South Korea
Katrina Haywood Allison Hill Maddy Williams FSH 316 International Retailing/Global Marketing Fall 2016 Ricardo Sison
Table of Contents
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Executive Summary About Sephora Cultural Research: Do’s and Don’ts Culture Economic Research Market Research Market Recommendations Works Cited
Executive Summary
As an international company that holds 2,300 stores across 33 countries, Sephora has become one of the most recognizable and innovative brands in the global market. In July, 2017 Sephora will be expanding into it's 34th country, South Korea, and opening its Flagship store in downtown Seoul, Myeong-dong. As one of the beauty capitals of the world and home to the one of largest cosmetics markets, this move will further advance Sephora's influence in the global cosmetics industry. Known for its massive shopping district and high tourist attraction, Myeong-dong will be the perfect location to open the newest Sephora Flagship Store. Our brand will become the go-to beauty destination for exclusive product offerings, knowledge, and prestige cosmetics for every style. Through market analysis we have determined there are significant gaps within the Western cosmetics presence in the South Korean market that Sephora can capitalize greatly on. By targeting emerging markets, ones that have been neglected, and tourists visiting Seoul we will create our own space within the market which only Sephora can cater too.
About Sephora •
A visionary beauty-retail concept founded in France by Dominique Mandonnaud in 1970.
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Owned by LVMH
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Highly regarded as a beauty trailblazer thanks to its unparalleled assortment of prestige products, unbiased service from experts, interactive shopping environment, and innovation.
Mission Statement: •
To build the most knowledgeable and professional team of product consultants in the beauty industry. In order to do this Sephora developed the "Science of Sephora," also known as S.O.S., which is a training program for employees to learn about general topics in the beauty and cosmetics industry, basic makeup application, and customer relations.
About Sephora Core Values •
Presenting a leading beauty selection and always be on the lookout for what’s new
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Offering beauty fans around the world the chance to touch and test the products.
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Transforming the customer experience into an exclusive opportunity to indulge in
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Creating bonds with its loyal customers and business partners
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Relying on the quality of its advice teams to guarantee customer satisfaction
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Promoting unexpected concepts, a non-conformist and dare to defy attitude that make Sephora a leader in the beauty industry
Chris de Lapuente •
Global President and CEO of Sephora
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Joined LVMH in 2011 as Chief Executive Officer of Sephora
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Head of all LVMH Perfumes & Cosmetics brands (excluding Parfums Christian Dior) since May 2015 “Innovation is certainly key for Sephora. The constant challenge is to find new, better and more captivating products for our customers. The enthusiasm of our teams and their passion for beauty are contagious, as is their desire to fully meet the needs of their customers. Sephora’s number one asset is this ability to react.”
Product Categories
Skin Care
Tools and Accessories
Makeup
Nails
Fragrance
Bath and Body
Hair
Men's
Services
Beauty Services
Beauty Classes
Custom Makeover • 45 minutes full face makeover by beauty advisors • Complimentary with a $50 minimum purchase
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Personal One-n-One • 90 minutes customized service from skin care to beauty makeover • Complimentary with a $125 minimum purchase Exclusive Product Matching: • Color IQ • Skincare IQ • Fragrance IQ
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Beauty studio Free in all stores 15 minutes session/ mini makeovers and facials
Why South Korea? •
World Bank Ease of Doing Business Ranking 2015: 4 of 189
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Heritage/WSJ 2016 Index of Economic Freedom Ranking: 27 of 178
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With sales exceeding USD 14 billion, Korea is the third largest beauty market in Asia and ranks 10th in the world
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The country is also the world’s largest per capita skincare consumer
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The Republic of Korea is a member of the Trans-Pacific Partnership (TPP)
Why South Korea? •
The Republic of Korea and the United States implemented the Korea-U.S. Free Trade Agreement on March 15, 2012. The Agreement is the largest Free Trade Agreement (FTA) negotiated by the United States since NAFTA
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The U.S. International Trade Commission estimates that the reduction of Korean tariffs and tariff-rate quotas on goods alone will significantly reduce and eventually phase out
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Under the FTA, almost 80 percent of U.S. exports to Korea of consumer and industrial products became duty free on March 15, 2012,
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Nearly 95 percent of bilateral trade in consumer and industrial products will become duty free within five years of that date (2017).
