final report cocoon introduction to laos market

Cocoon makes the most ofthe strength of indigenous natural ingredients and says no to animal testing.Vegan cosmetics are beauty products made solely from plant-based ingredients that hav

COCOON INTRODUCTION TO LAOS MARKET Table of content:

I) Introduction/Company overview

II) SWOT

III) Market Analysis

1 General of the Lao cosmetic market

2 Cosmetics consumption in Lao

3 Cosmetics distribution system

4 Types of cosmetics

5 PEST analysis

6 Competitors

IV) Recommendations

V) Conclusion

VI) Reference

Members of Group 3:

- Hoang Vu Phương Anh – QS170005

- Huynh Thi Kieu Quanh – QS70006

- Nguyen Tuyet Ngan – QS170044

- Thai Binh Yen – QS170014

- Nguyen Thanh Hieu – QS170019

I) Introduction/Company overview:

Loving nature and pursuing the spirit of beauty and environmental protection, you should definitely not ignore Cocoon - a cosmetic brand "made in Vietnam" Cocoon makes the most of the strength of indigenous natural ingredients and says no to animal testing

Vegan cosmetics are beauty products made solely from plant-based ingredients that have not been tested on animals.

Conventional cosmetics include many products that use ingredients of animal origin, such as: Beeswax, milk, snail mucus, silk, honey, wool fat (skin and wool), Albumin (a protein found in animal serum), cholesterol (a fat found in animal cell membranes), gelatin

Brand meaning

Here Cocoon means "cocoon", which nurtures small colorless worms until it turns into colorful butterflies This is also the meaning for a new regeneration and nurturing of the skin and hair of Vietnamese people so that they can become more beautiful, confident and shine in their own way each person The Creator has been extremely gracious when giving Vietnam an extremely rich ecosystem from fruit trees to herbs and also not forgetting to include people who are always

reality is changing, with regard to health, people favor things belonging to nature rather than products of chemistry and technology

We have a starting point as people who always want to immerse themselves in discovering and learning the special things in fruits, plants, herbs, herbs Different vitamins, all nutrients are researched and distilled to put in all Cocoon products in the most perfect way For us, cosmetics that are allowed to be used on the skin must always be safe, effective and free of any plant-related ingredients Because the original purpose is to promote skin health with the most quintessential combination of nature [1]

History begin

Launched in 2013, although the product was not very popular, at that time, many people were known for its benign natural products But in the past 3 years, Cocoon suddenly returned and stormed the domestic cosmetics market, not only about the thoroughness in the product but also creating a highlight with the psychological words on the above Packaging Products Most of us see, in the Vietnamese cosmetic market, Vietnamese brands are almost blurred in the eyes of users because of the confusion in quality compared to domestic products: Korea, Japan, On the other hand, Cocoon conquers customers thanks to the beautiful stories behind the process of making each product and strict commitments on the safety of ingredients

In 2021, Cocoon made a strong impression with a special collaboration with female rapper Suboi, to launch a limited edition Dak Lak coffee product that cleanses dead cells on the body

-"Queen" Substance This handshake has attracted the attention of young people Recently,

at the Vietnam Bear Rescue Center.

Cocoon and Watsons have continuously accompanied each other (since 2019) in environmental protection and ecosystem improvement activities, including the program "Exchange old bottles for new products" Cocoon's bottle exchange points are located at Watsons stores, making the customer's environmental experience more convenient and faster It is these diverse activities that have created leverage, bringing Cocoon to a high position among Vietnamese brands present at Watsons

Up to now, in 2023, not only Cocoon's products have been known to almost every region in the country but also imported to foreign countries Promising a more complete development for Vietnam's first pure natural cosmetic brand, which is extremely well received At the same time,

it marks the development of Vietnam in both wisdom and experience compared to other countries

Vegan Vietnamese cosmetics Cocoon hopes to become one of the leading Vietnamese brands in inspiring green living to Vietnamese youth with its own diverse vegan cosmetics from Vietnamese ingredients and community activities Cocoon is also approved by Leaping Bunny -Cruelty Free International's commitment to not testing on animals, and has received a certificate

of not testing on animals from the animal welfare organization PETA and certification vegan by The Vegan Society

Cocoon's achievements

+ 08-2020: Cocoon received the certificate of "Animal test-free & Vegan" (not tested on animals and vegan) from the global animal welfare organisation PETA

world's oldest educational charity.

