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Herborist

In: Business and Management

Submitted By pranavkk
Words 2188
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By Pranav Krishnakumar | Herborist | Case Analysis Report |

|

The Scene
Herborist is a high-end Chinese personal care brand which incorporates traditional Chinese medicine using biotechnology. The brand is a huge success in China and wants to expand globally. It has already made entries into the global market with mixed results – Hong Kong not performing well while Paris was successful. With restricted resources, Herborist needs to decide which geography to enter next – Asia or Europe?

Advantages of global expansion * Market Growth - The global market for personal care products grew from US$356.14 billion in 2003 to US$487.72 billion in 2010. While the recession and economic downturn of 2008 impacted the developed markets (eg. USA) greatly, there was still strong growth in emerging markets such as countries from the Asia-Pacific region and also from Latin America.

* Natural Cosmetics and personal care products gaining popularity - With consumers being more environment conscious and more aware of the effects of the carcinogenic and synthetic products, there is a trend of natural based cosmetic products becoming more popular and hence a huge potential market.

* Unique and different product - Apart from being an organic product, Herborist was also unique in the fact that there weren’t any other products combining Chinese medicine and personal care. The personal care products were based on the principle that beauty and good health worked together, with good health being founded on the Chinese principle of yin and yang. This would help Herborist differentiate from other products in the crowded markets especially since analysts predict that unique products in the minds of the consumer would hold a significant market share.

Challenges of global expansion * ‘Made in China’ Tag - There might be a pre-conceived perception (Country of...

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