Cultural Research: Do's and Don'ts
Business Meetings DO’S: • Be punctual and bring a small gift with you. • After the meeting, put all the cards you received in your breast pockets. • It should be printed in English on the one side and Korean in the other and also written one’s name, address, company, title and status.If you have your own website, it’s good to write it down
DON’TS: • Don’t say ‘No’ directly. • Don’t talk about business negotiations right away, make small talk for no more than 10 minutes • Don’t talk politics • No jokes • Don’t run out of your business cards, it’s disrespectful and implies you aren't serious
Punctuality •
Make an appointment for a business meeting ahead of time
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If ever late for a meeting, give them a call prior to the time of meeting
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Send proposals and meeting agendas ahead of time
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Let the senior member enter first and let that member sit in the middle
Giving Gifts • • •
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Offer and receive a gift with both hands Bright colors are preferred for wrapping gifts Yellow and red or green stripes are a traditional Korean wrapping paper design Avoid wrapping gifts in dark colors or red Do not give liquor to a woman It is common to exchange gifts at the first business meeting Allow the host to present his gift first Give: liquor (Scotch), fruit, desk accessories, small mementos, gifts from France or Italy (which often indicate a higher status) It is necessary for the recipient to offer some resistance unless the giver offers it for a second time Out of respect you will not open the gift in front of the giver unless they ask if you would like to Sharing is caring in Korea, you can bring whatever you’re having to eat or drink [this is related to the Korean concept of “Jeong”(정)] Giving 7 of an item is considered lucky
BODY LANGUAGE DO’S • • • •
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Keep you legs straight and upper body A slight bow is also used when expressing an apology Use both of your hands all the time Rise when an elder/higher status person enters the room as a sign of respect Bow a low, deep bow at the end of a meeting to indicate a successful meeting
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Don’t point to someone with your index finger, this is considered rude Don’t blow your nose in public Don’t cross your arms Don’t put your hands on other’s shoulder, it’s considered disrespectful Don't bow quickly or shortly, this parting bow could mean dissatisfaction with the meeting
Office Wear WOMEN: •
Never show your shoulders or cleavage
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The length of your skirt or dress should be slightly above the knee
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Wearing small sandal socks or flat socks is an unspoken rule
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No matter the clothes, makeup and hair is very important
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Avoid tight short skirts
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Tasteful accessorizing is encouraged
MEN: •
Pockets are useful for handkerchiefs and business cards.
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Traditionally, business-wear in Seoul is conservative, with suits confined to black and charcoal colors
YOUNGER GENERATION: •
Half-tailored suits, little quirks to add detailing is accepted now, oxford shirts and knitted ties to accessorize, and outfits that include bracelets are now becoming acceptable.
CULTURE
Language
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Official Language : Korean
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Spoken by 80 million people
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Official language in Republic of Korea: Yanbian Korean Autonomous Prefecture and Changbai Korean Autonomous County of the People's Republic of China.