+ 11-2021 Cocoon received an award in the "Inspiring Brand" category at the Asia Pacific Enterprise Awards (APEA 2021)

II) SWOT

1 Opportunity:

- Vietnam and Thailand are two countries in ASEAN In particular, both countries have signed the AFTA Agreement Under the AFTA agreement, member countries have agreed to reduce tariffs on goods traded in the region, including cosmetics and personal care products With the reduced tax rate, Cocoon's products will not be inflated too high in price, and remain at an average level for easy consumption

- The beauty care market in Laos is expected to grow 3.21% annually (CAGR 2023-2027) With such strong growth, this is an opportunity for Cocoon to break into this market [2]

- Lao people tend to use cosmetics more and more in recent years According to some market reports, Laotians' access to cosmetic products has increased significantly, especially for international brands and high-end products Laotians are increasingly interested in skin care and beauty, which is reflected in the increased demand for cosmetic products, especially skin care, makeup and hair care products With these needs in mind, Cocoon has all the products to meet

- Laos and Vietnam are both located in Southeast Asia, so the climate is almost similar Therefore, the ingredients in Cocoon cosmetics are also suitable for Lao people

- Laos cosmetics market is growing very fast, especially in natural and organic cosmetic products

expand their operations.

- The Lao government is promoting production, business and investment activities, as well as strengthening economic relations with countries in the region

2 Challenges:

- The Lao cosmetic market is developing very quickly, requiring businesses to quickly respond to the needs of customers

- Regional competitors such as Thailand, Vietnam and Indonesia are expanding the market and producing high quality cosmetic products

- Fake cosmetic products, counterfeit goods may affect the reputation and product quality of Lao enterprises

3 Strengths:

- Natural and organic cosmetics are becoming a popular trend in the global cosmetics market and Laos has potential in the development of these products

- Natural cosmetics in Laos have been widely consumed by many consumers due to the use of natural ingredients, high quality and reasonable prices

- The demand for cosmetics is increasing in Laos, especially for women

- The cosmetic market in Laos has not been developed much, so there are many opportunities for new businesses

- Cosmetics can be produced from abundant natural ingredients in Laos

4 Weaknesses:

- Cocoon is still a relatively new brand, so it is not known by many foreign consumers

- In addition, the Lao market advertises products mainly through celebrity reviews on their blogs

or youtube Therefore, Cocoon will have to spend a lot of money and effort to establish relationships with famous people in this market so that more people know about the product

- The retail market in Laos is quite limited, so distribution channels for Cocoon cosmetics may not be effective

III) Market Analysis:

1 General of the Lao cosmetic market

The cosmetics market in Laos is relatively small compared to other countries in the region, but it

is growing steadily The market is mainly driven by the growing demand for personal care and beauty products among the country's young and growing middle class

One of the big players in the Lao cosmetics market is Thailand's Siam Makro group, which operates several hypermarkets across the country Other notable names include local brands such

as Lao Pong Phra and foreign brands such as L'Oreal and Nivea which are steadily and strongly entering the Lao cosmetics market

The market is highly competitive, with companies constantly introducing new products and promotions to attract customers There is also a growing trend towards natural and organic products, due to concerns about the potential health risks associated with certain chemicals found

in traditional cosmetics It can be said that this is a problem that currently any cosmetic user is afraid Each skin will have its own characteristics, so not all chemicals are suitable for different skin types Once again, Cocoon spoke strongly with its strength in Laos Directly attacking the desire that consumers want is Cocoon's vegan cosmetics

infrastructure, limited distribution channels and lack of skilled labor However, with the government's focus on economic development and increasing foreign investment, the Lao cosmetics market is expected to continue its upward trajectory in the coming years

2 Cosmetics consumption in Laos:

Cosmetic consumption in Laos has steadily increased in recent years, especially among women The growing interest in beauty products is driven by a number of factors, including increased disposable income, increased awareness of beauty and personal grooming, and the availability of

a wide variety of products more products

Although the cosmetics market in Laos is relatively small, it is expected to grow at a rapid rate in the coming years The country's young and urban population is becoming more fashion-conscious and increasingly looking for high-quality cosmetic products

