to save for the future instead they focus on achieving quick results Unlike our country, Vietnam has a score of 57, making it a highly pragmatic country, meaning it favors a long-term orientation We believe that truth depends a lot on circumstances, time and context => So in order to simultaneously attack two markets that are different in this aspect, businesses should have a strategy Specifically, focusing on goals and results Should provide and develop products/services that can bring quick results in the short term but still ensure long-term results ● Indulgence: With an intermediate score of 45, a preference on this dimension cannot be determined for Thai A lower score Vietnam achieves is 35, it indicates that the culture of Vietnam is characterized as Restrained Societies with a low score in this dimension have a tendency to cynicism and pessimism People with this orientation have the perception that their actors are Restrained by social norms and feel that indulging themselves is somewhat wrong 1.2.2 Country risk/ demand uncertain a Market share of imported goods: The market share of imported cosmetics in Thailand is quite low, just only 13% => Cocoon will have to make a great effort in Marketing to increase brand recognition in this market b Competition in cosmetic industry: There are many big competitor global brands such as Beiersdorf Ag, Unilever and L'Oreal S.A., - three leading companies in Thai cosmetics Moreover, many companies have set up factories in Thailand to get human resources cheap work Therefore, Cocoon will have to compete with many great global brands c Thailand is the second largest cosmetics exporter in ASEAN, after Singapore and ranked 10th in the world (2020, exports 2.38 billion US dollars) So this is the barrier for Cocoon to be able to sell well in the market for such a large cosmetic export 1.2.3 Market size and growth a Market size The skincare and cosmetics sector in Thailand stands as one of the largest within Southeast Asia, attracting significant investments from major international brands.According to a new report published by Allied Market Research: “the Thailand skin care products market size was $2,568.2 million in 2019, and is projected reach $4,391.4 million by 2027, registering a CAGR of 7.6% from 2021 to 2027” Thailand's beauty products have found lucrative markets in countries like Japan, the Philippines, and Vietnam, establishing themselves as prominent export destinations Moreover, substantial efforts have been directed towards the development and expansion of domestic brands and production, aimed at promoting Thai cosmetics and skincare products in international markets b Market growth The evolving landscape of this industry has given rise to new brands, often influenced by prevailing trends, particularly those championed by social media influencers These influencers have leveraged their social media presence to become crucial marketing platforms for cosmetics brands Among the various social media platforms, Instagram, Youtube has emerged as the most popular for influencer marketing within the fashion and beauty industry By harnessing the power of influencers, the Thai cosmetics market has the potential to sustain growth and maintain a robust market performance In 2023, it was projected that the beauty and personal care segment in Thailand would experience a revenue growth of nearly percent compared to the previous year The consumer base for cosmetic products extends beyond domestic users and includes foreign tourists as well as individuals who are frequent visitors to spas or salons, which serve as impactful avenues for product marketing With the average monthly income of Thai households having risen over the past decade, there has been a noticeable shift in the demand for cosmetics towards the premium segment Over the period from 2023 to 2028, the 'Cosmetics' segment within the beauty and personal care market in Thailand was projected to see consistent revenue growth, amounting to a total increase of $226.1 million, representing a 31.02 percent growth rate This upward trend marks the eighth consecutive year of growth, with the estimated indicator reaching a new record high of $955.01 million in 2028 1.2.4 Direct and indirect trade barriers Exporting cosmetics from Vietnam to Thailand can involve several direct and indirect trade barriers Here are some of the key barriers that Cocoon may face: a Direct Trade Barriers: Import Tariffs: Thailand imposes import tariffs on cosmetics, which can vary depending on the specific product category Cocoon should be aware of these tariff rates and factor them into their pricing · The standard rate of VAT is 10%, but the rate is currently reduced to 7% until 30 September 2023 ● Import Licensing and Registration: Certain cosmetic products may require import licenses or registration with Thai regulatory authorities before they can be imported and sold in the country Compliance with these regulations can be time-consuming and costly ● Sanitary and Phytosanitary (SPS) Standards: Thailand has strict regulations regarding the safety and quality of cosmetic products Cocoon must ensure that their products meet these standards, which may involve testing and certification processes ● Technical Barriers to Trade (TBT): Technical regulations and labeling requirements can pose challenges for the company Complying with Thai labeling and packaging regulations is crucial ● b Indirect Trade Barriers: ● ● ● ● ● ● ● Language and Cultural Differences: Language barriers and differences in business culture can make it challenging to establish and maintain relationships with Thai distributors and Cocoon Local Competition: The Thai cosmetics market is highly competitive, with many local and international brands The brand may face strong competition, which can affect market