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19 Consonants and 24 Vowels
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Considered to be one of the most difficult languages to master, the United States' Defense Language Institute places Korean in Category IV
People
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38 percent of Korea’s population will be elderly by 2050
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There will be three Korean people ages 65 and over for every one Korean child
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In the 1980s, government slogans proclaimed that “even two are a lot” and “one child per family and our land still overflows with people”
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The total population in South Korea was estimated at 50.9 million people in 2016,
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Shinsedae, the new generation
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Strong beliefs against the globalization of Korea. Their version of nationalism -- the belief that Korea is not inferior whatsoever to the United States or Japan
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Korea’s workforce and population will enter a gathering decline. Korea’s child population already peaked in 1974 and has since shrunk by 31 percent
Korean Confucianism •
Originated in China, emerged and developed in Korea
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Focuses on right actions and human morality
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Obligation of people towards one another based on relationships
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Stresses duty, loyalty, honor, filial piety (respect for parents, elders and ancestors), respect for age and seniority, and sincerity
Holidays •
New Year's Day (January 1)
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Independence Movement Day (March 1)
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Seollal (February 7-9, 10 as a substitute holiday)
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Children's Day (May 5)
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Buddha’s Birthday (May 14)
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Memorial Day (June 6)
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Liberation Day (August 15)
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Chuseok (September 14-16)
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National Foundation Day (October 3)
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Hangeul Day (October 9)
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Christmas (December 25)
The Korean Family • •
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Family is the most important part of Korean society The father is the head of the family - families that follow Confucius and his teaching firmly believe that the father must take care of the health, shelter, food, and marriage of his family members The eldest son helps his father in all family matters - while he must obey and follow all directions In the past, women couldn't make decisions and handle external affairs Today, women are becoming leaders, business executives, and teachers Dreams and needs are secondary Family welfare is the first and most important goal of every family Confucius and his teachings run deep in Koreans. That is why they believe in duty, loyalty, honor and sincerity
Traditional Aesthetics •
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The art produced by people living in the peninsula of Korea has traditionally shared aesthetic concepts, motifs, techniques, and forms with the art of China and Japan. The beauty of Korean art and the strength of its artists lay in simplicity, spontaneity, and a feeling of harmony with nature. The avoidance of extremes is another characteristic tradition in Korean art. Many Korean symbols are similar to the Chinese characters for luck, fortune, longevity, and fertility Common themes in Korean symbols include longing for paradise, happiness, love, and good fortune. The cultural integration of color stems from principles of Eastern religions such as Confucianism and Buddhism. The five main colors of black, blue, red, yellow and white refer to the five elements of classic Chinese philosophy. The color yellow in Korea is associated with earth, black with water, white with metal, green/blue with wood and red with fire. They often appear in Korean clothing, celebrations, martial arts, architecture, art, food and symbols.
Symbol for good luck
Symbol for creation and birth
Symbol for happiness for husband and wife
Internet/Online Gaming Culture •
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At 29.0 mega-bytes per second (Mbps), South Korea boasts the fastest average Internet connection speed in the world Korea is well known as the world's "most wired nation," with 95% percent of Korean households having broadband Internet access Access to cheap, fast Internet allows Koreans to enjoy the latest online games, which require massive and fast transfers of data, if they are to be played as designed to be played The PC bang (internet cafe) provides a place for young Koreans to hang out and relax for an hour or two of online fun The omnipresent nature of the PC bang is related to Korea's equally widespread broadband access Even in the smallest of Korean towns, one can find a PC cafe Korean "pro gamers" have a celebrity status with countless adoring fans. There are even TV programs dedicated to the sport Korea has placed in the top three of the medal count in each of the World Cyber Games, held annually since 2001 Yo-hwan, 24, has an online fan club of 580,000 and earns a six-figure salary through prize money and endorsements
Pop Culture and Fashion •
Korean pop culture has gained wide-spread attention globally within the past few years.
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“Hallyu” means flow of Korea or Korean wave and is used to describe the growing popularity of K pop culture
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Online platforms such as Youtube and social networking sites aid in the Korean waves success
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K-Pop is a range of popular music within South Korea -dance pop, pop ballad, R&B, hip hop
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Stands out from crowd and takes self expression to a new level
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The style of K pop excels western stars (U.S.) in intensity and originality. [iI.e. G-Dragon & CL in 2NE1]
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Creative use of costumes and color in music videos
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Use of effects, make-up and outfits are used in creating themes and visions in the videos
Everyday Fashion
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A color palette of clothing that teens choose from may be limited to: •
Navy blue, white, denim blue, gray, ochre, lavender, brown, mild pink, laurel green, olive, rust, silver blue, mustard yellow, and black
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Brighter colors are reserved for traditional events such as weddings and people representing Korea as a country
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In these cases, the same colors as found on temples may be found in Korean formal dresses—known as “hanbok"—and business uniforms, such as those for flight attendants.
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Showing skin and exposing too much is also seen as bad. It is preferred that you be covered up and conservative.
Cosmetic Surgery • •
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The Cosmetic Surgery Capital of the World The number of medical tourists are constantly increasing Double eyelid, nose, chin, forehead, and breast augmentation surgeries are the most common procedures It is now a normal part of Korean culture It is very common for parents let their kids get surgery for their high school graduation present The effects of the Korean plastic surgery boom can be mostly seen in Gangnam district which is the wealthiest Koreans believe that plastic surgery will bring significant change in their career and marriage Plastic surgery in South Korea has a relatively low cost compared to any other country and the field has a vast majority of skilled surgeons.