However, the market is still dominated by imported brands, very few cosmetic products are produced domestically This is an opportunity for domestic companies to penetrate the market and provide products that meet the needs of Lao consumers

In terms of distribution, cosmetics are mainly sold through beauty and personal care stores, supermarkets and online platforms However, many consumers still prefer to buy their products from traditional markets and small independent retailers

In general, the cosmetics market in Laos has a lot of potential for growth, but there are still many challenges to overcome, including lack of domestic production capacity, limited distribution channels and the dominance of foreign brands However, with the right strategies and

3 The cosmetics distribution system

- The cosmetic distribution system in Laos is still developing and relatively fragmented compared to more mature markets There are several channels through which cosmetic products are distributed, including:

- Traditional retail stores: Cosmetic products are usually sold at traditional retail stores such as supermarkets, pharmacies and convenience stores These stores offer a wide range of products from international and local brands

- Specialized stores: There are also specialized stores that focus on cosmetics and skin care products These stores offer a wider range of products and are more likely to sell premium or premium brands

- Online platform: With the growth of e-commerce, many cosmetic products are now sold online This includes both domestic and international e-commerce platforms, as well as social media marketplaces like Facebook and Instagram

- Direct selling: Direct selling is also popular in Laos, especially for products such as skin care and beauty supplements Companies can use dealer networks to sell products directly to consumers

- Parallel imports: Due to the relatively small market size and limited distribution channels, parallel imports are also common in Laos This refers to products imported through unofficial channels or from neighboring countries, rather than directly from the brand owner

challenges, especially in rural areas Many companies rely on third-party logistics providers to manage their supply chains and distribution networks

4 Types of cosmetics

Laos does not have many famous cosmetic lines that are widely recognized internationally However, there are some local brands that are gaining popularity in Laos Here are some examples:

- Lao Silk Beauty: This brand produces handmade cosmetic and skin care products using traditional Lao silk as the main ingredient

- Naphavong Beauty: This brand offers a wide range of natural skin care products made with ingredients sourced from the countryside of Laos

- Lao Herbal Beauty: This brand uses local herbs and natural ingredients to create skin care products and cosmetics that are gentle on the skin

- Lao P.D.R Beauty: This brand produces high-quality skin care and cosmetic products using locally sourced ingredients

- It is worth noting that these brands may not be widely available outside of Laos, but they are gaining popularity within the country In addition, international cosmetic brands such as L'Oreal, Maybelline and Revlon are also present at some retail stores in Laos

5 PEST analysis

Politics:

- Laos is a politically stable country and rarely has major political conflicts Most of these conflicts were controlled and ensured political stability in Laos This is a great advantage to

the import.

- Vietnam is a major partner of Laos after Thailand and China, especially in the past few years, the friendly relationship between the two countries has also made great strides In order to show solidarity and support each other for mutual development, Vietnam and Laos have signed many trade agreements with many preferential tariffs, creating favorable conditions to promote trade activities between the two countries Therefore, the export potential is also high [3]

- Since joining ASEAN, ASEAN countries will enjoy preferential tax rates However, imported goods are usually subject to two types of taxes, namely import tax and value added tax (VAT) Import duties are calculated based on the import tax rate multiplied by the CIF value of the goods (the price includes the value of the goods, insurance and freight charges) VAT will then be calculated based on the full CIF value and import tax on the goods Goods imported for the purpose of re-export will normally be exempt from import duties and VAT Under new regulations issued in December 2021, Laos' standard VAT rate is reduced from 10% to 7% [4]

- Laos has regulations on packaging and labeling for imported goods, especially consumer products such as food, cosmetics, drugs, household appliances, clothing and footwear These regulations are enshrined in the Commercial Law 2017 and the government's executive decrees and decisions Packaging and labeling requirements for imports into Laos include:

+ Packaging: Imported goods must be properly packed and transported to ensure product safety during transportation and storage Packaging must meet the safety and hygiene standards set forth by the regulatory authorities

+ Label: Imported products must have complete and accurate labels to ensure that consumers can