entry and pricing strategies Intellectual Property Concerns: Protecting intellectual property rights is essential when exporting cosmetics Ensuring that trademarks and branding are not infringed upon is crucial Market Access Regulations: Thai authorities may have specific regulations governing the sale and distribution of cosmetics, such as labeling requirements and advertising restrictions Understanding and complying with these regulations is essential Consumer Preferences and Trends: Understanding Thai consumer preferences and staying updated on market trends is critical for successfully marketing and selling Cocoon cosmetics in Thailand Currency Exchange and Payment Issues: Managing currency exchange and ensuring secure payment methods for international transactions can be challenging Logistics and Transportation: Efficient and cost-effective logistics and transportation solutions are vital for delivering products to the Thai market 1.2.5 Intensity of competition Domestics cosmetics market: The cosmetics industry is quite developed in Thailand, with a total value of around 487 million U.S dollars (2022) Thailand is the second largest cosmetics exporter in ASEAN, after Singapore, and ranks 10th in the world The average spending on beauty by Thai people is about $89/person/year The Thai Cosmetics market is expected to grow at a CAGR of 6.32% during the forecast period 2021-2027 Nivea and Artistry are the top two brands in 2021, and the top three groups by value are Beiersdorf Ag, Unilever and L’Oreal SA For makeup products, the top brands are Mistine, Oriental Princess and Giffarine The market size of skin care products is highest for facial skin care and followed by body skin care products Imported cosmetics market: Thailand's cosmetics import is expected to reach $2.6 billion by 2026, up from $2.1 billion in 2021 Thailand imports many cosmetics and personal care products every year, especially makeup and skincare due to the demand for well-known brands from France and the U.S.A, plus trends of using Japanese and Korean cosmetic brands There are also various products imported from many brands with manufacturing bases in China International brand of vegan cosmetics: Many well-established international vegan cosmetics brands with global reputation were actively competing in the Thai market The Body Shop, a British cosmetics and skincare company, has a strong presence in Thailand There are many other brands, e.g Lush, Too Faced, KVD Beauty… 1.2.6 Number of relevant intermediaries available When Cocoon enters the Thai market, they need to consider which is the best channel for them: ● Hypermarkets and supermarkets, stores: Cocoon will invest heavily in its product distribution systems in Thailand, promising widespread coverage of more than 100 large and small cosmetics systems and stores across Bangkok In addition, extremely attractive policies for retailers will contribute to further promoting the consumption of Cocoon products ● E-commerce: Cocoon has appeared on most e-commerce sites in Vietnam such as Lazada, Shopee, Tiki, In addition, Cocoon also has its own website to provide products depending on users' consumption purposes of buyers Cocoon can continue to develop this form of distribution in Thailand 1.3 Desired mode characteristics 1.3.1 Risk-averse - In Thailand, There are The Foreign Business Act (FBA) of 1999 governing most investment activity by non-Thai nationals and the regulation that Joint ventures are not specifically recognized as a separate type of legal entity under Thai corporate law => It will not be easy for Cocoon to cooperate with Thai businesses to open a joint venture or establish a new foreign sales subsidiary in Thailand and it is also not the best types of entry mode for Cocoon - a business with no international experience and Cocoon is highly likely to encounter risks regarding paperwork issues, (Cocoon has always focused on expanding and covering the entire Vietnamese market because it prioritizes serving Vietnamese people Therefore, Cocoon has no experience working with international customers and has no intention of entering foreign markets before.) - For exporting products to Thailand, it is necessary to have documents and certification from Government agencies and Thai Industry and Trade first This process is similar to that in Vietnam, so there will not be too many different procedures for exporting in Thailand and this becomes an advantage for Vietnamese enterprises such as Cocoon However, there is a potential risk for Cocoon in export through local representatives or distributors that are a trademark owner This risk can often occur when the cooperation with a host country distributor ends and that distributor imitates the trademark of Cocoon - There are some market risks such as the market share of imported cosmetics in Thailand is quite low, just only 13% Therefore, Cocoon will have to make a great effort in Marketing to increase brand recognition in this market Moreover, there are many big competitors of global brands such as Beiersdorf Ag, Unilever and L'Oreal S.A., - three leading companies in Thai cosmetics Many companies have set up factories in Thailand to get human resources cheap work and established a joint venture with their considerable resources => Cocoon will have to compete with many great global brands and face many risks of can not gaining market share in Thailand market with a comparable intensity of competition => With limited resources to devote to international expansion gradually (and a desire to gradually penetrate international markets and test the market before committing major resources and efforts to develop an export organization in the future), the entry mode that helps minimize the most risks for Cocoon is Indirect export through Agent/Importer/ Distributor 1.3.2 Control