Before VS. After
Beauty Standards Korean Beauty Standard VS. US Beauty Standard •
Straight Shaped Eyebrow vs Arch Shaped Eyebrow
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Light on eye shadow vs wing eyeliner and heavy on eyeshadow
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Barely any contouring vs Contour and highlights all over •
A little contouring on the chin is essential to make V-shaped jaw line
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Pale skin vs prefer tanned skin
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Dewy and glowing vs matte
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Light pink/coral colored lipsticks vs neutral or dark tone lipsticks
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Highlight on eye-bag vs conceal the eye-bag
The Life Of A Teenager •
Due to the intensity of studying, teenagers rarely hold part-time jobs. Parents and teachers won't let them.
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From the time children start kindergarten, many parents are already pushing them into gaining scholastic advantages
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Many teenagers will meet at fast-food restaurants, libraries, karaoke parlors (known as noreibang), and computer game rooms (known as PC bang)
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Because most Korean teenage girls plan to marry before 26 years old, according to Teen Life in Asia, topics such as dating, and, particularly sexual relationships between teenagers is considered taboo, and rarely discussed between generations
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Teenagers are usually responsible for their own transportation to and from school. Most students take buses or the subway in larger cities.
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If one is running late, it is not unusual for teenagers to take a taxi to school because taxi fare is quite inexpensive
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Teenagers attend school all day eating both lunch and dinner at school. Often some attend clubs after or they immediately attend cram school.
ECONOMIC RESEARCH
Population • • • •
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Population: 50,924,172 (2016 est.) Growth Rates: 0.53% (2016 est.) Ethnic Groups: Homogeneous Median Age: total: 41.2 yrs, male: 39.7 yrs, female 42.8 yrs Ages and Sexes (2016 est.) • 0-14 years: 13.45% 1.07 male(s)/female • 15-24 years: 13.08% 1.12 male(s)/female • 25-54 years: 45.93% 1.06 male(s)/female • 55-64 years: 14.01% 0.98 male(s)/ female • 65 years and over: 13.53% 0.71 male(s)/ female
With a high amount of men within the population we will have room to expand our tertiary market (men) and capitalize on the quickly evolving market of Mens Cosmetics.
Economic Statistics and Activities
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GDP (2015 est.) Total: $1.378 trillion Growth Rate: 2.6% Per Capita: $36,000 Average Family Income: • Lowest 10%: 6.8% • Highest 10%: 37.8% Where They Get Their Growth: • Electronics • Telecommunications • Automobile Production • Chemicals • Shipbuilding • Steel
Methods of Transportation Modes and Availability: • Airports 111 • Waterways 1,600 km (most navigable only by small craft) • Railways 3,460 km • Roadways 104,983 km • Merchant Marine 786 Public Transportation: • Trains • Express buses • Local buses • Car ferries • Taxis and mobile apps like Uber Taxi and KakaoTaxi
Communication Systems •
Internet users: 44.153 million. 89.9% (2015)
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Telephone (fixed lines) total subscriptions : 28,882,783 (2015)
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Mobile cellular: 58.935 million subscriptions (2015)
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Internet cafes, known as PC bang, are ubiquitous throughout the country.
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Samsung accounts for 20% of the country’s gross domestic product, and its footprint is everywhere.
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With an online penetration of more than 84 percent, South Korea ranks as one of the most connected online markets.
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The country boasts the highest average internet connection speed as well as the highest amount of available WiFi locations worldwide.
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Local chat app KakaoTalk has currently more than 48 million monthly active users, making it one of the most popular mobile messaging apps worldwide.
Labor Force
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Labor force: 26.89 million (2015 est.) Labor force participation rate : 63.25% (Oct. 2016) Unemployment Rates: 3.7% (Oct. 2016) Youth unemployment rate in Korea is at its highest in 15 years
CAUSES OF UNEMPLOYMENT: • Wages • Long working hours, • High number of industrial accidents •
Average retirement age: 55
Currency Exchange Rate
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Fifty years ago, the country was poorer than Bolivia and Mozambique; today, it is richer than New Zealand and Spain, with a per capita income of almost $36,000.
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Money is called the won (KRW)
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South Korea’s economy has grown by an average of seven percent annually
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Economic Freedom Status: Mostly Free
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Global Ranking: 27th
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Regional Ranking: 7th in the Asia–Pacific Region
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Notable Successes: Open Markets and Monetary Stability
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Concerns: Corruption and Labor Freedom
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Overall Score Change Since 2012: +1.8
Inflation Rates •
South Korea's consumer prices increased by 1.3 percent year-on-year in October 2016, following a 1.2 percent growth in September and above market expectations of a 1.2 percent gain
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Inflation Rate averaged 7.55% from 1966 until 2016
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Consumer prices in South Korea rose 0.7% year-on-year in July of 2016, following 0.8% growth in the previous month and below market expectations of 0.8%
International Trade Statistics •
Currency vs. US Dollar •
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Exchange Rate •
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1 USD = 1152.80 WON South Korean won (KRW) per US dollar 1,130.95 (2015 est.) 1,052.84 (2014 est.)
Top Trading Allies • • • •
Japan: -US$20.3 billion (country-specific trade deficit in 2015) Qatar: -$15.8 billion. Germany: -$14.7 billion. Saudi Arabia: -$10.1 billion.
International Trade Statistics
Top 10 Imports: 1. Oil: US$103.4 billion (23.7% of total Korean imports) 2. Electronic equipment: $77.8 billion (17.8%) 3. Machines, engines, pumps: $46.4 billion (10.6%) 4. Medical, technical equipment: $18.1 billion (4.2%) 5. Iron and steel: $15.4 billion (3.5%) 6.Vehicles: $15 billion (3.4%) 7. Ores, slag, ash: $12.1 billion (2.8%) 8. Organic chemicals: $12 billion (2.8%) 9. Plastics: $10 billion (2.3%) 10. Iron or steel products: $8 billion (1.8%)
International Trade Statistics
Top 10 Exports: 1.Electronic equipment: US$138.4 billion (26.3% of total exports) 2.Vehicles: $69.1 billion (13.1%) 3.Machines, engines, pumps: $62.1 billion (11.8%) 4.Ships, boats: $38.4 billion (7.3%) 5.Oil: $33.2 billion (6.3%) 6.Medical, technical equipment: $32.5 billion (6.2%) 7.Plastics: $28.2 billion (5.4%) 8.Iron and steel: $20.2 billion (3.8%) 9.Organic chemicals: $18.2 billion (3.5%) 10.Iron or steel products: $11.2 billion (2.1%)
MARKET RESEARCH
Target Market PRIMARY: • Women: 20-35 • Income Per Year: 42073020-58434750 KRW ($36,000-$50,000) • Education Level: High school degree or higher • This Woman Is: Young, passionate about cosmetics, starting to move from mass brands to prestige brands, is at best intermediately skilled but not quite advanced, trendy, and always looking for the next big thing in cosmetics. She doesn't always buy the same products because she likes to experiment and try out new and cool brands and products SECONDARY: • Women: 35-55 • Income Per Year: 52591275-87652125 KRW ($45,000-$75,000) • Education Level: College degree or higher • This Woman Is: Well into her adult life, she knows what she wants, what works best for her, is at least intermediately skilled to having advanced skills, knows about trends but prefers to stick to her favorite brands, likes to experiment a little, sees her cosmetics as investments, and is willing to pay top shelf pricing for her products.
Target Market TERTIARY: MEN • Men: 20-55 • Income Per Year: 42073020-70121700 KRW ($36,000-$60,000) • Education Level: High school degree or higher • This Man is: An adult who has intermediate experience with cosmetics but is looking to invest in prestige products. Men don't buy as many products as women, however this allows more spending on the few items they do try. He wants to look good but natural, he is using cosmetics as a way to appear younger in the work force and to attract a partner.
Market Trends •
Trading up to premium brands has been increasingly apparent in certain categories such as color cosmetics and skin care
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Domestic manufacturers easily took up four out of the top five positions in beauty and personal care in 2015, as they jointly accounted for a 52% value share in the year
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Beauty and personal care is expected to record constant value growth over the forecast period
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Consumers’ high image-consciousness will support their continued willingness to invest in beauty and personal care to maintain their appearance
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A rapidly aging population in South Korea, with consumers keen to preserve their youth, will also provide a consistent target demographic for Sephora
South Korea Tourism Statistics • • • • •
Busiest Month: July (1,703,495 tourists) Slowest Month: January (1,077,431 tourists) Soft Opening: Saturday, June 17, 2017 Grand Opening: Saturday, July 8, 2017 We will hold a soft opening to allow ourselves time to fix any issues and make changes accordingly before our grand opening
Myeong-dong, Seoul Where: Myeong-dong is located in downtown Seoul Why: • It is the biggest shopping area in Seoul and is the No. 1 tourist destination • Internationally friendly with guides that can assist tourists navigate through the area • Walking distance from the Myeong-dong transit station • Mid to high end retailers as well as restaurants Shops: Local & international • Lotte Department Store(Duty Free) • Migliore • H&M • Zara • Nike • Olive Young • Its Skin • Aritaum
Industry Size
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South Korea is the 10th largest cosmetic market in the world (2.9% of global market) In 2015, Korean cosmetics market was estimated to be $13 billion USD Annual growth rate of 6.7% for the last five years Valued at $14 billion this year, and is expected to grow upwards of $20 billion by 2020 Last year, for the first time, Korea exported more beauty products ($1.067 billion) than it imported ($978 million) There are about 1,800 to 2,000 beauty brands in South Korea, AmorePacific and LG Household & Healthcare dominate the Korean cosmetic market with a combined 50% market share
Beauty and Personal Care Market
Western Investments •
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Big overseas investors are snapping up stakes in South Korea’s cosmetics companies as demand for the country’s makeup and complex skin-care regimen increasingly attracts a global audience. Goldman Sachs Group Inc. and Bain Capital Private Equity announced a deal to acquire a controlling stake in Carver Korea Co. LVMH Moët Hennessy Louis Vuitton SE announced the purchase of a stake in Clio Cosmetics Co. Estée Lauder acquired South Korea’s Have & Be Co., which sells skin-care products under the Dr. Jart+ brand name. The investments are a vote of confidence that South Korea’s momentum as a trendsetter for Asia’s rising consumer class still has room to run after several years of rapid growth.
Competitive Analysis Aritaum • • •
Products: Carries skin care items, cosmetics, cleansers, body/hair care items, packs and masks, and men's cosmetics. Price: $30-80 Promotional Strategies: CF, print advertisement
LOHBS (Love, Health, and Beauty) • • • •
Products: Carries international and domestic brands. Lower end products such as Burts Bees. Price:$4-50 Promotional Strategies: Little to no promotion, relies on word of mouth and multiple store locations to generate buzz
Olive Young • • •
Products: International brands from Europe and Asia are interspersed with Korean designer brands, Price: $20-60 Promotional Strategies: Events with k-pop stars, and other celebrities
Market Recommendations
Products •
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Sephora will offer the same array of brands and products (over 15,000 products) that are available in US stores in the South Korea store. Market analysis indicates gaps in availability of Western products and over-saturation in Korean products. As a Western company we will first target a niche market, which will expand due to a constant high demand for new and unique products in the market. The beauty services offered at Sephora will educate consumers about the products as well as set us apart from competitors. Competitors embrace a more "hands off" selling approach, this will build Sephora's reputation as a trendy destination with a luxury retail experience.
Products Skin Care: Best Sellers
SUNDAY RILEY Good Genes AllIn-One Lactic Acid Treatment $158
GLAMGLOW SUPERMUD® Clearing Treatment $22
Fresh Soy Face Cleanser $38
Tatcha The Water Cream $68
OLEHENRIKSEN Balance It All™ Essentials Set $34
• Skin Care is the top selling category in South Korea • With Sephora’s exclusive brands and products, we can offer our customers new and exclusive products not available anywhere else • Products that will do very well in the South Korean market will be anti-aging, hydrating, clarifying, and balancing products to help perfect the face for a smoother makeup application
Products Makeup: Best Sellers
Benefit Cosmetics Roller Lash Curling & Lifting Mascara $24
Kat Von D Alchemist Holographic Palette $32
Hourglass Veil Mineral Primer $54
Anastasia Beverly Hills DIPBROW™ Pomade $18
tarte BB Tinted Treatment 12Hour Primer Broad Spectrum SPF 30 Sunscreen $36
• Makeup in South Korea has a softer, younger, and more natural approach than it’s Western counterpart • Koreans are prefer having a clear, hydrated, and radiant complexion so they can wear less foundation and concealer (which tend to be heavier coverage) • BB and CC creams (beauty balms, and Color Correctors) are the more natural and preferred choice for makeup in South Korea • Other products that will sell well are highlighters, mascara, and eyebrow products
Price
Makeup $3.00 - $239.00 Skincare $4.00 - $590.00 Mens $7.00 - $160.00
KRW 44359.30
KRW 21012.30 KRW 57200.15
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KRW 11089.82 KRW 22179.65
Makeup $12 - $62 Skincare $0.54 - $138 Mens $14 - $68
KRW 437756.25
KRW 14008.20
Promotion COMING THROUGH YOUR SCREEN: • •
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Korea is the most "wired" country Sephora is well known for being one of the few makeup brands who focuses on being innovative and tech-savvy. A way to break through the market will be through Korea's number one app which is KakaoTalk Similar to Facebook, "brands can either add a notice on their page for free, or send a direct message to their followers (the cost varies depending on the number of followers and it costs around USD $9,000 to send one push message to 125,000 followers) or have weekly updates." Sephora will be able to partner up with Kakao to boost attention and social media hype about our brand On the app we can: share brand updates, new products and brands, promotions, mobile offers exclusive to online and the Sephora app, share upcoming sales, and also promote our beauty tips + videos
Promotion OUR MODELS: •
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We have learned most Korean brands typically have someone with a large fanbase or following endorsing them Celebrities or pro-makeup artist are well known in pop culture and on social media, such as Instagram and KakaoTalk Sephora heavily focuses on creating digital content which will help with tapping into younger markets through these digital channels such as Kakao Talk Using K-idols as spokesmodels will help create a cult following throughout South Korea Men are used as spokesmodels for Korean brands and will help promote the brand among our rapidly growing tertiary market (men)
SUZY. Korean actress PONY Make-up artist
CL. Rapper
SSIN. Make-up artist
G-DRAGON. Rapper
SHINEE. Korean group
Promotion
Myeong-dong, Seoul • • • • •
Myeong-dong is one of the primary shopping districts in Seoul, South Korea Population: 3,409 Designated as a special Tourism Promotion Area Contains a mixture of street stalls and retail outlets selling everything from high fashion to casual attires Estimated that almost 2 million people visit the area everyday.
Department Stores: • • • • •
Lotte Department Store, Shinsegae Department Store, Migliore M Plaza Noon Square.
Beauty Shops: • • • • • • • • •
Aritaum Olive Young Etude House Tony Moly Holika Holika Han Skin Skinfood Damsons LOHB
Myeong-dong, Seoul •
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Due to the large influx of tourism, we will be able to take advantage of the international customers in Myeong-dong already familiar with the brand During the opening weekend, we will have abnormally high foot traffic which will help us to start building our clientèle as well as learn our market at a more aggressive pace We will be located near Louis Vuitton to represent the LVMH Group in the shopping district In the international market our status as a prestige company will be easily established because we carry Western products and brands only sold through Sephora (Ex: Marc Jacobs and Kat Von Dee). Compared to low price competitors such as Etude House and Holika Holika, Sephora is a more high-end brand that offers a luxurious shopping experience for your designer beauty products.
SWOT Price (Highest)
Mass
Luxury
Price (Lowest)
SWOT
Strengths: • Being one of the most innovative and techadvanced beauty retailers with a strong omnichannel presence • Retains a highly loyal customer base and motivates purchases through their rewards program • Wide assortment of products and brands that will be introduced to the market through Sephora Weaknesses: • Offering brands and products currently unknown to the South Korean market • Having smaller brand recognition in a new market • Needing to adjust cast training and education according to the culture
Opportunities: • Establishing the brand reputation through well known luxury brands carried at Sephora, such as Chanel and Dior • Exclusive product offerings our competitors can't provide • Omni-channel retailing opportunities in the most wired country Threats: • The Korean beauty market is one of the most competitive and saturated markets in the world • The market is on average 3-5 years more advanced than the Western beauty market • Being located in one of the biggest shopping districts that provides multiple beauty retailers to choose from
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